4 Tips To Decide When To Pivot Your Business

People often ask me how hard is it to pivot a business.  Younger businesses are always easier to pivot than existing businesses.  Not only are larger businesses, well larger, they also have a legacy of existing revenue that will more than likely be cannibalized, reduced, or even eliminated.  An example of a recent pivot that was acquired is Twitch TV (formerly Justin.TV).  Amazon announced that it just purchased TwitchTV for $1 billion in cash.  TwitchTV had gone through many pivots.  This post from a couple of years ago does a nice job detailing all of their business incarnations.     

In startup or a restart of a business, you are basically trying to build a scalable business model that has longevity and defensibility.  On the path of finding your cadence in this new endeavor, you are constantly testing and iterating. There are a ton of great posts on indicators that are obvious when you need to pivot your business model.  I like Eric Ries post on the subject.   

Along the way to pivoting your business, you are going to go thru many different paths.  I have my own set of metrics that are indicators whether you need to pivot your business.  I call it the "Rodney Dangerfield Test” as a reference to the popular comedian’s stick for not getting respect.  Here are some indicators that your business doesn’t “get no respect” in terms of its future direction:  

1. You have to change your consumers mindset (or workflow) – anytime you have a product where your customers have to do something completely different in order to be successful is going to be either too expensive to launch/grow or will never be successful.  
2. No one wants to talk to you about it – this is the epitome of the Dangerfield principle, no one gives you respect.  Especially customers and partners, investors are a different beast, they say no to investment ideas for a living.  
3. No one likes your product – you can beat your head against the wall but if no one likes your product, then you need to try something else.  
4. Complex road to success – anytime you start out by saying to a prospect, you just need to believe that my widget is going to take off because of x,y,z happening that does not currently exist, it is too much of a risk on a confluence of long-term variables.  No triple-bank-shots, please.  

I have been involved in some pivots before like at AdXpose. Here’s a post on that.  I also sit on the Board for a travel company called Yapta which successfully moved from a consumer to a B2B business.  Although, pivots are a necessary part of growing or restarting a business, its hard to run through the Dangerfield assessment especially when you are in love with your business idea.  It can be a hard process but don’t be afraid of the ugly truth if your idea is not working.   Or as Dangerfield once said, “ “when I was born I was so ugly the doctor slapped my mother.”