🚀 How to pivot with purpose

3 tactics to pivot with purpose

🕹️ Systematically change one or more of these 4 core levers

• Problem – Prioritize urgent, high-pain problems for a target persona 

  • If the current issue is a “nice-to-have,” explore related problems or rethink the problem or persona entirely.

  • Example: Lattice stayed focused on people leaders, but went from building a solution for OKRs to solving performance management

• Persona – Re-evaluate who benefits most and experiences the problem most acutely 

  • The persona can be the buyer (CTO or CRO), the company type (e.g. Fortune 10,000 financial services) or both

  • Narrow or broaden or abandon the target persona entirely

  • Example: Plaid stopped selling to consumers and pivoted to serve fintechs who needed their integrations

• Promise – Refine the positioning and value proposition to address the need

  • This is how the benefit is communicated (not the product), and is the most overlooked pivot lever

  • Example: Ironclad shifted from “AI legal assistant” to “contract lifecycle management,” aligning with an existing category and clearer value

• Product – Change the product to better fulfill the promise

  • Validate if the solution and business model deliver value in a way users want and will pay for

  • Example: Alma pivoted from physical therapist offices to digital tools supporting private practices during the pandemic

✍🏻 Validate the learning

• List key assumptions driving the pivot (example from Airbnb: there will be strong interest that increases over time from homeowners willing to let strangers stay in their home instead of a hotel) and rank them by criticality and uncertainty

• Design targeted experiments to test those assumptions (e.g. reach out to ~10 homeowners/day to determine interest)

• Define key metrics based on current benchmarks to measure progress and success (e.g # of signups/listings over a fixed time period)

🤝 Get the team aligned

• Communicate the pivot clearly and decisively; announce the new direction as a firm, top-down decision when consensus isn’t possible

• Rally the team with a clear call to action (e.g. Team, this is the bet we’re making. Let’s go.)

• Identify knowledge gaps—replace team and bring in other specialists to provide fresh perspectives and skill sets (e.g. you can’t tell a soil scientist to pivot away from soil—they’ll get clinically depressed)

• Recognize that the skills needed to scale from 1 to 10 may differ from those required to pivot

2 traps to avoid

🚨Pivoting for the wrong reasons

• Jumping on trends, copying competitors, or pivoting out of boredom = lazy pivots

• Lazy pivots rarely work because they are not based on anything material

• Pivots should come from clear customer insight and data, not gut feels or headlines

🚨Pivoting when a full restart is needed

• Pivoting with misaligned co-founders or investors leads to messy cap tables and internal resistance

• If the new direction changes the mission, the team, or investor support, it may make more sense to shut down and restart 

• A clean restart resets equity, realigns belief, and attracts the right people for the next chapter

1 tool to leverage

📖 Best practice on when to pivot

• Ideation pivots (changing ideas before a fully formed product or meaningful traction) generally happens within 3 months of launch

• Hard pivots (changing direction with a live product and real users) generally happens around the 1 year mark and within 2 years after launch

• Leverage tools like Mixpanel to detect persistent lukewarm interest from users—a signal to consider pivoting

Bonus: 1 trend to spark startup ideas

📈 Wholesale is a $11.6T market, mostly running on manual workflows

• AI is perfectly suited to automate repetitive workflows like sourcing, invoice matching, inventory, and order fulfillment

• Firms with fewer than 1,000 employees make up less than 40% of all revenues but more than 50% of payroll costs

• High-growth opportunities:

  • Automating antiquated and legacy workflows for wholesalers to improve labor efficiency and reduce operating costs 

  • Acquiring low-tech wholesalers and injecting AI to grow topline and reduce overhead

  • Building a best-in-class wholesaler by leveraging modern marketplaces infrastructure (e.g. Amazon, eBay, Ghost, Whatnot, Poshmark), workflow tools, and analytics platforms