Flickr started as an online game tool. Nokia started as a paper mill. PayPal started as a Palm Pilot money exchange. Starbucks started as an expresso maker and coffee bean seller. Suzuki started as a silk loom manufacturer. YouTube started as a video dating site.
“Many new ventures have to pivot—radically transform what they are about—because their original approach has failed. However, pivoting risks disrupting relationships with key stakeholders, such as user communities, who identify with ventures. Stakeholders may respond by withdrawing support and starving ventures of the resources needed to thrive. This can pose an existential threat to ventures,” according to an Academy of Management Journal article.
“Pivoting is seen as a silver bullet for failing new ventures, but our study actually finds that it can be a double-edged sword, that it can backfire,” said coauthor Christian E. Hampel of Imperial College London. “Rather than being a surefire path to salvation in times of trouble, pivoting can create a whole new set of survival-threatening troubles.”