Smaller size of the team as well as a flatter organization allows startups to be nimble and make adjustments to their business plans as required. Flatter org structure makes it easier to decide and implement changes fast.
However, many startups run into the dangerous temptation of changing direction and strategy too often.
Often, at the first signs of the existing strategy is not working enough, entrepreneurs tend to get carried away and impatient and attempt too many different things without giving enough time for one direction/strategy to mature. In many cases it is a case of throwing the baby along with the bath water.
The danger in this is that while it seems like a lot of progress and course correction, the business, and more importantly the team, starts loosing focus and direction.
Hence, while it is possible to do course corrections, it is important that startups consider change in strategy and direction only after adequate deliberations and after discussions with the board, advisors and other stakeholders. I.e. A change in strategy or direction or customer segment or pricing is a serious change and should be treated as such. Just because the stage allows you the flexibility to change direction does not mean you should use that option enough.
Before changing strategy or direction, it is critical to evaluate what learnings have from the existing strategy and the basis for deciding to pursue an alternate strategy.