Business Model Pivoting

I built AI products. My best clients wanted the builder instead. Last week, I saw Gokul Rajaram's post on X that perfectly captured what I've been experiencing: "ENTERPRISE AI: BUILD AGENTS, NOT TOOLS" He noticed AI startups are pivoting from selling tools for building agents to actually building and running those agents for enterprises themselves. This hit home. Six months ago, our company was exclusively product-focused. We'd built sophisticated AI tooling that solved specific GTM problems. The platform was solid, but something interesting kept happening. Our churning customers all shared a pattern: they loved the tool's capabilities but struggled to integrate it into their broader strategy. They had the technology but lacked the expertise to maximize it. Meanwhile, our most successful customers kept asking for more. "Can you help with our sales strategy too?" "Would you look at our entire customer journey?" They valued our strategic value add as much as our technology. The signal was clear. We were selling hammers to people who needed houses. So we pivoted. We evolved from a pure product company to offering full-stack solutions—building and running AI agents while providing strategic guidance. Our original platform became just one component of our offering. This mirrors exactly what Gokul observed: "Enterprise AI defensibility and value creation might lie in the full-stack approach to building, running and evaluating agents. Almost consulting-ish." The transformation wasn't easy. I worried about scaling concerns. About being "just a service business." About losing our technology identity. But the market was telling us something important: the biggest barrier to AI adoption isn't technology—it's expertise. Enterprises don't have the talent density or specialized knowledge to implement complex AI workflows effectively. This expertise gap creates an opportunity for startups willing to be full-stack providers. You own the outcome, not just provide the tool. Revenue more than tripled since our pivot. Customer satisfaction is at an all-time high. And we're building better technology because we deeply understand implementation challenges. The irony? By becoming "more service-oriented," we've created greater defensibility than we had as a pure technology vendor. In emerging technology markets, your expertise in implementing solutions often creates more value than the technology itself. AI adoption is fundamentally about bridging capability gaps, not just providing tools. #startups #founders #growth #ai

Almost a year ago, I launched my startup’s MVP with high expectations. I thought I had an awesome solution to a pervasive problem—too many meetings. 🗓️ But the customer didn't flood in. Those who did sign up? Most weren’t active users. So, I refined the onboarding. Removed friction. Simplified everything. That had to be the issue, right? Nope. Maybe I wasn’t targeting the right customer segments? So, I worked on my Go-To-Market strategy. Refined my positioning. Reworked my messaging. Guess what? That didn’t do enough either. So, what do you do when adoption isn’t where you need it to be? I went back to first principles. Revisited my assumptions—those I thought I had validated and those I hadn’t. Here’s what surfaced: ✅ My target customer segment was too broad—making it harder to speak with relevance and resonate. ✅ My problem space - reducing meetings didn’t drive enough action —no matter how much people complain about meetings. ✅ People SAY they want fewer meetings, but most aren’t motivated enough to change their daily behaviour and challenge group norms. ✅ Getting an entire group to adopt a new way? Even harder. Group dynamics and organisational culture push back. So, when do you pivot? What I learned was this. If you're building a scalable, high-growth startup, start thinking about a pivot when: 1️⃣ You aren’t focused (initially) on winning a super-targeted customer segment with a clear job to be done. - If your audience is too broad, it’s hard to create messaging that resonates. - Narrow your focus to customers who urgently need your solution, are reachable, and are willing to pay. 2️⃣ The problem isn’t urgent or motivating enough for customers to change behaviour. - People complain about problems all the time, but that doesn’t mean they’ll take action. - If your customers aren’t hacking together their own workarounds, or if your solution isn’t 10x faster/easier or saving them a LOT of money, reconsider your customer-problem-solution fit. 3️⃣ Strong forces are working against adoption. - Group dynamics, organisational culture, distributed authority, or regulatory requirements can create serious friction. - If you’re facing headwinds, explore alternative customer segments or product approaches. 4️⃣ Customers aren’t willing (or able) to pay for a solution upfront. - Even the best ideas stall without revenue. If your model depends on a different monetization route (e.g., two-sided markets), make sure credible payers exist. 5️⃣ You don’t have a sustainable competitive advantage. - If competitors can easily replicate your solution for your target segment, scaling becomes a race to the bottom. - Find your unique, hard-to-copy advantage—or explore an alternative customer-problem-solution set that offers one. I’m still deep in the journey, but these lessons have reshaped how I think about building products. Would love to hear from other founders and innovators —when did you know it was time to pivot? #startup #pivot

I'm 2 years into multipreneurship. I embarked on this journey because I loved the early days of building Morning Brew, and I wanted to recreate that feeling over & over & over. The plan was simple: - Incubate 1-2 new businesses per year - Spend most of my time in the 0-to-1 - Bring on a CEO as soon as a business' cash flow can afford it - Fire myself from the business within 12 months I had doubts about this model from the jump. 1) Building something great requires maniacal focus. This model is unfocused by design. 2) I had an early win with Morning Brew, but I wasn't sure if I was lucky or actually good. 3) It was unclear if I could find great talent that would subscribe to this model. It's only inning 2 & there's a lot to be proven, but early signs are strong. Quick case study... Business: storyarb Description: World-class content for high-growth B2B brands I cofounded the business with Abby Murray 22 months ago, and since making a large pivot 6-8 months ago, it's been on fire. $3,000,000 in revenue annualized, growing 20% per month. 25% profit margins. An absolutely savage team. And I could get hit by a bus tmrw & the business would be totally fine. So some positive signals, but also a shit ton of lessons learned thus far... First, picking the right CEO is everything. You can only build a portfolio of businesses if you trust your partners to execute autonomously & successfully. Second, everything takes longer than you think. My original goal was to fire myself from storyarb within 12 months. In reality it took 18 months to get there. Third, pivoting is the rule, not the exception. The odds you nail the first product from the jump is almost 0%. Your ability to absorb info, find signal, and know the right time to shift course, is underrated. Fourth, you need the right structure or you’ll succumb to time suck. In this next phase of multipreneurship, a huge to-do for myself is to answer the following questions: - How many ideas can I work on at any given time?  - What is my process for qualifying ideas?  - What milestones must I hit to requalify ideas into legit businesses? Fifth, think of yourself as a product and your customer is your cofounder. The only way to command significant upside in businesses I launch, while being able to step out of the day-to-day is to offer so much value to my cofounder that it is worth their time. For me, it’s three things:  - Distribution: trusted audience gives my businesses unfair access - Zone of genius: my three gifts (invention, storytelling, curiosity) increase the odds of getting through the 0-to-1 - My network: past 0-to-1 my network of founders, investors, operators gives my cofounder an edge Sixth, multipreneurship isn’t for everyone. Multipreneurship shouldn’t be an empty goal. It should be the solution to a problem. My problem: I love the 0-to-1 My solution: Being the cofounder, but not CEO, of many businesses

What's the difference between an improvement and a pivot? And how do we know which we need to do? ✅ An improvement is when you make something you're already doing better, faster, cheaper, or more effective. You keep the same basic direction- you just optimize it. ✅ A pivot is when you change the direction- based on evidence that what you're doing won't get you the outcome you need. You're not just making the current path smoother, you're choosing a different path altogether. Granted, I talk about improvement a lot, but let's not forget the importance of pivoting. Pivoting the right way requires: 📌 Staying close to your customers 📌 Staying close to your team 📌 Acting based on evidence, not assumptions 📌 Moving swiftly but systematically Like Slack did. When Slack started out, it wasn’t trying to build the world’s best communication tool. It was actually a company called Tiny Speck, building an online game called Glitch. The game flopped but the internal messaging tool they built for their own team worked brilliantly. So, instead of folding, they pivoted fast. They repurposed what already worked, tested it with small groups, refined it based on feedback, and launched Slack, one of the most successful workplace tools in the world. And there's plenty out there that are relatively unknown, doing the same thing... I worked with a drinks manufacturer that created their own bottling plant instead of outsourcing the bottling. I also worked with a food supplier who added B2C to their B2B business. And a hotel who couldn't fill rooms, so rolled out "workcation packages" with dinner and spa treatments to attract more overnight business clients. There's a few lessons to learn from these pivot success stories... 1️⃣ Pivot based on facts- not fear or excitement. Pivot when the evidence tells you, and as soon as it tells you, not just because you feel like changing or because others are shouting louder. 2️⃣ Start small enough to be wrong without regret. Pivots are tiny experiments first. They’re not "bet the business" moves. They are low-cost, low-risk actions that teach you something quickly. 3️⃣ Stay close to reality, not the boardroom Many companies try to pivot by dreaming up something in a boardroom. The ones that get it right pivot by watching customers, talking to the frontline and learning what they need to do. 4️⃣ Use momentum as a resource, not a liability. An effective pivot builds off your current strengths- not by abandoning everything you’ve done, but by redirecting efforts. 5️⃣ Don't pivot alone-pivot with your people. Steer clear of sudden, secret decisions. It’s about involving teams early, gathering insights, and moving together. The best pivots are understood and supported at every level, not forced from the top. If you want to learn more about this, I suggest you read Eric Ries: "The Lean Startup" (It's not just for start-ups!) Any thoughts on how and when to pivot? Leave them below!

If you pivot your company and keep the same team, will you be more likely to fail or succeed? I kept going back and forth with another person in the startup space, and we were trying to figure out why so many pivots crash and burn. Here's the uncomfortable truth we landed on: Most founders pivot the product but not the people. Think about it. You hired a team to build a B2B SaaS platform. Six months later, you're pivoting to consumer mobile. Your enterprise sales VP is now supposed to understand TikTok growth hacks? Your B2B product manager is suddenly an expert in consumer psychology? It doesn't work. Well, it can work... but not always. A-players in one game become C-players in another. Your fintech compliance expert isn't going to crush it in social commerce. Your consumer marketing genius will drown in enterprise sales cycles. The pattern is predictable: - Month 1-2: "We're all excited about the new direction!" - Month 3-4: Team starts missing targets they would've hit in the old model - Month 5-6: Finger-pointing begins. Morale crashes. - Month 7-8: Key people leave. Pivot fails. The successful pivots? They thoughtfully evolve their teams. When Pinterest pivoted from Tote (mobile shopping) to visual discovery, they evolved the team's focus from e-commerce to social sharing. When Groupon pivoted from The Point (social activism) to group buying, they shifted from community organizers to people who understood local business sales. Even Nvidia's transformation from gaming to AI required bringing in AI researchers and reorienting their engineering teams. Now, I'm not saying everyone needs to go. Some people thrive in the new environment and become your most valuable assets because they understand both where you came from and where you're going. But ask yourself: Are you keeping people because they're the right fit? Or out of loyalty? The hardest truth: Your team didn't fail. You're asking them to play a sport they never signed up for. Want your pivot to succeed? Be honest about what skills your new direction requires. Have frank conversations about who's excited and equipped for the challenge. Help those who aren't a fit find opportunities where they can thrive. Build for what you're becoming, not what you were. The product isn't the only thing that needs to pivot.

What do you mean pivot? Does that mean you don’t have any customers right now? I got this question from an investor last week. It took everything in me not to let out a long, heavy sigh. There is a fundamental misunderstanding in the market about what a startup actually is. People think it’s a straight line. You have an idea, you build it, they come. In reality, a startup is just a portfolio of failed pivots until you find the one that works. We get emotionally attached to the product. We look at the lines of code and the late nights and think that is the value. It isn't. An unprofitable masterpiece is always worse than a mediocre product with great growth. Nobody really knows what works on day one. We all just have hypotheses. At Klipy, our evolution looks chaotic on paper: We started as a zero-admin CRM. Moved to an AI executive secretary. And now we are building a revenue defense system for enterprise sales. To the outside observer, that looks like an identity crisis. To us, it was a scientific process. Within those fancy term changes, we tested almost 50 different combinations of features and ICPs every pivot. We burned through dozens of cold outreach sequences. We rewrote the website more times than I can count. We ran paid ads against audiences that didn't care until we found the ones that did. A pivot isn't starting over. It is a change in business model. It is zooming in on a specific feature cluster that people actually use. It is changing the distribution channel because the math didn't work. So when I hear Does that mean you don't have any customers? I realize I need to explain the difference between activity and progress. Sticking to the original plan would have guaranteed we had zero customers eventually. Pivoting means we finally found the trajectory that points up. We aren't lost. We just stopped walking in the wrong direction. I'm Jung-Hong Kim - I'm the CEO of Klipy.ai. Follow me for raw thoughts and a front-row seat to the journey of building a revenue defense system.

Our first product made $100K ARR in six months. We shut it down. Our second hit $2M ARR in three months. Then we pivoted again. We stopped letting customers sign up. This chart shows what happened next: our old signup curve, flatlining overnight. It was one of the hardest decisions we’ve ever made. But it’s what led to Conversion. We just raised $28M. It’s by far the most successful thing we’ve ever built. This isn’t a story about winning. It’s a story about knowing when to walk away. Short-term revenue can trick you. Sign-ups can trick you. It looks like validation. It gives you a reason to keep going. Investors love it. Your team celebrates it. It feels like progress. But short-term revenue in AI, or any market, can be a mirage. It doesn’t ALWAYS mean people need your product. It can sometime just mean you’re good at marketing. We learned that the hard way. We started with in-game ads. Then a website builder. Then an AI SEO tool. Each one made money. But none of them were essential. The SEO product especially looked like a win. We hit seven figures in ARR quickly. But retention lagged. Customers weren’t building around us or logging in every day. They bought once, used it for a bit, and moved on. So, we shut off new customers. Completely. It’s easy to say “pivot” from the outside. But when you have a team whose livelihoods depend on you, and customers still paying you every month, it’s not so simple. Walking away feels impossible. The line between perseverance and denial gets very thin. But deep down, I knew we were fighting gravity. The energy wasn’t there. It didn’t pull people in. True product-market fit feels like the opposite. You stop pushing. People start chasing you. Slack messages pile up. Teams tell other teams. Customers feel a sense of loss when something breaks. You go from selling to being demanded. That’s when we knew it was time to start again. Pivoting isn’t a failure of execution, but a test of conviction. It’s saying no to something comfortable because you know it won’t scale. And it’s the hardest call you’ll ever make as a founder. If you’re building something and it’s working “okay,” don’t let it trap you. Revenue isn’t always traction. Listen to the energy. Know what's AI hype and what's real. Because sometimes, the billion dollar idea is one pivot away.

Wisdom can't guarantee that a startup won't die, but the hope is if it dies, it will at least be a new and interesting death. But, I've watched dozens of startups die the same death. They think they're pivoting. But really? They're just getting lost. Here's what I mean: In my Startup Garage class, I advised a team who had a decent product for HR teams. Engagement was okay, but not great. So they "pivoted" to selling a different product to sales teams. New customer. New problem. New everything. Six months later, they'd burned through runway and learned... nothing. Because they changed BOTH variables at once. I now think about this as "moving like a bishop" - changing both your X and Y coordinates simultaneously. You lose all your hard-won context. The founders who win? They move like a rook. ♜ ✅ Same customer, new problem (the AWS approach) ✅ Same problem, new customer (the Slack approach) ❌ But never both at once. I just wrote up the full framework - on the Chess Theory of Customer Discovery, inspired by my Stanford University Graduate School of Business co-instructors Jonathan Beekman and John Scull. It's helped me think much more clearly about when to expand vs. when I'm just flailing. If you've ever felt disoriented after a "pivot," this might resonate. Link in comments. 👇🏾 #business #strategy

Startups are hard. Pivots are harder. Here are 5 things I learned in the last 12 months: 1. Be different in a crowded category, not just innovative in an unknown one: It's far easier to find customers with nuanced problems in an existing market than to educate and find them in a completely new one. 2. Early competitive win rates can be deceptive: When we decided to pivot, both competitors and customers influenced us, and our win rates were low. We even heard, "You're just a cheaper [competitor]." But by finding a sub-segment with nuanced problems, we built unique capabilities that helped us win deals, even at a higher price point. 3. Go micro and iterate fast: We initially targeted SMBs, then moved to mid-market and enterprise, and then back to mid-market, only to realize our market segmentation was all wrong. Now, our definition isn't based on customer size but on their Go-To-Market (GTM) approach. We currently have over 50% win rates in our subsegment, and I predict that will exceed 90% as we develop our product in H2. 4. Knowing your persona is incredibly difficult: We solve the pipeline generation problem. Everyone in Sales, Marketing, Operations, and Leadership owns it, but the reality is there's no single owner. Factors like where SDR teams report, the size of their ABM budget, and how competitive their category is all influence who will buy. So, we now define personas by skillsets, not departments. 5. Focus on customers, not competitors: Early in our pivot, we were constantly worried about competitor feature launches. In fact, at least once, we changed our roadmap as a reaction to the competition. In retrospect, we should have stayed in our lane; we'd be two months further along today. PS: Ritika and Irwin are coming to our next show to talk about what marketing should do when pivoting while doing hundreds of millions in revenue. DM me if you want to hear more about their journey.

The pivot question nobody wants to answer. Is this a micro-move or a wrecking ball moment? Victoria and I have made both kinds of pivots. Sometimes we adjusted our pricing structure. Refined our service delivery. Shifted our target market slightly. Other times? We completely rewrote our business model. Walked away from revenue. Turned down clients that didn't fit the new direction. Both were necessary. Both were right for that moment. Most entrepreneurs get this backwards. They take a sledgehammer to problems that need a screwdriver. Or they tweak and adjust when the whole foundation is rotting. Here's how to tell the difference: Micro-move territory: Your business model works, but execution needs refinement. You're hitting goals, just not fast enough. The problem is isolated to one area. Wrecking ball territory: You keep solving the same problem over and over. Your revenue ceiling won't budge no matter what you try. You dread Monday mornings in a business you built. The mistake is treating every problem like it needs a nuclear option. Or worse—convincing yourself that massive systemic failure just needs a few tweaks and more hustle. Before you pivot anything, ask yourself: Am I renovating or rebuilding? The answer changes everything. PS. Our newsletter drops in 2 days with 10 questions that will save you from pivoting at the wrong time (or not pivoting when you should). Want it in your inbox? DM me "PIVOT" and I'll add you to the list.