Recently I was talking to an entrepreneur about his startup and he lamented that they’re now on their third idea. Idea one failed. Idea two failed. Now, after another pivot, they’re excited about idea three. I paused, looked up, and shared that almost every successful startup I know wasn’t successful with their original idea.
I’d bet that successful startups average at least one pivot. One of the hottest startups in town is on their third product after two pivots and a tremendous amount of iterating.
Here are a few ideas why pivots are so common:
- Unvalidated Ideas – Most entrepreneurs start with an idea and then go looking for a market. Unfortunately, the initial idea is almost always not viable (see customer discovery).
- Lack of Market Understanding – After jumping into a market with an initial idea, more opportunities start appearing, often related, and it becomes clear there’s a better direction. Time for a pivot.
- Poor Unit Economics – Many times a product is working and a handful of customers like it. Only, the cost of customer acquisition relative to the price the market will bear don’t match up. Meaning, if it costs thousands of dollars to sign up a customer, and the customer is only willing pay to $50/month, the business model doesn’t work.
Entrepreneurs would do well to recognize that most successful startups go through a pivot and that it takes time to find an idea that works.
What else? What are some more thoughts on the idea that successful startups average at least one pivot?