Crises causes change, and this is particularly strong pattern you notice in start-ups. The funding market today has tightened up to the levels not seen since DotCom crush, with young founders finding their runway space cut short. As venture capital providers found themselves unable to realise their shares in previous bunch of investments, they are keeping their wallets (and purses) tightly shut, with no hope of that changing till interest rates start coming down.
However, founders should take heart from love guru, Saint Valentine.
It is little known fact that Bishop Valentine was originally known as patron of young people afflicted by epilepsy. Sufferers, often young teenagers, were praying to him to send cure or at least make the disease less debilitating.
Important as they were, the number of people in this segment was very small, as the disease affects around 1.2% of population, so something of a ‘niche’ market.
As a Bishop with strong marketing flair, Saint Valentine has pivoted to reach a much larger audience. After some testing and experimenting, he found a larger group of young people – those who were in love and wanted to give him a donation to ensure the object of their desires got a nod with saintly blessing. Bishop Valentine retained the support of young epilepsy sufferers but expanded his reach to a much bigger part of his community, i.e., all young (and older) people in love. That has grown quickly, and now romantics of every age buy a card and ‘donate’ to St Valentine to ensure his blessing for their love interest.
As growth strategies go, this one landed perfectly. From a minor player, Saint Valentine is now the second most recognised saint, just after Saint Nicolaus (Santa Clause to you and me).
In a true St Valentine style, the best companies today are often the ones that were founded post Dotcom crush and had to dig deep to find a way to profitability in a harsh funding environment.
Many companies had to pivot with courage and seek a Plan B.
Take heart (sorry for the pun) from YouTube, back in the day a just tiny dating site called Tune In Hook Up. Alas, back in 2005, not many women were keen to upload videos of themselves to a site called Hook Up, so the team was forced to pivot beyond dating content and to accept any videos. They also renamed the site into a less cringy brand name “YouTube”, which found it’s true calling in providing video distribution channel at scale.
PayPal, world-class payment provider today, originally launched as a modest tool to send money securely using pre-mobile phone device called Palm Pilot https://www.techrepublic.com/article/how-the-paypal-mafia-redefined-success-in-silicon-valley/ . With an obscure name FieldLInk it was intended for senior execs, typical users of Palm Pilot to send and receive funds via the device. Palm was eaten by BlackBerry, both devices gave way to iPhone, but the team quickly pivoted into a payment app on top of eBay. It went viral thanks to eBay platform networking power and got sold for a very large amount of money. Since then, the members of the team have powered up Silicon Valley unicorns like Tesla, LinkedIn, or Yelp. As Peter Thiel is fond of saying, “there is money in … money” so providing tools for making payments secure and convenient is often a good direction when pivoting.
Shopify, back in the day a tiny shop for an unknown snowboarding brand, today a mega powerful ecommerce platform, with 1.2 mln merchants using it on line and in stores. It has pivoted many times, from a ski gear shop, to on line cart, and today it is a payment app and increasingly, a bank/debt provider to thousands of retailers.
Pinterest, initially a small shopping app called Tote, has pivoted in opposite direction, from taking payments to just providing online dreaming space for budding interior designers. The Kings of Mood Boards, Pinterest team offers a way to play your wedding, design your tablespace or even costumes for your burlesque troupe.
Expect 2024 to be a big pivot year. In fact, one already kicked off, with car manufacturer, top Tesla competitor BYD expanding from cars maker to ship owner. As China rapidly migrates from importer to cars exporter, there are opportunities to be the shipper and not just the maker. The next Onassis will be operating from China, as low cost EVs take over European and US markets.
Having done a few pivots ourselves, we can vouch there is a value in keeping open mind and testing different business models. If you feel things are not panning out, if your target market is too niche, or you are too early in technology, try alternative approaches, and don’t forget to pray to St Valentine, he may send some start up start up love your way!