The word “pivot” gets thrown around a lot in the business world. But in the entrepreneurship field, it has a specific meaning: a venture’s change of direction, triggered by the pursuit of a different opportunity.
A research team that included Jon Carr, Jenkins Distinguished Professor of Entrepreneurship, is challenging and expanding on that definition. In a study available in the April 2024 Journal of Management, Carr and his peers describe the “survival pivot,” a distinct phenomenon that’s more common and less studied than its opportunistic counterpart.
Survival pivots occur when firms identify threats and reorient themselves to stay in business. They tend to unfold faster than opportunity pivots, Carr and his co-authors wrote, and they tend to remake the firm’s business model approach more extensively, leaving fewer elements of the original venture.
Carr recently discussed why he’s interested in pivots, what’s next for his research, and the survival pivot that kept him afloat when his venture began to show signs of failure.
What did you and your co-authors learn about survival pivots?
There are a lot of intriguing things about a survival pivot–how they happen and what a firm faces in these kinds of situations.
A lot of times, there’s a precipitating event or a precipitating realization that they have to do something different right now. Maybe they’re confronted with internal information that’s saying, “We’ve got three months left, and then we don’t have any money.”
There are a lot of individual characteristics and trajectories that entrepreneurial firms and entrepreneurs themselves fail to see correctly. Some of the motivating literature that caused us to think this way was built around venture pitches by entrepreneurs who are told by advisors or investors or private equity people: “Hey, your thing ain’t that great.”
But they’re so in love with their solution or their product that they can’t switch away from what they fell in love with. After they have launched, they can become blind to the reality that the world isn’t knocking down their door.
It’s that recognition that becomes such a key first step, before a venture can engage in any kind of survival pivot.
If it happens more often, why has the survival pivot gotten less scholarly attention?
A: Pivoting is still a new area of research for entrepreneurship scholars, from an academic standpoint. I think that’s why this paper was looked upon so favorably. This is sort of the elephant in the room. How many stories and even movies have we seen about a firm crashing to the ground? And in some instances, it was because they just failed to pivot from a firm survival standpoint.
What makes pivoting an interesting topic for your and your team?
A: As a former entrepreneur, I’ve been through this before, so it was very practically relevant to me. I was involved in a healthcare startup that was going under fast, so we had to completely shift our venture’s business model. So, having the realization that it wasn’t working, that the company was bleeding money, we had to shift what we were doing to a different sort of target market and create new systems and approaches that actually make it work.
Did that work?
Yeah, it did, and I got to keep my house. Which was a wonderful outcome, as you can imagine.
Where does your pivot research go from here?
Something that our study’s lead author, Jared Allen (Assistant Professor of Management at Texas Tech University), and I have talked about very early on is that venture failure is kind of like rolling down a hill. And as you’re rolling, the failure possibilities are accelerating faster. There could be a particular point where, even if you recognized the need to pivot, you can’t. You’re too far gone.
Finding that point is a whole area of research that’s now opened up, based on this survival-pivot-vs.-opportunity-pivot conversation.
What’s the significance of having your research published in a Financial Times 50 journal?
The hope is that the lessons learned from these types of publications can help drive what practitioners do. And we hope some of these lessons help drive the instruction we provide our students here at NC State.
This post was originally published in Poole Thought Leadership.
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