How To Pivot Your Startup Effectively –

By admin / October 15, 2019

How can you ensure a smooth pivot that is really worth it?

Startups frequently go through pivots. Even big established businesses have to. There may be many small tweaks and adjustments as you go.

There are also major pivots that completely change the DNA of your business. Like the once-popular camera company moving into cryptocurrency with KodakCoin.

Sometimes a pivot is just natural. You get started with the business and find your customers aren’t who you thought and are really digging just one part of your business. Other times you hit a wall and realize there is no future or growth on the path you are on. Whatever the case, how do you navigate the pivot?

Be Sure You Need To

You don’t want to have to go through this again. A hard pivot is scary for everyone involved. They might stick with you and believe in you the first time. The second or third time is going to seriously hurt your credibility.

Consider whether you really need to go through such a hard pivot. You can’t get derailed every time you hit a challenge. There will be plenty of them coming on any path you take. Don’t expect any of them to be easy.

Of course, there can be obvious exceptions where you’ve clearly hit an impermeable wall or major change in the market. Such was the case of Ben Sigelman who found his first startup was so good, that no one wanted to tell their friends about it. That was a major problem because that meant no organic growth in the future. He has since gone on to raise $70M to change the DNA of software development.

Test & Prove It Works

You may have a great new idea that sounds like a much better angle than what you have been working on, but do you know for sure?

Just because people say they want certain features or would buy this other version, isn’t the same as them actually taking the time to become a customer and pulling out their wallets to pay for it.

If you’re going to announce a pivot you had better know for sure that it is the right pivot and it is superior.

Before you make a big declaration about it, test and prove it. Create the product, get it in users’ hands, get feedback. Otherwise, it is just a gut feeling, like the first one you had.

Be Sure It Is A Profitable Pivot

The business of being in business is to make profits. Otherwise, you are just donating your time to a cause. That’s a good thing too, just don’t confuse the two.

Pivots can be popular. They can even bring in a lot more revenues in terms of topline dollars. They also need to be net profitable. Otherwise, they are going to be equally a big deal when they implode.

Consider giant real estate website Zillow. They were notoriously losing money on their old business model.

Recently they decided to switch gears and begin to buy and flip houses themselves instead of just being a lead generation site for other investors and Realtors. Within months this new pivot has been responsible for the bulk of the company’s revenues. Despite them having many other business lines and being in business for over a decade.

That sounds great until you find out this new pivot means they are losing around $200M a year on it. That’s better than losing billions every year, but still not a profitable business.

Be sure your pivot makes your business profitable.

Be Sure Your Investors Are On Board

If you’ve borrowed or raised money, be sure those partners are on board with your pivot. If you are completely changing lanes in business, you may need to offer to return their money. They are going to take a loss if you’ve spent some of it.

If you’ve followed the above, then you should be able to back up your pivot as a very smart move that will only help them. Hopefully, they’ll be willing to stay on board and trust you in your new path.

Again, be sure this is the right pivot, because they may not stick with you next time.

Consult Your Advisors

Before you do anything, consult your advisors and get their feedback. They can help you make a far smoother pivot.

Your fundraising advisor and M&A broker can help you understand the impact of your pivot on upcoming and future rounds and potential acquisitions or your most likely exit.

Rebrand If You Need To

A major pivot may also warrant a major rebrand. If the name and other brand assets just don’t fit anymore, change them. It can feel like you are starting from scratch again, but you might be surprised to really find your sweet spot in the market. That may include business name, product names, logos, colors, web domain names and social handles.

Hire The Right Help

Going through a pivot in your startup business means that you may not need some of the team members you did last month. You may need new talent to help you excel and win in this new angle. Laying off team members is usually as painful to a founder. It can be one of the hardest things you have to do. Especially for early team members who made sacrifices to join your mission. However, you have to make these tough decisions if this new pivot will work. Delaying the inevitable isn’t going to help anyone. The faster and more decisive the better.


Choosing to pivot can be one of the best things your startup can do. If the future isn’t bright and what you are doing just isn’t working, then pivoting can help you achieve your vision, even if the tactics you deploy change a lot. Not all pivots are easy. Use this guide to help make the best of it.


Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs.

Most recently, Alejandro built and exited CoFoundersLab which is one of the largest communities of founders online.

Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding where he was involved in one of the biggest investment arbitration cases in history ($113 billion at stake).

Alejandro is an active speaker and has given guest lectures at the Wharton School of Business, Columbia Business School, and at NYU Stern School of Business.

Alejandro has been involved with the JOBS Act since inception and was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online.


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