Startup you’ve experienced pivot? This action is a drastic change for a company, therefore it needs to be considered carefully.
To do as a pivot in business, companies must be able to choose the time, the industry’s competitive climate, consumer preferences, and various things that can boost profits. In this article, Ideanation will discuss thoroughly about pivots. Let’s see!
Definition of Pivot
In a business there is something called a pivot. Pivot is a change in strategy that is carried out when the company is underdeveloped and it is feared that it will not survive for a long time. Until the pivot The aim is to make the business profitable again.
When a startup pivots, in general, an entrepreneur will seem to start his business from scratch because there are quite a few things that have been changed. This change is of course carried out by taking into account changes in the industry, market competition, and consumer preferences.
In some industry sectors, the startup pivot is a change that is not always drastic. Sometimes, the aspects that are changed are only related to the platform, application features, technology, or target market. Of course, this is done after receiving feedback from consumers or on expert advice in their field.
When Should a Startup Take a Pivot?
Pivoting can indeed be a startup savior from bankruptcy. But, when is the right time to do it? There is no definite answer to this question yet. But as an illustration, pivot can be done if the startup experiences the following conditions.
- The company’s financial situation is deteriorating.
- The product is not well received in the market.
- Performance is always below competitors.
- There are internal problems in the company.
- Want to try something new to make the company more developed.
When the company has experienced several things as mentioned above, then pivot can be an option to do.
Types of Pivot Strategies in the Startup
Market Segment Pivot
in business is carried out when it turns out that the target consumer is wrong. Make changes by targeting new market segments.
Customer Problem Pivot
One type of business pivot is a strategy to change the function of a product. This change was made to suit the tastes of consumers in the same segment.
Product Feature Pivot
You can also change the features of a product to suit consumer needs. Thus, what the company produces can be a solution to the problems of its users.
Revenue Model Pivot
Rearrangement of the price of a product in order to increase profits. Usually, this step is carried out by companies that provide subscriptions or licenses for their products.
Changes in technology to make it easier to use and able to solve consumer problems.
Product vs Service Pivot
Pivot in business can also be done by providing support services as product support. So, consumers will find it helpful if they find difficulties in using your service.
Sales Channel Pivot
Efforts to maximize sales by finding the right distribution steps, for example through e-commerce or business partners.
Tips for Pivot In Startup
Choose the right market segmentation
There are several reasons why a product may not sell well. Apart from the fact that the product does not match the customer’s wishes, it could also be that the product is being sold to the wrong market. If there is an error in the selection of market segmentation, there is no need to change the product. However, it remains only to find out the right customer segment to sell the product.
Create a product that is better than competitors
No matter how good the service for customers is owned by the company, but if the product is not good, it will definitely make them disappointed. That is why in the pivoting , a deep understanding of the products it has is very necessary. If the product has poor quality, then the pivoting will not run as desired.
Find a way out of the problems that are being faced.
Before starting to pivot in a startup course, you must know what the biggest problems are being faced by the company. For example, the main problem faced is a product that does not meet customer needs. So, spend more time doing research about what they want. You must understand that customer needs will not always be the same. So, regular research needs to be done so that they can always understand what they want. When you can always know what kind of product the consumer wants, surely the pivoting can be successful and bring benefits to the company.
- Always Involve Investors