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Business In Transformation

How Stagnation -- and Pivoting -- Can Crush a Startup

How Stagnation -- and Pivoting -- Can Crush a Startup
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Oscar Wilde famously quipped that "Fashion is a form of ugliness so intolerable that we have to alter it every six months." One could say the same of startups.

Most early-stage companies -- bootstrapped or VC-backed -- take time to generate real traction. And unlike passion projects or run-of-the-mill small businesses, linear growth for portfolio companies can be a harbinger of doom.

It's the NHL absolutism: achieve hockey-stick growth or head home. That's why meager gains or stagnation mandates change, and most startups will struggle through one or several severe changes, or pivots, in search of escape-velocity growth (a.k.a. Facebook, Twitter, et al.)

But too often, pivoting isn't purposeful change, but a thinly veiled attempt to buy more time. In a sense, pivoting has become the strategy, rather than a survival tactic. That may have worked for some startups like Fab.com, but others risk choking their potential.

Related: Is Pivoting a Smart Strategy for Young Entrepreneurs?

The cycle of drastic change can be both risky and costly, as consumers are ever on the lookout for the next big thing. So instead of gutting your business model every few months, the goal should be to attain a faster, more flexible state of evolution. Don't look for growth in numbers alone but true maturation. Businesses ought to embrace a structure (not just an operating model) where change is built in.

From my perch in the fashion/ecommerce world (I'm the CEO of BUREAU OF TRADE), I've noticed a number of upstarts that are leading the change "charge." Not only are we endeavoring to make good on this strategy of constant flux, I've noticed a few standout examples:

Related: Picked the Wrong Major? Here's How to Pivot Into Entrepreneurship

  • First, is Kiosk Kiosk, with its clever, thematic, capsule collections. Simplified -- but not simple -- these are mini-exhibitions comprised of unique products with an appeal driven by story, provenance, origin and originality. The site has already proven popular among more discerning consumers, or people who know the difference not between good and bad but between good and great.
  • There's also Of a Kind, which takes a slightly different but equally poignant approach. The site offers exclusive collections from emerging designers and artists, with stories and products that they pledge are available nowhere else online. Patrons can find affordable and approachable pieces that are created in small batches and limited editions. Of A Kind adheres to the belief that customers care about, and shop for an experience as much as any single product.
  • New to the mix is Popbasic, a shopping site that curates and sells beauty and lifestyle merchandise. Every month, they release a three-piece micro collection, sold as a set. The designs are wardrobe staples as well as trend-driven.
  • For our part, at BUREAU OF TRADE, we debut special collections every several weeks, and plan to move from a monthly cadence to a weekly syncopation (later this spring). Every collection is anchored to a specific theme. We wrap products in irreverent copy, emphasize the narrative and produce short films designed to inform, entertain and make people lust after things that really matter. It's not retail therapy, but purposeful purchasing.

Related: 'The Story of Stuff' and How Startups are Heeding Its Message

Ultimately, it's not about 180-degree pivots in pursuit of 'escape velocity.' Nor is it about a sizable exit. It's about relentless, purposeful change in the service of creating a great company. At the moment, some of the finest examples to follow are emerging from the most vulgar of all industries (other than the rest): fashion.

How do you think startups could more easily incorporate change? Or shouldn't they? Tell us your thoughts in the comments section.

The author is an Entrepreneur contributor. The opinions expressed are those of the writer.

Michael Phillips Moskowitz is the founder the Bureau of Trade, a luxury shopping portal that blends retail opportunities with style and cultural criticism. He formerly served as a Middle East foreign policy research analyst at think tanks in the United States and overseas. Over the last several years, he co-founded the award-winning menswear label, Gytha Mander, and TODO Monthly magazine; and spent several years at IDEO, a design and innovation firm in Palo Alto.

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