Written by James Chae — Co-Founder, Expert Sapiens
Reviewed March 2026
Business Strategy
Definition
A deliberate, structured change in a startup's or business's core strategy — whether its product, market, revenue model, or technology — in response to evidence that the current approach is not working.
The concept of pivoting was formalized by Eric Ries in 'The Lean Startup' as a structured course correction designed to test a new fundamental hypothesis about the business. A pivot is not a minor product update or a sales tactic change — it is a significant strategic shift in one or more of the key dimensions of the business model: the customer segment targeted, the problem being solved, the solution offered, the channel used, the revenue model, or the underlying technology.
Ries categorized pivots into distinct types. A customer segment pivot means keeping the product but targeting a different customer. A problem pivot means keeping the customer but solving a different problem for them. A platform pivot means shifting from a product to a platform (or vice versa). A channel pivot means distributing the same product through a fundamentally different sales channel. A revenue model pivot changes how the business captures value — switching from one-time sales to subscriptions, for example, or from B2C to B2B.
The most successful pivots in startup history illustrate how radical the change can be: Slack began as a gaming company (Glitch); YouTube started as a video dating site; Instagram was originally Burbn, a check-in app; PayPal started as a cryptography company for Palm Pilots. In each case, the founding team identified a specific behavior or insight in their early user base that pointed toward a different and larger opportunity.
Pivots are most effective when driven by systematic learning rather than panic or investor pressure. The lean methodology prescribes building a minimum viable product, measuring specific hypotheses, learning from the data, and then deciding whether to persevere or pivot based on evidence — not gut feel.
Knowing when to pivot and how to execute it well is one of the highest-leverage decisions a founder makes. Pivoting too early wastes an opportunity to iterate toward product-market fit; pivoting too late wastes runway on a model that data has already disqualified. Many founders struggle to make this call objectively because of emotional attachment to the original vision.
A business consultant or experienced strategic advisor can provide the outside perspective needed to evaluate whether the evidence calls for a pivot, which type of pivot fits the data, and how to structure the transition without destroying team morale or burning cash unnecessarily. Investor relations during a pivot also require careful management.
Written by James Chae — Co-Founder, Expert Sapiens
Reviewed March 2026