Something went wrong.
Despite your product team’s flawlessly executed strategic plan—diligent market research, thoughtful iterative development based on real-world feedback, competitive and flexible pricing, and a great go-to-market campaign—your product didn’t catch fire.
Worse, even though it wasn’t actually on fire, plenty of analysts and industry thought-leaders still felt the need to stomp all over it.
Worse still, this product was essentially your entire company. Much like Uber and Snapchat (except for the minor difference that those companies became megahits), your business was built entirely around this product—the one that just flopped.
What now? Is it all over?
Of course not! If a less-than-successful product or a doomed business strategy meant the certain death of the company behind it, then today you wouldn’t be able to find a coffee shop on every corner, you’d be using more than 140 characters to share your thoughts with the world, and your favorite TV shows wouldn’t be produced by your one-time DVD-rental provider.
Those companies—not to mention a bunch of smaller, lesser-known businesses—didn’t just give up because one thing didn’t work or because they saw danger ahead. They pivoted.
Examples of Successful Product and Business Pivots
Let’s discuss those three companies I alluded to above as examples of successful pivots.
Starbucks was originally a single-store retail location in Seattle that sold coffee makers, coffee beans, and other coffee-related products. Not a bad business, but probably not destined for massive success, particularly not with Amazon and other global-retailers on the way. And do you know what they didn’t sell in those early days? Freshly roasted coffee by the cup! It took the vision of Howard Schultz to recognize the opportunity to turn the mom-and-pop store into an international retail destination and a whole new addition to the modern lifestyle.
Twitter first hit the scene as Odeo, a platform for podcasters and their listeners to connect. But then came iTunes, and the founders knew it was time to pivot or die. So they pivoted—and, of course, #TwitterMadeHistory by becoming one of the world’s most successful social-media platforms.
Netflix is an example of a company that pivoted more than once—and not, as in the case of Twitter—purely as a means of survival. Originally launched as a company that rented DVDs through the mail, Netflix looked ahead and saw that the trend toward ever-increasing Internet capacity in the home meant streaming entertainment was the future. So they pivoted, investing heavily in becoming primarily a streaming-entertainment service.
Then, as they increasingly ran into trouble securing and maintaining content-license deals from the major entertainment companies—businesses that, for the most part, have failed to pivot—Netflix pivoted again, and invested heavily in becoming a TV and film production company in its own right.
What Happens if You Fail to Pivot
Pivoting can be either a defensive move (think Twitter expecting to be crushed by iTunes), or an offensive one (like Netflix spotting an opportunity to gain the first-mover advantage in the emerging streaming-entertainment space).
“Pivoting can be a defensive move or an offensive one. The important thing is to stay vigilant.”
Either way, smart pivoting is the result of product owners and entrepreneurs doing what they do best—always keeping an eye on their market, the competition, their customers’ changing behaviors, and emerging societal or technological trends.
It’s only by staying vigilant that a product leader will be able to spot an approaching threat or opportunity—and to pivot their product’s strategic plan, or their entire business—in time to do something about it.
And what happens when a business doesn’t pivot? What happens when a company either doesn’t see a major opportunity or threat right in front of them, or simply doesn’t know how to respond to it in time? When that happens, you get…
Online publications have been eating into newspapers’ centuries-long editorial dominance for years. Craigslist has eroded the newspaper industry’s one-time classified-ad monopoly. And now Google and even social-media platforms like Facebook and Twitter have taken the lead as millions of people’s primary source of news.
The newspaper industry didn’t pivot. And now they’re slowly going out of business.
When You Have to Pivot, How Do You Do It?
So what happens if your product falls flat, your investors grow impatient, a new competitor enters the market and sweeps up your customer base—or you simply realize your market isn’t really as massive as you thought it was in the euphoric heyday of your business launch?
What do you do when it’s time to pivot?
Obviously, you don’t want to take the newspaper industry’s approach. (Let’s call that the “paper route.” Ha!) That approach was simply to ignore the metaphorical freight train known as the Internet heading straight for them. But ignoring a paradigm-shifting new reality that threatened their existence and demanded innovation didn’t save the newspapers. It won’t save your company, either.
Here’s what you should do instead.
1. Admit your initial strategy and assumptions were off.
First, accept the fact that you need to pivot. Yes, that means admitting you and your product management team got a few things wrong. That’s okay. So did an early-stage Twitter, Starbucks, Instagram, Groupon, PayPal, Nokia, and a bunch of other now-successful mega-companies.
The point is, don’t let your team make the situation worse by putting your collective heads in the sand.
2. Take the same systematic approach to developing your pivot strategy as you did for your original plan (only, you know, do it better this time).
Next, you’ll want to apply the same careful, step-by-step approach to your pivot strategy that you would take with any new product or business strategy.
Ideally this will be a top-down approach, where you’ll first determine an overall vision for your new product. After that, you’ll want to translate that vision into a set of concrete strategic goals and objectives. From there, you’ll want to capture and communicate the strategic plan for your pivot strategy on a product roadmap.
(If you’d like a more thorough discussion of this phase of your planning, read our free book, Product Roadmaps: Your Guide to Planning and Selling Your Strategy).
Because your pivot plans will be big news across your organization, and you’ll want to communicate them to all relevant teams and departments, it’s important to make sure you develop your roadmap using the right tool—one that’s web-based, housed securely at a shared URL, and easy to present and update.
3. Use your communication and leadership superpowers to generate company-wide enthusiasm for the coming pivot.
Okay, this will be the most difficult step yet in your pivot strategy. But nobody said being a product manager or entrepreneur would be easy.
This is where you’ll need to call on those awesome product management skills—outstanding communication and the ability to persuasively evangelize your strategy.
You’ll need to bring three things to this company discussion: Evidence of why a pivot is necessary at this time (or why it represents a great opportunity that’s worth the risk), your strategic reasoning for pivoting in the specific way you’re proposing, and—perhaps most important—a contagious dose of enthusiasm for taking your team on this new journey.
A product or company pivot doesn’t have to be bad news. In fact, it might just be the best thing that ever happened to your team and your business—like it was for all of those organizations I discussed above.
So communicate that to your team. Get them excited about taking your product or business in a new direction. If it works, you might be another one of the great company-pivot success stories that gets reported in the newspap… ahem, on Google News.