To Pivot or Not to Pivot? | National Crowdfunding & Fintech Association of Canada

Mercury | Jun 23, 2023

Image: Unsplash/Peggy Sue Zinn

A successful pivot is more than a simple course correction—it is a profound transformation that requires careful consideration, resolute decision-making, and the ability to adapt to new circumstances while staying true to the company’s mission and values.

• How do you know when it’s time to pivot?
  • Recognizing the time to pivot typically involves identifying a problem with interest, adoption, or sales, and evaluating product-market fit.
    • Successful pivots often involve focusing on features that work, like Max’s previous company did with instant messaging, or aligning business goals with market needs, as Hillary did with her healthcare startup, Curio.
    • Immad, co-founder of Hayzap, warns against sticking with the initial plan for too long, advocating for adaptability and taking advantage of market trends.

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• How to manage your team during a pivot?
  • Transparency and honesty during a pivot can inspire confidence within the team. Immad suggests letting the team in on the challenges and the plan to overcome them, as an authentic approach will generate more support than trying to conceal the issues.
  • Assessing the resources available, including capital, team skills, and learnings from past experiments, is crucial after deciding to pivot.
    • As Max points out, understanding what you have and how it can help you towards the new direction is essential.
    • Hillary also emphasizes the importance of keeping the team lean and motivated, which requires a compelling reason and narrative for the pivot.
• Communicating with your investors
  • Startups should practice honesty and authenticity with their investors, particularly when planning a pivot. A transparent approach, rather than only presenting a positive picture, fosters trust and prevents sudden surprises.
  • Open communication with investors isn’t just about maintaining their trust; it’s also a chance to gain support during a pivot. Leveraging their experience and inviting them to collaborate can yield valuable insights and aid in planning future outcomes.

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• Should you pivot to a new hype cycle or stay the course?
  • Startups should be mindful when considering jumping on hype cycles such as AI, focusing on the utility and alignment of the new technology with their mission rather than merely following trends. Incorporating such technology should provide value to their business and customers.
  • Capitalizing on hype cycles can be strategic, as it may attract more interest from investors and customers. It can also expedite product testing and iteration due to increased attention. However, founders should have a unique insight into the technology and be prepared to commit to it long-term, even after the hype subsides.

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