After running experiments, every team faces a pivot-or-persevere decision. To persevere is to continue on the current strategic path because experiments confirm that the hypotheses are correct and the approach is working. A pivot, by contrast, is a structured course correction: changing one element of the business model based on validated learning. Pivots are not signs of failure but signs of learning. Founders are encouraged to keep a "pivot table," a record of every strategic change that documents what was learned and why the direction shifted.
Eric Ries describes several common types of pivots. A zoom-in pivot occurs when a single feature of the product becomes the entire product, with what was a sub-feature now becoming the whole focus. A zoom-out pivot is the opposite: the current entire product becomes just one feature of a larger product needed to solve the customer's underlying problem. A customer segment pivot keeps the product the same but targets a different customer segment than originally intended, because the product solves a real problem, just for different people. A customer need pivot retains a similar customer segment but addresses a different problem they have. A channel pivot changes the distribution or sales channel, for example moving from direct sales to self-serve, or from web to mobile, while keeping the product largely the same. A technology pivot achieves the same solution using a different technology, often to improve performance, reduce cost, or reach a new platform.
Steve Blank's customer development methodology provides a complementary structure for testing business model hypotheses through direct customer engagement. It proceeds in four stages. During Customer Discovery, the team tests whether the problem and solution hypotheses are correct by talking to potential customers, an activity Blank famously calls "getting out of the building." In Customer Validation, the team tests whether it has a repeatable, scalable sales process, proving that customers will actually pay for the solution. Customer Creation focuses on driving end-user demand into the sales channel, scaling marketing and sales activities based on the validated model. Finally, in Company Building, the startup transitions from a learning organization to a mission-focused company with formal departments and processes. The first two stages are the realm of experimentation, while the last two are about scaling what already works.