Beware the pivot: Why switching focus could kill your startup

The following is an edited excerpt from Rand Fishkin’s Lost and Founder: A Painfully Honest Field Guide to the Startup World. The excerpt was provided by Portfolio. You can buy a copy of the book here.

There’s an idea floating in the mythos of Silicon Valley’s hallowed halls that the “pivot” is a fundamental right bestowed upon all startups, designed to help absolve the sins of your past incarnation and allow you, too, to go from Tote to Pinterest, Odeo to Twitter, or Glitch to Slack. If the decisions upon which you founded your business prove foolhardy, never fear, the pivot will save you! It’s more important to get started than to spend months evaluating and choosing a wiser path. The path can never be known! The path must be discovered by trying and failing and… you guessed it, pivoting.

Bollocks.

In the annals of startup history, there are tens of thousands of companies that achieved remarkable success – hundreds of millions or billions of dollars in returns, a lasting impact on their ecosystems or industries, delighted customers and users, and a financially well-compensated founding team that now spends their days swimming in a pit full of gold coins (side note: everything I know about the lifestyles of the wealthy comes from Scrooge McDuck).

But among all those successful companies, how many great “pivots” were there? If we’re using the formal definition of migrating completely from one business idea to a radically different one, all my research could uncover only a few dozen. Slack, Flickr, Twitter, Pinterest, PayPal, Groupon, and Instagram aren’t just among the most famous, they’re among the only ones (at least of those that have achieved truly lofty, founders-now-have-a-gold-coin-filled-swimming-hole success).

This should come as no surprise. Pivots don’t happen on a whim. You change your business model, your product, your market, or your entire idea only if things are going very poorly indeed. Anything else would be foolhardy (if it ain’t broke, don’t pivot). It’s nasty, ugly, hard, grueling work building these things in the first place, and if you’ve achieved any progress whatsoever, you’re likely to stick with it, learn, and improve.

Given this reality, it might pay to be less cavalier and more analytical in your approach to choosing an industry, an idea, a product, and a target customer. It may also pay to choose a field others ignore because it’s perceived as unsexy, sketchy, or uninteresting by some other vanity-centric logic.

We love to praise execution, as if executing well on any dumb old idea would take us somewhere. Sure. Immense dedication, skill, and the hard work of great people can overcome most obstacles. But choosing wisely at the start—the field, the approach, the customer target, the economic model, and the marketing methodologies—has a massive impact on the difficulties you’ll face and how forgiving the journey will be. Not everyone can afford the costs of starting over. Not everyone has the privilege of being able to test hypotheses willy-nilly. If you have a family, if you have debts, if your cost of failure is anything but zero, it makes better sense to tread carefully.

The switching costs can kill you

Here’s the weird thing about this argument in favor of pivoting: execution is far more fungible than your idea, your business model, the industry you choose, or even your team. What happens as a startup makes progress? The team improves the quality of its work.

Customer service folks improve their response times. Product features and functionality catch up to customer needs. Engineers deliver better technology. User experience goes from bare bones to impressive. The marketing funnel widens. Conversion rates go up. If you’re prioritizing execution and learning from your mistakes, you’re already doing this. Now imagine how hard it is to move from targeting one market to another.

Many of the hard-won lessons your marketing team or salespeople or business development folks have earned are useless. You’re back to square one on how to attract customers, how to close deals, how to retain their loyalty. Yikes. Say you switch your idea or product. You’ll throw out months or years of sweat and toil validating a concept, earning customer buy-in, and attracting influencers, press, and perhaps even investors.

Maybe this new product or service will be easier to build than your last one. But it’s not free. And it’s certainly going to set you back on every other vector – including customer traction and acquisition. Or maybe you’re changing from one business model to another. It may be a smaller shift than the two above, but it still takes a vast degree of energy, and likely means migrating your customers (if they’ll come) from one system of compensation to another. Don’t believe the hype – execution isn’t everything. You can be the tortoise, rather than the hare, and by picking the right race and the right route, win over far more talented teams because you’re constantly improving in a less crowded space no one else has chosen.

Some unorthodox tips on choosing your market and your idea

If you haven’t already read Eric Ries’s book The Lean Startup, go do that now. Then pick up Sprint by Jake Knapp and the Google Ventures team. The first one will help you nail the basics of choosing and validating a market, and the second shares my favorite method for nailing new products and features. Now that you’re analyzing competitors’ UVPs* like a boss, and rattling off sarcastic product/market misfit jokes with the best of ’em, I’ve got a few additional suggestions: