Over the past month, I’ve had several conversations with founders who have been running very exciting start-ups, raised quite a lot of money and had big plans. I say had not because their companies shut down, but because halfway through each conversation they explained how they pivoted to a completely different business model since the lockdown in India. And most of them went on to say they did it to show investors that their company had the grit to thrive (not just survive) no matter what came their way.
These conversations have sent a chill down my spine. These teams (like every other start-up) had left jobs to follow a dream. They had convinced themselves and their families that these companies were their calling. They spent years working on making these idea come alive. And then suddenly they’re doing something else. Not because the original idea was faulty but because external conditions changed (in many cases for the short term) and because (horror!) they feared investor backlash.
That’s a scary place to be. And yet, everyday there are articles about start-ups considering sudden and massive changes in their entire business. There seems to be a prevalent fear within this ecosystem that start-ups need to find revenue wherever they can irrespective of their original model. And if they can’t find revenue, they’ll never get funded again. No matter how costly that revenue is - both in terms of margin and people.
This is leading companies to do a blitz pivot. Essentially where entire business models are changed, normally in a rushed decision.
And blitz pivots aren’t good for anyone.
Start-ups are already really hard businesses to run. And if suddenly the founder changes the mission, re-aligns the vision, and re-positions the company in front of investors, there is a good chance that that business is in trouble. And while it’s possible that even the most daring “Hail Mary” of pivots can deliver success, the chances are never really high of that happening. Especially if it’s being done just to re-engage investors.
This pandemic is obviously a time to reflect and make hard decisions. There is a good chance it will force many companies to pivot. But all pivots are not equal.
Meet the bricolage pivot (yes, it’s French...but not as fancy as it sounds). Bricolage loosely means to tinker with something. A bricolage pivot has two parts: One, it involves making strategic changes to a business model while either maintaining the product, selling related products to an existing customer base, or evolving the customer base. Two, it involves a thoughtful (which doesn’t equal slow), data-driven approach leading to a calculated change in direction where all sides of a start-up (the founders, the team and the investor base) are aligned.
Don’t get me wrong, even these pivots are painful to live through. But with a little bit of luck and right timing, they have a better chance of success.
Founders need to be bricoleurs (Someone who practices bricolage...also French) when it comes to pivots, even during worldwide recessions caused by pandemics. Pivots test your creativity, your persistency, your resiliency, your focus, your passion, and your grit in the best of times. A blitz pivot, especially to prove something to someone else, might be the best way to shut your company down.