Navigating Startup Pivots and Recognizing the Signs of Rot


Hatched by Glasp

Jul 20, 2023

3 min read


Navigating Startup Pivots and Recognizing the Signs of Rot


Startup pivots are a crucial aspect of entrepreneurial journeys. They involve making strategic decisions to change course, adapt to market conditions, and ultimately drive growth. However, not all pivots are successful, and recognizing the signs of potential failure is equally important. This article explores different types of startup pivots and emphasizes the need to identify and address underlying issues that could lead to downfall.

1. Pivoting Within Existing Markets:

When faced with challenges, many founders tend to pivot while staying within their current market. They fear sunk costs and believe their industry knowledge will give them an advantage. However, this approach often leads to failure due to a lack of product-market fit. As Andy Rachleff, founder of Benchmark Capital, wisely stated, "When a great team meets a lousy market, the market wins." To succeed, startups must be willing to explore new areas and adapt their offerings accordingly.

2. Repositioning or Focusing on Specific Use Cases:

Sometimes, a startup's product gains enthusiastic adoption within a particular user base or use case. In such cases, it might be beneficial to reposition or amplify the product's focus on that specific area. This approach allows startups to leverage existing behavior and create a stronger product-market fit. However, it is essential to avoid creating confusion by maintaining clarity about the changes being made and the brand's direction. If the original product can sustain the business financially, launching a new brand might be a viable option.

3. Identifying Real Market Needs through Internal Tools:

Building tools that a startup requires internally can lead to the discovery of genuine market needs. Products like Yammer and Slack started as internal tools and later became successful standalone offerings. However, transitioning an entire company to pursue this pivot requires rebuilding the team and ensuring fairness to employees who supported the startup in its previous iteration. Core employees who believe in the new vision are essential to weather the storms of change.

Recognizing the Signs of Rot:

1. The Danger of Privileges and Perks:

Leaders often fall into the trap of believing that perks and privileges are natural rights. This sense of entitlement can lead to a culture of corruption and decay. Leaders must be aware of their actions and be open to feedback from trustworthy advisors who can point out any signs of rot. It is crucial to address even small issues promptly to prevent them from escalating.

2. Anticipating the Early Signs of Failure:

Startup failures are rarely sudden or unexpected. There are usually warning signs, much like the signs of an impending pandemic. Developing a sixth sense for spotting these signs can help founders anticipate problems before they become insurmountable. By staying vigilant and addressing issues proactively, startups can increase their chances of survival.

3. Managing Stakeholders and Embracing Change:

During a pivot, it is crucial to manage stakeholders effectively, including co-founders, employees, investors, and customers. Some employees may resist the changes or lose faith in the company. In such cases, it may be necessary to propose a restart, initiate buyouts, or consider selling the company. Letting go of the past and focusing on creating a new and brighter future is essential for success.


Startup pivots are transformative moments that require careful consideration and strategic decision-making. By exploring different types of pivots and recognizing the signs of potential failure, founders can navigate the challenging terrain of entrepreneurship more effectively. Additionally, staying mindful of privileges, anticipating problems, and managing stakeholders can contribute to a successful pivot. Embracing change and building a strong foundation for the future are key to achieving long-term growth and sustainability.

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