Twitter started as an audio podcasting service.
YouTube came online as a video dating service.
Nokia started as a paper mill.
Flickr was once a role playing game.
Nintendo once sold playing cards and instant rice.
And when Groupon launched, they organized political protests.
All of those ideas don’t even seem close to their current business models.
That’s because somewhere early in the launch of the business, they made a pivot. From something that wasn’t working well to something that would scale. They shifted to a different product, a better service or a better idea.
There is power in the pivot, not just for these companies, but for your organization.
When your idea isn’t working the way you thought it would, you might need to pivot.
A change of this magnitude a brave decision, but it’s more common than you may think. The New York Times reports as many as 15-20% of companies go through a major pivot in search for sustainability.
If you’re stuck, or you can’t scale, here are three types of pivots you could make.
A product pivot.
Wrigley – the famous chewing gum company and the reason it’s called Wrigley Field- didn’t start that way. They were a soap company.
They offered free baking powder to boost soap purchases, and the baking powder was more popular than the soap. So they shifted the business and made baking powder the main product.
Since the freebie strategy worked so well the first time, they wanted to include another freebie with the baking powder.
That pivot proved to be valuable, and it made the company what it is today.
When they learned an auxiliary product was what the market wanted, they didn’t stubbornly hold on to the need to sell baking soda or soap. They were willing to pivot to meet market needs because they found out their customer wanted something different.
How well does your product or serve match up to the true needs of your customers?
A lot of companies solve problems that only exist in the minds of the company’s founders.
A lot of startups set out to solve a problem people don’t really have.
A lot of businesses are pushing products nobody wants.
Sure, a great salesman can sell ice to an Eskimo, but an Eskimo doesn’t need ice. Don’t be afraid to pivot you products to meet the needs of the people you’re trying to help.
A people pivot.
We started Church Fuel with a desire to serve church leaders and provide practical training for the church. But after several months of shipping early products, we realized we needed to make a people pivot and niche down our audience even more.
During our initial planning, we got a lot of things right. But once we started selling products and interacting with real customers, we realized a small change was in order.
We decided to create resources and products for Senior Pastors, not church leaders. And not just all senior pastors, but senior pastors of churches that were willing to grow. That might seem small, but it’s really a big filter for us.
One of our first courses taught church leaders how to use content marketing to grow the church. It was a really practical, top-quality product. It still is.
But most senior pastors are not interested in that topic. They should be, but they are not. It wasn’t the type of course they could easily understand with a baked in benefit. We had to overcome a communication barrier just to describe it.
So we pivoted our focus and communication to creating resources FOR senior pastors. Our next course was called Breaking 200. The benefit to the senior pastor is baked right into the title. And the launch was far more successful. The quality of the course didn’t change, but the audience was more focused.
For most startups, going after the smallest possible segment is preferable than attempting to launch a product or service with mass appeal. It’s easier to identify and reach a smaller segment.
The reason a small town, local pet store can survive even though they are located right next to the giant pet store chain is focus. The local store specializes in snakes and reptiles, not dog food and cat food.
The reason a travel website can make it despite the competition is the travel website focus exclusively on helping people travel with their pets.
The riches are in the niches.
A price pivot.
The third type of pivot you can make in your business is price.
Just because you started at one price point or payment option doesn’t mean that’s the right place for you now. Maybe the market has changed, you cost of goods has decreased or your systems allow you to scale.
It could be time to change your price.
But be careful.
You don’t want to price your product or service higher or lower as a careless reaction to a bad month. Sure a flash sale or a fire sale can generate revenue, but you need to consider what it will do to your brand long term. You need a careful pivot not a careless reaction.
And it’s likely your price pivot should be an increase not a decrease. There will always be someone to sell it cheaper than you so competing on price alone probably isn’t smart. Understanding a niche audience and tailoring your product to meet a very real need of that audience will allow you to charge a premium.
If your product or service meets a real need, would your customers be willing to pay more? Should you offer payment plans or to make it more budget-friendly or should you keep one price point to keep it simple? Should you add personalized services and create a top tier or should you remove options and sell an entry level service? And where does price really rank on a customers top three decision points?
It’s tricky, but don’t be afraid to make a pivot.
These are just three of the pivots your business could make. But you could really apply the pivot to any part of your business model.