# Pivot Types

## Purpose
Understand the different ways a startup can change direction while preserving validated learning, making pivots strategic rather than random.

## When to Use
- Validation experiments are failing despite tuning efforts
- Product-market fit remains elusive
- Need to decide between persevering and changing direction
- Want to explore alternative paths for a struggling idea
- Current strategy isn't working but underlying opportunity exists

## Process

### 1. Recognize When to Pivot

**Signs a pivot may be needed:**
- Metrics have plateaued despite multiple improvement attempts
- Customer feedback reveals you're solving the wrong problem
- Growth is powered only by unsustainable tactics
- Unit economics don't work (CAC > LTV)
- Team has lost conviction in current direction
- Competitors are winning despite your efforts

**Signs to persevere instead:**
- Metrics show consistent improvement
- Customer feedback is increasingly positive
- Clear hypotheses about what will improve results
- Product changes drive measurable improvements
- Team believes in the direction

### 2. The Ten Pivot Types

**1. Zoom-in Pivot**
A single feature becomes the entire product.
- **When:** One feature gets all the engagement; the rest is ignored
- **Example:** Flickr pivoted from a game (where photo sharing was one feature) to photo sharing platform
- **Signal:** Usage concentrated in one area; customers asking for more of that specific feature

**2. Zoom-out Pivot**
The entire product becomes a single feature of a larger product.
- **When:** Current product is too narrow to sustain a business
- **Example:** Adding marketplace features around a single-purpose tool
- **Signal:** Customers saying "I wish it also did X, Y, Z"

**3. Customer Segment Pivot**
Same product solves a real problem for a different customer.
- **When:** Product works but for different people than expected
- **Example:** Selling collaboration software to hospitals instead of offices
- **Signal:** Unexpected customer segments showing strong adoption; target segment not buying

**4. Customer Need Pivot**
Serving the same customers but solving a different problem.
- **When:** You understand the customer but not their most important problem
- **Example:** Realizing customers want scheduling help, not calendar features
- **Signal:** During conversations, customers keep bringing up different pain points

**5. Platform Pivot**
Changing from application to platform (or vice versa).
- **When:** Single application can't capture full value; or platform is too complex to start
- **Example:** Starting as a service, becoming a platform (AWS from Amazon's retail)
- **Signal:** Customers wanting to customize/extend; or struggling to get platform adoption

**6. Business Architecture Pivot**
Switching between high margin/low volume and low margin/high volume.
- **When:** Original model doesn't match market reality
- **Example:** Moving from enterprise sales ($100K deals) to self-serve SaaS ($100/month)
- **Signal:** Sales cycle too long; or self-serve users wanting more support

**7. Value Capture Pivot**
Changing how you monetize (business model change).
- **When:** Current pricing model doesn't align with value delivered
- **Example:** Moving from subscription to usage-based pricing
- **Signal:** Customers churning because they don't use enough; or heavy users feeling constrained

**8. Engine of Growth Pivot**
Changing how you acquire and retain customers.
- **When:** Current growth engine isn't working
- **Example:** Moving from viral growth to paid acquisition
- **Signal:** Viral coefficient below 1; or paid acquisition ROI positive

**9. Channel Pivot**
Changing how you reach customers.
- **When:** Current channel doesn't work for your customers
- **Example:** Moving from direct sales to partner distribution
- **Signal:** CAC too high through current channel; or customers expecting different buying experience

**10. Technology Pivot**
Achieving the same solution through different technology.
- **When:** New technology enables better delivery of same value
- **Example:** Rebuilding desktop software as cloud application
- **Signal:** Technology limitations blocking growth; or new tech creating opportunities

### 3. Choosing the Right Pivot

**Ask these diagnostic questions:**

**Do customers want what we're building?**
- No → Customer Need Pivot or Customer Segment Pivot
- Yes → Look at other issues

**Are we reaching the right customers?**
- No → Customer Segment Pivot or Channel Pivot
- Yes → Look at other issues

**Can we make money from this?**
- No → Value Capture Pivot or Business Architecture Pivot
- Yes → Look at other issues

**Can we grow this?**
- No → Engine of Growth Pivot or Channel Pivot
- Yes → Keep iterating

**Is our product scope right?**
- Too narrow → Zoom-out Pivot or Platform Pivot
- Too broad → Zoom-in Pivot

### 4. Executing the Pivot

**Before pivoting:**
1. Document what you've learned (preserve the learning)
2. Clarify what's changing and what's staying the same
3. Set new hypotheses to test
4. Get team alignment on the new direction

**During the pivot:**
1. Treat it as a new series of Build-Measure-Learn loops
2. Don't throw away everything—keep what's working
3. Move quickly—a pivot isn't a break, it's a change of direction
4. Re-validate core assumptions for the new direction

**After pivoting:**
1. Establish new baseline metrics
2. Set new success criteria
3. Communicate the change to stakeholders
4. Don't look back—commit to learning about the new direction

### 5. Common Mistakes

**Pivoting too early:** Not giving the current strategy enough time/iterations

**Pivoting too late:** Persevering despite clear evidence of failure

**Pseudo-pivot:** Changing randomly without clear hypothesis

**Forgetting the learning:** Throwing away insights from the previous direction

**Pivoting without team alignment:** Creates confusion and reduces commitment

### 6. Synthesis

When considering a pivot:
- What have we learned that's valuable regardless of direction?
- Which pivot type best preserves our learning?
- What's the hypothesis we're testing with the new direction?
- What would success look like in 90 days?
- What would make us pivot again (failure criteria)?

## Example

**Original Idea**: "B2B SaaS for enterprise meeting scheduling"

### The Journey

**Initial metrics (3 months in):**
- Target customers: Enterprise (1000+ employees)
- Sales cycle: 6+ months
- Pipeline: 3 deals, none closed
- Burn rate: $150K/month
- Runway: 8 months

### Pivot Analysis

**The symptoms:**
- Enterprise sales cycles too long for our runway
- Procurement process killing deals
- Product works but customers can't buy fast enough
- Individual employees love it; IT/purchasing blocks it

**Pivot options considered:**

1. **Business Architecture Pivot:** Enterprise → SMB
   - Shorter sales cycles
   - Self-serve possible
   - Lower contract values

2. **Channel Pivot:** Direct sales → Bottoms-up adoption
   - Let individuals use for free
   - Convert to team plans
   - Enterprise follows

3. **Customer Segment Pivot:** Enterprise → Startups/SMB
   - Faster decisions
   - Lower complexity
   - Growth potential if we scale with them

### Decision: Combination Pivot

**Business Architecture + Customer Segment:**
- Target: SMB companies (50-500 employees)
- Model: Self-serve SaaS ($29-99/user/month)
- Growth: Bottoms-up (free trial → team → company)

**What we preserved:**
- Core product (works well)
- Enterprise learnings (useful for future expansion)
- One enterprise pilot customer (case study)

**New hypotheses:**
- SMB decision-makers can buy in <30 days
- Self-serve onboarding will work
- Pricing at $49/user/month achieves positive unit economics

### Post-Pivot Metrics (3 months later)

- Target customers: SMB (50-500 employees)
- Sales cycle: <30 days (✓)
- Paying customers: 23 companies
- MRR: $18K
- CAC: $450
- LTV (projected): $2,700

**Insight:** The pivot preserved the core product value while changing the business architecture and customer segment. The technology and team capabilities were assets; the original go-to-market strategy was the liability.

**Next decision point:** If MRR reaches $50K in 6 months, expand team. If not, consider Engine of Growth pivot (current: paid acquisition → test: viral/referral).
