RST Software
Editorial Team
Ross Krawczyk
Reviewed by a tech expert

Effective business pivoting 101: when, why, and how

Read this articles in:

Imagine for a moment you’re a basketball player pushing the ball up the court. Your team’s offensive play is picking up pace but the defense isn’t slacking either. In fact, it’s getting increasingly tight and you suddenly end up in a tough spot with the ball stopped and in your hands. You have to quickly figure out what to do next while you can’t dribble any more. This is the time to pull out the pivot – a maneuver designed to help you get out of a difficult situation by allowing you to probe, create space between you and the defender, or set up shooting and passing opportunities. You are the player, the ball is your startup, the defender pressuring you is all the factors impacting your growth. The situation may be dire but by no means lost. Understanding how to perform effective business pivoting can lead you to score and that’s what we’re talking about today.

In the ever-shifting business environment, the ability to adapt and evolve is paramount for success. One concept that has gained significant prominence in recent years is business pivoting.

What is “pivoting” in business

Pivoting in business (the term borrowed from basketball) refers to a strategic move wherein a company switches its focus or direction to respond to market changes, customer demands, or unforeseen challenges.

The idea of pivoting is about recognizing that the initial business model, product, or strategy might not be yielding the desired results. Rather than stubbornly sticking to the original plan, performing a successful pivot allows companies to adjust their course while building on their existing strengths.

Pivoting encourages flexibility and fosters a culture of innovation, positioning businesses to seize new opportunities and tackle emerging threats proactively. Initiating a pivot doesn't imply failure but rather a better understanding of the business environment and your position within it.

There are several types of pivots you can do, including:

  • Product pivot: Which involves changing the features, functionality, or target audience of an existing product to better meet market demands.
  • Market pivot: Which takes an existing product and starts targeting it at a new customer segment or industry.
  • Technology pivot: Where a company adapts its core technology or expertise to address a different problem or industry.
  • Business model pivot: Which entails a fundamental change in how a company generates revenue, such as shifting from a subscription-based model to a freemium one, for instance.
  • Geographic pivot: Where a company is expanding or contracting its geographic scope of operations to explore new markets or consolidate existing ones.

How to know if you should pivot your startup

Visionary entrepreneurs are somewhat of modern-day inventors, whose journey of building a startup is both thrilling and challenging. However, one of the most critical decisions you may face as one is determining when to pivot your startup. Let's go ahead and explore the signs that indicate it's time to make a move and throw in some practical tips to navigate this defining moment in your entrepreneurial journey.

Sign #1: You confuse traction with politeness

The initial step in contemplating a pivot involves distinguishing between the true traction and mere courtesy from a few potential customers. A handful of positive reactions shouldn't be hastily interpreted as a strong market fit. If there's genuine enthusiasm, you won’t be google’ing how to pivot.

To help you assess the state of your digital product, here are critical software metrics you should measure.

Sign #2: You avoid admitting failure

The fear of admitting weakness or defeat can be a significant obstacle in making any kind of decisions, including about pivoting your business. However, acknowledging when an idea is not working is crucial for entrepreneurial growth. You should embrace the possibility of change and view pivoting as a strategic move to maximize your chances of success.

Sign #3: You start blaming external factors

Blaming customers or investors for the lack of success is a common pitfall. Instead of externalizing the reasons for failure, introspect and take accountability for the startup's performance. Self-awareness is vital in making a well-informed decision about pivoting.

Sign #4: You ignore hard data

While success stories of persistence and eventual breakthroughs are inspiring, they shouldn't be the sole basis for your decision-making. Rely on statistical evidence, early market feedback, and founder-market fit to assess the viability of your idea.

Sign #5: You start falling a victim of insignificant traction

Beware of entering a weird territory where having just a little traction can in fact be more detrimental than having none at all. A slight glimmer of success may tempt founders to hold on to an idea that lacks genuine market fit, wasting precious time and resources. Embrace the freedom to pivot early and explore new opportunities without regrets.

Startup pivot strategy and process

Startup world is moving at a break-neck speed. Operating within, it's pretty much impossible to avoid change. When you're facing challenges and shifting market demands, the decision to pivot can make or break your venture. Whether you're a seasoned founder or a rookie visionary, the idea of switching lanes may arise anytime, so let's evaluate a potential pivot strategy that will provide you with actionable steps that can put you on the road to success.

Step 1: Recognize the need for pivoting

The first step in the startup pivot process is recognizing the need for change. As previously mentioned, founders must distinguish between genuine traction and politeness from customers. If growth is stagnating, or early market feedback is lackluster, it's time to critically assess the viability of the current idea. Avoid the trap of projecting blame externally and be open to the possibility of pivoting towards better opportunities.

Step 2: Assess your founder-market fit

founder-market fit is a key aspect to consider when pivoting. Evaluate whether your team possesses the necessary expertise and passion for the new idea to succeed. Becoming extremely self-aware in identifying your strengths and weaknesses as a founder is crucial. Leverage your expertise to pivot into a domain where you have a competitive advantage, enhancing your chances of success.

Step 3: Choose a solid business idea

Ideas with legitimate potential are essential for a successful pivot. Employ the quality score criteria to evaluate each potential idea objectively. Consider the size of the market, the ease of getting started, and the early market feedback. Opt for ideas that excite you, inspire optimism, and align with your long-term vision.

Step 4: Welcome the idea of pivoting

Founders often find themselves lost in a misleading product-market fit, holding onto a slightly successful idea that lacks true potential. Drop that and give yourself the freedom to pivot early on. Learn from failures and iterate rapidly towards a better solution.

Step 5: Employ iterative pivoting

Iterative pivoting can be counterproductive if not done thoughtfully. Avoid constantly switching up without a clear direction, as it may lead to founder burnout and hinder progress. Strike a balance between persistence and adaptability, using each pivot as a learning opportunity.

Step 6: Scale wisely

Scaling your team while in the process of pivoting can be challenging. It's best to add team members only after achieving product-market fit and gaining confidence in the new direction. A focused and agile team can navigate the pivot more effectively.

Step 7: Align with venture scale

Consider the venture scale potential of your new idea. Venture capital funding may not be suitable for every business, so choose an idea that aligns with your growth and funding objectives. Ensure that your new direction has the potential to generate substantial revenue and attract investors.

What is a venture scale startup?

A venture-scale startup refers to a startup company that has the potential for significant growth and scalability, often aiming to address large markets and achieve exponential revenue growth. These startups are typically characterized by:

  1. Large addressable market: They target a large and growing market, which means there's a significant opportunity for revenue and customer growth.
  2. Monopolistic end-game: For venture capitalists, vast markets hold little allure unless there's potential for significant profits. They favor scenarios where one player dominates. Companies like Uber, Facebook, and YouTube can sustain losses for extended periods, knowing that market supremacy eventually grants them unparalleled pricing leverage.
  3. Scalability: Their business model allows them to grow rapidly without a linear increase in costs. This often involves leveraging technology to serve an increasing number of customers without a proportional increase in overhead.
  4. High growth potential: They aim for rapid growth in terms of revenue, customer base, and market share, often at the expense of short-term profitability.
  5. Investment ready: Due to their high growth potential, venture-scale startups are attractive to venture capitalists (VCs) and other institutional investors. These startups typically seek external funding to fuel their rapid expansion.
  6. Exit strategy: Venture-scale startups typically have a clear exit strategy in mind, whether it's an acquisition by a larger company or an initial public offering (IPO).

How to pivot effectively

Understanding how to pivot successfully is crucial for startups and companies seeking to make a change in order to sustain growth. Admitting one's shortcomings and adapting to market demands shouldn't be viewed as unpleasant but rather as an opportunity to expand horizons. Let's have a look now at the key areas you should pay attention to when attempting a successful pivot.

Step 1: Recognize the signs

The first step in pivoting effectively is recognizing when your current idea is not gaining momentum. Pay attention to market feedback, user engagement, and growth metrics. If you end up with only a somewhat successful idea that lacks real potential, consider this a crucial moment to evaluate the need for change.

Step 2: Conduct a candid evaluation

Before diving into a pivot, conduct a candid evaluation of your founder-market fit. Make sure your team's skills and interests match the new direction. Determine if your expertise and domain knowledge align with where you're trying to pivot to. Founder-market fit is crucial for navigating the challenges that come with a new idea.

Step 3: Fear not pivoting

Taking advantage of an early pivot can be a game-changer for your startup. Avoid being overly attached to a failing idea and be willing to iterate and experiment. Multiple shots at the goal can increase the likelihood of finding a breakthrough concept that resonates with your target audience.

Step 4: Iterate carefully

While pivoting allows for new opportunities, it's essential to iterate with care. Avoid hasty decisions based on momentary setbacks. Seek actionable feedback from customers, analyze data, and make informed decisions.

Step 5: Leverage your team’s expertise

Pivoting effectively requires a cohesive and agile team. Prioritize communication and collaboration within your group to foster a supportive environment. Adjust scaling of your team to the pivot's progress and the need for additional expertise.

Successful business and startup pivot examples

Over time, there have been many successful business pivots made, highlighting the fact how viable this growth strategy can be. Here are some real-life examples of startups and companies that pivoted, effectively navigating this transformative process.


Brex, a financial services startup, was originally conceived as a VR hardware headset for work. However, the founders quickly realized the lack of founder-market fit and the challenges in getting started with such a product. They made a decisive pivot during their time at Y Combinator to create a credit card for startups. This pivot aligned perfectly with their expertise in FinTech and their understanding of the target audience. The product gained traction rapidly, leading to tremendous success.

Brex's pivot exemplifies the power of recognizing early signs of a flawed idea and swiftly adapting to a more promising opportunity.


Retool, a SaaS company, went through a series of pivots before achieving success. Initially, they aimed to create a classroom feedback tool for students, but it did not gain significant traction. The founders exhibited resilience and continued iterating until they landed on their winning idea – a no-code internal tools builder. The key to their pivot's success was founder-market fit. They leveraged their expertise in analytics to build a product that resonated with their target audience.

Retool's journey underscores the importance of tenacity and continuous improvement in the pivot process.


Magic began as a blood pressure app, but it struggled to gain momentum despite early market feedback. Recognizing the need for change, the founders built several prototypes, including a simple product on GitHub. Surprisingly, this prototype went viral and received overwhelming market feedback, leading them to pivot to a chatbot platform.

Magic's pivot demonstrates the value of being open to unexpected opportunities and listening to the market's demands.


Segment's pivot journey is a testament to the power of community-driven product decisions. Initially, they were working on a classroom feedback tool, but they soon realized its limited potential. Instead of completely giving up on their idea, they open-sourced the product. To their surprise, the market expressed immense interest, urging them to pivot to their current data collection tool.

Segment's pivot exemplifies the importance of active market engagement and leveraging community feedback to refine and redefine the product.


Groupon is a well-known example of a successful pivot in the business world. Originally, Groupon was a platform called “The Point”, focused on collective action for social causes. However, they noticed that one of their side deals, a coupon for a pizza shop, gained significant traction. Recognizing the opportunity, they pivoted to a deal-of-the-day model, becoming Groupon.

The pivot propelled Groupon to become a multi-billion dollar company, highlighting the power of data-driven insights and seizing unexpected opportunities.

How RST Software can help you pivot your business

A well-performed pivot is a great move to have in your arsenal, which has the potential to significantly improve your situation should you find yourself in a tough position.

It allows you to reassess and rearrange the play, providing you with the opportunity to come up on top in the end. And even if you pivot yourself into a better shot opportunity and still miss, there’s a chance for an offensive rebound, adjustment, and another attempt to score, so it’s not something you should refrain from at all cost. Your efficiency stays at .000% if you don’t take any shots.

An effective business pivot is a powerful maneuver that allows companies to successfully navigate the dynamic business landscape. Whether driven by market changes, customer needs, or technological advancements, a well-timed pivot can rejuvenate an organization, offering a range of new opportunities. Embracing change and being agile in decision-making are the hallmarks of companies that not only survive but thrive in today's marketplace.

At RST Software, we boast extensive experience in a variety of market niches, designing and developing digital products that perform. We offer both selective and comprehensive business assistance, from product workshops to MVP development services, to help you make the switch once you decide to go for it.

Contact us and tell us about where you currently are and the new direction you’d like to head into. Together we’ll figure out how to effectively pivot your business and make the most of the new opportunities that come with the move.

People also ask

No items found.
Want more posts from the author?
Read more

Want to read more?

CEO Corner

Top Business Intelligence tools - free 2024 comparison

Explore the best free business intelligence tools for 2024. Compare features and functionalities to make informed choices.
CEO Corner

How to pick a data analytics consultancy? Practical tips

Unlock practical tips for selecting the right data analytics consultancy. Make informed decisions to drive data-driven success.
CEO Corner

The data stack you’ll need to build a versatile modern data platform in 2024

Discover the essential components of the modern data stack for building a robust data platform in 2024. Stay ahead in data management.
No results found.
There are no results with this criteria. Try changing your search.