The Pivot Pyramid
A visual framework for startup experimentation. Understand where to pivot and how changes cascade through your business.
Why I Created This Framework
In 2016, after my second startup, I joined 500 Startups as a Venture Partner. Having been through my own journey pivoting Socialwire from a product recommendation engine for online retailers to a product advertising platform, I recognized a familiar struggle in the founders I was working with: deciding what to change when things weren't working.
Some would pivot their entire business when they just needed a new marketing channel. Others would tweak their landing page when the real problem was they were targeting the wrong customers. And some were building for multiple customer profiles with completely different problems—essentially running three startups at once without realizing it. The cost of getting this wrong was huge—wasted months, burned runway, demoralized teams.
I created the Pivot Pyramid to give founders a simple mental model for these decisions. It was first published on the 500 Startups blog and has since been featured in VentureBeat and many other publications online.
The Five Layers
Every startup can be broken down into five layers. Understanding these layers helps you identify where to focus your experiments and what the true cost of change will be.
Customers
Who are you building for? This is the foundation of your startup. Changing your target customer is the most fundamental pivot—it affects everything above it.
“Are you solving a real problem for people who will pay?”
Real-World Pivots:
- →Shopify started selling snowboards online, then pivoted to building tools for anyone selling online
- →Slack started as Glitch, a multiplayer game, before pivoting to team communication
Problem
What pain point are you addressing? If you change the problem you're solving, you need to reconsider your solution, technology, and growth strategy.
“Is this problem painful enough that people actively seek solutions?”
Real-World Pivots:
- →Instagram kept the same young social users but pivoted from check-ins (Burbn) to photo sharing
- →Twitter kept tech-savvy users but pivoted from podcast discovery (Odeo) to microblogging
Solution
How do you solve the problem? This is your product or service. Changing your solution is less disruptive than changing customers or problems.
“Is your solution 10x better than alternatives?”
Real-World Pivots:
- →Netflix solved home entertainment first with DVD-by-mail, then pivoted to streaming
- →PayPal solved online payments first on Palm Pilots, then pivoted to web-based payments
Technology
What do you build to deliver the solution? Technology changes are relatively easy pivots—you're just changing how you implement your solution.
“Does your tech stack enable or constrain your solution?”
Real-World Pivots:
- →Facebook rewrote from PHP to Hack/HHVM to handle scale—users never noticed
- →Twitter migrated from Ruby on Rails to Scala to handle traffic spikes
Growth
How do you acquire and retain users? This is the easiest layer to pivot—changing your marketing channels or growth tactics doesn't affect your core product.
“What's your unfair advantage in acquiring customers?”
Real-World Pivots:
- →Airbnb auto-posted listings to Craigslist for distribution—no product or tech changes needed
- →Dropbox's referral program drove viral growth without changing the core product
The Core Insight
The lower in the pyramid you pivot, the more fundamental the change.
When you change something at the bottom of the pyramid (like your target customers), everything above it needs to change too. But when you pivot at the top (like your growth channels), the layers below remain stable.
This framework helps founders make informed decisions about where to experiment and understand the true cost of different types of pivots.
Pivot Pyramid vs. Business Model Canvas
You may be familiar with Alexander Osterwalder's Business Model Canvas—a widely-used framework for describing how a company creates, delivers, and captures value. So how does the Pivot Pyramid differ?
The Business Model Canvas is a static snapshot. It's designed for mature businesses that have already found product-market fit. It documents what you know: your value proposition, customer segments, channels, revenue streams, and cost structure.
The Pivot Pyramid is a dynamic tool for search. It's designed for startups that are still looking for product-market fit—where everything is an assumption waiting to be validated. Rather than documenting a stable business model, it helps you understand which assumptions to test and the cascading impact of changing each one.
Think of it this way: the Business Model Canvas is a map of known territory. The Pivot Pyramid is a compass for navigating unknown territory. Use the canvas when you've found your footing; use the pyramid while you're still searching.
Key Takeaways
Start with customer and problem
Don't focus on marketing until you've nailed customer, problem, and solution. First, make something people want. “You don't want to put jet fuel in a car with a broken engine. Fix the engine first.”
Pivoting below changes everything above
Changes at the bottom of the pyramid impact all layers above. Changes at the top don't require changes below. Your pace of experimentation should increase toward the top.
Focus on one customer type
Targeting different customer types = building multiple startups at once. Exception: Marketplaces (Uber, Airbnb) have buyers and sellers from day one—that's why they're hard.
How to Use the Pivot Pyramid
Identify Your Current State
Map your startup onto the pyramid. Be clear about who your customers are, what problem you solve, and how you solve it.
Diagnose the Issue
When something isn't working, identify which layer is broken. Don't change your growth strategy if the real problem is your target customer.
Understand the Cascade
Before pivoting, understand what else needs to change. A customer pivot means reconsidering everything above it.
Experiment Strategically
Start experiments at the top of the pyramid where changes are cheaper. Only pivot lower layers when you have strong evidence.
All Experiments Must Lead to Growth
Great growth people approach experimentation like scientists. Apply the same rigor to every layer of the pyramid:
Have a thesis on how your idea will drive growth
Run a low-cost experiment to test it
Measure the results with data
If it works, make it repeatable
Start Using the Framework
The Pivot Pyramid has helped hundreds of founders navigate uncertainty and make smarter decisions about where to experiment.
Feel free to use the Pivot Pyramid in your articles, presentations, or courses—just credit Selçuk Atlı and link back to this page.
Download PDF