Communicating the Pivot
*This is a sample from one of my scholarly research articles. It contains the first three pages of the article.
This paper analyzes the external communication conveyed by a startup while undergoing a pivot. From our grounded study, we present a theory of five phases of external communication that occur during the pivoting process. Each stage serves a specific purpose and exhibits defining characteristics. The first phase attempts to engage external stakeholders before any major changes to the business model occur. The second phase informs the stakeholders about specific details of the changes that are about to take place. During the third phase, external communication is used to maintain relationships with external publics as the startup begins to undergo major changes to the business model. The purpose of the fourth phase is to reinforce the mission and need of the startup in addition to deflecting attention away from the venture’s actual activities after revealing the newly altered business model to the public. The final phase accelerates the business model by calling direct attention to the changes made and persuading external stakeholders to begin using the new product or service.
In his book The Lean Startup, Eric Ries proposes a new theory for startup management that challenges traditional management literature. According to Ries, experiencing failure is essential to entrepreneurial learning. Prior to encountering failure, a startup may take the opportunity to analyze stakeholder feedback and make critical decisions pertaining to the business model. Ries describes these key decisions as the moment when a startup decides to “persevere or pivot” (2011).
The concept of an entrepreneurial pivot is receiving an increased amount of attention in startup studies (Remy, Hyland, O’Connor, and Peters 2014; Grimes 2012). The majority of the literature focuses on the internal processes taking place directly before, during, and following, a pivot (Remy et. al 2014; Grimes 2012). Ries himself describes a pivot primarily from an internal perspective, having experienced the phenomenon first-hand. Despite this movement towards developing a better understanding of the pivot, no attention has been given to how a startup communicates a pivot to their external publics.
This paper will attempt to provide a theory of how a startup communicates a pivot to its external stakeholders. This theory will be constructed from results from a grounded theory study of a social startup venture. Before presenting our results and proposed theory, we will first establish the significance of our research, including a thorough review of related literature, followed by a description of our methods for the study.
Significance of Research
As mentioned above, the majority of current literature about pivoting focuses primarily on internal communication and does not attend to communication targeting external stakeholders. Our research will begin to fill this void by supplementing the existing literature with research on pivot-related communication created by applying an external, rather than internal, lens.
This research and proposed theory will serve as a basis for future research and studies concerning communication surrounding a pivot. By bringing attention to this neglected area of communication, we hope to help move the field toward a better understanding of how a pivot is communicated and lead to developing best communication strategies and methods for future startup ventures electing to pivot.
There is no single, agreed upon definition of entrepreneurship (Venkataraman 1997; Shane and Venkataraman 2000; Cunningham and Lischeron 1991; Kobia and Sikalieh 2009). Cunningham and Lischeron (1991) compared definitions from the six different schools of entrepreneurship and concluded that there is not a “correct” way to define entrepreneurship, but that the definition depends on context, perspective, and values. Kobia and Sikalieh (2009) offer a similar conclusion stating “it may be too ambitious to expect a complete and robust definition due to the interdisciplinary nature of entrepreneurship” (122). Venkataraman (1997) states that entrepreneurship “requires making investments (time, effort, and money) today without knowing what the distribution of the returns will be tomorrow” (124). He later suggests that “to have entrepreneurship, you must have entrepreneurial opportunities” and that “entrepreneurship involves joint production, where several different resources have to be brought together to create the new product or service” (Shane and Venkataraman 2000). We agree with what the above literature suggests: that no single definition of entrepreneurship exists and context, perspective, and values need to be taken into consideration when operationalizing a definition. For this study, our idea of entrepreneurship is similar to that presented by Venkataramen (1997) and Shane and Venkataramen (2000): it is taking advantage of an identified opportunity, investing resources to create a new product or service with some amount of risk due to not having a guarantee of the returns.
Small Business Owners vs. Entrepreneurs
To further clarify our definition of entrepreneurship, we need to differentiate between small business owners and entrepreneurs. In their study to attempt to identify defining characteristics for each term, Carland, Hoy, and Boulton present the following definitions for a small business owner and an entrepreneur:
Small business owner: A small business is an individual who establishes and manages a business for the principal purpose of furthering personal goals. The business must be the primary source of income and will consume the majority of one’s time and resources. The owner perceives the business as an extension of his or her personality, intricately bound with family needs and desires.
Entrepreneur: An entrepreneur is an individual who establishes and manages a business for principal purposes of profit and growth. The entrepreneur is characterized principally by innovative behavior and will employ strategic management practices in the business (358).