It May Be Time for a Business Pivot

Startups excel or die based on their ability to innovate and occasionally pivot. Today’s writing is about the business pivot or adaptation. To show entrepreneurs out there that some of the most brilliant innovators and companies in recent years had no idea, at least initially, what they would become, I’m going to share a quick list of memorable pivots… 

It’s a list of some household name businesses that were once startups with very different models/offerings than what they have today.

 

Business Pivots Created Some of the Greatest Companies We Know

  • Netflix, the Godfather of streaming, wasn’t always a streaming service worth roughly $140 billion (market cap of the company, based on Bloomberg data January 5, 2020). Netflix started as a lower op cost competitor to Blockbuster. It was an online platform where you could rent DVDs and have them mailed to your house.

 

  • SodaStream sold a product that enabled users to add sucralose into carbonated water. The company was doing fine at that point, but what took it to billion-dollar status and acquired by Pepsi was when it went full-blitz on its carbonated water device – with no sugar additives. The company brought to consumers a slick-designed apparatus you could put on display in the kitchen and generate carbonated water from in a few seconds.

 

  • YouTube started as a dating site. Today, it is the second most popular search engine in the world and the platform for all video creators — pros and DIYers. It’s also estimated to be worth around $40 billion.

 

  • Gmail started out as an internal project for Google. It’s now the most prominent email provider on the planet.

 

  • Instagram started pretty messy…

According to Jason Nazar at Forbes, “Instagram began as Burbn, a check-in app that included gaming elements from Mafia Wars, and a photo element as well. The creators worried Burbn had too much clutter and potential actions, and would never gain traction. So they took a risk and stripped all the features but one: photos.” 

A billion dollar buyout from Facebook later, and the rest is history. Instafabulous.

 

  • Starbucks was a hardware company of sorts at its inception in 1971. It sold espresso makers and coffee beans – very similar to what Nespresso is today. Try going a day without seeing a Starbucks coffee shop packed with caffeine addicts now.

 

  • Twitter began as a podcast platform, and it wasn’t even called Twitter. It was known as Odeo. Today, it’s the most popular news curator and/or trash-talking app (depending on how you utilize it) the world has ever seen.

 

Be Inspired to Pivot

I could go on for pages with examples of the pivots/adaptations many of the biggest companies over the last fifty years made to their businesses. Some are profound pivots, which saw the entire business model of the company change, while others are more adaptations. 

I’m going to speculate that roughly 75% of the best companies on the planet do not have the same business models, or even operate in the same sector, they did when starting. 

Pivots should excite and inspire entrepreneurs for many reasons. First, no matter how bad things may get, there is always a pivot/adaptation that can be made to improve your current standing. Second, never stop innovating – innovate or die. Third, keep an open mind. Humans continue to make and seek progress by finding more efficient ways to get things done. Be the business that helps make essential things easier or more enjoyable for others, and you’ll be just fine. Fourth, entrepreneurship is an unpredictable journey… enjoy it. And remember, how you react to the volatility determines how well you succeed as an entrepreneur.

 

Recognizing the Need for a Business Pivot is Tricky

Most entrepreneurs don’t recognize the need for a business pivot because they have their blinders on, are buried in their bubble (which results in missed opportunity), or let their ego take charge. If you’re a stubborn entrepreneur (we all are to some degree), remind yourself that the majority of all great startups in the last decade have had to make a pivot or adaptation; otherwise, they’d risk the threat of stagnation, loss of market share, or death. That’s facts. And recognizing this vital aspect of entrepreneurship puts you in the right frame of mind, sets you up for the journey ahead, and makes you excited to explore new ideas.

We mustn’t downplay our initial business models or ideas after making a pivot, either. Please don’t be ashamed of them, and don’t forget about them. You would have never even recognized a new opportunity within your industry and realized a pivot was necessary had you not pursued your original concept. The learnings are what matters to your long-term success as an entrepreneur. And whether that original model was lucrative or not, the market determines its lifespan, not you – so embrace the pivot.

 

Economic Opportunity Shows Itself Subtly

Economic opportunity, the genesis of any excellent business pivot, is a funny thing. Rarely does it blatantly present itself, and that’s why such a small percentage of the population recognizes business opportunity. It shows itself subtly, only observable to those who are paying attention and open to the world around them. You have to be looking for it, and can’t be married to a single concept/model.

Stay hungry,

 

 

 

Aaron

PS – Enjoy your entrepreneurial journey more and learn about some of the things I’m passionately working on. Subscribe to my newsletter below. Only my best content will land in your inbox.

PPS – If you’re wondering why I chose a picture of Kobe Bryant for this entry, I encourage you to Google how he pivoted out of basketball and into the world of entrepreneurship. It’s pretty fascinating.

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