Thursday, October 20th, 2016
To pivot is to change the direction and focus of a business, but to only change the angle or scope, not the path. For example, if you run a sandwich shop, you might discover that the coffee you sell is really popular and so you decide to change your focus to coffee. Here you’re pivoting to change what the focus of your business is, coffee was part of the original business, just not as prominent.
Elasticity is an enviable trait. It means you can bend, bow and flex without breaking. The most successful business plans are also elastic. They can stretch to meet consumer demand today, and expand to meet and shape consumer demand tomorrow.
It is possible to devise a business plan that allows you to home in on what works, and to grow into something different — and better. Sometimes, the market changes to bring a niche business mainstream. Paypal is a household name brand today, but when it began as Confinity in 1998, founders Max Levchin, Peter Thiel and Luke Nosek envisioned a product that allowed Palm Pilot users to pay each other on their devices. In the pre-iPhone/Android days, Palm Pilots represented a small sliver of the mobile market, used mostly by affluent customers. But the bones of Confinity grew into the largest payment processor in the world.
How we play, just like how we pay, has changed. From 1889 to 1956, Kyoto-based Nintendo Koppai produced a popular card game called Hanafuda. In the 1960s, the founder’s grandson, Hiroshi Yamauchi, recognized the limited market of playing cards and worked to procure new licensing and technology that would position Nintendo to become a global leader in electronic entertainment and gaming.
Nintendo, like other early game developers, could easily have ignored the changes around them and sunk into obscurity, a footnote in the history of gaming. Today, they are a leader in a fast-growing space.
Summing-up: The world guarantees change. Elasticity in a business plan is like insurance for something that you absolutely know is coming. If you haven’t already, now is the time to get a policy. It’s not the strong who survive; it’s the most adaptable.