When startups pivot – some great and not so great examples
Some of the best example of startup success have come up from pivots, a move that changed the game for the enterprise. The art of pivoting, although difficult, is critical especially if the timing is not right for the startup or the talent isn’t best utilized. Pivoting is a prevalent phenomena in the startup sphere, with many startup utilising it to turn their fortunes around by means of rediscovering or starting afresh.
Twitter – In a really insightful and bold move, CEO Jack Dorsey created the most successful pivot in Silicon Valley. Odeo was the original startup product offered by Jack, which was previously a platform where you can subscribe to podcasts. However, due to iTunes' market domination, Odeo had to pivot to an alternate product offering - but it even that became irrelevant within weeks. The company gave its employees two weeks to come up with another product idea and that was how a $13 billion+ social media revolution was born, aka Twitter.
SnapDeal – One of the highest growing e-commerce companies, Snapdeal has had a great pivot - moving from a daily deals platform to an online e-commerce site. The company decided to move away from the internet coupon business, after it realised it was drying up profits and the slow pace of market growth. Snapdeal made its move strategically after hiring key product people to initiate its growth.
AskMe – AskMe laid-off 4,000 employees in one shot in a very public PR nightmare, underscoring the dismal response its multi-million-dollar campaigns and celebrity sponsorships received. AskMe has pivoted many times and failed time after time finally shutting down last year. They raised capital, acquired many companies but towards the end failed to make that impact, accruing net losses of more than ₹300 crore.
In a press release, one of the co-founders Avlesh Singh, candidly spoke about the decision and the reason that drove the company to make the choice.
“Pivoting is one of the most difficult decisions for a company – for two reasons, first the world labels you a failure and second, the world doesn’t believe that you’d be able to make it either with the new product. At Webklipper, we didn’t care about the world. That’s the only difference.
We were the first ones to realize that this (annotation) product is not going to make money for us. It needed a far more bigger gestation period than we imagined. We needed to pay office bills. Hence the pivot. Simple.
WebEngage, was our second product idea and worked well. We are the feedback, survey and notification backbone of over 3,200 businesses worldwide as of this morning. We have raised money twice. If these stats were not as great, we’d have pivoted again. Simple!”
RedBus – Funded by Mahesh Murthy’s firm Seedfund, RedBus had one of the biggest pivots a few years ago. They switched strategies from B2B to B2C and invested in branding and marketing across India to grow its platform to the consumer community in general. Clearly, there was more demand in the B2C sector and lesser challenges in the B2C space for a company of the size of RedBus.