by Ted Spooner, CEO of RespondWell
Speed bumps and change live at the very heart of entrepreneurship. As Mark Cuban says in his book “How to Win at the Sport of Business“, “you only need to be right once.” But what if you got it right and you were derailed by circumstances out of your control? Part of being an entrepreneur is to know when to take a step back to build something else. Knowing how to do this, however, takes a different skill and talent altogether.
I know pivoting well. My current company, RespondWell, is the result of a pivot from our original company, RespondDesign, which developed the world’s first fitness game for the Xbox. We had to convince a major game console company to allow them to self-publish in a completely new category, compete side-by-side with other large competitors, and following their pivot take a chance in a completely different industry.
Here are my five tips on how to pivot successfully:
1. It’s time to burn the house down.
Part of the pivoting process is being able to recognize when it’s time to seek more fertile ground. You need to be able to read the signs from the business and the industry and acknowledge a declining revenue model. Once you’ve accepted that your offering will not accomplish your long-term plan, be open to re-imagining your assets and shifting to a new industry, one that can open up new revenue streams for your new company.
2. Pivot cleanly.
You’ve studied the trends in the industry and acknowledge it’s time for a change, but a badly handled pivot can cause more damage than good. Make the change as quickly and cleanly as possible. If you’re exiting one industry for another, let go of what once was. Focus on the new business model so it doesn’t lead to any confusion with employees and investors. It’s not easy giving up on the original plan but startups are so lean that they can only execute on one plan at a time.
3. Resiliency is key.
Being resilient can determine whether you are capable of continuing to fight or simply walk away and seek that low-risk corporate job to fall back on. Put your challenges into perspective. Once you’ve developed an ability to get knocked down and get back up ready to fight another fight, it is only then that you realize that guts and determination are the battle scars of success that no one can put a price on. Knowing how and when to go toe-to-toe with titans or insurmountable odds is an enviable and sought after trait for the startup CEO and his team. And until you’ve tried startup life, stuck with it for a several years and encountered many “no’s” along the way will you understand that having tenacity is also a key ingredient for a company and the individuals that manage and drive it.
4. Competition is good.
Don’t get thrown off by eager competitors. Those who establish themselves after your entry into a new market lends credibility to your new company direction and will make you realize that what you started really has legs. Concentrate on continuing to bring new ideas to market that will allow your company to change, evolve and stay ahead of the pack. Company heavyweights like Twitter, PayPal, Square, HP and Instagram started out as one concept and as competition grew each one evolved and changed to stay ahead of their competitors. Even if you are not the first to come to market with a product understand that it’s okay to take someone else’s idea and do it better. View competition as a vehicle to help shape the future of your company.
5. There’s no “I” in Team.
Before deciding to make the pivot, seek advice from experts in the new industry you’re entering to help you gain insight and information about the new market. This will help you to understand what part of your product works and what innovations are needed to make an impact early on in the industry. Find a customer to partner with in the early stages of the process that is willing to take that leap with you to help guide you through your transition. Add members to your team that have experience in your new industry and expand your presence in the market with resources like industry accelerator programs like StartUp Health.
Ted Spooner’s 22 years of broad experience in financial services, technology, digital entertainment and healthcare IT led him to co-found RespondWell in 2003. As Chairman and CEO, Ted led the company’s initial strategy for development of a new game category – fitness gaming, selling more than $80 million at retail in the global consumer fitness game category. Ted led the company’s transformation of the business, utilizing its assets for development of a Microsoft Kinect-based solution for physical therapy automation, making RespondWell the award-winning company it is today.