Most Startups Pivot
But Weak Founders Call It a "Strategy Shift"
The Semantic Battleground Where Survival Meets Self-Deception
In the startup ecosystem, language matters more than most founders realise.
When a company fundamentally changes direction, the words chosen to describe that transformation reveal everything about the mindset driving it.
Strong founders embrace the brutal honesty of a "pivot" - acknowledging that their original hypothesis was wrong and they're making a fundamental strategic shift based on market feedback.
Weak founders, however, cloak the same reality in euphemisms like "strategy shift," "market repositioning," or "value proposition adjustment" - linguistic gymnastics that obscure the hard truths of entrepreneurial failure and learning.
This semantic distinction isn't merely academic.
It reflects a deeper psychological divide between founders who can confront reality and those who remain trapped in the comfortable delusion that their original vision was always sound.
The difference between these mindsets often determines whether a startup emerges stronger from its transformation or slowly dies while maintaining the illusion of progress.
Source : Forbes
The Psychology of Denial in Startup Leadership
The reluctance to acknowledge a true pivot stems from what researchers in organisational psychology call "commitment escalation" - the tendency to increase investment in a failing course of action to justify previous decisions.
In the startup context, this manifests as founders who cannot admit that their original market hypothesis, product strategy, or business model was fundamentally flawed.
Consider the stark contrast between two recent high-profile cases.
When Artifact, the AI-driven news app founded by Instagram's Kevin Systrom and Mike Krieger, shut down in 2024, the founders openly acknowledged that despite multiple feature expansions and strategic shifts, they had not found sufficient market opportunity to justify continued investment.
They didn't dress up their closure as a "strategic pivot" or "market repositioning" - they simply admitted failure and moved on.
Contrast this with the behaviour patterns observed in companies that repeatedly rebrand their failures as strategic adjustments.
These organisations often exhibit what venture capitalist Fred Wilson calls "pivot fatigue" - a cycle where leadership makes surface-level changes while refusing to confront the fundamental flaws in their business model.
The result is often a slow decline disguised as strategic evolution.
The Economic Cost of Linguistic Self-Deception
The financial implications of this psychological divide are staggering.
According to startup failure analysis from 2024, companies that acknowledged genuine pivots early in their lifecycle had significantly higher success rates than those that repeatedly made incremental "strategy adjustments" without addressing core business model problems.
The data reveals a counterintuitive truth: admitting fundamental failure often leads to greater long-term success than maintaining the illusion of continuous strategic refinement.
The case of Swipes, a personal task management app that peaked at over one million users, illustrates this dynamic perfectly.
Founder Stefan Vladimirov retrospectively acknowledged that their attempt to pivot from B2C to B2B was driven more by the desire to monetise existing success than by genuine market validation.
The company's focus on preserving the appearance of strategic evolution, rather than acknowledging the need for fundamental business model reconstruction, ultimately led to its demise after six years of operation.
This pattern is particularly pronounced in the current economic climate.
With startup funding becoming increasingly selective and burn rates under intense scrutiny, the luxury of gradual strategic evolution has largely disappeared.
Companies that cannot make decisive, fundamental changes - true pivots - are finding themselves unable to compete with more agile organisations that embrace radical transformation.
The Venture Capital Perspective on Authentic Transformation
From an investor standpoint, the distinction between genuine pivots and cosmetic strategy shifts has become a critical evaluation metric.
Marc Andreessen has noted that successful pivots require "courage and taking early action," emphasising that founders must be willing to make dramatic changes before market conditions force their hand.
This perspective reflects a broader understanding within the venture capital community that authentic transformation requires psychological courage that many founders simply lack.
The data supports this investor intuition.
Research indicates that 75% of venture-backed startups fail despite significant funding, often because founders cannot execute the kind of fundamental business model changes that genuine market feedback demands.
The ability to pivot authentically - to acknowledge that core assumptions were wrong and rebuild accordingly - has become one of the strongest predictors of long-term startup success.
Ryan Sarver, former Twitter employee turned Redpoint Ventures partner, describes pivoting as "essentially an irrational act" because it requires teams to abandon strategies they've been fighting to implement.
This emotional and psychological difficulty explains why many founders prefer the comfortable middle ground of "strategy shifts" - changes significant enough to appear responsive to market feedback but incremental enough to preserve the fundamental narrative of the original vision.
Source : Silicon Valley, HBO Series
The Market Reality Behind Successful Transformations
Examining successful pivots reveals consistent patterns that distinguish them from superficial strategy adjustments.
Companies like Slack, Instagram, and PayPal didn't simply modify their approach - they fundamentally reconstructed their value propositions based on direct market feedback.
Slack's transformation from gaming company Tiny Speck to communication platform wasn't a "strategic repositioning" - it was an acknowledgment that their original product had failed and that their internal communication tool represented a completely different business opportunity.
Similarly, Instagram's evolution from Burbn (a check-in app with gaming elements) to a focused photo-sharing platform required founders Kevin Systrom and Mike Krieger to abandon most of their original feature set.
This wasn't strategic optimisation; it was recognition that users were primarily engaging with only one aspect of their complex offering.
The founders' willingness to eliminate functionality rather than incrementally improve it demonstrates the kind of radical thinking that separates genuine pivots from strategic adjustments.
The current market environment makes these distinctions even more critical.
With AI disrupting traditional business models across industries and consumer behaviour shifting rapidly, companies that cannot make fundamental transformations face extinction.
The most successful startups of 2024-2025 have been those willing to abandon entire product categories, revenue models, or target markets based on emerging data - not those making incremental improvements to existing strategies.
The Organisational Dynamics of Authentic Change
The internal organisational challenges of genuine pivots further illuminate why many founders prefer the language of strategy shifts.
True pivots often require painful decisions: layoffs, complete product redesigns, new hiring strategies, and fundamental changes to company culture.
The case of Gigya, which successfully pivoted twice under CEO Patrick Salyer's leadership, demonstrates the organisational courage required for authentic transformation.
Gigya's first pivot from social media widgets to social infrastructure required rebuilding their technology stack and sales approach.
Their second pivot to customer identity management necessitated shutting down a 40-person office and restructuring their entire go-to-market strategy.
These weren't strategic adjustments - they were organisational reconstructions that required admitting fundamental errors in previous strategic thinking.
The psychological toll of such decisions explains why many founders prefer incremental changes masked as strategic evolution.
Acknowledging that your team has been building the wrong product, targeting the wrong market, or using the wrong business model requires a level of leadership courage that many entrepreneurs struggle to demonstrate.
It's far easier to frame continuous adjustments as sophisticated strategic thinking rather than repeated course corrections driven by fundamental misunderstanding of market dynamics.
The Competitive Advantage of Intellectual Honesty
In an increasingly competitive startup landscape, intellectual honesty has become a differentiating factor.
Companies led by founders who can acknowledge fundamental errors and make dramatic course corrections possess a significant advantage over those trapped in cycles of incremental optimisation.
This honesty manifests not just in external communications but in internal decision-making processes.
The most successful startup transformations of recent years share a common characteristic: founders who could admit to investors, employees, and themselves that their original thesis was wrong.
This acknowledgment creates space for genuine innovation and prevents the kind of resource waste associated with prolonged strategic drift.
Companies that embrace the language and reality of pivoting position themselves to identify new opportunities rather than optimising failed strategies.
The venture capital community has increasingly recognised this pattern.
Investors now specifically evaluate founders' ability to acknowledge failure and embrace fundamental change as a predictor of long-term success.
The psychological profile of entrepreneurs who can execute genuine pivots - those who prioritise market feedback over ego protection - has become a key factor in funding decisions.
The False Comfort of Incremental Change
The preference for "strategy shifts" over "pivots" reflects a broader human tendency to prefer incremental change over dramatic transformation.
In the startup context, this psychological bias can be fatal.
Markets move too quickly and competition emerges too suddenly for gradual strategic evolution to remain viable.
The failure of companies like InVision, which was once valued at $2 billion but ceased operations in December 2024, illustrates the dangers of incremental thinking.
Despite recognising competitive pressure from Figma and other design tools, InVision's attempts to shift focus to new products like Freehand represented strategic adjustments rather than fundamental business model reconstruction.
The company's inability to acknowledge that their core value proposition had become obsolete led to a slow decline disguised as strategic evolution.
This pattern is particularly visible in companies that make multiple "strategy shifts" over short periods.
Rather than acknowledging fundamental business model problems and executing dramatic change, these organisations engage in continuous minor adjustments that preserve the illusion of progress while avoiding the difficult work of genuine transformation.
The Cultural Implications of Startup Language
The language entrepreneurs use to describe their business transformations reflects broader cultural attitudes toward failure and learning.
Silicon Valley's celebration of "failing fast" and "pivoting often" represents an attempt to normalise the kind of intellectual honesty required for startup success.
However, many founders have internalised only the superficial aspects of this culture while avoiding the deeper psychological work of confronting fundamental business model errors.
The distinction between pivots and strategy shifts has become a cultural marker within the startup ecosystem.
Founders who embrace the language of pivoting signal intellectual humility and market responsiveness.
Those who consistently frame fundamental changes as strategic adjustments signal psychological rigidity and potential inability to adapt to market feedback.
This cultural dimension extends beyond individual companies to influence investor behaviour, employee retention, and partnership opportunities.
Startups led by founders who demonstrate genuine adaptability - through both language and action - consistently outperform those led by founders who cannot acknowledge fundamental errors in strategic thinking.
Conclusion: The Courage to Confront Reality
The difference between startups that thrive through fundamental transformation and those that slowly decline through incremental adjustment ultimately comes down to leadership courage.
Strong founders acknowledge when their core hypotheses are wrong and execute the kind of dramatic changes that markets demand.
Weak founders disguise necessary fundamental transformations as sophisticated strategic thinking, preserving their ego while compromising their companies' survival prospects.
In an environment where technological disruption accelerates continuously and consumer behaviour shifts rapidly, the ability to execute genuine pivots has become essential for startup survival.
The semantic distinction between "pivots" and "strategy shifts" reveals deeper psychological patterns that determine whether founders can access this essential capability.
Companies led by entrepreneurs who embrace intellectual honesty about market feedback and business model effectiveness possess decisive advantages over those trapped in cycles of incremental optimisation.
The startups that emerge as leaders in the coming years will be those led by founders with the courage to acknowledge fundamental errors and the vision to rebuild accordingly.
The language they use to describe their transformations will be among the first indicators of whether they possess this essential capability.
Source : Confessions of a successful startup pivot, Medium.
References
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✍️ Why I Wrote This
I’m endlessly fascinated by startups and the emotional rollercoaster that begins the moment a founder has that epiphany - the “aha!” moment 💡 where a problem grips them so tightly they feel compelled to solve it.
As a recovering Founder and Co-Founder myself - and someone who now supports startup founders and leadership teams across the globe 🌍 - I’ve seen something intriguing: the way a person approaches decision-making, risk, and intuition often varies dramatically depending on their age, experience, or both.
That divergence becomes especially clear when tackling the issue in this piece - not addressing the elephant 🐘 in the room - the original hypothesis of the business is not working and not delivering results as expected by all stakeholders. So the only option is to change, or “pivot” and this is hard.
In working with founders, I’ve learned that the best founders face into this reality of traction and valid alignment of their strategy. Choose your destiny. More on this soon.
💥 If you’ve pivoted before, did you call it that? Or did you reframe it? What did your language reveal about your mindset at the time? Let’s talk in the comments
🎧 Let’s Stay Connected
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🎙 Listen + subscribe → https://www.linktr.ee/thegtsessions
(For deeper dives into the psychology of founders.)
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Ciao for now 👋
– Andrew
Wow! To say this is "comprehensive" is an understatement! Did Netflix present their change of direction as a pivot or failure? Just curious. Also, a few years ago in New York City, I attended a monthly meeting of a group with the official name "F**kup Nights," which featured three entrepreneurs who told the story of what they launched, "certain of success," only they hit an unexpected wall. The organization was founded in Mexico and has chapters around the world, dedicated to taking the stigma out of so-called "failure." Tony Robbins says that they most successful people are also the ones who have "failed" the most. Right, Mr. Edison?