Elad Gil's Guide To Startup Pivots
Startup Codex

This post by Elad Gil dedicated to the topic of pivots is divided into three parts.

In the first part he presents the different types of pivots that startups may have to go through. He classifies them into four categories: the pivot within the same market, the pivot consisting in focusing on a specific aspect of the product or market, the marketing repositioning, or the most radical pivot consisting in doing something totally new.

The second part is devoted to the decision to make a pivot, as opposed to the alternative of starting a new company.

Finally, the third part is devoted to the consequences of a pivot for the company and the various issues to be managed (conflicts between founders, employee morale, investor and customer reaction).

An excellent read for any founder.

The most common type of pivot is to change direction in a market you are already in, but without any new information on the market or a new customer segment. This is the most common type of pivot, and the most likely to end badly. In general founders worry too much about sunk cost and the industry knowledge they have built. So when they pivot, they pivot inside their market instead of considering new areas to work in. In general, startups tend to fail due to bad product/market fit (either the product is not differentiated or needed, or the go-to-market does not work, or both).