I had spoken about pivots briefly in “The Sub-broker Moment.” The idea of a pivot in a business needs a fuller explanation.
Here is an article from Founder Institute:
While pivoting in the startup world means to shift to a new strategy, it is often believed to entail drastically changing the whole company. But this is not always the case. Oftentimes, a company only has one important problem that needs to be addressed, and only requires one aspect of the company to change. Below are some examples of pivoting that you might not have guessed are considered a “pivot”:
Turning one feature of a product into the product itself, resulting in a simpler, more streamlined offering.
The opposite of the previous point is also considered a pivot, in which one product is turned into a feature of a larger suite of features as part of another product.
Focusing on a different set of customers by positioning a company into a new market or vertical.
Changing a platform, say, from an app to software or vice versa.
Employing a new revenue model to increase monetization. For example, a company might find that an ad-based revenue model may be more profitable than freemium.
Using different technology to build a product, often to cut down on manufacturing costs or create a more reliable product.
Forbes writes about 14 famous business pivots. They write about Twitter and Flickr, among others.
Twitter: “The most legendary pivot in social media history is the transformation of Odeo into Twitter. Odeo began as a network where people could find and subscribe to podcasts, but the founders feared the company’s demise when iTunes began taking over the podcast niche. After giving the employees two weeks to come up with new ideas, the company decided to make a drastic change and run with the idea of a status-updating micro-blogging platform conceived by Jack Dorsey and Biz Stone.”
Flickr: “Flickr actually began as an online role-playing game called Game Neverending, where users would travel around a digital map, interact with other users and buy, sell and build items. The game also included a photo-sharing tool, which turned out to be one of the most popular aspects of the game. The company decided to leverage this photo popularity and pivot to Flickr, which was acquired by Yahoo! in 2005, and became one of its most beloved and successful acquisitions.”
Netcore began its life as a Linux-based mail server company. We stayed that way for almost 10 years (with many failed attempts at new ideas along the way). When SMS started growing in India, we made a pivot to offering enterprise SMS services. Over time, we added email to the mix, and then moved up to the stack to offering a full stack marketing automation platform. These were all shifts. If we had stayed in email servers, we would have been irrelevant by now.
Pivot links to strategy. As you think about the future opportunities, you have to make a choice – stay or shift. In the world of tech where collaborators can become competitors and every large company is working to expand its share of the customer wallet, deciding if and when to pivot is an important pillar of strategy.
Tomorrow: Part 54