To pivot or not to pivot: On the relationship between pivots and revenue among startups

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Scopus citations

Abstract

The concept of the pivot, whereby a new venture alters its offering or business model, is standard practice among new ventures seeking to validate their value proposition in uncertain markets. Whereas a new venture begins with a business model driven by the entrepreneur's perception of the market, pivots driven by market feedback align the venture with market need. However, we argue that executing too many pivots can adversely affect firm performance by postponing the maturation of the firm. Using change in a venture's NAICS code as a proxy for pivoting, we show an inverted-U relationship between revenue and the number of pivots among Kauffman Firm Survey participants. This longitudinal empirical study is one of the first on the relationship between pivoting and performance. It aims to attract attention to this important topic of entrepreneurship, and help the entrepreneur facing the difficult decision of whether or not she should pivot.

Original languageEnglish (US)
Title of host publicationProceedings of the 52nd Annual Hawaii International Conference on System Sciences, HICSS 2019
EditorsTung X. Bui
PublisherIEEE Computer Society
Pages5449-5454
Number of pages6
ISBN (Electronic)9780998133126
StatePublished - 2019
Event52nd Annual Hawaii International Conference on System Sciences, HICSS 2019 - Maui, United States
Duration: Jan 8 2019Jan 11 2019

Publication series

NameProceedings of the Annual Hawaii International Conference on System Sciences
Volume2019-January
ISSN (Print)1530-1605

Conference

Conference52nd Annual Hawaii International Conference on System Sciences, HICSS 2019
Country/TerritoryUnited States
CityMaui
Period1/8/191/11/19

All Science Journal Classification (ASJC) codes

  • Engineering(all)

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