Not only should this concept be in the entrepreneur's mind to avoid business failure, it should also remind us that at no point should you stop learning or using resources.
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5 min read
This article was translated from our Spanish edition using AI technologies. Errors can occur due to this process.
The opinions expressed by the entrepreneur's contributors are their own.
Panning in the context of a startup happens when a company decides to change its business strategy to adapt to changes in its industry. A CB Insights study suggests that not panning is one of the 20 reasons startups fail and even lead to death.
Running a business is not an easy task; it takes a lot of effort in every way to bring a product or service to market. Typically, a plan is drawn up that outlines the business goals, strategies, or projections required for success. In reality, however, the proposed roadmap is not a path that draws a straight line. On the contrary, it is a path of obstacles and changes of direction that lead startups to make important decisions for the company. One of them is spinning, and if it doesn't, businesses can even be fatal.
A CB Insights study suggests that not panning is one of the 20 reasons startups fail and even lead to death. We believe that not only should the concept be in the entrepreneur's mind to avoid a business failure, but also to remind us that at no point should you stop learning or using resources.
Pivoting in the context of a startup happens when a company decides to change its business strategy to adapt to changes in its industry, customer preferences, opportunities that were not considered at the beginning of the project, or other factors that affect your company, adjust final results.
There are many cases that have succeeded thanks to the direction of their business, such as Netflix, which stood out as a very innovative company and it was clear that it wanted to revolutionize the entertainment industry.
In 1997, Netflix wanted to become the largest DVD distributor in the world. Though it initially competed directly with Blockbuster, ironically and for financial reasons, they tried to offer it the company (another case that ceased to exist by remaining static and not responding to market needs in a timely manner). After a difficult (mostly financial) path for the company, they changed their DVD rental business model to a subscription model.
Image: Alto Nivel / Depositphotos.com
Later, with the arrival of streaming, they decided to realign their efforts and keep developing the brand as we know it now. The rest is the story they will keep making as one of the main recommendations is to watch out for changes in the environment and Netflix needs to be one step ahead of its competitors in order to continue to compete in the market with the likes of Amazon If necessary to swivel again.
Pivoting requires a full analysis of your business and your environment in the industry (and in the world, just look at the changes brought about by the pandemic). Always try to adapt to them and the preferences of the clients, take advantage of opportunities that were not considered at the beginning of the project or other factors that affect the end results.
One of the toughest questions startups ask themselves is when is the right time to pivot. So, when it comes time to turn your business around, G2 Consultores shares these moments to help you rethink your business more clearly:
When one element of the product or service stands out from the others. When the business is financially unprofitable. When the market didn't react as expected. When the competition keeps beating you. When you need to seize an opportunity that wasn't there to begin with.
Accompany these important circumstances with some key recommendations like: do it ASAP, don't react to the circumstances, listen to your customers, but the best recommendation we can make is that you always get from an expert be accompanied to ensure your company's success.