Pivot decisions in startups: a systematic literature review

Abstract

PurposeEntrepreneurs' pivot decisions are poorly understood. The purpose of this paper is to review the existing literature on pivot decisions to identify the different conceptualizations, research streams and main theoretical building blocks and to offer a baseline framework for future studies on this phenomenon.Design/methodology/approachA systematic literature review of 86 peer-reviewed papers published between January 2008 and October 2020, focusing on the pivot decision in startups, was performed through bibliometric, descriptive and content analyses.FindingsThe literature review identifies four research streams concerning the pivot concept – pivot design, cognitive, negotiation and environmental perspectives. Building on previous studies, this paper provides a refined definition of a pivot that bridges elements from the four research streams identified: a pivot comprises strategic decisions made after a failure (or in the face of potential failure) of the current business model and leads to changes in the firm's course of action, resource reconfiguration and possible modifications of one or more business model elements. This study proposes a framework that elaborates the pivot literature by identifying four stages of the pivot process addressed in the existing literature: recognition, generating options, seizing and testing and reconfiguration.Originality/valueThis study provides a comprehensive review, enabling researchers to establish a baseline for developing future pivot research. Furthermore, it improves the conceptualization of pivots by summarizing prior definitions and proposing a refined definition that places decision-making and judgment at its center. That introduces new contextual and behavioral elements, contributing to a better understanding of how entrepreneurs assess alternative courses of action and envision possible outcomes to redirect a venture after failure.

A Business Acceleration Program Supporting Cross-Border Enterprises: A Comparative Study

“…The Albanian entrepreneurs appear to be determined to implement their original business idea in comparison to their Greek peers, whose answers indicated that they are more likely to pivot their idea and implement a different idea than the original one, or even implement more than one business idea. This particular finding may indicate that because of the particular entrepreneurial ecosystem conditions in Albania, which renders it in a still nascent position, the ability to recognize alternative business opportunities and ways to seize them is relatively low [58].…”

A qualitative research study of the tech startup journey through entrepreneurial pivoting

“…The decision to pivot involves uncertainty as it may jeopardise the firm's survivability. Due to this uncertainty, it is challenging to determine what, when and how to pursue a pivot (Flechas Chaparro and de Vasconcelos Gomes, 2021).…”

“…At the same time, they pointed out that the concept of entrepreneurial pivoting has not gained much attention among researchers. Whereas Flechas Chaparro and de Vasconcelos Gomes (2021) conducted a systematic literature review on pivoting decision in startups. This study provided a comprehensive review on the pivot decision in startups, including discussion of prior definitions as well as proposing a refined definition of entrepreneurial decision making.…”

“…Therefore, this study focuses on reducing this gap by investigating in detail the phenomenon of entrepreneurship pivoting, which is a key part of the LSA. Moreover, Flechas Chaparro and de Vasconcelos Gomes (2021) identified that decisions behind entrepreneurial pivoting are currently poorly understood, which further undercover the pressing need for empirical research in this area.…”

Pivots as strategic responses to crises: Evidence from Italian companies navigating Covid-19

“…However, the assessment of an alternative’s viability requires in itself some degree of resource commitment—previous studies have referred to this trade-off as the paradox of entrepreneurship ( Gans et al, 2019 ). In this sense, recent literature has reported that entrepreneurs cope with the uncertainty of the unfolding context they operate in by pivoting ( Berends et al, 2021 ; Flechas Chaparro and de Vasconcelos Gomes, 2021 ). A pivot represents a strategic reorientation that enables firms to probe new hypotheses about their business model ( Frederiksen and Brem, 2017 ), rapidly collecting information about its potential viability ( Contigiani and Levinthal, 2019 ; Eisenmann et al, 2013 ; McDonald and Eisenhardt, 2020 ).…”