The top business pivots

“Adaptability is paramount in today's dynamic business landscape,” says Chris Beer, professor of practice at Warwick Business School. “Organisations must be prepared to pivot their strategies swiftly, driven by factors such as market shifts, technological advances and changing customer expectations”.

According to PwC’s 27^th UK CEO Survey, one in five chief executives says their organisation will not be economically viable within ten years on their current path, compounding the importance of pivoting.

Many successful companies have pivoted, and here’s our list of those who did it best:

Slack

Slack was originally formed to create a collaborative, non-competitive online game called Glitch, but by the fourth year of building, its co-founders were considering changing direction. Work on the game stopped because they would have had to raise more money without growth, said co-founder and chief technology officer Cal Henderson at Slush 2023, the annual tech start-up event held in Helsinki.

The co-founders spent “about eight days” brainstorming ideas before deciding to utilise the collaboration tools they had built to work on Glitch, believing other small technical teams would benefit from them too. After managing to keep all their existing investors, they eventually convinced people to try the product, which informed much of what the cloud-based team communication platform eventually became.

In 2020, Slack was acquired by Salesforce for $27.7bn (£21.7bn).

“Pivoting from Glitch to Slack was fairly intuitive for us, given it naturally addressed a universal need for all businesses: a desire to better communicate and collaborate,” Henderson said.

Nokia

Nokia began as a wood pulp mill in Finland in 1865. Its second mill opened three years later in a town called Nokia, where it would later take its name.

After World War I, Nokia was bought out by Finnish Rubber Works, a maker of galoshes, hoses and tyres. They were subsequently acquired by Finnish Cable Works, an exporter of telephone and electricity cables to the Soviet Union, marking the beginning of Nokia’s electronic venture.

In the 1960s, Nokia transitioned into telecommunications and in 1982 introduced its first carphone, Mobira Senator and its first handheld mobile, Mobira Cityman, in 1987.

Between the 1980s and 2000s, all but the telecommunications business exited the company, and in 1999, Nokia released the Nokia 3210 and 3310 mobiles, which each sold more than 100 million units.

“Our pivot in 1991 meant that we were more than a manufacturer. We became an enabler, a connector of people and places,” said Pekka Lundmark, Nokia’s president and chief executive.

Airbnb

Founded in 2008 as Airbedandbreakfast.com, Airbnb’s initial concept was to provide a housing solution focused on conferences by offering an airbed and breakfast in short-term accommodation.

To pay off $30,000 (£23,649) worth of credit card debt, the founders developed Barack Obama and John McCain-themed cereal boxes during their 2008 presidential campaigns. Advertised as limited-edition collector items and selling for $40 (£31.53) a box, the company remained afloat, impressing investors and securing $600,000 (£472,986) in funding by the end of the year.

In 2009, the name was shortened to Airbnb after the transition to listing rooms and properties for travellers looking for cheaper accommodation. During the Covid-19 pandemic, the company expanded its offering, pivoting its product line in 14 days to offer online experiences. Now with more than 800 experiences, two million guests per night and a $26bn (£20.5bn) valuation, Airbnb has thrived since the initial concept.

Airbnb founder and chief executive Brian Chesky said: “Every single opportunity is a moment we have to pivot and move fast.”

Prove

Prove was founded in 2008 as Payfone Inc., a mobile tech start-up that allowed users to pay for goods using a phone number. In 2013, Payfone secured private equity and began its pivot to the identity verification and authentication platform it is today.

The company remained out of the public eye for two years to develop a new premium product, Identity Certainty, which verifies the person using a mobile phone is the owner of the underlying bank account, and built stronger relationships with banks and network providers.

In 2020, Payfone successfully rebranded as Prove. “The decision came from the need to update a legacy name after successfully pivoting from a mobile payment company with a much slimmer scope to one with an expanded focus on solving digital identity challenges for a much wider market,” chief executive Rodger Desai said.

After Prove raised $40m (£31.5m) in October 2023, TechCrunch reported it had passed the $1bn (£788m) valuation mark.

Netflix

US streaming giant Netflix began life as a DVD-by-mail movie rental service in 1997. By 2005 the company was posting one million DVDs a day. The following year, despite having more subscribers, Netflix started to lose market share to its main rival, Blockbuster.

In January 2007, it launched a streaming media service via the internet. At the time, Netflix had just 1,000 films available for streaming compared to 70,000 on DVD. The following year, its rental disc subscribers were given free access to unlimited streaming and, by the end of 2008, Netflix had stopped selling used DVDs.

By 2009, streams had overtaken DVD shipments and Netflix never looked back. Fast forward to today and the company is the most subscribed video-on-demand streaming media service with more than 247 million users.

Groupon

In 2007, Andrew Mason co-founded ThePoint, a tipping-point-based collective action website dedicated to getting people together to accomplish local philanthropic and community goals.

When looking to drive revenue, the company soon realised some of the most effective campaigns brought customers together to gain collective buying power at local businesses. It began featuring a side blog that offered readers a different deal from various vendors every day. This aligned with consumers' cost-conscious habits during the 2008 financial crisis and Groupon - then called Getyourgroupon.com - was born.

The first Groupon was a two-for-one pizza deal and, by 2011, the company was valued at $16bn (£12.5bn) with a $750m ($588m) IPO. Post-IPO, Groupon encountered challenges and reduced its global footprint, but continued its pivot to a marketplace offering thousands of local experiences and services, goods, travel, and discount codes.

“Since 2007, we've evolved into a global leader in local commerce,” interim chief executive Dušan Šenkypl said.