So your company is pivoting – here’s how to respond

It’s tempting to dig your heels in, but it won’t hurt anyone but you.

👋 Hi, it’s Greg and Taylor. Welcome to our newsletter on everything you wish your CEO told you about how to get ahead. 

I pivoted my previous company, FirstUp, 3 times.

Every time, the pivot was painful and exhausting. Most of the team thought I was crazy – especially those who had been around for the previous pivots. I remember driving home from a late night in the office, thinking, “This one might cost me my marriage” (that’s another post).

Luckily it didn’t – and the third pivot eventually worked. 10 years later, the company crossed $100M ARR, but those first two years of that pivot were brutal.

We’re in the middle of a pivot at Section – and I think we will see a LOT of pivots over the coming year. SaaS is mature and enterprise buyers are hard to find, so stalled SaaS companies with capital will try the “AI pivot.” Or they’re already in AI, and they’re pivoting to a different product (or trying to get bought already). So don’t be surprised if your CEO calls an All Hands soon with “an important company update.”

When a pivot happens, it can be tempting to be skeptical or even resist. But pouting won’t prevent your company from moving forward. And getting on board with a pivot can accelerate your career. I still remember the 10 people (out of about 50) who helped me execute our final pivot at FirstUp. Most became leaders in the company, and now are leaders at other startups.

When your CEO announces a pivot, it’s time to lead … or leave. Here’s how to do it. 

- Greg 

What’s going on when your CEO decides to pivot

When we say “pivot,” we mean your company is making a significant (sometimes drastic) change to the existing product or the existing market you serve – for another shot at growth.

If your CEO is saying you need to pivot, they’re not just flailing toward a new idea (most of the time). Here’s what’s going on:

- The current business isn’t working – either your CEO can’t see a path to break-even with current capital, or they CAN see a path but the company will cap out in revenue and therefore valuation. 

- There are fundamental flaws in the company’s original assumptions: the size of your market, rate of growth, margins, etc. Often the assumption is as simple as, “We thought more people would want this.”

- Your CEO has already considered other pivots – but you didn’t hear about them because they didn’t go anywhere. They’ve likely been talking about this for months and have considered 5+ options.

How to be a leader in a pivot 

Your instinct when your CEO announces a pivot might be to roll your eyes. We get it. It usually sounds like (and is) more chaos, work, and risk.

Your job is to evaluate the pivot, get yourself to believe in it, and then commit. And if you can’t do that, it’s time to move on. 

How to do it: 

1. Accept that the current business isn’t working. This is a critical step. When we’ve pivoted before, we’ve heard people say, “I joined this company for our original mission – why are we abandoning that?” They don’t see what we see: that the original mission, product, or business model isn’t getting us the growth we need to return capital to investors or get to break-even. To buy into a pivot, you need to accept that what you thought would work hasn’t worked or is just too small a business (which means it hasn’t worked).

2. Suss out whether the decision has actually been made. Is this a thought exercise from the leadership team, or are they fully bought in? If it’s still being considered, jump in and help the team make a better decision. That doesn’t mean “poking holes in the plan” – it means discarding your preconceived notions (“this won’t work”), doing the research, staying intellectually honest, and helping them make a smarter call.

3. Understand what the next six months looks like. In other words, what are the milestones and key outcomes needed to prove this idea out? Even if the decision is “made,” there are still usually 6-12 months where the plan could change based on the signals you’re getting back. Figure out which data points the company needs in the next 6 months, then be a partner to your leadership in getting them.

4. Assess your current focus, in terms of new business / old business. Businesses don’t pivot overnight, so you’ll still be working on the old business as you’re setting up the new one. But even if you’re in a role that has to focus on the old business (e.g., you’re marketing the current product while the product team builds the new one), spend at least 25% of your brainpower on the new business. Make sure you’re dedicating time to thinking about the pivot and what needs to be done — not just plugging away at tasks that won’t be relevant in a year. If you’re that marketer, start to think about the new business, run messaging tests, and develop positioning options.

5. Get on the projects that matter. With the 25% you have allocated, get yourself on the projects that matter to the pivot, whether it’s collecting data, setting up the new product, or figuring out go to market. The people on those projects will be the “critical 10” who make the pivot happen.

Our advice

A pivot can be a defining moment for you and your career. 

As we said in a previous post, you need one experience on your resume that shows you can work through a crisis. But don’t stay to show you are tough. Stay because you believe in the pivot and the plan. Sometimes that means you have enough data to indicate this is the right direction; other times it means you just trust the management team.

Either way, be intentional. Think about it, buy into the pivot, and go hard to make it work. Or leave. 

And resist the urge to talk shit. We get it – it feels good to go to your peers and say, “WTF is the CEO thinking?” But if you’re actually trying to make the pivot work, talking shit undermines that progress. Bite your tongue and try to be the person who says, “Here’s how I’m thinking about the potential upside” or “here’s what we need to prove next.” 

To the next 10 years,
Greg & Taylor