New ventures need to ‘pivot’ gracefully to avoid alienating their initial user community, says a new study co-authored by Professor Paul Tracey of Cambridge Judge Business School.
athletes, companies “pivot” in adapting to changing circumstances.
But while a bad pivot in football could result in losing the ball, in business
the risks are even greater – alienating loyal customers and sparking a
is especially prevalent among startup ventures, which may have to radically
transform themselves because their original approach has failed. Such pivoting
risks disrupting relationships with “user communities” that engage
intensively with a product and therefore form a strong identification with the
what’s a startup to do when conditions require pivoting, but key stakeholders feel
betrayed and pose resistance?
study co-authored by Paul Tracey, Professor of Innovation
& Organisation at Cambridge
Judge Business School, argues that there are techniques to defuse such an “existential
threat” to new ventures – and the key is to create a “bond”
focused around shared experience of the startup and the venture’s early
can remove the affective hostility of stakeholders and rebuild connections with
many of them by exposing their struggles,” says the study just published in
the Academy of Management Journal. In
other words: user communities show a little tenderness if they better
understand the venture’s difficult journey.
study focuses on a dramatic pivot by the Berlin-based Impossible Project, an
analog instant photography venture founded in 2008 to relaunch production of
Polaroid film after the Polaroid Corp. went bankrupt.
initially focused on a small niche of dedicated customers known as Pioneers,
but this analog community proved too small to sustain the venture. So
Impossible in 2013 pivoted from being a pure analog instant film provider to a
company that sought to redefine analog instant photography in a digital world for
the mass market. This strained relations with the Pioneers, many of whom turned
against the venture and stopped buying film.
Impossible tackled this issue by engaging in what the study terms “identification
reset work” – which involved “emotionally reconnecting with
stakeholders to put their relationship on a new basis.” Impossible did
this by generating empathy for the venture and its challenges, and by mythologising
the technology of analog instant photography – even invoking the memory of
legendary Polaroid founder Edwin Land. “By revering the technology,”
the venture helped to “idealise its struggles.”
of Impossible’s initial user community then came around to resume support for
the venture: they reconnected with Impossible’s mission out of “reverence”
for its products and its efforts to improve them.
“The ideas in the paper could apply to any user community,” says co-author Paul Tracey of Cambridge Judge. “The most famous example is Reddit, the aggregation and discussion website, whose users revolt all the time. But you also see similar dynamics affecting any company whose customers identify strongly with a product – like the 2015 protests after Cadbury changed the recipe of its Crème Egg.
while Cadbury is part of a big multinational that can weather consumer
protests, this kind of rebellion can be fatal to startups because they are
usually resource constrained and very reliant on their users.
while entrepreneurs are advised to build user communities and forge close
relationships with customers, they often forget the flip side – that building
these kinds of relationship creates a sense of obligation. So if you do something
users don’t like, they can treat it as an act of betrayal and turn on you – and
such risks are greater in later stages of a venture.”