What is pivoting?
A pivot, first and foremost, refers to a change a business can take in order to adapt to difficult situations. Perhaps there is more competition in the market, the market has shifted, or profits are simply not what they were before. All of these are examples of why a business would choose to pivot. Essentially, the main goal of a pivot is to help a company shift their business model to improve revenue or survive in the market.
The concept of pivoting has been performed many times throughout history, as businesses reidentify themselves in order to remain competitive. Here are some prominent examples of successful pivots, as these companies were able to not only survive but thrive after they adjusted their business model to comply with an altered market:
Netflix took the market into their own hands as it continued to innovate the video viewing experience. While originally succeeding with their DVD-to-mailbox model, they decided to further satisfy their customers’ desire to enjoy video content at home by introducing streaming services. The company did not stop there, as it continued to pivot by creating its own content, as it launched its original series “Lilyhammer” in 2012 and introduced the binge-watching concept of releasing a TV series’ episodes all at once. The following year “House of Cards” was released, and just three years later Netflix had roughly 126 original series or films under their belt. Netflix has had continued success as it now boasts roughly 220 million subscribers.
Instagram is one/if not THE most widely used photo applications available, but it wasn’t always the photo/video sharing titan it is now. Instagram was originally known as Burbn: a check-in app that included gaming as well as photo elements. The creators were concerned that Burbn was too cluttered, and would therefore never gain any traction. As a result, they decided to remove all of the app’s features except for one: photo sharing. Due to the immense popularity of this feature, the creators of Burbn removed every other aspect of the app besides the photo, like, and comment functions. They essentially restructured the app, shaping it to cater to those primarily interested in sharing their photos. The business ultimately rebranded and became Instagram.
Today, Nintendo is one of the most famous video game companies on the planet. However, before it started creating its first video games/consoles, it was actually engaged in a variety of other ventures such as taxis and “love hotels.” Nintendo was founded in 1889 as Nintendo Karuta by the craftsman Fusajiro Yamauchi and produced handmade hanafuda playing cards (or “flower cards”). But in 1963, when the interest in the playing cards business began to wane, the company began to pivot into the toy and gaming market. Since then Nintendo has evolved into the video game giant it is today.
How can you pivot successfully in your startup?
Although the aforementioned cases are prime examples of a pivot gone right, it’s important to recognize that pivots are not always an instant, fix all remedy. However, in order to prepare for a successful pivot, consider the following tips. First and foremost, focus on the aspects of your business that work; evaluate your product and business model, and keep the aspects that perform the best. You must also communicate your intent with the pivot properly to the investors and stakeholders; argue the significance of the change in the business model and get them on board. It may also be necessary to adjust your workforce depending on the nature of the pivot. Does this new business model require a new set of skills? Be willing to hire new, skilled individuals or invest in having your current team adapt. Finally, it is fundamental to be comfortable with change and to actively embrace it.
How do we pivot at Global School for Entrepreneurship?
On the significance of being open to change, consider one of Global School for Entrepreneurship‘s main tenants: being comfortable with being uncomfortable. At Global School, we prepare our students to adjust to any situation, including ones that would require you to restructure your business by employing a pivot. With a cutting edge curriculum that is taught by entrepreneurs for entrepreneurs, our master’s program offers immediate value as it caters specifically to your business. Global School facilitates you in the scaling of your own business and provides you will the tools required to do so with confidence. If you’re an entrepreneur ready to take your business to the next level, our Master of Science in Scaling Up is perfect for you.