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Entrepreneur Insight

Launching an Idea and Knowing When to “Pivot”

April 07, 2016
Hand playing with spinning top - knowing how to pivot in business is the key to a successful realignment
(Photo credit:)

Key traits that will make or break a startup during a business pivot.

Turning an idea into a business concept is hard enough, but making the executive decision to pivot that initial idea can be even harder. As an entrepreneur navigating a dynamic marketplace of existing ideas, products and services, how can you grow your business into something unique, popular and profitable?

With more than 7 billion people on the planet, an original idea may have already been patented or put into motion. With faster technology, a trend or product can easily become obsolete. When the original vision and business idea begins to falter, how do entrepreneurs realign themselves to get back into the game? It’s all in the pivot.

Some companies that have made major business pivots to become industry leaders include famous digital platforms like Instagram and Pinterest, and the beloved coffee shop Starbucks, which only sold espresso makers and coffee beans when it first opened.

The truth is, 90 percent of startups fail, and the reason behind their failure is mostly attributed to the lack of demand for their product or service. While pivoting usually means leaving behind hard work that has already been invested, the change is not necessarily negative. The pivot can recalibrate and revitalize the long-term vision, objectives and strategies of a business.

Does it meet a need?

Despite being a trendy word in Silicon Valley, the definition of a business pivot can range from a simple product tweak to an entire business idea overhaul. So how do business owners know when to pivot?

“My No. 1 rule is that when you have to pivot, you pivot quickly,” says Harrison Lee, cofounder and CEO of Aetho LLC, a company that designs industrial and human-centered products.

“While designing products, we really felt out the marketplace to see how it would fit from a professional level to a consumer level,” continues Lee. Asking the question of whether or not your business provides a solution to a market need is crucial in deciding whether or not to pivot.

"My No. 1 rule is that when you have to pivot, you pivot quickly"

- Harrison Lee

Aeon, Aetho’s handheld GoPro steadicam, which was designed for everyone from cinematographers to everyday consumers, went through multiple prototypes before reaching its current model and design. “We’ve gone through over 100 iterations before we arrived on what we have today,” says Lee, “When we first started out, we really had to think through whether we would just be a robotics company. Our first handheld stabilizer initially came with a headset, similar to Google Glass.” Lee says that the idea was progressive and cutting edge, but after diving into deeper market research, the company realized that the adoption rate would be low.

Since then, the company’s focus has shifted to making the prototype much more user friendly at a price point accessible to average consumers.

Sink or swim

“We weren’t sure if we would succeed,” says Katie Rosen Kitchens, cofounder and editor in chief at FabFitFun, a quarterly beauty box subscription service. “That’s part of being an entrepreneur and developing a new business. You’re never going to know for sure.”

FabFitFun began as a digital magazine that emphasized women’s health and beauty. Despite being a content-rich online publication, FabFitFun faced big competition in a highly saturated market. To redefine itself, the company sought out a completely different way of actively engaging its audience while building a new revenue stream. “We always knew that we wanted to get into e-commerce,” Kitchens says, “we just weren’t sure how.”

"We weren’t sure if we would succeed. That’s part of being an entrepreneur and developing a new business. You’re never going to know for sure."

- Elise Buik

From flash sales to launching its own customized line, the team brainstormed a number of ideas and used market research to decide on creating a subscription-based beauty box. “At that point, there were already a few other boxes [on] the market. But for us, we really identified as being a lifestyle brand,” says Kitchens. “Our consumer wasn’t the hard-core beauty girl, or even the marathon-running fitness lady. We really cater to consumers who love to celebrate everything about being a woman.” Today, the company has 200,000 active members and many boxes to fill. As a data-driven brand, FabFitFun actively solicits consumer feedback to remain relevant and to create a customized product. “The other piece of the puzzle that allows us to create unique boxes is finding something unexpected,” says Kitchens.

Understanding your market and making decisions based on research, while also providing a unique element, is a winning combination for any startup.

Kitchens points out three essential components to building a successful brand:

  1. Create a strong team.
  2. Do as many partnerships as possible to create bigger campaigns.
  3. Be curious.

Establishing these things will strengthen a startup, especially one that is going through a pivot and requires extra wind in its sails.

Avoiding burnout

Jimmy Chen is the cofounder and CEO of Prizm Labs, the company that makes Playtable digital board game consoles. He says, “Passion matters. It’s what differentiates successful projects from those that fall by the wayside.” Chen’s love for board games and passion for his product are apparent from each pitch, demo and company milestone.

Playtable is one of the first table-top products to combine traditional board games, digital features and figurines, and it already has the support of major board game brands such as Hasbro, the maker of Monopoly. It also has the ability to incorporate Amiibo and Disney Universe figurines on the board and into the game. What most people don’t know is that Playtable was created by a team of four hardware engineers and Chen, none of whom had any experience in game design. Despite this shortfall, the team demonstrated resilience by learning and acquiring the knowledge they lacked.

From reading online about basic game development scripts to late-night discussions about how to best pitch their Playtable idea, Chen and his team have worked relentlessly since their inception in 2014 to create their first digital board game console.

“The real differentiator for the success of our product comes down to two things: timing and adaptability,” says Chen. Market research determined how receptive consumers would be and helped to indicate when to launch the product. The team’s versatility, driven by its passion, continues to play a big role in avoiding entrepreneurial burnouts. “We’re not just a team of engineers, we’re also the consumers,” says Chen. “We know and have that DNA of what gamers would love, want and crave.”

Pivot, aim and shoot

Change can be an intimidating prospect for most companies, and not all startups are able to withstand the transition. Pivots are useful, however, when startup momentum begins to stagnate. Taking a hard look at the demand, company vision and long-term strategy is beneficial for any company. As all of the featured startups exemplify, a strong, resilient and passionate team that does its market research will have the necessary components to make a good pivot, aim with purpose and shoot for success.

As Lee eloquently puts it, “You look at the trends, identify who you have to address and their immediate needs, see how you can grow the company at a steady pace with limited funds, and you just go for it.”

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