By Joanne Wilson (Blogger & Angel Investor, Gotham Gal) Women 2.0 has been compiling questions for a book project called 101 Questions About Launching Your Company. Of course all the answers are by female investors, founders and CEOs. Love that!
Here is the question that I chose to answer: How often and when should we pivot?
One of the definitions of pivot is: A person or thing on which something depends or turns; the central or crucial factor.
Pivot is a word frequently used in the startup world. Companies pivot but another word to use here is evolve. One of the definition of evolve is: to develop or achieve gradually.
Let's say an entrepreneur raises money around an idea. The idea forms, the company is built and all of a sudden there is a realization that the concept is not getting any traction, that revenue is impossible to capture, the company is just not cutting it and the runway of cash is getting shorter by the day. After much conversation between the company and the investors there is a realization that if they pivot, in essence change the entire direction of the company, that there is a better outcome for success. That is a pivot. The original idea is no longer there but perhaps parts of it still are or perhaps none of it is.
Most companies evolve. Success does not happen over night. It takes years and keep that in mind. The few companies that just hit the high notes out of the box are few and far between. As products start to get traction and the business becomes real as companies start to understand where their focus needs to be. How the business needs to evolve in order to succeed. Maybe a new product is part of the evolution of the business or a new direction to capture customers and eyeballs.
Sometimes companies never need to pivot. You would hope that they don't need to pivot but as an investor you invest in the entrepreneur first. A good entrepreneur will know if something isn't working and will not stop at anything that is less than success. They will know that the original plan must change.
What you really hope for is a solid evolution of the business. So the answer is, you hope you have never to pivot but if you do, pivot quickly and make sure you are pivoting in the right direction because you don't get alot of chances to pivot your business model. It costs money to pivot your business. If you have a solid business, you get plenty of time to evolve.
This post was originally posted at Gotham Gal.
Photo credit: Zlatko Unger on Flickr About the guest blogger: Joanne Wilson is an advisor and investor in startups, including Curbed (Eater/Racked), Food52, Red Stamp, Catchafire, DailyWorth, Editd, Ricks Picks, Cacao Pietro, Editions 01, Hot Bread Kitchen, Nest.io, Gotham Gym, The Moon Group and MOUSE. Her most successful venture is being married to her best friend Fred and raising her three kids, Jessica, Emily and Josh. Joanne blogs under the name Gotham Gal. Follow her on Twitter at @thegothamgal.