Is It Time to Pivot Your Business? These Are the Only Two Signs You Need to Look For.
There's one thing that every great company, executive, business leader, innovator and entrepreneur has in common — the willingness and ability to change course — but how do you when the time is right?
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Shopify was originally an online store that sold only snowboards. Its founders and leaders, frustrated by existing online storefronts, created what they considered an ideal sales platform for their designs. After recognizing that other online retailers had similar growth strategy challenges, however, they leaned into a new opportunity — from just selling snowboards to becoming an ecommerce platform for small business owners. And did that change of strategy ever pay off: Shopify now has a valuation of more than $50 billion.
I've invested in more than 100 companies, and 90% of them dramatically altered goals or products/services at least once. The ability to pivot is, I've found, all but essential when it comes to building and growing.
A few other notable examples:
• YouTube started as a video dating site.
• Twitter was originally a podcast platform.
• Netflix began with mail-order DVDs before evolving into a streaming service.
• Starbucks used to only sell coffee beans before realizing that the bigger opportunity was in making their own drinks.
• Instagram began as the social app, Burbn.
Related: 4 Ways Leaders Can Navigate Change and Find the Hidden Opportunities
All of these companies shifted — took a chance and made a change. The decision to do so reflected two key realities of the world we live in: nothing is guaranteed, and the path to success is rarely a straight line.
The need to alter direction can happen for many reasons, including market forces, misjudgments, a shift in the market/culture or the economy broadly, developments in technology or simply an unmissable opportunity. Sometimes the need is obvious, other times it requires reading between the lines. Here are key signs that it's time for you to pivot.
Sales are slow, plateaued or declining
Customers might not be responding to products the way you thought they would, and/or one product line or service significantly outperforms anything else you offer. In both cases, it might be time to consider course correction. Often these decisions are born from need when sales are faltering or the path to financial viability is at risk. Others can be opportunistic, such as shifting when you see a strong market opportunity.
When I started the company 100.co two years ago, my mission was to leverage AI to provide competitive intelligence in the creation of new consumer brands. Immediately after going to market, we got amazing feedback: including that, even though we had built our platform for internal use, external brands were requesting to use our intelligence tools. So, we listened to customer demand and shifted focus to build and launch a self-serve platform for external brands as well as our own. Our product stayed the same, but we pivoted the platform to appeal to a new-client segment. Within six months, we had 30 customers using it.
The pivotal takeaway is that businesses are dynamic and always changing, and you have to be open to adapting to thrive.
Related: Shift Your Mindset and Actions to Embrace Change
The business model is showing its faults
As needs and market conditions change and technology evolves, so must entrepreneurs' ability to adapt. I've seen many companies decide to "stay the course," even when its key decision-makers knew deep down that if their model stayed the same, success would likely elude them.
I'm not suggesting that change is easy. Taking a risk is scary, and I've been there many times, but hoping for the best is simply not a strategy.
One of the most important lessons I've learned in my career is that there's no shame in admitting the need to revamp, even radically. It's actually a strength — an active choice to improve the chances of success.
When was your last decision to do so, and more importantly, when will your next one be?