What Recent Research Says about Pivots

Research on the topic of pivots has been intensified in the past years. Some of the more recent findings are:

A. Flechas Chaparro and de Vasconcelos Gomes find four streams of research about pivots in their 2021 study “Pivot decisions in startups: a systematic literature review”:

1. 1. Design perspective stream: how the process of pivoting happens, and how to include it into permanent strategic work in highly volatile / newly developing markets,
   2. Cognitive perspective stream: “how an entrepreneur’s perceptions, experiences, and behavior lead to the decision to pivot and the resulting actions”, and how these decisions may be constrained by lack of knowledge, cognitive biases such as psychological ownership or fixation etc.
   3. Negotiation perspective stream: analyzing the negotiations between a firm and its stakeholders during pivots, in view of potential negative effects, or the goals to decrease resistance and strengthen relationships)
   4. Environmental perspective stream: focusing on a firm’s response to external challenges and changes and claiming that pivots are “totally dependent on environmental factors such as competitors, customer preferences, regulators and other actors”).

They also propose a four-step process, consisting of the following stages: recognition, generating options, seizing and testing, and reconfiguration.

B. In their 2016 study “Failures to be celebrated: an analysis of major pivots of software startups”, covering 49 startups, Bajwa et al already found 14 triggering factors. Those are split into:

1. 1. Eleven external factors: negative customer reaction, unable to compete with competitor, technology challenge, influence of investor/mentor/partner, user appreciation of one particular feature of the product, unanticipated use of product by users, wrong timing, positive response from an unforeseen customer segment, running into legal issue, side project more successful than main project, targeted market narrowing, and
   2. Three internal factors: flawed business model, identification of a bigger customer need through solving an internal problem, unscalable business.

Besides Ries’ original 10 pivot patterns, they also found three new pivot patterns

1. 1. “Market zoom in” pivot: focusing on one specific market sector rather than the whole market,
   2. “Complete pivot” essentially a new start in a completely different business, but same team,
   3. “Side project pivot”, where a different business idea unrelated to the main project becomes the main project.

With regards to the patterns, their study concludes: “customer need pivot is the most common among all pivot types. Together with customer segment pivot, they are common market related pivots. The major product related pivots are zoom-in and technology pivots”.

C. The 2022 study “A qualitative research study of the tech startup journey through entrepreneurial pivoting” by Pavan Kumar Sala et al., covering 30 startups, essentially confirms the results of Bajwa. They add two more pivot types to the 14 previously identified patterns: “business ecosystem pivot” and “brand pivot.” Customer feedback, technology challenges, competition, market conditions, and the influence of an investor/partner/founder are identified as main drivers for pivots. They also found that during a pivot, the following three challenges were mentioned most: (1) persuading customers; (2) pursuing stakeholders, partners, or suppliers; and (3) onboarding resources.

D. Finally, Devin Burnell et al. explored 80 startups in their 2023 qualitative and quantitative study “Early-stage business model experimentation and pivoting.” According to their findings, founders often resist changing their value propositions despite negative feedback, due to their personal identity attachment to the initial business model concept. They also identified the following three key factors that increase the likelihood of successful pivots:

1. 1. Entrepreneurial experience: Entrepreneurial mindset grows over time due to exposure to entrepreneurial situations, “which is a similar finding as in strategy research, where board members with greater industry experience are more likely to instigate strategic change because their experience enables them to assess and react to nuanced strategy-related issues in the industry.”
   2. Startup mentoring: “Startup mentors help entrepreneurs by offering guidance and advice … and can help entrepreneurs break initial frames of mind and give sense to new ways of seeing. … Angel investors were more likely than venture capitalists to encourage founders to experiment and listen to stakeholder feedback because angels tended to have more entrepreneurial experience themselves.”
   3. Team size: “A larger group entity increases subjective certainty through multiple perspectives … they also have more opportunities to peer mentor each other .., and engage in productive conflict, debate, and discussion.”