Pivots – the changing of direction that restarts growth in a company – are in the news lately. Twitter, PayPal, Groupon, Starbucks and Nokia are all publicized examples of successful pivots.
Most experts say that pivots are a good and necessary thing for all businesses. But, they often involve getting into new markets or making other significant changes that alters the company’s positioning.
When that happens, communicating the pivot becomes a very important component of the plan.
The Pivot Guru
One strong proponent of pivots is Steve Blank, a Silicon Valley executive and author who today works with startups using a methodology based around the concept of the lean startup.
Many consider Blank a guru when it comes to building a successful entrepreneurial enterprise (his own record – in his words – is “Total score: two large craters (Rocket Science and Ardent), one dot.com bubble home run (E.piphany) and several base hits.”)
Here’s how Blank defines a pivot:
A pivot is a fundamental insight of the Lean Startup. It says on day one, all you have in your new venture is a series of untested hypotheses. Therefore you need to get outside of your building and rapidly test all your assumptions. The odds are that one or more of your hypotheses will be wrong. When you discover your error, rather than firing executives and/or creating a crisis, you simply change the hypotheses.
A pivot is not just changing the product. A pivot can change any of nine different things in your business model. A pivot may mean you changed your customer segment, your channel, revenue model/pricing, resources, activities, costs, partners, customer acquisition – lots of other things than just the product. Definition: “A pivot is a substantive change to one or more of the 9 business model canvas components.”
Communicating the Pivot
With that definition, we shift to looking at the best way to communicate the pivot. I put that question to the speakers at a recent “Art of the Pivot” panel discussion held by the Santa Barbara chapter of the MIT Enterprise Forum.
Mike Sheldon is President and CEO of Curvature, formerly Network Hardware Reseller. His experience with communicating the pivot is: “We changed our name to get a fresh start.” Many people knew of the company as a network reseller, but management wanted to re-position the company so it would be known more for its service offerings.
The key to changing the public perception of Curvature was “brute force” communication of the new positioning with “relentless repetition.”
Another advocate of the wholesale change model is Brian Plackis-Cheng of cielo24, a company with amazing technology that enables users to develop searchable captioning and media data.
Cielo24 pivoted to this position after starting life as Cogi, a company that provided a voice-recording note-taking application. To ensure that the new company’s positioning would get traction, Plackis-Cheng changed the company name, as well as all product names.
The result was a “clean change” that allowed the company to imbue the new brand with “factual and emotional” content, without having to fight against the market understanding of the old brand.
Throwing out a company brand and starting from scratch is not the answer all of the time; an alternative is to develop new messaging and communicate to all relevant markets, without changing the company or product names.
Which alternative is harder (and more expensive) depends on just how far along your company is in its brand building and how well understood the old brand is within the customer base.
If the pivot is something all businesses should try, then it’s critical to ensure that communicating that pivot is part of the plan. A great way to do this is to develop a solid public relations campaign – something an experienced public relations agency can design and implement for you.