Sometimes a startup is faced with a difficult situation. They’re current model isn’t working. Often times these situations come up after the startup has already invested a large amount of time and energy into their current model and technology. It’s a difficult realization and I’ve seen hundreds of new companies wilt under the pressure and disappear.
But there are a lucky few who manage to pull off a successful pivot and reinvent themselves as an entirely new company. There have been some amazing success stories of pivots in the past. For instance, Twitter actually started off as Odeo, a podcast network. When iTunes got into the podcast space, Odeo knew they had to pivot or be crushed. Now Twitter is one of the hottest stocks and the darling of the social media world.
Instagram is another successful company that was able to pivot early on. They began as Burbn, a check-in app that included gaming elements and a photo sharing element. The creators felt that their app was too busy and would get lost in the shuffle. So, they stripped down the parts that didn’t seem to have as much traction and were left with a photo sharing app that was purchased for a billion dollars by Facebook.
So, if your startup isn’t getting the traction it needs, here are three pivots you might consider.
Luxury brands experience benefits that most other brands don’t. There’s less competition at the price points they offer. Their margins are usually much higher than lower end products. And they don’t require large manufacturing since they usually focus on quality over quantity.
Casino owner Stephen A Wynn is an example of someone who pivoted to a luxury brand. After owning and operating many resorts in Las Vegas, Wynn decided to pivot to a luxury and exclusivity offering. He placed his name atop his hotel and ensured that his visitors would experience the highest level of quality. By doing this, his brand became synonymous with luxury.
Picking a Winner
Similar to Burbn’s pivot to Instagram, if you’re product offering is too broad and you have several features that aren’t used as frequently or products that aren’t purchased as regularly, then consider trimming down your product or service portfolio.
Perform an audit of everything you offer or sell. Find the “winners” and focus on those. Oftentimes startups fail because they’re trying to be everything to everyone. When they should really be focusing on being something great to someone specific. When this happens, your services improve, your quality takes a step up, and your headaches can go away.
Pick your Vertical
I once talked to a web design firm that built websites for small businesses. He told me how in their first two years of business, they merely treaded water. They barely made enough to pay their two employees and there was never enough left over at the end of the month for him or his partner to take a paycheck.
Then they pivoted.
They decided that instead of focusing on the small business market (which is huge), they instead would have a laser focus on chiropractors. They honed their offering to appeal specifically to chiropractors and they came up with specific packages for this vertical. Within six months the firm grew 300%. Their growth continued at a staggering rate. Today, the firm has over 30 employees and is a major player in the chiropractor marketing space.
So, if you’re down in the dumps because your company isn’t performing how you think it should, don’t fret. Perform some introspection and decide if your startup requires a pivot. It might just save your bacon.