Entrepreneurial strategy depends on finding new opportunities, and it also depends on negotiating what markets, investors, and institutions expect of a venture.

The startup world loves the pivot. In the familiar version of the story, a founder sees that an idea is failing, listens to customers, and changes course. The pivot then counts as proof of entrepreneurial intelligence, a sign that the founder was willing to drop old assumptions and chase a better opportunity.

Much of that story holds up. Something important is missing from it, though. A startup changes direction in front of an audience. Customers, investors, business partners, regulators, and others all hold their own expectations about what the venture should do. So a founder who changes course has two jobs. One is finding a better opportunity. The other is persuading these people that the new direction is credible and deserves their support. And what happens when they disagree?

That question carries more weight in emerging markets, where institutional uncertainty and regulation tend to shape entrepreneurial decisions more visibly. In a recent study in the Journal of Entrepreneurship in Emerging Economies, Anıl Şen and I looked at how two Turkish fintech startups reoriented their strategies under different institutional conditions. What we found is messier than the usual pivot story. Changing strategy was only part of the founders’ work. They also had to make the change understandable, and legitimate, to several audiences at once.

What the pivot story leaves out

The language of pivoting suggests a tidy sequence. A venture tests an idea, sees what fails, changes its business model, and moves toward a better market. In practice, a startup’s current direction is also a bundle of commitments. Founders have explained their strategy to investors. Customers and partners have formed expectations. The product has an identity, and the founders have spent time building relationships around particular promises. Those commitments stay in place after the venture changes course. A founder may see a new market opportunity where an investor sees a departure from the original investment case. Customers may wonder whether their existing products will still be supported, and partners may want reassurance that established relationships are safe.

Every pivot, then, sets continuity against change. Shift too far and the move reads as an admission that the original strategy was wrong. Shift too cautiously and the venture misses opportunities that are genuinely new. Reorienting successfully takes more than a product change. It means managing what the change means to other people. McDonald and Gao’s (2019) strategic reorientation framework captures this well. It looks at how entrepreneurs anticipate, justify, and stage strategic changes for the audiences that matter to them. We wanted to know whether the framework travels, because a framework built in one institutional setting may work differently in another.

Two fintech ventures under different pressures

We studied two early-stage Turkish fintech ventures, which we call Alpha and Beta. Both changed their business models, both competed in a crowded and still-forming fintech market, and both had to explain their new direction to stakeholders. The pressures behind their decisions differed, however.

Alpha started with a personal pension-management app for individual consumers. It then moved into robo-advisory services for small and medium-sized enterprises, and later broadened into a wider set of financial services for SMEs. Its reorientation was tied mostly to market considerations, including competition, customer acquisition, openings in adjacent markets, and possibilities that came with new relationships. Alpha’s challenge was to move into new activities while keeping a recognizable link to its existing product and expertise.

Beta took another path. It began by rating funds for institutional investors, moved into business-to-business pension management, and eventually built a business-to-consumer digital investment advisory service. Beta’s founders also dealt with difficult customer processes, market pressures, and investor expectations, but for them regulatory requirements and authorization issues were more visible. I want to be careful here, though. We cannot say regulation alone caused Beta’s pivot, and the evidence would not support so simple an explanation. Regulatory conditions were a more prominent part of the setting in which Beta’s founders read their options and justified their changing strategy.

The contrast matters because general accounts of pivoting tend to hide it. Two startups can do similar strategic things while facing quite different mixes of stakeholder expectations. The mechanisms of reorientation stay recognizable, and their expression shifts with institutional context.

When regulation moves into the foreground

Accounts of entrepreneurial strategy usually focus on customers, competitors, resources, and investors, with regulation treated as a constraint somewhere in the background. For sectors like fintech, that picture is too simple. Regulatory authorization and institutional legitimacy can determine what a venture is allowed to offer, how it positions itself, and how its founders weigh their options.

None of this makes regulation the main explanation for every entrepreneurial decision. Its weight varied between our two cases. Alpha’s reorientation was tied mainly to market-related pressures from stakeholders. Beta’s involved more deliberate regulatory positioning alongside customer, market, and investor considerations. The lesson for emerging markets is narrower than “the state drives everything.” The mix of stakeholder pressures that matter can change from one institutional context to another, and even between two ventures in the same sector and the same country. Sometimes regulation stays in the background. Sometimes it becomes prominent enough that founders have to weigh it explicitly when they assess their opportunities.

The difference has practical stakes as well as research ones. A founder who reads every problem as a market signal can misjudge a regulatory requirement. A founder who blames everything on regulation can miss weak demand, poor product-market fit, or problems with execution. The job is to tell these pressures apart.

Making a pivot make sense to several audiences

Strategic changes need justifying, and a polished slide deck about the company’s new direction only goes so far. Different audiences judge the same change by different standards. Customers tend to care about usefulness and reliability. Investors focus on growth potential and risk. Regulators check compliance with legal and authorization requirements, and business partners care about contractual stability and whether operations still fit together.

Because these audiences can read the same decision quite differently, the founder faces what we might call a legitimacy problem. A changing venture has to look recognizable and credible to people who judge it from different institutional and commercial positions. At Alpha, relational networks and market-facing explanations helped the founders change strategy while keeping a sense of continuity. At Beta, the move toward consumer-facing financial services happened in a more complicated environment, where regulatory positioning also mattered strategically.

Our study stops short of showing that these audiences reached incompatible judgments independently of one another. It does show why paying attention to the range of audiences is analytically useful. When founders announce a new strategy, they are also explaining how it connects to earlier commitments, current expectations, and future possibilities. In that sense a pivot is partly a communicative achievement.

Founders carrying the governance burden

A further implication concerns who interprets strategic pressures in the first place. Much entrepreneurship research studies startups whose formal venture-capital investors carry real weight in decisions. Those investors shape strategy, monitor performance, challenge assumptions, and take part in governance. Formal investor involvement varies a great deal across entrepreneurial settings, though. In our cases, and especially at Alpha, the founders themselves carried much of the responsibility for reading external stakeholders’ expectations and justifying changes of direction. Relational networks, informal advice, and the founders’ own judgment held the process together.

I would read this cautiously. The finding says nothing about formal governance being absent or unnecessary, and it gives no grounds for treating informal networks as a universal substitute for investor oversight. What it suggests is that strategic reorientation can become a governance problem that sits with the founder. Founders may have to decide which stakeholder concerns need action, how to balance competing expectations, and how to stay credible while changing direction, all with little help from investor-led governance. That is a lot of managerial work for a small startup.

Emerging markets on their own terms

A broader issue runs through how entrepreneurship is studied and taught. Influential theories tend to come from particular institutional settings, and the US startup ecosystem has shaped much of what we think we know about entrepreneurial growth, venture capital, and pivoting. Those theories can be useful well beyond their home settings, but their reach needs testing.

Our study does this through a conceptual replication of McDonald and Gao’s framework. Rather than asking whether Turkish fintech ventures behave like American startups, we asked which parts of the original explanation still hold analytically and where context calls for qualification. Managing audience expectations remained a useful lens in both cases. The mix of stakeholder pressures differed, especially where regulatory authorization became more prominent. Founder-centered governance and situated legitimacy-building also helped us make sense of how the cases unfolded, though we treat these as supporting interpretations. We make no claim to have established new universal mechanisms.

That distinction matters to me. An emerging-market setting is more than an underdeveloped copy of some ideal entrepreneurial environment, and its institutional arrangements can show where existing theories need refining. Studying entrepreneurship in emerging markets teaches us about those markets, and it also sharpens our understanding of entrepreneurship in general.

What founders can take from this

Two ventures are a thin basis for any universal formula for pivoting. They do suggest some questions worth asking before a strategic change.

The first is what kind of pressure is actually driving the reorientation. Weak customer demand, intense competition, investor expectations, and regulatory requirements are different problems that call for different responses, and often several are at work at once.

Founders should also ask what ought to carry over as the venture changes. Technical capabilities, relationships, and strategic commitments can often survive a change of product or customer segment. Then there is the matter of whose understanding counts. Explaining a new direction to customers is one task. Justifying it to investors is another, and demonstrating regulatory compliance is a third. Someone also has to interpret and reconcile all these expectations, and where formal governance is thin, that responsibility may fall largely on the founders.

The last question is the easiest to skip. Are founders mistaking a good strategic explanation for a good strategic outcome? A persuasive account of why the venture is changing guarantees nothing about whether the new business model will work. Justifying a strategy and validating it in the market are separate tasks.

The institutional side of strategic flexibility

The current startup narrative rightly values experimentation and adaptability. It falls short when it reduces strategic flexibility to spotting new products, technologies, or markets. How much room a venture has to maneuver also depends on the relationships and institutions around it. Customers may need reassurance, investors may expect continuity, regulators may require authorization, and founders may have to reinterpret earlier commitments and rebuild credibility around a new strategy. These conditions shape which opportunities look attractive, which are actually available, and how founders can pursue them.

Our study is a qualitative comparison of two Turkish fintech ventures, based on nine in-depth interviews with founders and supporting documents. It cannot establish the independent causal effect of regulation or any other stakeholder pressure, and its findings do not generalize to the whole fintech sector. What it offers is a closer look at the institutional and relational work that strategic reorientation involves.

Startup strategy, as I see it, is a process of working through competing expectations while protecting the venture’s credibility and its capacity to act. Product decisions belong to that process, and so do the founder’s choices, though those choices are always constrained. Any pivot raises the question of where to go next. The harder question is how to make that direction possible and credible to the people and institutions the venture depends on.

This commentary is based on research with Anıl Şen. Şen, A., & Tunçalp, D. (2026). “Strategic Reorientation Under Institutional Volatility: A Conceptual Replication in an Emerging-Market Fintech Context.” Journal of Entrepreneurship in Emerging Economies. Read the research article at https://doi.org/10.1108/JEEE-10-2025-0667