Success Story Margaret DonnellyThis article is the third in a series of blog posts focused on using lean principles to build a startup.

One of the benefits of being a Lean Startup is the ability to constantly learn. The lean methodology is a series of experiments; each cycle is a build – test – measure – learn feedback loop. Each loop enables you to learn as you go instead of the old methodology of design – build – commercialize – monetize and THEN adjust if the product doesn’t fit the market.

But even with this loop, there often comes a time when you hit a wall; no matter what adjustments you make, no matter what features you build, no matter what channel you tap, your customers are exiting as quickly as you can close them; it’s like water through a sieve. Or, as Jason Calacanis put it in his blog post, “In startups, if you’re not growing, you’re dying. It’s really that simple.” And if you’re dying, you need to do something else. It’s time for a pivot.

A pivot is a fundamental change in strategy. That change can be a change in product, customer segment, customer need (problem you’re solving), platform, business model, channel, etc. What has happened here is that you have invalidated your working hypothesis, and you’ve gathered enough data to support a new/modified hypothesis. Once you do this, it means a change in what you’re doing or how you’re doing it.

Pivots happen in most every startup. By building, learning and growing, we take our original inspiration, mix in perspiration, shake it up with a little reality, and come out with something new. And oftentimes, that new will be significantly better than your original inspiration.

At JitterJam, our pivot led to our exit. We were originally JitterGram—a mobile advertising platform. We were finding that though our customers were happy with the cost/benefit of our platform, they were cancelling their service. We performed an exit interview with one of our customers, and it led to our pivot. When asked why he was leaving, our customer said, “Well, I have email marketing, mobile marketing and now social media with Twitter and Facebook. It’s so hard to manage all this. If I could have this all in one place, that would be a gift from God.”

That was the inspiration for JitterJam, our Social Media Marketing/SocialCRM platform that incorporated Twitter, Facebook, email and mobile marketing into one with a central CRM database that built intelligence on our contacts and helped businesses and brands market across multiple channels. We went from the inception of this product to our exit in 18 months. Our pivot helped us identify an evolving need early in the cycle and put us on the trajectory to success.

Pivot isn’t a bad word. It’s usually a necessary step in the evolution of a startup. It shouldn’t be based on a single conversation. It’s a major change in strategy. But it’s also a way to use the intelligence you’re gathering to find your product/market fit and move forward.

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