Nobel Prize winner George Bernard Shaw once said, “Progress is impossible without change, and those who cannot change their minds cannot change anything.”
Customers change. Trends change. Technology changes. Business needs and finances change.
Change is inevitable. And with how many changes regularly affect businesses, it’s not uncommon for both large and small businesses, chiefly startups, to have to pivot in order to open themselves up to new opportunities, customers and revenue.
A pivot in business can be described just like a pivot in dance. A business keeps one foot behind them, leaving it in the past so to speak, places the other in front of them, in the future, and turns toward a new direction. They do it quickly and early—because that’s when successful pivots happen—while keeping their foot in the past grounded, using what they’ve learned to help them venture into a more successful future.
So when should a business pivot?
According to entrepreneur Eric Ries, who coined the term in 2009, along with some other notable entrepreneurs and business folk, there are 8 common types of pivots businesses take:
- Customer problem pivot
- Market segment pivot
- Technology pivot
- Product feature pivot
- Revenue model pivot
- Sales channel pivot
- Product versus services pivot
- Major competitor pivot
Pivoting doesn’t mean you don’t understand business or your customers. It means just the opposite. It shows you care about your customers and your business. It shows you understand that change is necessary for progress. It shows that you’re in tune with consumer needs and are willing to do what’s needed to stay relevant and earn loyal customers.
The following are three companies that have made a name for themselves in their respective industries by nailing the art of the pivot.
Cariloha
In 2007, Jeff Pedersen founded Cariloha, a company that produced and sold island-leisure products, such as sunglasses, watches, apparel and more; and in 2008, he opened his first three stores in cruise port locations. Unfortunately, what Pedersen and his executive team thought would be a surefire success, wasn’t.
Sales weren’t near what they needed or wanted them to be, mainly due to the fact that no one knew about their brand and they were selling similar items at similar prices to established brands. So rather than competing in the current marketplace, Pedersen decided to pivot his business by creating his own marketplace.
He went from using traditional materials, like cotton, to using only bamboo to produce bedding, bath items and apparel, which no one else was doing. He went to his customer base and realized people wanted something that was unique, sustainable and most importantly, comfortable; and after feeling a small swatch of bamboo, he knew this was Cariloha’s ticket to business success.
In the first year of selling bamboo products, Cariloha saw a 600 percent increase in sales; and today, they have 60 stores in 14 countries and are meeting and exceeding their sales projections.
Most of us have Twitter. In fact, as of February of this year, there were 319 million Twitter users. But out of all those users, how many know that Twitter didn’t first start out as Twitter? Probably not too many.
Twitter began as a company called Odeo, a podcasting platform that had its product going in July 2005. But, by the fall, Odeo’s founders knew their vision would have to change because Apple announced that iTunes was going to include a podcasting platform, and they just couldn’t compete with Apple.
So Odeo’s employees started spending their days working on projects, trying to come up with a product that people would use and Odeo would prosper from. That’s when the “status” product idea of Twitter was proposed (back then it was just an Odeo project called Twttr).
Today, as we know, that pivot produced one of the most successful and used social media platforms of our time -- all thanks to founders and employees knowing that competing with a large company like Apple wasn’t smart, trusting in one another to come up with a new business vision and giving the necessary time and effort to turn a small project into a now worldwide, profitable platform.
Nintendo
The makers of some of the most known and well-liked games, like Super Mario, was around and selling other various products long before they were selling video games.
Nintendo’s history dates back to 1889, where the small company Nintendo Koppai sold playing cards, and in 1953, the company was the first to produce plastic playing cards in Japan, resulting in them ruling the industry. But the now owner knew this business model was too limited. So, Nintendo next started selling books that explained games to play with their cards; and in the 1960s, they even tried selling vacuum cleaners, instant rice and games and consoles. Obviously, only the latter of these stuck.
And even though Nintendo is an established business that made its name and money from pivoting from plastic playing cards to video games and consoles, Nintendo hasn’t stopped making little pivots to stay relevant with the times and consumers. They did Pokemon Go, which was crazy successful, and their latest system, Nintendo Swtich, lets users play at home or on the go, which gamers want.
As technology has changed, so has Nintendo. As consumers needs and wants have changed, so has Nintendo. By understanding their target audience and letting them command their business, Nintendo has been successful and innovative for decades.
Photo credit: Shutterstock / nd3000