Stick or Twist? - When to Pivot
It’s tempting to stick with an idea if you’ve invested time, and especially money, into something. This could be a pet project you’ve been working on, a concept you’re developing, or even a stock market investment. But at some point, you need to take a pragmatic, mile-high view on things and ascertain whether it’s right to continue, or pivot!
1. Recognizing Sunk Costs
The "sunk cost fallacy" refers to the phenomenon where people justify increased investment in a decision based on the cumulative prior investment. In simpler terms, it's the mindset of "I've already put so much into this, I can't give up now." It's essential to recognize that past investments shouldn’t impact future decisions. Instead, make decisions based on potential future outcomes.
2. Data Doesn’t Lie
Before making any drastic changes, collect and analyze the data. It’s your best friend in this situation. Metrics can provide an objective view of how your project or investment is performing. If the data consistently indicates stagnation or decline, it might be time to pivot.
3. Feedback is Gold
Listen to your users, clients, and trusted advisors. They often see things from a different perspective and can provide valuable insights. If multiple people are giving you the same feedback, it might be an indication of a bigger issue at hand.
4. Trust Your Gut
Data and feedback are crucial, but never ignore your intuition. Entrepreneurs often have a gut feeling about their projects. If something doesn’t feel right, delve deeper into the issue.
Contrary to point 3, sometimes you may have to ignore some people if you truly believe in your idea or product. If it’s really original or groundbreaking then you may be the only one who believes until it’s actually a success.
5. Understand the Landscape
Changes in technology, market demands, or regulatory environments can impact the viability of a project or investment. Continually assess the landscape and adjust as needed. If the ground has shifted beneath you, it might be time to pivot.
6. Define "Success" and "Failure"
Having clear definitions of what success and failure look like can help you make more objective decisions. If your project or investment is consistently falling short of success metrics but hitting the failure markers, reconsider your direction.
7. The Power of Small Pivots
Not all pivots need to be large, sweeping changes. Sometimes, small adjustments can lead to significant improvements. Assess if there’s a smaller pivot that can address the core issues without a complete overhaul.
8. Know When to Walk Away
As difficult as it may be, sometimes the best decision is to walk away. If you’ve analyzed the data, sought feedback, and still see no path forward, it might be time to let go.
Conclusion
Pivoting can be a challenging decision, especially when you're emotionally and financially invested. However, by regularly assessing your direction using data, feedback, and intuition, you can make informed choices that will lead you to success, whether that means sticking to your current path or forging a new one. Remember, every twist and turn on your entrepreneurial journey offers a learning opportunity. Embrace it.
