Pinion Blog
Why I Love Pivots (The Counterpoint)
A pivot is sometimes the best thing that can happen to an early-stage investment. The founders I most want to back are precisely the ones willing to do it.
I wrote a piece last week about why I hate it when one of my investments pivots. Everything in it was true. The pivot isn’t the business I underwrote, it costs me my pattern matching, it sometimes reveals uncomfortable things about the founders, and it resets the clock on an already-long-duration bet.
But that was the half-hour-after-the-email version. Here's the other half of the argument, the version I sometimes arrive at once my initial irritation wears off: a pivot is often the best thing that can happen to an early-stage investment. The founders I most want to back are precisely the ones willing to do it. And some of the best outcomes in my portfolio - and in the entire history of venture - came from a team that had the courage and clarity to abandon the original plan.
If hating the pivot is my heart speaking, then perhaps loving the pivot is my brain. Here’s why I love a good pivot.
A pivot means the founders are paying attention to the market
The original business plan was always going to be wrong. Not entirely wrong, but wrong in important ways - that's the nature of starting something at the earliest stage, when you have a thesis and a deck and very little contact with reality. The plan is a hypothesis. The whole point of the first eighteen months is to test that hypothesis against the market and find out where it breaks.
A founder who pivots is telling me they ran the experiment and read the results honestly. They didn't fall so in love with the original plan that they kept marching it into a wall. They didn't ignore the data because the data was inconvenient. They looked at what the market was actually telling them and they responded.
That's the behavior I want. The alternative - a founder who sticks rigidly to the original plan regardless of what they're learning - is far more dangerous to my investment than a founder who adapts. Stubbornness in the face of contradicting evidence is not conviction; it's a failure to update. The founders who never pivot aren't all visionaries holding the line. Some of them are just not listening.
When I see a thoughtful pivot, I see a team that's coachable by reality.
The best pivots come from inside the business
The most valuable information about where a startup should go almost always comes from being in the market, not from the original strategy work. The founders learn things building the first version that no amount of pre-launch diligence could have surfaced. A customer uses the product in a way nobody anticipated. A small feature turns out to be the thing people actually want. An adjacent problem turns out to be more painful and more fundable than the one they set out to solve.
These insights are only available to the team that's already in motion. They're the dividend of having built something, shipped it, and watched real people interact with it. A pivot driven by this kind of learning isn't a retreat from the original thesis - it's the original thesis paying off in an unexpected way. The team bet that this market was worth entering. They entered it. And the act of entering taught them where the real opportunity was.
When I underwrote the investment, I was betting on the founders' ability to navigate toward a large outcome. A learning-driven pivot is that exact ability in action. It's the bet working, even though it doesn't look like what I expected.
A pivot can be the moment the real company is born
The venture history is almost embarrassing on this point. Slack was the internal communication tool built by a team trying to make a video game. The game failed; the tool became a generational company. Instagram started as a cluttered check-in app called Burbn and stripped itself down to the one feature that worked. YouTube began as a video dating site. Shopify was a snowboard shop that built its own e-commerce software because nothing good existed.
In each case, the pivot wasn't a footnote in the success story - it was the success story. The original business was the vehicle that got the team into the right neighborhood, and the pivot was the moment they found the actual house. If those founders had stuck with the original plan out of loyalty to their first idea, or out of fear of what their investors would think, the real company never would have existed.
I try to keep this in mind in the half-hour after the pivot email, when my instinct is to mourn the original business. The original business may have been the cocoon, not the butterfly. The company I underwrote might have just been the thing that got these founders to the company that's going to make my portfolio.
When pivots are appropriate
Not every pivot is a good one, and loving pivots in general doesn't mean approving of every specific pivot. The distinction I try to make is between pivots that come from a position of insight and pivots that come from a position of panic.
A pivot is appropriate when:
It's driven by learning, not desperation. The best pivots happen because the team discovered something true about the market, not because they're out of money and need a new story to tell investors. The tell is timing: a pivot announced alongside genuine evidence and a clear post-mortem is different from one announced two months before the cash runs out with no real explanation of what was learned.
It builds on existing strengths. The strongest pivots leverage something the team already has - a technology they built, a customer relationship they earned, a distribution channel they cracked, a domain insight they developed. A pivot that throws away everything and starts completely fresh is far riskier than one that redeploys existing assets toward a better target.
The new direction is more focused, not less. Good pivots usually narrow. The team finds the one thing that's working and doubles down on it, cutting away the rest. Pivots that expand - that add new markets, new products, new ambitions without abandoning the old ones - are often a sign of a team that hasn't actually decided anything, just added hope.
The founders can articulate why the new thesis is better. A team that pivots well can tell you exactly what they learned, why the original approach didn't work, and what specifically makes the new direction more promising. If the explanation is crisp and evidence-based, that's a good sign. If it's vague and enthusiasm-driven, be careful.
There's enough runway to execute it. A pivot needs time and capital to play out. A team pivoting with eighteen months of runway can actually test the new thesis. A team pivoting with three months of runway is gambling, and the pivot is more likely a Hail Mary than a strategy.
The reframe
When I put it this way, the thing I claimed to hate in the other essay starts to look like the thing I should want most. We back founders at the earliest stage precisely because we believe in their ability to navigate uncertainty toward a large outcome. A pivot is that. It's uncomfortable for me because it invalidates my diligence and resets my clock - but my discomfort is not the point. The point is whether the company finds its way to something big, and pivots are often how that happens.
The honest synthesis of my two essays is this: I hate the experience of a pivot, and I love the capability it represents. The experience is a tax on my attention and my thesis. The capability is the entire reason I invest in people rather than plans. A founder willing to pivot is a founder willing to do whatever the company needs to be successful.
So when the next pivot email lands, I’m still going to be annoyed. And then I'll read it again, looking for the signs that this is a team finding its way to a market that is legit.