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The Problem with Pivots | Business Genome | Blog of Andrea Kates

The Problem with Pivots

Before We Pivot, We Must See Things in a New Way

Eric Ries, author of The Lean Startup, convinced us that sometimes we need to pivot to adapt to a changing business landscape. The problem is that we still suffer from a dearth of inspiration—how do we move from “stuck” to “Eureka” and start the pivot process working? Where do our ideas come from for what could come next? How can we move beyond traditional competitive mindsets and really accelerate growth?

Here is a practical way to start down the pivot path, with an example of where inspiration comes from. I’ll talk about how a job placement firm took clues from a DNA testing service and how a restaurant chain learned from Target to grow revenues.

There’s a great verb, “pivot”, made popular by Eric Ries in his book The Lean Startup. Fast Company has a whole segment devoted to stories of how people have done it—pivot. Over the past couple of weeks, I’ve heard many, many references to the need for companies to pivot. People have been talking about how important it is for entrepreneurs to be nimble and to be able to pivot—shift course—from what’s not working to what will work better. Ries outlined a wonderful system for scientifically testing a number of options on a small scale and then selecting the one that gains traction in the market. (For people who don’t have time to read the whole book, I made a cheat sheet of his ideas below.)

Eric Ries’ book The Lean Startup started us thinking about pivots

The pivot is a brilliant way of thinking—The Lean Startup’s core concepts have shifted many entrepreneurs like Wealthfront onto new courses that drive tremendous growth.

The problem is, sometimes we don’t have an idea for where we should look for our pivot. For example, once we realize that sales for our online game are slower than we wanted, we might not have any role models to look at to inspire our next move. We know we have to shift, but where should we head?

We need to imagine what we could be before we actually pivot toward a new direction.

Traditionally we’d start the process of getting unstuck with a look at our competition. If our competitors expand their feature set (Ries calls that the “Zoom-Out Pivot”), we’d follow suit.

But playing the pivot game like that won’t get us far enough fast enough.

The secret to seeing things in a different way is to jolt ourselves into a new frame of mind—we need to reduce our challenge to a core element, then adopt the cross-industry perspective to open ourselves to new opportunities. Here’s how it works.

Stuck Organization
Job placement agency

Traditional Idea for Pivoting (not good enough)
Do a “Zoom-Out” Pivot by testing new features, measuring against Manpower

Core Element of the Challenge (getting to the core of possibilities)
Candidates were dropping out because they didn’t trust the confidentiality of the information and wanted more of a coaching forum for employment-related issues.

Cross-industry idea that accelerates the pivot process
23 and Me, a genetic testing lab that has earned the trust of their 180,000 members. The job placement agency can learn how to build committed community members (versus job applicants).

Stuck Organization
Asian restaurant concept

Traditional Idea for Pivoting (not good enough)
Do a “Customer Segment” Pivot by testing new features, measuring against Cheesecake Factory and Olive Garden.

Core Element of the Challenge (getting to the core of possibilities)
Diners had moved from “date night” weekly habit to a special occasion option because of the recession. The restaurant concept didn’t want to erode their brand with value pricing that would smell of a quality compromise.

Cross-industry idea that accelerates the pivot process
Target maintains brand coolness at a lower price point. What can the restaurant learn from Target to pivot toward a new customer need?

What industry could offer inspiration to your organization to start you toward your pivot?

In a Nutshell: Eric Ries’ Catalog of Pivots (excerpted from The Lean Startup)

Zoom-In Pivot: a single feature of a product becomes the whole product
Zoom-Out Pivot: the feature set expands
Customer Segment Pivot: aim at different customers than originally targeted
Customer Need Pivot: use a product for a different purpose
Platform Pivot: especially in software—a specific application develops into an entire platform
Business Architecture Pivot: for example, shifting from high margin/low volume to more mass market
Value Capture Pivot: building brand strength beyond sales revenues
Engine of Growth Pivot: going viral, becoming the industry standard
Channel Pivot: shifting distribution focus
Technology Pivot: for example, moving to ecommerce from traditional retail

2 Responses to “The Problem with Pivots”

  1. Justin R. June 20, 2013 at 2:10 am #

    Can you define “platform” in more detail please? I’m not the most tech-savvy person when it comes to software so I don’t quite understand the “platform pivot” that’s described in the book. Thanks in advance!

  2. Hershel Kantarian January 11, 2014 at 9:04 pm #

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