The current business model does not bring profit

[Joywtome231]

Reasons for pivot:
Low demand. If a company launches a new product or service but does not receive the expected interest from customers, it may need to reconsider its strategy. For example, if the product is too difficult to use or does not solve real problems for users, a pivot may be necessary.

In this case, the company decides what features need to be implemented to develop the product, which will help make it more attractive to users. For example, they use the Jobs To Be Done method to understand in which direction to turn.

Changing market conditions. Customer needs are constantly changing. If a company notices that its current strategy no longer meets market requirements, it may be worth considering pivoting.

For example, this is what Netflix did when they saw that people were no longer interested in renting movies. The company changed the concept: instead of renting, they launched streaming data.

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Ineffective business model. Sometimes The managers realized that the business portugal phone number list is unprofitable and something needs to be changed. In this case, changing the business model will help.

For example, initially access to the service was sold as subscriptions, but they decided to make access free. Now the company will receive income from advertisers by placing ads in its application.

It is expensive to attract customers. Sometimes a pivot is carried out to change the strategy of attracting customers. Let's say that due to the high cost of attracting customers, the company is incurring losses and may go bankrupt. In this case, a pivot is a tool for eliminating a problem in the marketing sphere.

Pivot example: Dropbox founders tested all types of customer acquisition, but they were too expensive. Then the company changed its approach to promotion: they launched a loyalty program. This is what gave the result.

Pivot is used not only in crisis situations. If you see a free niche or come up with a way to monetize a new product or service, you also pivot. That is, you see new opportunities and make a profit with them.

Here's what Eric Ries says about the reasons for pivoting in his book, The Learn Startup Method for Rapidly Testing Ideas and Choosing a Business Model.