What is the best strategy to stay relevant (and alive) in an age of disruption?

This isn’t a hypothetical exercise, either. In a world where legacy industries are turned on their heads overnight, leading to the extinctions of huge corporations and thousands of good jobs (see Kodak Eastman), mastering the art of adaptation is critical to staying afloat. In fact, for high-ranking executives and regular employees alike, to innovate and seize on the latest trend is, quite literally, the difference between life and (financial) death.

That’s where the pivot comes in. Though the term itself has been beaten to death in popular culture, a proper pivot can make all the difference. It can save a flailing legacy company from bankruptcy, or rescue a scrappy, unprofitable startup from irrelevance.

The origins of the pivot

By now, the pivot is a household term, part and parcel of the lexicon we use to describe startups, tech, and innovation. It’s been on shows like Silicon Valley, a clever, tongue-in-cheek comedy that satirizes the absurdities of the insular tech world, and even made its way into the national security lexicon (such as the Obama administration’s “pivot to Asia”).

In its simplest form, a pivot is a shift, most often in the areas of business model or technology.

The concept of a pivot was developed by Eric Ries, the mind behind the Lean Startup model, though the idea had existed long before he put a name to it. For his part, Ries noticed that many of the most popular tech companies (Twitter and Youtube among them), had executed flawless pivots, and in the process, either redefined existing industries–or created new ones entirely.

Today, pivots are so deeply woven into the popular imagination simply because they’re so successful. Moreover, pivots have also become an integral part of the entrepreneurship narrative. After all, audiences and consumers alike love comeback stories: who doesn’t want to hear about how an entrepreneur snatched their company back from the brink with a well-timed, clever pivot?

Failing Fast is Actually Pivoting

Practically speaking, it’s also no surprise that pivots are an indispensable part of the startup toolkit. For one, pivots fit perfectly with the tech mindset of “fail fast and often,” which holds that companies must not be afraid of failures and mistakes–and in fact, must learn from them, using them to improve on previous weaknesses and setbacks.

As part of this fail fast strategy, pivoting can result in radical makeovers that render a company nearly unrecognizable. Take the case of Fab.com. Originally intended as Fabulis, a social networking site for gay men, the co-founders debuted their company to crickets–their app lost to obscurity amidst a market dominated by Facebook. Instead, the co-founders shifted their business model to high-end e-commerce, a pivot born of a solid strategy: one of the few successful features of the original website was a deal of the day feature, a popular feature that gay men, the website’s core demographic, liked and used.

Even if Fab ultimately failed, it provides an example of just how drastic a pivot can be. Nor is it an isolated case. Twitter, for example, began its life as Odeo, a podcasting company that had fallen on hard times. Threatened by the overwhelming market share of iTunes, the company revamped their business model, pivoting to a side project that included 140-character messages, alongside a feed that would track the messages. Today, Twitter has 32 million users, and is the ninth-largest social media network in the world.

Pivoting for Growth

Despite popular notions, not all pivots are born of desperation, as embodied by a failing company that seeks to change course. Instead, companies may also launch pivots to grow and expand into new niches.

For instance, faced with increased consumer demand for healthy eating (which grew by as much as 3,400 percent over the past two decades), General Mills pivoted to organic foods, buying up a number of such brands, aiming to reach $1 billion in organic and natural food sales. Granted, General Mills saw a slight decrease in net profits (2013-15) prior to pivoting to organic foods, but even so, was far from bankruptcy.


Unfortunately, there aren’t always hard-and-fast rules for executing a successful pivot. Because they can be applied to such a wide range of situations and industries, pivots will obviously vary from one company to the next.

All the same, there are some general guidelines for executing pivots. Harvard Business Review identifies five important criteria for anyone, from student leaders to entrepreneurs, seeking to turn around a struggling organization.

  • Keep a compost pile of ideas. Even if your first business model or technology doesn’t succeed, it will still yield actionable insights. In that sense, the first “failure” isn’t necessarily a failure at all, as it provides valuable feedback and ideas that can be used at a later stage in some way.
  • Know your customer. Go beyond click-through-rates and shallow market research. Instead, really get to know them, so that you can understand their mindsets and needs. If at all possible, try to meet potential customers in-person, through either a focus group or social networks.
  • Fail earlier and more cheaply. Failing is insightful and potentially expensive, especially if you roll out a fully-finished product only to find no users. Instead, prototype cheaply with inexpensive, run-of-the-mill tools like Powerpoint or Adwords. Alternatively, turn to small focus groups and do cheaper soft launches.
  • Focus on customers, not products. This principle is similar to design thinking, a philosophy that holds that end-users must always be considered. Moreover, having a customer-centric culture makes it easier to execute pivots; rather than resisting your vision, your team may agree to shifts if they perceive such moves as geared towards pleasing customers, rather than destroying the hard work already spent on building a product.
  • Don’t settle on mediocrity. Similar to pivoting for growth, don’t simply accept a solid, if small, market share. Instead, seek out ways to re-evaluate and refine your product or business model. As McKinsey puts it, “all companies need a second act,” that is, they must look beyond their core business and identify new sources of growth. Diverse streams of income can always help ward off collapse.

Ultimately, pivoting will depend on your insight, your strategy, but most of all, your team and your company culture. Used properly, however, a pivot is a tool for good: it can shift an unprofitable, failing company (or perhaps one that is limping along) into a dynamic, resourceful organization with a great business model, an excellent product, or hopefully, both.