Sometimes it pays to switch course, the trick as an entrepreneur is knowing how and when to do so. Here we take a look at five global businesses who owe their substantial success to a smart pivot move, as well as take in some expert advice on how to perfect the art...
PayPal was started in 1999 by a company called Confinity as a money transfer service. In 2000 Confinity merged with Elon Musk’s company X.com. Apparently, users didn’t take to the name, finding it potentially pornographic and so the company became PayPal Inc. After an IPO, the company was purchased by eBay but the two became separate companies again in 2015.
Pivot: Sometimes your name can be make or break
It may seem pretty hard to imagine now but once upon a time there wasn’t a Starbucks on every street corner. In fact, the company started out in the early 1970s selling espresso makers and coffee beans. However a trip to Italy in the 80s changed everything for CEO Howard Schultz.
He came home with the aim of selling coffee in a European-style coffeehouse chain. Fair to say it was a good decision.
Pivot: Take influences from other cultures
Twitter’s actual origins have a few different stories, depending on who you ask. Officially, start-up Odeo was founded as a podcasting platform but when iTunes launched, it became redundant. The company gave its staff two weeks to come up with new ideas and a trio of employees (including Jack Dorsey) hit upon the idea of turning it into a platform where you could send a text to one number and it would be broadcast to all of your friends. The idea of something similar had apparently been twittering around in Dorsey’s head for some time.
Pivot: When one door closes, another is waiting to be opened
Nintendo is probably the most famous example of pivoting successfully, if not pathologically. The name now might now be synonymous with video games but the company itself was founded in 1889 as a playing card manufacturer. The company tried everything from taxi services to vacuum cleaners and only started making electronic games in the late 60s.
Pivot: Don't feel restricted by the industry you currently reside in, look for opportunities in different sectors
The company behind the system you might be reading this article on started as a camera operating system to allow you to connect your camera to your PC. But by the time Google got its hands on it, the business had shifted from cameras to mobile handsets, thanks to the decline of the camera industry towards smartphone use.
Pivot: Be ready to spot emerging trends
The expert advice
These are all success stories. But, according to business growth consultant, Isla Wilson, "We tend to hear the stories of large and successful businesses who experienced a dramatic and sudden pivot and we hear far less often about the businesses whose pivot was a disaster, or who made smaller pivots along the way, it can be dangerous to think that suddenly or dramatically are the only ways to pivot."
The key to a successful pivot, says Wilson, "is to have really good performance data and to be diligent about scanning the horizon for new threats or opportunities. In most cases the more time you have to research or plan a pivot the better. It is also worth considering whether you need to do a wholescale pivot. Sometimes it may be more appropriate to pilot something new (or several things) and test the market for your new direction in advance of a decision to turn the whole ship round." She adds, "The concept of pivot is closely linked to the idea of continuous testing and feedback loops, and works best when you can be fleet of foot and when you have really good evidence and data to judge your performance."
Great pivot ideas, says Wilson, build on existing skills and strengths: "If you need to pivot start by doing as review of where your strengths lie, and then look for new ways to apply these, or new markets which you can take them to. Similarly, if your strength lies in your knowledge of a specific customer group, consider a pivot which builds on this by offering something new, or disruptive to your customer base."