If there were to be a single word that describes the Lean Startup methodology, I’d vote for “Pivot.” However, “Pivot” is one of the most abused terms in the lexicon of a Lean Startup.
In his book, “The Lean Startup,” Eric Ries notes: “A pivot is a special kind of change designed to test a new fundamental hypothesis about the product, business model, and engine of growth.” He then lists 10 types of pivots that can occur in a startup. He suggests that startups should have regular “Pivot or Persevere” meetings. The typology of pivots is strongly tied to the building blocks and profit logic of a business model. However, Ries does not illustrate the typology of pivots especially within the framework and profit logic of a business model.
This presentation on the 3-Act Business Model Storyboard visually organizes the 10 types of pivots within the profit logic of a business model; see http://goo.gl/MorILv . Consequently, one can see how a pivot in one part of a business model affects other parts of the Lean Startup’s business model. The Business Model Storyboard also indicates why it’s difficult to make pivots or structural changes in established business models; I describe this phenomenon as “Pivot Inertia (PI).” Pivot Inertia is responsible for the demise of once established firms such as Blockbuster and Borders. Overcoming Pivot Inertia is critical for the success of both startups and established businesses. Google, PayPal, and Groupon all overcame Pivot Inertia and made a fortune.
Finally, there is a template of the Business Model Storyboard that facilitates application of the Lean Startup Method. In particular, the Business Model Storyboard facilitates the process of formulating, testing, and validating business model hypotheses of Lean Startups. Using the Business Model Storyboard should make easier the understanding, planning, and execution of pivots in both startups and established companies.