How do you align your vision with a startup pivot?

Goals change, strategies change but the vision should just like the values not change. It’s the reason a company exists and the long term foundation it’s built on. Call it the intrinsic motivation or the invisible driving force.

Defining your vision, or in other words, why you are building what you are building, and effectively communicating it to all stakeholders including the team is a crucial part of setting up your company for success. I personally have not done a great job when it comes to communicating the vision, and I am currently working on it because I see that when the vision is clearly explained to the team, it immediately shows its positive impact on the team's performance.

Pivots are a natural part of many company journeys (e.g. X/Twitter started as a podcast platform, Slack as a video game company). As a product-led founder having led multiple pivots throughout the last decade, including CarbonChain's pivot to carbon accounting and OpenCover's pivot to onchain insurance, I've found successful pivots validate the customer, product and market first. The vision then naturally emerges from the combination of a business opportunity anchored in reality and the leadership's values, strategy and overarching goal(s).

Assess the Current Situation: Begin by conducting a thorough analysis of your startup's current situation. Identify the reasons for considering a pivot, whether it's market changes, customer feedback, or internal challenges. Revisit Your Vision: Reconnect with your original vision and mission for the startup. Understand what motivated you to start the business in the first place and the long-term impact you aim to achieve. Evaluate the Pivot's Alignment: Assess how the proposed pivot aligns with your core values and overarching vision. Will it bring you closer to your initial goals, or will it necessitate a significant shift in your mission?

Regardless of the pivot type (e.g. full to new industry vs change of direction within the same product space), we've seen things work best when the validation process is transparent and internal stakeholders invited to participate (even if they choose not to). For instance, in the case of a full pivot, taking a collaborative approach to define new potential product directions with the founding/core team is a powerful way to create alignment and increase the quality of the process by leveraging collective intelligence. Similarly, agreeing on validation criteria upfront (e.g. # of customers to speak with, data to collect, success thresholds) creates certainty and accountability that make validation easier once the data has been collected.

I agree, but it’s often not that black and white. From my experience the best way to validate the direction of a pivot is when you in sales meetings start telling a new type of story and see how prospects react. Another way to validate is to show an early MVP to the existing customer base and/or on an external platform with big following, for example Product Hunt or Appsumo to learn how it is received, before you start risking more in that direction.

Iterate and Adjust: Be prepared to make adjustments based on feedback and data analysis. Pivots may require refinements as you progress. Communication Plan: Develop a clear communication plan to inform stakeholders, including employees, investors, and customers, about the pivot. Transparency is crucial. Risk Assessment: Identify potential risks and challenges associated with the pivot and develop mitigation strategies. Commit to the Pivot: Once you've validated the pivot through research, testing, and analysis, commit to the decision and allocate the necessary resources and efforts to execute it effectively.

Being transparent about the reason for a pivot, the associated validation process and consistently communicating status/progress with internal and external stakeholders are signs of confidence when navigating uncertainty. Resilience is a what sets apart exceptional founders and is a great way to garner support when pivoting.

This is very important, but it is easy to go wrong because you’re so stuck in the old way of thinking or doing (and thereby also communicating). Could be worth taking external help to shape the new story, comms and value proposition with sober eyes.

Provide Context: Offer context about the market conditions, customer feedback, or other factors that led to the decision to pivot. Help your team understand the bigger picture. Be Transparent: Transparency is key. Share as much information as possible while respecting any confidentiality concerns. Being open builds trust. Highlight Benefits: Emphasize the benefits of the pivot for the company, employees, and customers. Explain how it addresses challenges and creates opportunities. Address Concerns: Encourage questions and address concerns from your team. Be prepared to provide additional information and reassurance.

From experience this is part of the pivot process. It is rarely the case that a potential pivot idea does not evolve as validation data trickles in. Iterating over customer, product and market assumptions should be baked into the pivot process. While products and companies constantly evolve, the pivot can be called complete once the pivot process concludes (pivot validation sprints should be timeboxed, multiple sprints might be necessary to reach a conclusion). The pivot process concludes when a product/customer/market is positively validated and the chosen new direction is officially shared with internal and external stakeholders.

Yes, and this paragraph therefore makes the ”validate your pivot” paragraph above weak. I believe more in this approach. The early pivot is often based on gut feeling while the validation happens through iterating as you start walking, talking and creating value in the new direction.

Pivot is a necessary inflection point, brought on by the unforeseen shifts in event patterns. It typically occurs as an instinctive nature for the fittest.

Gather Feedback: Continuously collect feedback from employees, customers, investors, and other stakeholders. Encourage open communication channels to receive insights and suggestions. Analyze Data: Examine data and metrics related to the pivot's implementation. Look for patterns and trends that can inform your decision-making. Identify Challenges: Identify any challenges or roadblocks that have arisen during the pivot. Determine the root causes and prioritize them based on their impact. Evaluate Successes: Celebrate and evaluate the successes and achievements that have occurred as a result of the pivot. Recognize what is working well.

We've found the best way to pivot is to run timeboxed validation sprints on multiple pivot candidates and allocate as much company resources to the effort as possible. This avoids the Sunk Cost Fallacy — if the decision was made to pivot, the company's success depends on the pivot's success and resources should be allocated accordingly.

Feedback and Evaluation: Encourage feedback from your team and stakeholders regarding resource allocation. Regularly evaluate the impact of your resource allocation decisions. Scenario Planning: Consider various scenarios that may impact your startup's resources, such as growth, market shifts, or economic changes. Develop contingency plans. Long-Term Sustainability: Think about the long-term sustainability of your resource allocation. Ensure that you are not depleting essential resources for short-term gains. Iterate and Adjust: Resource allocation is an ongoing process. Be prepared to iterate and adjust your allocation as your startup evolves and grows.

This is a bit redundant, especially the last sentences. It’s a given. However - the word ”focus” and channeling your resouces in the same direction, and deciding for how long and to what extent to do that, that is very important.