Businesses change as they grow both through internal and external influences. However some businesses don’t just adjust, they completely shift and change tact which is what is called a ‘pivot’.
I love looking into business pivots as many have a great story behind it and some are truly inspiring. Some of these pivots have changed our lives. Just imagine Facebook stayed as being a hot or not style site and never pivoted to become the world’s largest social network, changing our lives completely and how we interact with friends and family. Whether it’s for better or worse, that’s an argument in its own right.
The truth is, when it comes to starting a business it is highly unlikely that the business you start is going to be word for word the business you end up with. It is crucial that even if you have a precise dream and vision for your business, that you are open to the idea of changing to fit the market you want to break into and to make a more profitable and stable business in the long run.
What is a Business Pivot?
Sometimes when you set out with a very specific business model it may seem viable at first but having a contingency plan in place can be a life-saver. So what do you do when your original plan fails? Or what if you see an opportunity developing that you are poised to take advantage of? A choice needs to be made as to whether you continue along the same path or whether you decide to shift your focus.
It’s a hard call to make. You may have spent years of your life doing one thing and making the decisions to realign can be a tough one and no doubt has seen the downfall of many businesses but also has left many pondering what ‘could have been’.
A business pivot is essentially a business plan diverting or pivoting from plan A to plan B in an effort to make a more successful or sustainable business model. A business pivot does not necessarily mean that you are desperate or that the chances of recovery are slim or nonexistent. In fact, some very successful companies diverted from their original business plan to become the companies that we know and trust today. Here are ten such pivots that redefined what it means to change direction and head down a different path.
Famous Business Pivot Examples
Nintendo – From cards to riches
The company that we know and love that has brought us countless hours of fun and enjoyment be it through old school systems and consoles or the newest of technology. Nintendo started out as an all encompassing company that offered a wide range of services and products. This is perhaps why they changed to a more streamlined and focused vision. Nintendo started in 1889 and offered things like playing cards, vacuum cleaners, and instant rice. Yes that’s right.. rice. The guys that brought us Mario Kart also brought us rice.
The company was also a taxi company at one point and even a chain of short stay love hotels, or hourly hotels as we know them today. Nintendo started as Nintendo Koppai, or Nintendo Playing Card Company LTD.
When the card making business did not garner enough profit Nintendo branched out to several smaller niche businesses like a cab company and love hotels.The Daiya Taxi company that Nintendo founded became too expensive to run and other ventures started to fail and falter.
In 1964 the stock prices for the company plummeted and it was time to abandon the idea that Nintendo was meant to be a playing card company.It was not until the 1960s that Nintendo began to transition to the household name that we all recognize now. In the 1960s Nintendo switched to toys and eventually by the 1970s they began to focus on video games.
Nintendo released their first console in 1983 and it was called the FamiCom which was short for Family Computer that was exclusive to Japan. The company is now worth an estimated $85 Billion dollars and is known across the world.
Twitter – How to turn Podcasts turn into a Public Offering
The now super popular social media site started out as a company called Odeo that allowed people to search and subscribe to podcasts. Thought eh idea was fresh, it was not something that allowed for much growth and profit. It was the rise of iTunes that made the founders switch their market plan in fear that iTunes would take over and drive Odeo out of the podcast business.
The company changed directions after a ‘Hackathon’ and in one of the most well known business pivots in history, they are now one of the most popular microblogging platforms in existence.
Twitter has over 1 billion registered users and each person spends an average of 170 minutes on the site each month. Stock for the company traded for $49.43 in 2014 and is set to continue growing.
The above paragraph doesn’t do it justice I don’t think so if you want a really interesting read about the beginning’s of Twitter, check this out.
PayPal – PalmPilots to Pivot equals Paypal
everyone has used this site at least once or twice to help facilitate an easy online transaction but the company actually started out as a PDA software security program called Confinity. The premise was that it would help to protect personal information on PDAs. That’s right.. it was a company providing security to a phone that people didn’t really want anymore.
The company then transitioned to a virtual wallet and morphed into the auction currency we came to know and love (love the convenience.. not the fees) and now partners with some of the largest companies on the internet.
The company has over 140 million active accounts and over 2.5 million customers use PayPal to make purchases each year. PayPal is the top virtual wallet and is even accepted in some physical stores across the country. Lucky they were not attached to PalmPilots ay?
Groupon – From social good to category crusher
Everyone love saving money and this site is proof of that people will jump on a bargain. The company beginnings are different to what you would think however. The company actually started out as a social good fundraising site that was called The Point. Groupon was intended as a side project that eventually overtook The Point in popularity and success forcing the founders to abandon their original idea and business in favor of continuing with Groupon. Very Twitteresk.
Groupon is now featured with over 650,000 merchants, is available in over 40 countries globally, has over 200 million subscribers, and employs over 12,000 people.
Groupon is now saving people money
and destroying business profits across the globe alerting users to deals that allow them to experience new things that they may have never done or will ever do again as a result of these business killing deals!
Instagram – Just keeping it simple
Now one of the most popular photo sharing apps going around, the company actually started as Burbn (sounds like something you would drink?), a combination gaming and photo app.
The creators feared that the app was too cluttered and bulky so they chose to focus instead on photo sharing, and rightly so. In 2012 the founders sold the app to Facebook for an impressive $1 Billion dollars and now it is used by 200 million monthly users with about 60 million photos uploaded each day on average garnering about 1.6 billion likes per day. That’s a lot of selfies and food pics #narcissism #foodie #52triesandcounting
Android – The ultimate perfect pivot?
Odds are if you are not working with an iPhone you are operating with a phone that runs off the Android system. The company started as an operating system for cameras so that you could essentially connect your camera to your pc and work from there. By the time Google acquired the company however the business plan had pivoted from cameras to mobile handsets.
The downward move of the camera industry to the use of smartphones is what spurred the decision. With the transition to the creating an infrastructure for handsets, Android has become one of the largest operating systems for any smartphone in the world. Android phones now account for about 80% of smartphone market shipments and is now in cameras, and more. Android is essentially working to connect more devices then they ever could have imagined.
Starbucks – It was there all along
What would you do without your favorite cup of coffee every morning? If Starbucks had not changed course from selling espresso makers and coffee beans you may have had to find somewhere else to get your favorite drink. In 1971 the company was selling the equipment and organic material to make coffee, but they were not actually brewing the liquid gold themselves.
When the founder, Howard Schultz traveled to Italy in 1983 his mind changed and he decided that he wanted to brew coffee instead. Starbucks then changed from a seller of the things you need to make coffee to a full fledged European Style Coffee house and is now the absolute success that it is today.
In a day and age where things are seldom what it seems, it may be scary to change your business path. Though you work hard to create that initial business plan, sometimes it is necessary to alter it in order to create a plan that is going to be sustainable and ultimately profitable. A great plan B is always your best plan A so that if the need to pivot does arise you will not be left floundering and trying to find an alternative to your original idea.
In most cases, a pivot is essentially a second chance to use all the hard work that you have already put into your business. Often, your pivot is not going to be so far off base that you have to change the entire infrastructure of your company but rather a slight diversion toward something else that is going to work better in both the long and short terms. With a great business pivot you can get your business model back on track and you can get your company back in good standing and ready to flourish and profit. Business pivots are responsible for some of the most successful businesses that we now know and love and may be just what your company needs to grow and change for the better.