The need to pivot, as it is known in the industry, is an issue that many startup companies encounter. A pivot is frequently prompted by an insurmountable technological barrier, or when a company discovers that their product has little or no demand, or is simply not cost viable.
When the market reacts unpredictably, undermining all underlying assumptions, the company may need to make a significant shift.
When the decision to pivot is taken, the founders must hold on to their determination to succeed while also being flexible enough to overcome what may appear to be failure.
Now they’ll have to turn to financial analysis and planning to figure out which new technological solution to seek, what adaptations to their product should be made, and how to re-price and re-budget the offer. Often enough, the entire marketing, advertising, and cash burn rates must be adjusted to reflect these changes.
In summary, the financial side of a successful pivot is as important as the product being offered.
