Sometimes, After a Successful Run, It's Time to Switch Gears. Learn How to Pivot.
Where are you today? Looking back a few years to when you first started your career -- are you where you thought you’d be? Many of us start our paths with passion and zeal, only to discover along the way that it’s time to switch gears.
It may be daunting and frustrating at first, but many find they’re much better off after the pivot.
Tom Rossi and Kevin Finn, the team behind Tick, originally worked in the client services space. When the dot-com bubble burst in 2001, and clients froze their spending, they stopped making money. To keep themselves afloat, they had to pivot from client services into product development, and they started Higher Pixels. Including their time tracking application, Tick, which was founded in 2005, they now have four web apps.
As they reflected on their work with clients, they realized that all of the time tracking solutions in the market made it easy to keep track of the amount of time spent on a project but didn’t focus on treating time for what it is -- inventory. As a result, they ended up developing Tick to serve anyone who works in client services, and to make a contribution back to the very field they worked in.
2. 37 Signals
37 Signals is the company behind business products like Basecamp, Highrise and Campfire. Originally a client services company, they pivoted to create business products to address project management, customer relationship management (CRM) and group chatting and file sharing. Recently, they reorganized things, sending Highrise off to a new team, and integrating Campfire into Basecamp 3. Along with those changes, they retired the 37 Signals name and are now known as Basecamp.
The original version of Basecamp launched in 2004. Jason, the CEO and founder realized his web design firm was busy. And while that’s a good thing, multiple projects running at the same time caused issues with organization. Things fell through the cracks, as they relied on email for everything.
After trying a few existing project management tools, failing and going back to email and seeing the same issues again, the team decided to switch gears to develop their own project management app. They used it with their clients, and saw results. Before they knew it, clients were asking to use it, and within a year, they pivoted from web design services to project management product.
Related: Turn Around Your Business in 5 Steps
Before it was Twitter, it was Odeo. Odeo, founded in 2005 was a service for finding and subscribing to podcasts. It also allowed people to create their own podcasts without investing in a lot of equipment. Eventually, iTunes became too much to compete with. Odeo released “Twttr” in 2006, a group-send text application, where each person controlled their network of friends. It worked by sending a text message to “40404,” and all the sender’s friends could see it. This obviously later morphed into the Twitter we know today.
Odeo was bought back from investors in 2006 and sold in 2007. As Twitter celebrated its 10th birthday in March 2016, we’ve seen it grow into a massive social network with 320 million monthly active users and 1 billion unique visitors monthly to sites with embedded tweets.
4. To pivot or not to pivot?
Only you can make the call as each situation is different. It may just be your business needs a rebrand rather than a complete pivot. Sabri Suby, founder of King Kong says, “The decision to rebrand usually starts with the intention of fixing a problem or creating a solution for your customers. If this is not the case, it is really important to ask yourself-- ‘Why?’."Rebranding is more than crafting a new mission statement and unveiling a new logo. It’s a chance to target new audiences with a change of company name or vision.
It may be best to pivot if you see any of the following:
- You’re not getting enough traction from your target audience. It's either because the customers don’t really care about the problem you’re trying to solve, you realize the market is smaller than you initially thought, or you’re talking to the wrong customer.
- Your costs are too high, or you can’t build the product. You need to outsource or find cheaper ways to produce everything while still delivering your value proposition. According to Chase Hughes, the managing director at Pro Business Plans, “We have seen many clients perform poorly with investment groups due an imbalance between profitability and consumer value creation. Those who have the most success establish a competitive advantage around producing more consumer value at a lower cost.”
- Your value proposition just isn’t resonating with customers. You need to look at your product features to make sure you’re able to meet the customers needs and solve their problem well.
- Customers love the idea, but they aren’t willing to pay your asking price. Either they can’t afford it or don’t see the value. Find ways to lower the price, remove costly features and sell a lower version of the product -- or find ways to expand your market.
No matter where your journey takes you as an entrepreneur, always be agile enough to pivot when you need to. Recognize that things don’t always go according to plan, and have an alternate path ready, just in case. You may find the new venture is much more successful than the original course.