The Lean StartUp - 8 Pivot (or Persevere)

This Chapter, according to Eric Ries, determines the one decision that is the most challenging, the one with the potential to be the least time-efficient and the one that contributes to the most waste created by a startup. That decision is when to pivot and when to persevere. Everything asserted thus far, leads to this decision. 

The definition of a pivot, provided by Ries, is the following:

"A structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."

As Ries subsequently makes clear, innovation accounting (discussed in Chapter 7) leads to faster pivots. This would then result in the startup being more productive, since persevering when a pivot should be made does not lead to progress. (Remember that customer feedback should always determine pivots or perseverance and hence, this is innovation accounting from the measuring of customer data). 

Additionally, the author recognises that entrepreneurs need courage to perform a pivot. This is mainly because the entrepreneur feels that this would be admitting that he/she has made a mistake and it is human nature that people do not like to admit their mistakes. Moreover, another reason is the fact that without proper measuring and innovation accounting, their conclusions are not accurate or objective and hence, they do not realise that they should pivot. It is significant to identify these problems and find the courage to make the pivot because as Ries points out, failing to make the pivot could turn out to be fatal for a startup. 

The symptoms as to when to pivot are the reduction of effectiveness of the experiments of the products and 'the general feeling that product development should be more productive.'

At some point, the need to pivot might be inevitable, as an innovative startup must start to sell to mainstream customers and not only early adopters, which are more demanding and it will be required that the product solves real problems. This is what Ries calls, 'customer segment pivot'. 

Lastly, it is notable to state that pivots are at the heart of the Lean StartUp methodology and they come in various different forms. The significance of pivots comes from the fact that even if a startup has made incorrect assumptions, they can rectify it by acknowledging it and then pivot to find another way to achieve success.