When should tech startups pivot?

: determining factors leading to a pivot

Abstract

Recent years have seen the field of entrepreneurship gaining a lot of traction. However, despite very insightful learning over the past decades, the entrepreneurial process continues riddled with uncertainty and new ventures still have staggering failure rates. In the interest of understanding the complex mechanism of entrepreneurship, we examine a specific component that is often overlooked – the Pivot. A pivot is broadly defined as shift in the business model strategy. Although the concept has been recently popularized by the work of best-selling authors such as Eric Ries, there is a lack of actual empirical research on the subject, particularly, in the technological field, in which both the level of uncertainty and growth opportunities are greatly amplified. This study focuses on understanding the impact a pivot has on technological startups, and factors that lead to a pivot. Drawing heavily from the work of Comberg et al., we employ a mixed methodology by analysing five pivot case studies, along with survey data. Results confirm the overall positive impact of a pivot on a startup’s development and identify five influential factors leading to the decision to pivot – Founders’ Role; Cash and Financing; Sustainability; Market Conditions; and Business Financials – while disproving the importance of New Technology. Implications for theory and practice are then discussed.

Date of Award	8 Mar 2018
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Cláudia Isabel de Sousa Costa (Supervisor)