B2B Wins #46: Pivots Are Not Failure
The road to success is rarely straight
Three days a week, I talk to at least two founders. Some of this is business development, but mostly it’s to stay plugged into the founder ecosystem. I like hearing what folks are working on and, hopefully, I help them a bit in the process. If nothing else, misery loves company.
I recently met with a founder who is working on deep tech. The challenge with deep tech is that it requires years of investment before the payoff. She’s at the point where she needs to decide whether to stay the course or shift to something else. One possible shift is to an adjacent swim lane that would be complementary to her current research with the added benefit of getting her to a demo-able product and perhaps some cash.
As we talked, I could see her disdain for the idea of shifting course even though she knew that there’s a cliff coming. She admitted that she has to do something to get off of her current course. She didn’t say why she was so committed to the original course, but I get it. You’ve given so much of your self to something that just started as an idea, it’s hard to let it go. If feels like you’ve failed. Nothing could be further from the truth.
The mythology of startups is filled with stories of founders who had an idea, stuck to it through thick and thin, and eventually succeeded. But for every one of those stories, there are dozens of founders who recognized opportunity when it knocked, and opened the door.
What is a pivot, really?
Let's be clear about what a pivot is and isn't. A pivot isn't abandoning ship when things get tough. It's not throwing away everything you've built. A pivot is a strategic change based on market feedback and opportunities.
Market feedback is a gift. Opportunities are a gift. A pivot is a gift. It’s the gift that helps you avoid failure, not failure itself.
Remember, Slack began as a gaming company. Twitter emerged from a podcasting platform. PayPal started as a way to beam money between Palm Pilots. Were these failures? The market caps suggest otherwise.
Why founders resist pivoting
The resistance to pivoting usually comes from several deeply human places:
The sunk cost fallacy
"I've spent two years building this." Yes, and those two years taught you valuable lessons about your market, your customers, and yourself. That knowledge isn't lost in a pivot—it's fuel for your next iteration.
I know a founder who spent years building a tool that helped software engineers better manage their work. It was a valuable product for software engineers, but that was just a wedge into a much broader workflow technology market.
I’m sure he wishes that he could say that he was brilliant in seeing the larger market from the beginning and this was the plan. But that’s just bullshit. He was brilliant in reading the market feedback and making pivot to a better opportunity.
Fear of looking stupid
Nobody wants to admit they were wrong. Especially to investors, employees, or customers. But here's the truth: the market doesn't care about your ego. Your investors would rather have a successful pivot than a failed startup. Your employees would rather pivot than lose their jobs. There is a time for ego and time to let it go. Let it go.
Loss of identity
This is the big one. Many founders become so emotionally invested in their original vision that it becomes part of their identity. Pivoting feels like losing a piece of themselves.
I don’t know any easy way around this one. It’s the thing that I think holds most folks back. You are not your work. Easier said than done.
Signs you should consider a pivot
How do you know when it's time to pivot? Here are some clear signals:
Customer indifference: Not active hostility, but something worse—apathy. When potential customers understand your product but still don't buy, that's a problem.
Long sales cycles that go nowhere: If you're having lots of great conversations that never convert, the market is telling you something.
Customer success takes heroic effort: When every customer implementation requires custom work and endless hand-holding, you might be solving the wrong problem.
Adjacent opportunities keep appearing: If customers keep asking for something adjacent to your product, pay attention. The market might be showing you a better path.
I have failed at each of these in the past. In fact, I think the failure of my last company was due to most, perhaps all, of these to some degree.
Customer indifference? Well, not indifference, but certainly not excitement.
Long sales cycles that never seem to close? Check.
Adjacent opportunities? Well, wait till you hear about my next company. :)
If you have two of the three. Take a long look at what’s going on.
Three or more? Consider that an alarm bell. Do not ignore it. Even if you’re closing in on $2M ARR.
How to pivot effectively
A good pivot isn't a random change of direction. It's a calculated move based on market feedback and opportunity.
Listen to the market
The best pivots come from intense customer interaction. What problems are they actually trying to solve? What are they willing to pay for? Often, the pivot opportunity is hiding in plain sight in your customer conversations.
Leverage your assets
Your technology, your team's expertise, your market understanding—these are valuable assets. A good pivot builds on these strengths rather than starting from scratch.
Test before you jump
Before going all-in on a pivot, test your new hypothesis. Can you build a minimal version of your new direction and get market feedback? Can you run a pilot with existing customers?
Bring your team along
Your team needs to understand and believe in the pivot. Share the data, the reasoning, and the opportunity. Some won't make the journey with you, and that's okay.
The upside of pivoting
A successful pivot can be transformative. Why? Because you're not starting from zero. You have:
Market knowledge: You understand the ecosystem, the players, and the dynamics.
Team: You have a battle-tested team that knows how to work together.
Infrastructure: You have systems, processes, and technology you can repurpose.
Relationships: You have investor relationships, customer relationships, and industry connections.
The best founders I know have an almost paradoxical combination of conviction and flexibility. They're convinced they're working in the right space, solving important problems. But they're flexible about exactly how they solve those problems.
Reread that last paragraph.
Remember, your investors bet on you, not just your idea. Your ability to recognize and capitalize on opportunity is more valuable than your ability to stubbornly execute a failing plan.
The next time you're wondering if you should pivot, ask yourself: Are you being stubborn about your solution or committed to solving an important problem? The answer might show you the way forward.