Should Your Business Pivot?
Many companies started out in a completely different line of business than the one we know them for today. Could a pivot be in the future of your business?
The startup world and Silicon Valley have long been obsessed with the idea of the ‘pivot’. If a company isn’t doing well, the idea goes that they can simply re-evaluate their service offering or functionality and pivot to a new strategy to bring them success.
Businesses Who Pivoted to Success
There are numerous tech companies you might not even know started out doing something entirely different to what they offer now. Most famously, Nokia started out as a wood pulp company. In a more recent example, much of the technology for the photo-sharing app Flickr was originally designed to be used in a video game which Flickr’s founder treated as a passion project. Today of course, Flickr is one of the most successful image companies around, but it’s unlikely this would have happened had they not. Pinterest is another example. The network was once an online shopping service called Tote, which allowed users to amass and organize lists of items they wanted to buy. Where Tote faltered in the mobile shopping market, Pinterest soared as a place for people to browse and organize their favorite images and inspiration related to shopping, fashion, food and other categories.
When you consider these massive successes, it’s easy to see the allure of such a move, as it suggests that a flailing company is just one small tweak away from unicorn-level success. However, there is a danger in pivoting too much or too often. Constantly changing direction can mean a startup is unsure of its mission, rather than simply being savvy and opportunistic about its market. In most cases a pivot works best when the mainstream usership isn’t familiar with a company’s previous iteration, or in other words when a company learns from its mistakes and finds its core value proposition before it gets mass usership.
Recent Big Brand Pivots
However, there has been an interesting recent trend where established tech companies have decided to pivot into dramatically different service offerings. As mentioned previously, it is more difficult to change course once a brand or business has already become known for a given service. Users and customers might not be willing to try something knew if it’s too far removed from what they are familiar with. Here are some examples of these large scale pivots that have happened recently. Only time will tell if users are willing to adapt to their new ambitions.
Amazon does store brand: The retail giant known for efficiently delivering other company’s products is now said to be rolling out its own line of private label products, with a focus on non-perishable goods. While the company has previously sold its own line of electronics and clothing, this is the first time it will delve into more everyday items like coffee, tea, baby food and household products like detergent. While consumers have certainly shown they trust Amazon as a delivery service, it remains to be seen if they will rate the retail giant’s products over other, more trusted brands, and if Amazon’s design and quality can match up to major competitors.
Line goes on demand: The popular Japanese messaging app is now pivoting into delivery of goods by introducing on-demand “motorbike delivery staff wearing green jackets clad with Line’s cartoonish emoji characters.” In partnership with logistics startup Lalamove, the company is piloting the program in Thailand to test its widespread feasibility. Users are definitely enthusiastic about using Line to chat with their friends, so it will be interesting to see if they use it similarly to get delivery of their lunch or groceries.
Spotify does programming: Music streaming is a crowded market, and perhaps because of that Spotify is pivoting to original programming to differentiate itself. The Swedish company has announced that nine original shows are currently in development. While most of the shows are thematically linked to music, users will not be familiar with the idea of watching video on the streaming service.