Many pivots?

Pivots have joined the vocabulary of entrepreneurship thanks to Steve Blank and Eric Ries. It has become so prevalent that when you ask any entrepreneur who isn’t making much progress, you get a response – “I am making a pivot.” The question that immediately comes to our mind is, why are you pivoting so many times!

Pivots simply refer to changes in a strategic component of the venture building, guided by a goal. If one is changing the goal so many times, then are you at all making any progress, or are you simply confused? To understand the concept of pivot better, it is important to understand the lean start-up process beginning with the venture idea.

An entrepreneur beginning with an idea should first acknowledge that there are many underlying assumptions made. You begin with testing these assumptions (which otherwise would weaken the foundation). The testing of assumptions requires an appropriate formulation of the hypothesis. A hypothesis that can be empirically tested through experiments. 

The empirical testing begins with designing the experiments. Most often, entrepreneurs skip this critical step of experimental design. If you are not designing an experiment, you really cannot make causal inferences by running the experiment. You need to be pretty sure what the variation is before you can run with it and make a claim about the validity of a hypothesis. Testing the hypothesis takes the form of a version of the MVP (more on it later), which is then experimented to gather the outcomes. Based on this experiment’s outcomes, you infer if the assumption was accurate and realistic or just plain fiction. If the assumptions are inaccurate or fictitious, you must re evaluate the component of the idea and make amends. This amendment is what we refer to as pivots. If the assumption withstood the experimental test, you move ahead and persevere on the idea and build your venture.

So next time you are claiming to be amid a pivot, ask if you have really tested your assumption and thus seek a change in the strategy to build the venture.

Ask yourself:

Have I identified the underlying assumption of my venture idea?

What is a good experiment to test this assumption? It need not necessarily be building your MVP!

What do the results of the experiment imply? Is the assumption invalid and, therefore, requiring a pivot, or am I simply fooling the world claiming to be in a pivoting mode all the time?