History's Best Business Pivots

The best business pivots in history show how important it is for companies to remain innovative, adaptable and intuitive. Even the most robust business models and seemingly technologically progressive organisations can become redundant in a split second. Proactive organisations who can sense redundancy should pivot their core offering- moving on from their usual formula of success and diving into uncharted territory, searching for new customers, opportunities and further profitability. 

It hasn't been easy for many businesses to navigate through this pandemic. This pandemic has changed the way we approach our usual routine and shaped new ways of conducting business. During uncertain times, businesses may find comfort in clinging to the familiar and lower their risk-taking capacity. However, your ticket to survival could be a change in your business model. I've compiled a list of organisations that have made a significant change to their business model due to external or internal influences. I hope that this will inspire you to reflect upon the future possibilities of your business.

Youtube 

Initially, the video streaming giant, Youtube, was conceived as a video-dating platform with the slogan "tune in, hook up." Co-founder Steve Chen told the audience at the South By South-West festival that "We always thought there was something with video there, but what would be the actual practical application? We thought dating would be the obvious choice."

Back in 2005, the Youtube team offered $20 to women willing to upload a video of themselves to the site. Jawed Karim, another co-founder of the ever-popular video streaming service, said that "the whole thing didn't make any sense. We were so desperate for some actual dating videos, whatever that even means, that we turned to the website any desperate person would turn to, Craigslist." The co-founders went back to the drawing board, pivoted and expanded the scope of what Youtube could be, opening it up as a platform for anyone to upload a video. Google bought out Youtube's co-founders just over a decade in a $1.65 billion acquisition deal.

Fun fact: this was the first video to ever be uploaded to Youtube. 

Starbucks

Starbucks today is vastly different from when the company was first founded. Howard Shultz founded a company that was primarily focused on shifting high-priced coffee machines and exotically sourced coffee beans. It wasn't until Shultz took a trip to Italy when he recognised first-hand just how infectious the coffee culture in the country was and saw that he could capitalise on this back in the States. This lead to Shultz pivoting the company's core business offering. Instead of putting coffee machines and beans into the houses of Americans, he offered them a comfortable place to socialise and drink coffee.

Twitter

Twitter started as a podcasting platform called Odeo. The problem for Odeo was that Apple's launch of its own podcasting platform swallowed up any chance of Odeo gaining significant market share. The project needed to be quickly reevaluated. At that time, Jack Dorsey, Twitter's CEO, ran marathon brainstorming sessions to develop new ideas to pivot to. He came up with the concept of sharing real-time thoughts with a wider online community. 

"To improve is to change; to be perfect is to change often" - Winston Churchill. 

Groupon 

Groupon today is worth an estimated USD $1.254 billion. But, just over a decade ago, it was a struggling company with a bold vision: to bring people together behind charitable causes or for disaster relief. Founders Andrew Mason and Brad Keywell managed a site called The Point, which was slowly building up momentum as the crowdfunding project launched in Chicago. However, it was losing its edge. The point launched a subdomain known as Groupon with funding from Eric Lefkofsky. Groupon negotiated group discounts with restaurants, sporting and entertainment events. Groupon's innovative approach to finding discounts was so popular that the charitable donations site almost overnight became the household name that we recognise today. 

Netflix

The entertainment giant Netflix first started as a mail-order DVD service. Now, Netflix is barely recognisable from where it began. Netflix has not necessarily pivoted its business but has slowly evolved through market anticipation. Netflix's origins in posting out DVDs to consumers moved with the technological tides. When Netflix had enough adequate bandwidth to capitalise on, the company moved to downloadable content. And, eventually, a fully-fledged online streaming entertainment platform. Later, Netflix made an important business pivot to minimise its costly licensing fees by launching a number of films and series produced entirely in-house. This business pivot radically shook up the entertainment and production industries. 

PayPal

 Paypal's founders, Max Levchin and Peter Thiel, had relatively modest ambitions compared to Paypal today. The company's key business pivots have ensured it stood the test of time in a rapidly changing technological landscape.

 The two Paypal founders met at Stanford University in 1998. Levchin pitched a number of ideas that involved cryptography, finances and personal handheld devices that were in the early stages of their development. After 12 months, the pair's idea had taken them nowhere, and they rebranded the company to Confinity. They pivoted the strategy and core offering to transfer IOU notes between Palm Pilots. After months, this idea failed to take off, too. Unheard of at the time, their next idea was a payment system designed specifically for web-driven financial payments - called PayPal. Soon after the launch of PayPal, eBay discovered the company and made it the default payment option for its site. 

Entrepreneur's Jayson DeMers writes that we can learn from these business pivots in the following ways. "If some aspect of your business isn't working, there might be another aspect that's doing extraordinarily well-- like the one in which Groupon performed so well under The Point's brand. Focus on the wins, and try to expand them. Even if you're in love with your business idea, you can't keep pursuing it if it's not striking a profit. Ultimately, your business needs to be profitable if it's going to survive. Throw hypotheticals and ideals out the window, and instead focus on where you can generate the most revenue." 

In conclusion, business pivots can save companies. This pandemic has thrown millions of spanners in the works. However, necessity is the mother of invention. You will experience challenges thrown in your path, which you will need to overcome, but with disruption comes opportunity. Individuals who have been pulled into a dark vortex yet still stay positive will invent, innovate and pivot their business.

Educate and motivate yourself to become a visionary. Don't be pulled down by immediate challenges.  

If you're leading your business and team through challenging times and need some guidance, check out "The Leadership Behaviours You Need To Navigate A Crisis".

Thanks again for your time, and I'll see you in the next piece. 

Kobi Simmat - Director & CEO of the Best Practice Group.