At a recent Northland Coffee Connect, Dave Palmstein, Managing Director of the Northland Angel Investors Network, spoke about the need for start-ups to show proof of business. In other words, can you prove buyers will purchase your product or service?
What happens, however, when after years in business – with tangible proof of business – your perfect solution is no longer a match for your target audience?
For many entrepreneurs, the answer is: PIVOT.
Famous Business Pivots
According to Jason Nazar, a contributor to Forbes.com, during early and second stage growth phases, nearly every business should contemplate a course correction. It’s normal and healthy. For example did you know that before their pivots:
- Facebook and YouTube started as dating sites?
- Starbucks started selling espresso makers and coffee beans in 1971 until founder Howard Schultz returned from a visit to Italy determined to brew and sell coffee in European-style coffeehouses?
- Hewlett-Packard began as an engineering company in 1947, creating electrical testing products before shifting solely to home computers in the 1990s?
- Wrigley didn’t always sell gum? Mr. Wrigley Jr. began his entrepreneurial journey as a soap and baking powder salesman who offered free chewing gum with his purchases. When gum proved to be more popular than his products, he went on to manufacture his own chewing gum brands.
- Founder of Suzuki high-performance motorcycles is best known as the inventor and purveyor of weaving loom machines?
Looking back on these examples, they are certainly pivots in the moment, but throughout history, pivots are the spokes of a business’ evolution. To that end, EnCorps45 is evolving. The original vision of providing a networking and online support to professionals 45 and older has become an exciting foundation to serve Boomer business owners.
Are you considering a pivot? Have you found yourself at a crossroads? Consider the following.
Streamline and specialize. Often business concepts begin broad and far-reaching. Literally, you offer everything to everyone. This approach confuses customers and dilutes your marketing impact. After initial traction, growth opportunities often result from focusing on a key feature or demographic.
Develop the upsell. A local publication saturated the market by capturing 85% of its intended audience and sponsors. Currently they are transitioning to a “this and that” approach by appealing to its current readers and new cross-generation demographics and new vertical industries.
A noteworthy of example of this type of pivot is Facebook. Initially the social media platform aimed at college students. Later they focused on consumers in general. Most recently, Facebook found a lucrative growth path with businesses. Recognizing cultural shifts can kick-start growth.
Follow your passion. When you find yourself dreading your work, it’s time to change. Once the passion behind your entrepreneurial project dies out, declining profits are soon to follow. If you find yourself drawn to one part of your journey and ignoring tasks, products or services – consider a pivot. If the overlooked part of your business cannot be delegated or sold, look at a business model that accelerates the beloved part of your business while phasing out the part that no longer interests you.
Consider alternative technology platforms. Continually evaluate how technology fuels your business. Often businesses need to transition based on new technology in order to stay competitive or improve margins. Other pivots in this area may include considerations in environment, sustainability and/or social consciousness.
Adapt to an emerging customer need or pain. With the rapid change of economic conditions, evolving government regulations and consumer buying habits, entrepreneurs benefit from a “strategic flexibility,” or a mindset open to capturing market opportunities as they occur.
As we enter the New Year, start thinking about business pivots as a healthy path to growth. When you are intentional about shifts and presume marketplace change, business pivots cost less and offer greater returns.