Pivoting as a Business Strategy July 5, 2012Posted by David Dirks in business strategy, Strategy.
Tags: business strategy, David Dirks, differentiation, market differentiation, Pivot, Pivoting, small business strategy, strategy
A Wall Street Journal article (‘Pivoting’ Pays Off for Tech Entrepreneurs, April 26, 2011) caught my attention. What used to be called a “failed business idea” is now known as pivoting. That’s when you have a business model and learn that it does not provide the revenues and profits you need to sustain it (or the venture capitalists who might back you). Pivoting is the art of then taking the pieces of the business model that work and creating a new business model…even if that means going 180 degrees in another direction.
Pivoting as a business strategy is not new. It just didn’t happen with much frequency until the advent of the web, apps and other such fluid technologies. Now, if it doesn’t work, just pivot quickly to something else. To me, pivoting makes sense. If you start with a business plan and model that you learn has faults, you just pivot to another business plan and model.
Of course, pivoting is not easy and full of risk. First, pivoting is an admission that your original business model is either failing or has already failed. In the “old days” businesses that failed or were on the path to failing…just plain went out of business. Secondly, you can’t pivot slowly. If you pivot you have to do so with all speed. Yes, pivoting is like changing the tire on a car that is still moving at highway speed. You don’t have time to extend the debate on what in your business model stays and what parts get junked and replaced. Third, pivoting doesn’t guarantee anything. It just means you get to live and learn another day.
Pivoting isn’t new. Thomas Edison pivoted more than 1,000 times before perfecting the light bulb. Sir James Dyson created 5,127 prototypes before he perfected his bagless vacuum. Pivot if you dare.