How Startups Pivot Gracefully

Have you pivoted lately? If not, you should probably be thinking about it. Yes, a proactive pivot. Why? Because you’ve heard that old phrase: In startup, if you’re not growing, you’re dying. A lesser known but more actionable phrase is: If you’re not changing, you’re not growing.

A pivot is when a business changes their overarching strategy quickly and dramatically. Traditionally, a pivot is seen as a cause for concern, maybe a last-gasp hack at reinventing a lagging business as its runway contracts.

The desperation pivot happens, of course, and when it does, it gets headlines. But the pivot-or-die scenario is relatively rare in the startup world, especially when you consider the vast number of proactive strategy changes that happen in any successful startup lifecycle.

Here’s a rundown of the most beneficial proactive pivots I’ve been through as a founder, as executive management, and as an advisor over the last 20 years. I’ll start with the big, rare ones and follow through to the smaller, more frequent ones that every startup should be thinking about.

To set the tone for positive proactive pivots, let’s start with what should be the final pivot in any startup lifecycle, the one that actually takes the startup out of startup.

At my current startup, Spiffy, we just closed a $10 million fundraise to make sharp, but not sudden, changes to our market strategy.

We started out as a mobile car wash company, with a secret sauce of an app and backend that allowed us to maximize all the things our customers wanted without straining our margins or our workforce. We had challenges, of course — travel logistics, scheduling gaps, margins on low-end services, and a bunch more.

Like any good startup, we started looking for ways to turn those challenges into opportunities. Long story short, we found most of our answers in our small-but-quickly-growing fleet business. With some research and experimentation, we realized that there were even more opportunities in fleet management — massive opportunities we hadn’t even thought about but were not far from being able to exploit.

But we didn’t want to abandon our current business, which we still wholeheartedly believe in. So, we set out to pivot to a model that included both retail and fleet business, and we raised the money to make it happen.

I had done the same thing at Automated Insights, my previous startup. When we went to raise our Series B, we spent long hours trying to decide if we should be an automated sports content company or a full-service natural language generation (NLG) company. In the former world, we were already stars, the latter was something no one had heard of yet. We raised as an NLG company, which was not an easy sell, but we exited three years later. We never could have done that as a sports company.

Now, not everyone is in the position to go out and raise seven or eight figures. But there are a number of other ways to proactively pivot which don’t require a massive influx of funding.

Sometimes, as we approach the growth stage, the opportunity to pivot finds us, and the proactive move is to recognize the pivot and then suck up the courage to execute it.

At the same time I was getting Automated Insights off the ground, I had just gotten ExitEvent underway. All ExitEvent was at its beginning was a web-app and a networking event for entrepreneurs. It was a give-back operation, much like these posts.

I was also winding down Intrepid Media, an even older startup that had been very successful as the first social network for writers, but had hit a ceiling. It wasn’t a failure, I never raised money and always kept it on the side, but it was nagging at me that Intrepid was a really great idea that I didn’t give enough execution to.

So it hit me: Take the best parts on Intrepid, a combination of a content play and a services marketplace, and bring that to ExitEvent. I did exactly that, even lifted the entire codebase. In three weeks ExitEvent went from an email list to a full-on SaaS for startups.

I hit oil. Suddenly ExitEvent went from a regional, ad-based operation to a borderless product. People were trying to throw money at me for services that weren’t even fully realized yet. So I put all my effort — as little as it was since I was already waist-deep in building Automated — into changing everything about ExitEvent to meet the demands of the oil strike. Two years later I sold ExitEvent.

While those two proactive pivots are once-or-twice in a lifecycle type opportunities, there are several pivots that can and should happen more frequently and with a lot less fanfare.

One of the companies I’m advising is approaching their product evolution pivot point now. Led by a second-time founder, they’ve been around for about a year and have another year of runway. They owe that runway to the revenue generated by their SaaS product successfully running as a pilot with several customers in their target market.

But they’re not letting success stop them. They want to be a billion-dollar business. So while they run their pilot, they’re planning to evolve into what they will eventually become, looking for where to place their bets on their next story.

To create options for those bets, they’ve put together a small, part-time team. It isn’t a skunkworks, where top secret experiments are carried out in dark backrooms, but it isn’t a frontline initiative either. They’re already a product-focused company, so they already have a team that takes data generated by the pilot to figure out how to build on the company’s current story, the one generating the revenue.

From that team, they carved off a pivot team, one that looks at the same data but with a longer-term focus — not where the product needs to be in the next release or the next quarter, but in the next three years, when the company has 10x the customers, 10x the employees, and 10x the revenue.

This team works backwards from the future while their traditional product team works forwards towards the future. At some point, the teams will meet. Then they complete the pivot.

A proactive pivot can happen without a company assembling a team or spending a lot of time and money. But like with any change of direction, it’s always better to know where you’re going first.

At every startup I’ve ever founded or worked at, we’ve taken a page from innovation-leaning companies like Amazon and Google and launched experimental or MVP versions of products and services that don’t fit within our standard offering.

This kind of pivot is tough for an entrepreneur to wrap their brain around, especially a product or tech-focused entrepreneur, because we’re not looking for success or failure with these MVPs, although we’re always looking for success. But with these experimental projects, we’re just looking to learn.

Back with Automated Insights, we were creating fantasy football recaps for both Yahoo and when NFL asked us to partner on an advanced-stats helper app for fantasy football called Scout. Automated wasn’t in the app business, we weren’t in the predictive business, we didn’t even have a B2C infrastructure to sell the app. So we hacked the infrastructure together, focused on the core product, and launched very small.

We never expected to take the fantasy world by storm, and the app did OK for the small customer base who used it. In the end, we learned a lot of about who we wanted to be and who we didn’t want to be, and it helped codify our strategy to pivot away from sports and into personalized automated content.

Again, we don’t have to launch an app or partner with a big customer. I’d say Spiffy launches one of these experimental programs every couple of weeks, either in our services offerings, with our technology, or even in an area unrelated to everything we do today. Some of them change our strategy, some become part of our strategy, others go away quietly, but we learn from every single one, and in that sense, none of them are failures.

Any of these pivots can lead to small or large changes in strategy that will allow us to grow in leaps and bounds instead of incremental steps. Furthermore, the more we practice proactive pivoting early in our lifecycle with small strategic shifts, the better position we’ll be in when we need to make one of those company-altering pivots down the road, whether it’s to ward off failure or to accelerate towards massive success.

I’m a multi-exit, multi-failure entrepreneur. Sold ExitEvent. Building & GetSpiffy. Former Automated Insights. More info at

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