There have been several famous pivots in American business over the last twenty or so years.
YouTube began as a dating app before pivoting to redefine entertainment and television as we know it. Instagram began as a location-based check-in app before pivoting to become the platform of choice for every celebrity and celebrity-obsessed teenager on the planet. Twitter was once an application primarily dedicated to helping people find podcasts before it became, well, the platform of choice for politicians aspiring for world domination.
And, of course, there is Ross Geller of Friends shouting “Pivot!” over and over in a video that’s been viewed millions of times. There is a good chance that many of those views come from founders working in the startup world who understand just how challenging, necessary, and sometimes inevitable pivoting their company can be.
After spending more than twelve years in the real estate industry—including serving as the founder and CEO of a brokerage that was #89 on the Inc. 500—I founded Transactly, a platform built to increase trust and transparency, while creating a better experience for buyers and sellers. The platform is designed to solve one of the biggest problems in real estate transactions: an almost complete lack of understanding about how the process of buying a home works. We decided to solve that problem by providing a dashboard that real estate agents could use with their clients.
The problem with that approach?
It was too disconnected from the entire transaction. While buyers and sellers are better off being more informed, increased transparency doesn’t directly benefit agents. It’s not that agents necessarily want their clients to be uninformed; it’s just that we were trying to solve a problem that wasn’t top of mind for one of our primary customer segments: agents who will pay subscription fees for the service.
As a result, we’ve pivoted to providing qualified leads to agents who’ve agreed to use the platform. Rather than marketing our platform to agents under the premise that we are solving a problem that doesn’t directly impact them, we’ve begun marketing directly to buyers and sellers and matching leads with trusted agents who subscribe to our platform.
It isn’t a YouTube-level pivot, but it is a significant pivot and change to our marketing approach and business model.
It is a hard thing to admit when you were wrong or at least on the wrong track—especially when you’ve had prior success as an entrepreneur. However, pivoting your startup is not a sign of failure. Embracing a pivot shows that you understand the value of the product, platform, or service you’ve developed, while acknowledging that there are better markets or better ways to reach a target market than you had anticipated.
As an entrepreneur, you don’t know what you don’t know until the market tells you what you don’t know.
When we beta-tested Transactly, the market told us there is tremendous value that will come from increasing trust and transparency between buyers and sellers; we were just taking the wrong approach to reaching real estate agents. We needed to fix that. We needed, in other words, to pivot—and by pivoting we now have a large, dedicated, and growing base of partner agents who have adopted our platform, and a steady stream of buyers and sellers connecting with them.
Jeff Bezos once said in an interview that he didn’t think consistency in thought was a particularly positive trait. He went on to say that the people who are most often right are the people who most often change their minds. Stated differently, what Bezos meant is that being a successful entrepreneur means being willing to learn the lessons the market and your customers are trying to teach you.
Smart, strategic pivots that result from customer feedback are not a sign of failure. In fact, the more you cling to original convictions, the more likely you are to fail in the rapidly changing environment of a startup. If what you’re doing isn’t working, but there is clearly value to the platform you’ve built, follow the lead of YouTube, Instagram, Twitter, and Ross Geller—and be willing to pivot.
It’s working for us at Transactly.
And it might work for you.