PIVOT, ITERATE

Accelerate your business with these expert tips on "Pivot, Iterate". Analyse and discover this TIP!

In the context of start-ups, pivoting refers to significantly changing one or more aspects of the business model (any of the 9 areas of the CANVAS) to adapt to new circumstances or to improve market fit. In other words, is a fundamental change in the company's strategy to seek a better product-market fit and, consequently, to increase the chances of success. The goal of pivoting is to find a better fit between supply and demand by changing the customer segment, distribution channels, revenue model or any other relevant element of the business model. This is a risky move, as it may require significant investment and may not work, but it may be necessary for a company to succeed in the long term.

It is important to note that pivoting is different from iterating, which refers to making small, continuous improvements to the business model to adapt to changes in the market or in the company itself. While pivoting involves a significant change in the business model, iterating involves making minor adjustments to the strategy to keep improving and evolving.

Recommendations for an entrepreneur to know when to pivot in his model

There are some signs that may indicate to an entrepreneur that it is time to pivot and shift his or her focus in the right direction:

• Lack of market interest: if customers are not showing interest in the product or service, it may be necessary to pivot to adapt to the needs and wants of the market.
• Technical problems: if the company is having technical problems developing its product or service, it may be necessary to pivot to a simpler and more feasible solution.
• Business model problems: if the company is struggling to generate revenue or is not meeting financial targets, it may be necessary to pivot to a more sustainable business model.
• Fierce competition: if competition is gaining ground and making it difficult for the company to succeed, it may be necessary to pivot in a direction that offers a unique competitive advantage.
• Market changes: if the market is changing and the company cannot keep up with trends and demands, it may be necessary to pivot to a new direction.

In summary, pivoting is an important tool for entrepreneurs to adjust their approach and adapt to changes in the market, technical or business model problems, fierce competition, and changes in the market. The key is to watch for signals that pivoting is necessary and be able to adjust the company's strategy effectively to succeed.

Tips for an entrepreneur to pivot

Here are some tips for an entrepreneur to consider when pivoting:

• Conduct an honest assessment: The first step to pivoting is to conduct an honest assessment of the business. The entrepreneur should ask himself whether his current business model is working, whether he has found a viable market and whether his customers are satisfied with his product or service.
• Listening to customers: Customer feedback is critical to any business. If customers are dissatisfied with the current product or service, it is a sign that something needs to change. Listening to and understanding customer needs can be key to deciding which direction to pivot in.
• Analyse the competition: Looking at the competition and understanding how they are approaching the market can help entrepreneurs identify new opportunities. By assessing the competition, entrepreneurs can see what they are doing well and what they can do better.
• Maintain flexibility: Entrepreneurs must be willing to be flexible and make changes to their business model. This may involve changing the focus of the company, adopting new technologies or modifying the product offering.
• Have a trial-and-error mentality: Pivoting is a process of trial and error. Entrepreneurs must be willing to try new ideas, make adjustments and try again. It is not an easy process, but it can be crucial to the success of a business.
• Establish a solid plan: When deciding to pivot, it is important to establish a solid plan to guide the process. The plan should be detailed and set clear goals and objectives.
• Measuring success: Finally, it is important to measure success by pivoting. Entrepreneurs should establish metrics to measure success and adjust the company's approach accordingly.

In a nutshell, Pivoting is not easy, but it can be necessary for a company's success. By listening to customers, analysing the competition, being flexible and establishing a solid plan, entrepreneurs can successfully pivot and take their business in a more promising direction. It is changing your business model as you discover that your hypotheses, your ideas, your assumptions do not work or that they do not correspond to what your customers want. Pivoting yourself is about leaving one foot on the ground and moving the other. Many people still believe in the figure of the visionary entrepreneur, capable of predicting the future and anticipating its era. However, this image is far from reality, and what really happens is that the entrepreneur has been able to pivot his or her models. 

Many business opportunities have been born thanks to an entrepreneur who pivoted his original model, I'm sure you are familiar with them: YouTube (+), Google,... all the big companies you know today have gone through many pivots. Pivoting means leaving behind the ideas you originally conceived in your business model, in order to achieve profitability in your work. It is, therefore, to modify and optimise the key activities of your business, in order to have a more sustainable and efficient growth.

Examples of pivoting in internationalising companies

Pivoting in internationalising companies can be especially important because of the unique challenges companies face when expanding into new markets. Below are some examples of companies that have pivoted during the internationalisation phase:

• Airbnb: When Airbnb began its international expansion, it found that the user experience varied widely in different countries and cities. To address this problem, the company decided to pivot to a more community-centric model, involving local hosts and guests in decision-making and enriching the user experience.
• Uber: Uber has been forced to pivot in several countries due to local regulations and market competition. For example, in China, Uber teamed up with a local company called Didi Chuxing to expand in the market, and in Europe it has had to adapt to local regulations and competition from traditional taxis.
• Coca-Cola: Coca-Cola has pivoted several times in its international expansion process. For example, in India, the company had to adapt its drink formula to suit local tastes and preferences, resulting in a lower sugar version of Coca-Cola. In addition, the company has pivoted its marketing strategy to adapt to different markets and cultures.
• McDonald's: McDonald's has pivoted its menu strategy in several countries to adapt to local tastes and preferences. For example, in India, McDonald's offers a wide variety of vegetarian options to meet the needs of local consumers.

In short, pivoting in internationalising companies can be crucial to adapt to different markets and cultures. Companies must be willing to adapt their business model, marketing strategy and product and service offerings to succeed in international markets. The examples of Airbnb, Uber, Coca-Cola and McDonald's demonstrate the importance of adaptation and pivoting in the internationalisation phase.

THE CONCEPT OF PIVOTING TO A NEW VENTURE

The lean startup (+) gives us this great advice:

"Get it wrong a lot, get it wrong early and get it wrong cheaply"; a phrase that has a lot to do with pivoting.

Examples of well-known companies that have pivoted

We are often intimidated by those visionaries in Silicon Valley who turn any idea they touch into gold... without realising that they get it as wrong as we do. What makes them different is really their ability to reinvent their company, to pivot on what they have learned to create great businesses... and that is what we need to learn from. And nothing better for that than to discover that some of today's leading companies were just as lost as you were when they were born. That they made mistakes. That they had to change their business models.

There are many companies that have pivoted throughout their history, here are some examples:

• Instagram: The photo and video app started out as a social network for check-ins and place recommendations, but after realising that users were more interested in sharing photos, the company pivoted to a photo and video sharing platform. Burbn was born, an initiative similar to Foursquare. The team realised that, although the reception had been lukewarm, users loved uploading photos... and in a crucial meeting in which they questioned the future of the company, Kevin Systrom asked "How can we evolve this product into something that millions of people want to use?". From there and with what they learned, they decided to create Instagram, an application that in 10 months was able to attract 9 million users.
• Twitter: Before becoming a microblogging social network, Twitter focused on podcasting. After realising that they were not gaining traction in that market, the company decided to pivot towards publishing short, real-time messages.
• PayPal: PayPal started out as a mobile security software company, but after realising that its primary focus on security was not what customers wanted, the company pivoted to an online payment system.

In 1999 Confinity had an application called Paypal for the defunct Palm Pilot that allowed money to be sent between PDAs. Although the advanced encryption technology of P2P payments was absolutely differential, the idea did not prosper then... so they merged with X.com, an online financial services company. After analysing various strategies, and taking advantage of what had been developed so far, they decided to position themselves as the best and safest option for paying for products purchased through eBay, which in a short time made them the standard for payment on the platform (in fact, they were acquired by them years later).

• Nintendo: before becoming a video game company, Nintendo manufactured playing cards and toys. After realising that the toy industry was in decline, the company decided to pivot to video games and has been a leader in the industry ever since.
• YouTube: Originally, YouTube was conceived as an online dating site, but after realising that people were using the site to share funny videos, the company decided to pivot to a video-sharing platform.

YOUTUBE (+):

Although now a huge Internet giant, YouTube began as an online dating site, Tune In Hook Up, which was inspired by HotorNot. The founders met at PayPal, and there were two things that convinced them of the need for a service to pivot to an online video service: the difficulty of finding online videos of the 2004 Tsunami and Janet Jackson's Super Bowl breast show.

GROUPON:

It evolved from a social action platform called The Point that was created to try to change the world with social shopping. After realising that the site was too unfocused they decided to leverage the technology they had developed for another business, because putting limits (in units, in time) on group purchases worked very well. Andrew Mason started writing a blog where he offered readers different discounts and coupons, and saw that there was a lot of interest. The day he managed to sell 100 $25 passes for an experience floating in salty water in a dark, soundproof tank, he realised he had something big on his hands and decided to start Groupon.

NOKIA:

It's not all online. Surprisingly enough, Nokia was initially a Finnish paper company in 1865. Then they moved into rubber manufacturing, and in 1912 they decided to enter the cable manufacturing business. By 1960 the cable business began to diversify and Nokia entered the electronics market... but it wasn't until 1991 that they decided to focus on the mobile phone business. And in recent times we are witnessing another new pivot in one of the longest-lived and most changing companies in history.

AirBNB:

It was created taking advantage of a convention in San Francisco for which there were hardly any places left. In fact, it was initially called "Air Bed and Breakfast"... but it was hardly a success, and then they tried it with other conferences. 

In fact, they had to sell cereal with Obama or McCain's face on it to survive, which allowed them to hold on until they entered Y-Combinator... a milestone from which they started to grow. But it wasn't as quick or easy as many think.

PANDORA:

Although it is now known as one of the most relevant Internet radio platforms, it didn't start out that way in 2000. Founder Tim Westergreen believed it made sense to create a music recommendation site for businesses (like the Bestbuy chain) based on the concept of the music genome. Gradually they pivoted to the current concept of Internet radio, but since it only worked via the web, their success was limited. But in 2008 they tried building an app that allowed them to stream music and everything changed: it was a tremendous success, and they grew by more than 35,000 users a day.

TWITTER (+):

At first it was an appendage of a podcast service called Odeo, but when Apple launched iTunes it made it irrelevant. Then employees started doing various hackathons, and one of the ideas that was born was for a multi-mobile SMS messaging service called Twttr... and the rest is history.

• FOURSQUARE:

It was born from a startup acquired by Google, Dodgeball. Its founder, Dennis Crowley, did not feel comfortable at Google and in 2007 decided to leave the company to launch a startup based on his original idea, but this time focused on geolocated services... something that fitted in very well with the growing penetration of smartphones in the market, which in a short time made it the leader in the sector.

FLICKR:

It started as a photo sharing tool within Game Neverending, an online role-playing game created in Flash. When they saw that customers were using the photo sharing service a lot, they decided to give it more weight, and above all, to look at what they used the most and what their needs were. They listened to their customers and gave them what they asked for. And little by little the site became what it is now. These are just a few examples, but there are many more cases of companies that have successfully pivoted to adapt to changes in the market.

WHAT FORMS OF PIVOTING WILL WE FIND? 

• Close the target. When a secondary functionality becomes the customer's key functionality and therefore the core of our product. It is an achievable pivot and simply reorganises our efforts into a relevant functionality that is what the customer really wants.

• Open the lens. What we considered to be a product is simply a functionality of something much broader, which is what the customer requires. This pivot is much more complicated as it requires a greater investment in time and resources.

• Objective problem. As a result of the study of our "target customer", we realise that we were trying to solve a problem that our customer does not really have. However, we have detected an unresolved latent problem that we could address with our resources, although this change will involve the development of a new MVP that will have to be validated.

• Business model. Changes in the way we monetise, in the sales channel or in the marketing channel. These are usually the most common pivots and, for example, we can find changes towards subscription models (of platforms that came from a payment for occasional use) or a move towards sales. online to physical shops (or vice versa).

• Technology change. One of the most radical changes that we are perhaps going to find. Its origin lies in the fact that, while we were developing our MVP, we realised that the technology we had chosen was not optimal. A change of technology could speed up our development, reduce our costs or even offer our clients better services.

As you can see, the key to success is not to stick to your original idea. It is to be flexible, active listening (+) to your customer in order to be able to adapt to what the market is asking for, to what users use the most. To be successful you have to be able to pivot the model when it becomes stagnant and look for new customers, new problems or new features that allow you to grow. Courage!!!

ITERAR

Iterar, within the philosophy of Lean Startup (+), is to repeat the same process over and over again, taking as a starting point for each repetition, i.e. the previous result.

THE PROCESS OF:

Idear, test (+) and redefine is the key to the methodology. Lean Startup (+) to generate validated learning.

In order to iterate and achieve a good result in our experiments or hypotheses, two previous actions are necessary:

• Knowing the customer segment (+) to which we are going to direct our business.
• Offering a value proposition (+) solid that meets the needs of the target customers.

With these two actions, we can now begin to elaborate our first draft of the Business Model Canvas (+). The iteration method is used for redesigning and experimenting with prototypes, both in established and new companies. Startups. In established companies, iteration allows you to find and test new business models. It is therefore a living process that allows for continuous evolution.

Differences between Pivoting and iterating in a new venture

Pivoting and iterating are two different concepts, although they are related in the context of product or service development.

• Pivoting refers to a significant change in the strategic direction of a company. That is, it involves making a drastic change in the business model, value proposition, target market, etc. in order to find an approach that works better for the success of the business. It is a radical change in the direction in which you were originally working, and is usually done after efforts have been made to validate the initial hypotheses, without obtaining satisfactory results.
• Iterating, on the other hand, refers to a process of continuous and gradual improvement. It is about making small, frequent changes to the product or service, based on feedback from users or customers. The aim of iteration is to make small, precise adjustments to improve the quality of the product or service over time.

In short, while pivoting is a radical change in the direction of the business, iterating is a gradual process of continuous improvement in which small changes are sought to improve the product or service.

What is the opposite of pivoting a company?

The opposite of pivoting in the business context would be to stubbornly "persevere" - that is, to continue in the same direction or with the same approach despite signs that the current model is not working. While it is important to be persistent and confident in the business model, it is also necessary to be willing to change course if data and circumstances indicate that this is necessary to achieve success.

KNOWING THE EVOLUTION (PIVOTS) of a new company is very interesting:

Knowing the evolution of a company through its pivots is a way of understanding how its business model has evolved and how it has adapted to the needs of the market. A pivot is a significant change in a company's strategy, which is made when it is discovered that a key assumption of its business model is not correct or does not work as expected. Tracking a company's pivots can be useful to understand its trajectory and to learn from its experience. Some of the aspects that can be analysed when studying the pivots of a company are:

• Identify what the original assumptions were and why they did not work.
• Analyse the changes made to the company's business model and strategy to adapt to the new circumstances.
• Evaluate the results of the changes made and how they affected the success of the company.
• Learn from mistakes made and apply this knowledge in future projects.

Knowing the evolution of a company's pivots can be useful both for entrepreneurs who are just starting out and for experienced entrepreneurs who are looking to improve their business model. Through this tool, it is possible to learn from the mistakes made and discover new opportunities for the future.

When to pivot? (excellent article)

The article "What to do when the business has stagnated? When to pivot?" by Javier Megías focuses on the situation of an entrepreneur who has created his business and has reached a point where he is stuck, unable to advance or grow any further. Megías presents the idea that, in these situations, it may be necessary to pivot in order to overcome the stagnation and find a new direction that allows the business to grow and succeed. The author explains the concept of pivoting, which is a process of taking a different direction from the original one, but maintaining certain aspects or assets of the business that can be useful in the new direction. Megías provides some examples of companies that have successfully pivoted, such as PayPal or Instagram, and explains how the decision to pivot can help companies get out of difficult situations and find new opportunities.

In addition, the article includes some advice for entrepreneurs who are considering pivoting, such as the need to make a realistic and honest assessment of the business, the importance of considering all possible options, and the need to have a clear and detailed strategy for the new approach. Megías also points out that pivoting is not always the best option and that in some cases, the problem can be solved with better execution or the addition of new resources. Overall, the article offers useful insights for entrepreneurs who are struggling with business stagnation and are considering a pivot to overcome it.

How does an entrepreneur know to pivot?

An entrepreneur may know to pivot if his or her product or business idea is not generating the expected response in the market.

Some signs that may indicate that pivoting is necessary are:

• Lack of traction: If the product or business idea is not generating the expected number of customers or revenue, this could indicate that there is a problem with the value proposition or business model.
• Negative customer feedback: If customers are not satisfied with the product or service, or if they are providing negative feedback, this could indicate that a change in strategy is needed.
• Market changes: If the market changes significantly and the company is no longer competitive, this could indicate that a change in the business model is needed to adapt to the new conditions.
• Financial difficulties: If the company is having difficulty raising finance or generating revenue, this could indicate that a change in strategy or business model is needed.

Once these signals have been identified, it is important for the entrepreneur to conduct a thorough assessment of their product or business idea to determine what adjustments are needed. This may include customer testing, market research and evaluation of the business model. Based on this assessment, the entrepreneur can decide whether pivoting is necessary and, if so, in which direction. In short, an entrepreneur may know to pivot if his or her product or business idea is not generating the expected response in the market. It is important to watch for signs that a change is needed and conduct a thorough assessment to determine the best strategy to follow.