What Is Pivoting?
Updated: Oct 17, 2022
In one episode I welcomed the owner of Gallery GoGo that has years of experience as an entrepreneur in various industries, which got me thinking about pivoting.
What is pivoting, why is it important, and why should an entrepreneur care?
Now for those that may have played basketball growing up, then you are very familiar with a pivot on the court, and in business the concept is pretty much the same.
According to Forbes a pivot means, fundamentally changing the direction of a business when you realize the current products or services aren't meeting the needs of the market. The main goal of a pivot is to help a company improve revenue or survive in the market.
This is not a bad thing – pivots are ok. Ever heard of the podcasting network Odeo? Or something like that, no?
It was a podcast network created by the Founders of another company. However, due to competition concerns from iTunes, these Founders pivoted and gave themselves two weeks to invent a new idea. Twitter was born.
William Wrigley Jr. was a former soap salesman who gave free baking powder with ever purchase. After seeing the baking powder do well, he stopped selling soap and pivoted to selling baking powder and giving gum away as an incentive to buy baking powder.
Guess what William Wrigley Jr. pivoted into next? If you need some help, just go visit the North Side of Chicago but don’t you dare wear a White Sox hat.
Starbucks pivoted from selling beans to owning cafes, Nokia used to be a paper mill way back when.
Now I’m about to date myself here but – who remembers DVD Netflix? Man, I hated those people that would hold onto a new release for like 3-weeks knowing damn well they only watching it once and it’s now just sitting there, and it doesn’t even need to be rewound!
Now there are some companies that should have, could have pivoted but didn’t as well, such as Blockbuster. As the story goes, Blockbuster had the opportunity to purchase Netflix but declined, and we all know how that story ended. Well except for Bend, Oregon where I believe the last Blockbuster still lives.
Nonetheless, pivoting is important for an entrepreneur to understand, and utilize if needed, because it can help keep the company moving forward in a new world. Look at what is happening with NFTs – Nike purchased an NFT company to create their own NFTs.
Strategically, as an entrepreneur, you must always be looking forward. Like Wayne Gretzky once said, “I skate to where the puck is going, not where it has been”, and that is what made him great.
As the most recent world events have shown us all, our futures can change in a blink of an eye. Most small business owners already know that, according to the 2019 SBA report, the failure rate of startups was around 90%. Research concludes 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year.
That gives this business I am working on right now a very slim chance at success. Feels like almost guaranteed failure. But what has this show taught us?
That’s right – we don’t fail, we learn. And that is why it is important to understand how to pivot, and when it is necessary to pivot. Keep abreast to your market, understand the trends.
I just opened a TIK TOK – I know, I know. Still ain’t dancing, but I felt I was missing out on the trends. Understanding what is new, hope, dope, fresh, outta-sight -whatever you want to say.
And guess what? I am realizing I don’t have to dance on TIK TOK!
Now again it is not guaranteed a pivot will help save any business. Staying in tuned to the fundamentals of what we have been discussing throughout these episodes still applies: observe/address customer’s needs, network, understand the laws, ask for help!
In the end, my measuring stick for this venture, is to truly highlight our communities with a goal of deceasing that failure rate.
The more we all know about the great businesses in our communities, the better equipped we will be to continue to help our community grow.