If you’re trying to cut down a tree with a hand saw and you’re not making any progress, what do you do? Do you saw harder? Or do you think about changing tools?
It seems like an obvious answer: If sawing harder isn’t working, stop what you’re doing, take a step back, take a deep breath, and reevaluate your approach.
Unfortunately, that’s not always the obvious answer in business. As entrepreneurs, we think we’re supposed to grind it out. You know the advice: “Success is one percent inspiration and 99 percent perspiration,” or “Hard work beats talent when talent doesn't work hard.”
Hustle. Grind. Sweat it out.
However, as a founder, there may come a point when the grinding mentality does more harm than good.
Close wasn’t my first startup idea. Your first startup idea probably won’t be your last either.
One hard lesson I learned in my entrepreneurial career was knowing when to take a step back from an idea that’s not working and pivot.
But how do you know when it’s time to pivot or time to grind?
Why it’s Okay to Pivot
The first thing I needed to hear when I was first starting out was: Your startup is not your baby.
Becoming too attached to your original idea is a common mistake for founders. If you treat your startup like your baby, your ego can get too wrapped up in it, making you rigid in your thinking and resistant to necessary changes.
A business isn't something you can tinker with in a lab for years, perfecting the formula on your own. A business is a partnership between you and your customers. You need to give your customers what they want, not what you want them to want.
The second thing I needed to hear was: No idea survives first contact with reality.
You may believe your idea is the Next Big Thing, but once it's out in the real world with actual users, it should change and evolve based on their feedback. One of the most important skills you can develop as a first-time founder is adaptability.
It’s okay to pivot your startup. In fact, most successful startups will experience a pivot at some point. Did you know that YouTube started as a video dating service? Pivoting to what it became—the world’s largest video hosting platform—only seems obvious in retrospect.
On the other hand, when you’re in the thick of things, and you’ve sunk time, energy, and sweat into your idea, pivots aren’t so obvious. Pivoting can feel like a step backward and even a little embarrassing—but remember that a pivot isn’t the same as a defeat.
Your startup is not your baby.
Accepting Defeat isn’t the Same as Accepting Failure
When I was a new entrepreneur working on my first startup idea, Supercool School, I was like so many founders: I wanted to stick to my original idea, come hell or high water. I didn’t need multiple iterations—surely my idea was perfect from the beginning! It was only a matter of time before it was a success, right?
I was working 16-hour days, seven days a week without breaks. No social life. No vacations. Just grinding—and yet, never moving the needle.
As hard as that work was, it was even harder to admit defeat. I wanted my idea to be right so badly, I was willing to devote every waking hour to it—but my passion wasn’t translating into progress.
It’s easy for founders to become susceptible to the sunk cost fallacy, or the tendency to continue to invest time, effort, and sweat into something simply because you’ve already invested a lot of time, effort, and sweat into it. If you’re sticking with an old idea that’s not working simply because you don’t want to admit defeat, that’s a strong sign that you’re overdue for a pivot.
I had sunk as much time as I was willing to invest in Supercool School (five years, but who’s counting?). With my next startup idea, SwipeGood, I moved much faster. I was admitted into Y Combinator within a few weeks and secured my first million in funding a few weeks later.
Success comes much faster when you have the right idea and some traction, rather than the wrong idea and 16-hour days.
You won’t lose everything when you pivot to a new idea. You can take the skills and discipline you built with a failed idea and apply them to the new idea. And that should be exciting, not defeating.
I mean, give yourself a weekend to spend sulking and eating an entire box of chocolate in bed alone in the dark, but after that, it should be exciting.
No idea survives first contact with reality.
Pivot When Something Works Better, Even if it’s Not What You Expected
Remember when Netflix shipped DVDs directly to consumers? Today, it’s a streaming giant that changed the way movies and TV shows are made. But if Netflix had never pivoted to streaming, it might have suffered the same fate as Blockbuster (R.I.P.).
Sometimes, you need to pivot even when your idea is working just fine, but a better opportunity reveals itself along the way.
When growth stalled at my Y Combinator startup, SwipeGood, it became clear I would need to pivot. I wanted to take everything my team learned doing enterprise sales for SwipeGood and pivot to a “sales as a service” business for other startups called Elastic Sales.
When I pitched this idea to Y Combinator co-founder Paul Graham, he told me it wasn’t just a pivot—it was a jump. He said that with a pivot, you should still have one foot on the ground.
Whatever you want to call it, it was a jump I was willing to take because I saw a need in the market firsthand. With Elastic, we provided other startups with an on-demand, high-velocity B2B sales team. Finally, I had a business that was gaining traction in the market with real customers and we were profitable from the get-go.
There was just one problem: To offer customers the best sales team in the world, we needed to have the best sales CRM in the world. Frustrated by the lack of good sales CRMs for high-volume sales teams like ours, we decided to build a CRM from scratch to fuel our internal sales process.
We began to develop a point of view about what the perfect sales CRM should look like, iterating on it constantly to meet our own needs. Word spread around Silicon Valley that Elastic had built this amazing internal CRM for B2B SaaS companies, and people began asking when they could get their hands on it.
Our head of engineering, Phil Freo, thought we should pursue this opportunity to pivot to B2B SaaS. He pestered me relentlessly to sell the CRM in addition to the services business.
I didn’t want to do it at first. I was already running one startup, and this guy wanted me to run two startups! How many hours does he think I have in a day?! I liked the idea, but I didn’t think the timing was right.
I brushed off Phil time and time again, for months. Still, he kept bugging me. He’d pester me in the breakroom, in the parking lot—Hell, he once pitched me in the bathroom when I was truly a captive audience.
Finally, I said, “Alright, asshole! You take five people from the Elastic team, lock yourself in an office, and launch a CRM. I don’t want to hear about it anymore!”
Of course, we all know now that Phil was right. When we launched Close as a CRM, it was exactly what our customers wanted.
I ran both Elastic and Close for a full year so we’d know for certain which business would win the battle for product-market fit. Close won and we shut Elastic down after that first year.
The lessons I learned:
- Always be on the lookout for opportunities.
- Listen to your customers (and your most annoying employees, like Phil).
- Keep your finger on the pulse of the market and be willing to adapt, even if the move is not what you had in mind.
After our final pivot to Close, we were able to scale to over $30 million in annual recurring revenue—a level we never could have achieved with our original idea.
Look for opportunities. Listen to your customers. Keep your finger on the pulse of the market and be willing to adapt.
The Signs You Might Need a Pivot
Every business is different, and I can’t tell you specifically when you need to pivot, as opposed to staying the course or burning it all down. But there are a few common signs.
When it’s Taking too Long
Patience is a virtue. But only up to a point.
I spent five long years trying to make Supercool School work when it turned out I was ignoring a simple lesson: the scope of an online education platform was far too large for me to manage as a solopreneur with zero funding. That’s not a problem that can be solved by patience.
The faster you get a product out into the world, the faster you can gauge its success and the faster you can pivot. Plus, moving faster gives you the opportunity to iterate so you don’t fall victim to the sunk cost fallacy and get too stubbornly committed to any one idea.
When Working Harder Doesn’t Move the Needle
During my 16-hour days, it should have been obvious to me that my work ethic wasn’t the problem. It sounds counterintuitive, but too much hard work was the sign I needed a pivot.
If your idea is up against so much resistance that there aren’t enough hours in the day to get it off the ground, it’s time to hit the pause button. You can’t outwork a bad idea. If your passion isn’t translating to progress, it’s time for a pivot.
When Your Results Plateau
Sometimes, your idea works…at first. If your startup gets some initial traction, but growth stalls, don’t let that initial groundswell of enthusiasm fool you into thinking you won’t ever need a pivot.
Is your business seeing a huge uptick in users? Are people clamoring to send you business? Or are you only wishing the idea will eventually take off like a rocket ship “any day now”?
You might not always need a full pivot. Maybe these are simply signs that your target market is too small. Maybe your potential customers recognize the problem you’re solving but don’t believe it’s that valuable to them. Maybe your idea requires a small adjustment, like solving another problem for the same target demographic.
If your growth chart isn’t trending upward, it’s a sign that something needs to change.
When You’re Just Not Excited Anymore
Entrepreneurship requires not only your skills and business savvy but also your energy, belief, and conviction. If your internal batteries are not filling up every day with enthusiasm for your startup, ask yourself why.
Pay attention to when you’re feeling drained of motivation and creativity because those factors matter just as much as metrics and KPIs. Consider your motivation and energy levels as signals—if they drop too low, it can lead to burnout. A burnt-out founder is not an effective founder.
I like to follow the 80/20 rule: You should have 80 percent conviction and 20 percent doubt that your startup will be a success. If that ratio ever reverses, you won’t have the motivation to do the work necessary to make your startup successful.
I like to follow the 80/20 rule: You should have 80 percent conviction and 20 percent doubt that your startup will be a success.
The Pivot Might Be the Best Thing You Do
In nature, it’s not always the strongest or the biggest that wins, but the most adaptable species that survive. Be flexible. Don’t stick with an idea just because you spent a lot of time on it.
Many times in my entrepreneurial career, I found myself banging my head against the wall, frustrated that I wasn’t making any progress. I needed someone to tell me that banging your head against the wall won’t do anything—most walls are harder than your head.
Change your approach. Find a door instead. Move on to the next thing. Soon enough, your headaches will stop, and you’ll be able to think more clearly about your next idea.
