Surviving Through Pivots
Experts believe that there are three elements which determine successful startups, pivoting, extension and relevancy
Airbed and Breakfast (2008), a platform for renting air mattresses during festivals and conferences in San Francisco pivoted due to low adoption, limited market and difficulty in scaling.
It became a full-fledged accommodation platform (2010) allowing users to book entire homes, apartments, and rooms. The pivot resulted in rapid growth, global expansion and diversified offerings.
The firm’s valuation rose to over USD 50 billion. Airbnb's pivot demonstrated that even the most successful startups must be willing to adapt and evolve to achieve success.
“Pivot is inspired by a quote, ‘build products that people want’ and if you haven't then you should not be ashamed of pivoting very quickly. There are three elements which determine successful startups, pivoting, extension and relevancy. As a founder and product manager, we observed that product love is missing and we will need to build something which has long-range retention, better engagement etc. Hence, we also pivoted from a short video app to a live streaming platform,” said Saurabh Pandey, Founder and CEO, Eloelo.
Indian startups for instance, Zomato, Paytm, Snapdeal and Flipkart also pivoted to adapt to the rapid market change and consumer feedback to discover the product market fit.
Product-market fit (PMF) which is also a crucial milestone for startups, indicating a product's alignment with market demand. Achieving PMF requires understanding customer needs, iterating on feedback, and refining the product to meet those needs. It's a continuous process, essential for driving growth, adoption, and long-term success.
“Before the pivot, we discussed the value proposition for the user. Further, on the customer's side, we deeply focused on the repeat business. We have big recruiters like Flipkart, Amazon, Reliance and we observed their repeat rate. Moreover, in every repeat business we targeted to go deeper into the customer's pocket. PMF is not just the base product, but also everything which is ancillary to the base product and are the customers willing to take up those elements or not. Discovering PMF is not an event rather a process,” said Ankit Agarwal, Founder, Unstop.
Speaking at the BW Businessworld 40 under 40 forum, Manu Jain, Co-founder, Vama, emphasised the expert to suggest the entrepreneurs certain sectors which can lure the VC funding.
“VC funding is cyclical, a couple of years back they were finding visionary entrepreneurs, however today their sole focus is upon profitability. Although VCs are lining up for hot sectors like artificial intelligence (AI), climate, fintech etc. In this dynamic market, entrepreneurs should trade across cycles and build something they like and have long-term reliability,” said Rohit Garg, Co-founder and CEO, Olyv (Formerly SmartCoin).
He further added, if India has to grow to a USD 7 trillion economy, fundamental sectors like financial services will play a pivotal role. With all the innovation from government and startups, if you pick your niche right you can tackle each and every problem statement.
