Have you ever seen a business pivot from one model quickly to another?
I learned the background story of how a start up shifted gears while watching Your Business that airs on MSNBC. The show focuses on small business needs around funding, marketing, strategy and so on.
The host J.J. Ramberg, profiled a business called Yabbly that was in a tail spin and dying a fast death. Their business model was an attempt to connect consumers to other consumers for advice on products. They were trying to go beyond search to add the human element to recommendations for products.
Unfortunately that business could get traction and was actually getting strong negative reviews creating big roadblocks.
So the owners, Ian Shafer and Tom Leung pivoted.
They had another idea that they decided to try using the same staff and team. It was a completely different idea but the pivot allowed them to move from a business on life support to one that was acquiring new users and customers rapidly.
The new idea is called Poachable, and it focuses on the career segment. “Let your dream job find you”.
It allows a consumer to identify companies, locations and position that attract them and then anonymously matches potential candidates with a job. The beauty of the idea is that companies can find candidates who are not actively searching since it is all anonymous. In a short period, they had 28,000 users and thousands of companies posting jobs in this new and innovative spin on matching candidate and company.
Pivot, a Market Lesson
Making a pivot is a big risk. Inaction, is the bigger risk.
Sometimes entrepreneurs and start ups need to consider if their business is not reaching its goals and milestone, whether they would be better off shifting into a completely new direction.
Pinterest started out as a shopping app. Odeo had to transform itself and became Twitter. Starbucks was a shop selling espresso machines before it got into selling coffee. Flickr was an online gaming site and ended up shifting toward its popular photo sharing feature as it core business. Groupon was more focused on advocacy but ended up leveraging one key component of their offering.
It’s not for the faint of heart but it happens more often than most people realize. Consider these seven questions if a pivot is right for your faltering company:
Experts Can’t Help: Have you brought in experts and help from outside and yet you still can’t reach your key performance indicators like number of new customers acquired, conversion of leads to orders or top line growth overall.
Patience is Limited: How much patience will you and/your investors have with where your current plan? At some point, the investors may say that it times to close down the shop. Can you get ahead of that curve by proposing a pivot and shift into a completely new direction where the core business concept might solve a market need that is currently unfilled?
The Emotional Toll: If you have been declining for years, that downward spin can take a toll emotionally. Sometimes, regrouping and realigning around a new idea, can energize a company. Perhaps it is time to change direction for the health and well-being of yourself, your business and your staff.
What do you have to lose? Sometimes the writing on the wall is clear. You need to acknowledge your reality and move on. Determine that you aren’t going to build your original idea and you must move in a new direction. The risk of staying the course outweighs the risk of the pivot.
Great Ideas Create Uplift: Every business with a great idea doesn’t succeed because of execution. But a great idea can provide you with momentum, market buzz and a forward motion. Perhaps it is just time to get out of neutral and push that button to move forward.
Pivot, but stay aligned with core values. You don’t want to move in a direction that is a values-disconnect for your employees. Find a new direction but make sure its consistent with the ethos of the company and the core beliefs of your culture.
Pivots can be a small alignment with more focus: Don’t think the pivot has to be a big shift – it can be a slight realignment for your new direction. Sometimes a little zig, is all it takes. Focus on one vertical market, eliminate 90% of your SKU’s or pick one country or region. Pivoting can be about getting off the fence of indecision.
Shifting gears and pivoting in a new direction isn’t that unusual. Business do this all the time. Some pivots can be 180 degrees while others are just heading 5 degrees to the right. If you are thinking about a pivot, you would be wise to make sure you have some independent advisers who can be brutally frank and with your best interest at heart. Find someone without a financial interest in the choice you make as a sounding board.
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