It’s inevitable that we will all face challenges when starting our business. Although all of us will face challenges, our solutions will differ. Sometimes all we need is patience, more money, or a larger audience. Other times, we need to make a change. We have the product but we are targeting the wrong customers, it’s too expensive, lacks essential features, or doesn’t solve the right problem. In these situations, what we have to do is change our strategy without changing our vision.
However, how do we know when we need to persevere, and when we need to pivot? It isn’t always so easy to tell. So in this post, we will study some companies that have successfully chosen the right course of action, and learn from them how you can decide which solution is right for your business.
The term “pivot or persevere” started gaining traction when entrepreneur Erik Ries published his New York Times best-selling book “The Lean Startup” in 2011. The term is applied to situations when an entrepreneur faces a challenge with his business and has to decide whether they are going to keep pushing forward in the same direction or change course and revise the product.
Persevering is considered to be a stubborn trait that doesn’t allow entrepreneurs to move forward. An entrepreneur who doesn’t pivot when they are supposed to can lead them to destroy their own idea. Sometimes, however, you just need to be patient with your customers and keep your head high.
Fake It ‘Till You Make It
My favorite example of a company that persevered through tough times is Reddit. Everyone knows Reddit now as the social news platform with over 170 million unique monthly visitors. However, when it launched in 2005, no one would use the platform. Reddit, like any social website, is only as powerful as the users that interact with it. Reddit knew that their idea of creating a community that could share and discuss content was a valuable one. They just had to light the match.
So, what they did is they created a bunch of fake accounts to interact with the website. With these fake avatars, they would engage in discussions amongst each other, and overtime, real accounts started to participate. By not giving up in the early days and throwing in the towel, they were able to grow into the billion-dollar company they are today.
Pivoting is hard for anyone, not just entrepreneurs. When we think pivot, we think someone made an error. However, this isn’t the case. Any successful product or service goes through various iterations before it gets fully optimized. If you aren’t growing and listening to customer feedback then you’re business is doomed to fail. So, instead of thinking of pivoting as correcting a mistake, we should look at it as evolving. Two companies that went through extremely successful pivots: Youtube and Slack.
From Dating App To Video-Sharing Platform
We all know about Youtube. What many don’t know is that when Youtube started it wasn’t a video sharing platform. It was a dating service… A video-based dating service where instead of writing a bio about yourself, the way we do now on Tinder or Bumble, you would upload a video describing your ideal partner and then browse for matches. The site had very few initial users and the retention rate was abysmal. However, the founders noticed something interesting. The people who did use it weren’t just uploading videos of themselves, but of all types of content. The co-founders then transformed their idea into a free video-sharing platform. The rest is history.
The Genesis of a Communication Platform
Slack may be less known to you unless you work at a company that uses it. It is one of the biggest professional chat and messaging services in the world with about 10 million daily active users. However, the founders of Slack had absolutely no idea it was going to be as big as it is now. In fact, it wasn’t even their original idea. The founders originally set out to make a PC game called Glitch. The game failed, but there was one feature of it that was quite useful. In order to communicate between the New York and Canadian offices, they used an internal chat feature that was programmed into the game. After realizing the potential of the chat feature, they then changed their attention to selling it to corporations that needed a messaging platform. The company has been widely successful ever since.
All entrepreneurs are faced with dilemmas when running their business. One of the most common ones is, “Do I be patient or do I change course?” The answer is often found by observing customer feedback. With Reddit, they realized that people only wanted to interact with a site that had conversations already happening on it, the business model was sound, but they needed to fake it until they made it. For Youtube, they observed how their customers were using their site and pivoted their business to provide them more value. Originally, Slack was part of a failed company, but upon seeing the value it provided, the founders were able to repurpose it and sell it to businesses all around the world.