Do you know the types of pivots that exist? Startups often pivot until they achieve their own successful business model. Here we explain what pivoting is according to the Lean Startup method.
What is a pivot?
Pivoting is a change of direction in your project when you realise that the initial hypothesis no longer works. This can happen when we make a particular product and believe it will be useful for the customer, but once launched, this proposal proves to be unsuccessful.
According to Eric Ries, author of Lean Startup, a pivot is:
“A structured course correction designed to test a fundamental new hypothesis about product, strategy and growth engine.”
Therefore, once we have identified that there is a failure, we must decide whether we want to pivot or continue with the original idea. It is important to gather enough information and data to enable us to make this decision judiciously, as well as to take into account the specific phase we are in.
It is key that we are consistent with what a pivot implies, as we can fall into an excess of pivots or fail to identify when it is the right moment to execute it.
Once the definition has been established, the lean startup methodology itself establishes ten different types of pivoting, which respond to the different needs that a startup may have.
Tipos de pivotes
Zoom-in
This type of pivot occurs when a single utility becomes the main product. This helps organisations to target the MVP more quickly.
Zoom-out
This would be the opposite of zoom-in, whereby the initial product becomes one of the characteristics of the new product that is developed, becoming more complex and complete.
Customer segment
When developing a product, we define a customer, who in principle would be the ideal consumer. However, it is sometimes the case that end buyers do not match this profile, so it will be necessary to redefine it and adjust it to the needs of this new segment.
Client’s need
In this case, the profile of our ideal customer would be correct, but his or her needs have not been correctly identified or the consumer is not willing to pay to solve that problem. It is therefore important to re-analyse existing needs and generate a tailored product, for which the customer is willing to pay.
Platform
This could be the shift from an application to a digital platform, or vice versa, as this is often a very relevant aspect for software and Internet companies.
Business architecture
It is usually a change of business model, from B2B to B2C, or vice versa. In this case, it moves from a model with low sales and high margin to one with much higher volume but lower profit margins.
Catch value
This pivot is based on monetisation, thus changing the way the company captures value. An example could be when a company gives certain features for free, and over time asks customers for a fee to unlock new ones.
Engine of growth
Here we find the three growth engines: viral (customers themselves promote our product), sticky (based on retaining existing customers) and paid growth engine (in this case we pay to attract potential consumers through advertising).
Channel
It is about changing the delivery channel of our product to one that is more effective. Typically, this pivot is accompanied by an adjustment in price or product positioning. It could be that we decide to sell directly to the consumer, eliminating intermediaries during the sales process.
Technology
In this case, the change would focus on the type of technology we use to deliver our product, so that it is more efficient and gives us a better competitive position.
