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Startup Vortex

5 Common Mistakes Startups Make When Pivoting - According to a16z

September 23, 2024
4 min

General Partner at a16z, Andrew Chen, recently wrote an excellent piece on the most common and unfortunate pivots he has seen founders make.

We all know that in the fast-paced world of startups, pivots are often necessary. Sometimes, they lead to massive success stories like Glitch becoming Slack or Justin.tv evolving into Twitch. However, not every pivot turns out well.

Andrew Chen shared his experience working with early-stage startups through the SPEEDRUN program (where they invest $750k into pre-seed and seed-stage startups), and the pivots he has seen that tend to go awry.

Here’s a breakdown of some common startup pivots that usually don’t work out.

5 Common Tragic Startup Pivots

1. From B2B to Consumer

You’ve built a solid foundation selling to enterprise customers, and you have a deep network within your specific industry. But now, you want to pivot to a consumer product, like an AI meme generator for cute animals. While it's tempting, especially when personal passion comes into play, pivoting from B2B to consumer is incredibly challenging.

Surprisingly, the reverse pivot—going from consumer to B2B—tends to be more successful because enterprise software often benefits from excellent user experience and a product-led growth model.

2. Adding Social Features to a Weak Product

It can be tempting to add chat, social sharing, or notification features when your core product is struggling with user retention. However, adding these "buzzy" features rarely solves the fundamental problem. If people aren't sticking around, adding more features won't make them care. It's not that your product needs more bells and whistles; it likely needs a deeper overhaul. Instead of tacking on secondary features, it’s often better to focus on improving the core experience.

3. Bolting on Trendy Tech (AI, Web3, etc.)

When the core product isn't resonating with users, adding trendy technologies like AI or Web3 might seem like a quick fix. While it may generate initial curiosity, these technologies often feel like "bolt-ons" that don’t solve the underlying issue. Both customers and investors can usually tell the difference between a product that authentically integrates these technologies and one that’s just jumping on the latest trend. If the core experience isn't solid, no amount of cutting-edge tech will fix that.

4. Prematurely Trying to Build a Platform

Another common pitfall is attempting to "zoom out" and build a broad platform when the original, more specific concept isn't working. For instance, if you're trying to create a social app for yoga enthusiasts but it’s not gaining traction, broadening your target to encompass all wellness communities likely won’t help.

Without a proven "killer app" that works in a specific niche, expanding into a platform only adds complexity to an already struggling concept. In contrast, zooming in and solving more specific problems tends to work better.

5. Going From Paid to Free

When a product isn’t gaining traction, some founders pivot by making it free. The logic is that removing the price barrier will attract more users. However, this almost never works. If people aren’t interested in your product when it’s paid, making it free won’t change their indifference. Instead, consider whether the product needs to be rethought or repositioned. In many cases, charging more and focusing on delivering premium value might be a better strategy.

What Makes a Pivot Successful?

Pivoting is a natural part of the startup journey, but not all pivots are equal. Before making a big shift, ask yourself some critical questions:

  • Is any part of the product working for a specific group of users? Consider doing a “zoom in” pivot and building a more tailored solution for your top users.

  • Is your product misunderstood because it's too new or innovative? Try pivoting into an existing category that customers are familiar with, and introduce your innovation within that framework.

  • Have you learned something new about your market? Would that new knowledge lead you to start fresh with a different approach? If so, consider making that change.

  • Are your competitors struggling too? Sometimes, it’s not your product that’s the issue, but the entire market. If nothing in your space is working, you may need to rethink the core problem you're trying to solve.

Pivoting can breathe new life into a startup, but it requires careful thought and strategy. By focusing on understanding your users, refining your value proposition, and avoiding common traps, you can make pivots that truly drive growth.

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