Which type of pivot is the hardest for entrepreneurs?

If you have been working on your startup for any reasonable amount of time, you will learn quickly that the market and customer assumptions you make are quite different from reality in most cases. In some situations they might be relatively benign and still others they might take a complete change of focus and direction.

At the #napkinStage of the company, pivots are a lot easier to execute than at the later stages. Since the immediate impact is largely the time and effort spent on the idea, it tends to be easier to acknowledge, explain or work on.

In watching 14 entrepreneurs over the last 6 months, I have seen 5 companies pivot.

Types of Pivots
Types of Pivots

The hardest is the Market pivot – focusing on a completely different market than the one they focused on before – going from IoT startup to a data SaaS company. This type of pivot will take 18 or more months to execute. Learning about a new market is hard. Building relationships and understanding nuances of the landscape is even harder. It might seem easy since when you research on the Internet, but many markets are fairly opaque, till you spend more time learning about them.

The second hardest is the Customer type pivot – a company went from selling to consumers to selling to SMB with the same product. Changing the customer type or target customer is equally difficult. The hardest part is knowing and understanding the influence and decision making landscape if you are in B2B or to find the immediate value for the consumer if you are B2C.

The third hardest is the Customer problem pivot – one of the startups, realized, after talking to their target users that the problem more pressing was a different one and hence changed their product. If you already know your customer, but find out that the “latent” problem you perceived was different from the top 3 problems for your customer, then it is relatively less difficult to change course and pivot to the new problem. While communication with the internal team is still a challenge, these pivots tend to be able to execute faster.

The less harder pivot is the Business model pivot – a company went from charging on a SaaS monthly subscription model to a commission model on sales. By no means am I suggesting that a Business model pivot is easy. Having seen 2 companies of 14, just in the last 6 months, I think of all the other pivots, these are easier to execute and will likely take less time.

The first part of your problem is spotting the trend lines that help you understand when to pivot. The second (and likely more hard) part of your pivot is communicating – to your employees and founders, your customers, to potential and existing investors and to others who were involved – mentors, advisers, etc.