Business management

Step change: when to pivot in business

If your business growth is not where you want it to be, should you consider pivoting your business in a different direction?

Treat pivoting as a step-by-step process

Celia Pool is the co-founder of DAME. Launched as Sanitary Owl in 2015 as a subscription service selling disposable menstrual products, it pivoted to developing D, the world’s first reusable tampon applicator, under new name DAME.

Why did you decide to pivot?

“We got a few thousand subscribers and it was going really well,” says Pool. “But we stopped believing in the products. Many were filled with plastic and we were amazed that although women would buy reusable coffee cups, they would only buy disposable sanitary products. That didn’t fit with our values anymore.”

How did you go about it?

Pool began by asking subscribers why they did not use reusable sanitary products.

“According to market research there was a huge increase in the number of women concerned about the environmental impact of menstrual products. But the overriding answer that came back from our customers was that moving to reusable would be too much of a habit change,” Pool explains. “So, we thought that if we made an environmentally friendly reusable tampon applicator that they felt comfortable switching to there was a huge opportunity.”

She describes the move as daunting but approached it “step by step”. “Right from the beginning we held consultation talks with our investors to run them through what we were thinking. We put together a business plan and set ourselves realistic goals,” she says. “We drafted in freelancers to help us with medical engineering and product design to get to a prototype. We then launched D on the crowdfunding site Kickstarter to get validation. It was a huge success, overfunding by 500%.”

It is now sold direct to consumers and in retailers such as Waitrose.

What did you learn from the process?

Pool says owners need to be ready for the emotional aspect of pivoting. “It’s not an overnight decision. You have to wrench yourself away from your original idea into something which is very unclear and convince your stakeholders that your gut is right,” she explains. “You need to be running towards something, not away from it, and be passionate about it.”

Pay attention to shifting customer appetites

Simon Crowther is the founder of Flood Protection Solutions. Launched in 2012 selling a flood prevention product called the Water-Gate, the company now also offers an e-commerce website and a full consulting service.

Why did you decide to pivot?

“For the first two years the product sold well to our main customers, such as SSE gas and electricity. But the sector is very dependent on government grants to help businesses and homes invest in flood protection solutions,” Crowther explains. “It is very feast or famine and we decided to slightly change direction to become more sustainable.”

How did you go about it?

The company’s first pivot was to create an e-commerce website selling products such as well and borehole and swimming pool pumps.

Being agile helped us survive. There is no harm at looking into new avenues and setting aside some time and money each year to research whether it could work for your business

Simon Crowther
Founder at Flood Protection Solutions

“We were already recommending water pumps to our customers and had a good network of suppliers,” Crowther explains. “We spent time translating the technical data of the pumps into something more understandable for household customers. We found experts to build an easy-to-use website and used Google Ads for digital marketing,” he says.

As the company grew, customers kept asking Crowther and his team for more varied flooding advice. In response it launched a consultancy arm looking at flood risk assessment for planning and house purchases.

What did you learn from the process?

“Being agile helped us survive. There is no harm at looking into new avenues and setting aside some time and money each year to research whether it could work for your business,” he states. “Try and move the way your sector is heading, and attending industry events.”

Consider revising your target audience

Nikolaus Sühr is the chief executive and co-founder of KASKO, an insurtech start-up launched in 2015.

Why did you decide to pivot?

“We began as an insurance intermediary approaching businesses with an existing consumer base and offering tailored products. Our first product was KASKO Drive; a short-term car insurance sold via classifieds or through an online dealership,” Sühr explains.

“But identifying businesses and then finding insurance partners took a lot of work with a high cost of customer acquisition. We also only got paid if the product was successful so that was risky for our cash flow. We aren’t averse to taking risks, but it was one we had little control over.”

How did you go about it?

“The breakthrough was realising that insurers wanted us to build white-label digital products that they couldn’t themselves because of the poor condition of their IT legacy systems. For that they would pay us upfront licence fees; it was a very attractive new model,” he explains.

It meant adjusting its distribution, sales and remuneration models without having to change its technology. “It was a smooth transition as we didn’t have to rebuild our platform, though we did have to explain the changes to our staff and talk up the positives of working with insurance firms and investors.

“Most existing investors were happy, as they understood the space and were patient, trusting our judgement. There were some potential new investors that backed away, but the shift made us attractive to others that have filled that gap, especially since we got immediate traction.”

What did you learn from the process?

“It’s about finding your product/market fit and adjusting to feedback, which can help you make a change from say B2C to B2B, if that is your aim,” says Sühr. “For that purpose it is important that you have a well-balanced and agile team that is capable of a pivot – and patient investors!”

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