And what best practices are there to follow?
2020 may well turn out to be the year of the pivot.
As budgets are slashed, VC funds dry up, and consumers and businesses all across the globe assess their spending habits, the growth markets we’ve all been used to of late have taken a pummelling.
And that has meant some serious changes for both the well-known brands and the growing scaleups.
Take Airbnb as one of the most famous examples from the previous few months.
A travel-based company that saw its revenues drop by $1BN and its workforce slashed by 25%, Brian Chesky, CEO and Co-Founder of Airbnb, led a huge realignment effort for the company.
Of course this involved the basics of establishing consistent comms to all their employees, shareholders, customers and hosts. But it also led to the company stripping back its operations, doubling down on some amazing and high-profile virtual experiences, and, as Brian Chesky put it, ‘going back to basics’ with their core offering.
The Big Pivots
Airbnb is somewhat of a mild case in comparison to others though.
Paris startup, Withings, was quietly chugging along as a consumer device company when Covid hit a few months back.
Since then though, they’ve been focusing more on servicing doctors, hospitals and medical research programmes, who are all eager to take advantage of the heart monitoring data that a Withings smartwatch collects.
And it’s a pivot that’s paid off - Withings have recently announced a $60M investment raise to power their growth even further.
It’s a pivot that’s echoed by the meeting platform we’ve all come to know and love, Zoom! Now on the surface of it, Zoom didn’t pivot - they just took advantage of the Covid-inflicted situation.
But actually, Zoom did pivot - they were used to targeting Enterprise companies (and actually suffering because of it due to the long sales cycles).
In 2020 however, they re-evaluated and looked to market to SMBs, as well as individuals. It’s a change that anyone in the software business will know is not an easy one to do - it requires a complete overhaul of everything from your positioning to how your internal teams are organised. Certainly not for the faint-hearted!
Closer to home, many UK companies have pivoted in recent months to helping the frontline and focusing on much-needed supplies for the medical industry.
RDM Group, the company behind driverless pods and an autonomous luggage dolly for the aviation sector, made a massive pivot to support the UK’s search for PPE. It even went on to develop hand gel sanitiser, something that was replicated by the likes of Scotland-based BrewDog and the mobile charging company, ChargedUp.
How Do You Pivot?
Although recent months have been unprecedented, the idea of ‘pivoting’, especially in the startup and scaleup worlds isn’t new. And this is great news for any growing business considering it, because there’s a plethora of resources to draw upon.
In fact, Sahil Chopra, CEO and Founder of iCubesWire, believes that ‘pivoting’ should be part and parcel of any scaleup vision, especially in this era of digital disruption where business is a constantly evolving process.
In terms of the pivot itself, it’s important to take into account five key focus areas:
1. What can stay the same, and what needs to change?
There’s no need to throw the baby out with the bathwater, so take time to identify which areas of your business really need to change, and which can stay the same.
This is especially important in short-term situations like we’ve had in 2020. It’s something echoed by serial entrepreneur and angel investor, Peter Cowley, who spoke at one of Invigorate’s recent masterclasses.
For him, it’s important to understand that whilst there are huge changes happening right now, both investors and founders shouldn’t assume that what’s a problem today is investable, as it won’t necessarily be a problem in the future.
2. Over-communicate with your team and other stakeholders
Involve your team, and any change will be a whole lot easier! Get them onboard early, and they may even have valuable contributions to make to the strategy too.
Whether the uncertain times are global and wide-ranging, or small and just affecting your business, be crystal clear and regular in your comms, and ensure you maintain a good level of team spirit to get everyone through.
3. Keep track of the numbers
Data, data, data! Keep a close eye on your key metrics, especially for existing customers who you want to be sure to retain through any pivot. Your numbers are also crucially important for any pitching or fundraising you’ll need to do to support your pivot. Make sure you know these like the back of your hand!
4. Remain true to your vision
You may need to pivot, but you still need to remain true to what you’re passionate about, and that means sticking to your vision. Make sure the pivot sits under the same ‘umbrella’ so that your short-term approach may slightly change, but the long-term mission and vision remain grounded.
5. Plan different scenarios
Any scaleup should be familiar with this one, especially if you’ve been through funding rounds! But it’s worth remembering that any pivot requires the same due diligence in planning out all the possible scenarios that may unfold. If 2020 hasn’t taught us this, then what will?
The final piece of advice for pivoting… accept you won’t get it all done!
It’s something that the CEO of Voxpro, the global CX company, advocates too:
“Make peace with your to-do list. And accept the fact that you will never get to the bottom of it.”
Perhaps advice we should heed at all times, never mind during a pivot!