Pivot – Dutch Uncles

How Pivoting Is Important For Startups In This VUCA World?

Vaishali Das — Fri, 27 Aug 2021 12:35:08 +0000

Having the right attitude in addition to an innovative mindset is a yardstick for any successful entrepreneur. In order to maintain the sustainability of a startup venture, it becomes important to streamline the direction in which it is functioning and whether the product or service is catering to the needs of the market. Likewise, pivoting or changing the direction of business sometimes emerges as a better choice in order to maintain the sustainability, thereby improving revenue and surviving in the market. But it is better said than done – how you pivot can make all the difference, especially in the VUCA (volatility, uncertainty, complexity, and ambiguity) world.

In order to address the topic of pivoting and providing some surviving strategies, Dutch Uncles had an Innerview session with Mr. Krishnakumar Devnally. ‘Innerview – Only the Paranoid Survive’ a weekly live 45-minute motivational and inspirational talk show which features interviews of industry experts who bring forth informative and life experiences and techniques to help shape and gear you up, to succeed.

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If something is not measurable, one cannot manage that particular thing. When you have a benchmark set for yourself, a performance related target, and certain goals, then you go on the path of realising those particular goals and getting to the next level.

- Mr. Krishnakumar Devnally

Mr. Krishnakumar Devnally is a seasoned technology professional having thirty years of experience in the industry, seventeen years with leading telecom and IT Brands and the rest thirteen years as an entrepreneur. Considered as a bridge between startups and investors, he is a mentor, advisor and investor to several startups and also a consultant to MSMEs. Mr. Devnally has been mentoring early stage startups to build scalable and sustainable business models and helping them in fundraising. He is a member of an advisory board of investment bankers and investors helping them do the due diligence on their global target startups. Mr. Devnally’s mission is to create a global economy empowered by innovation and entrepreneurship thus empowering people and helping them realise their dreams.

In brief the session had the following takeaways:

Innovation is the foundation of entrepreneurship
Design thinking/lateral thinking
Team is above idea
How to build scalable and sustainable businesses
How to survive the VUCA world – Pandemic and Pivoting

Here are some excerpts from the interview

What should be startups’ perspective on time to time assessments?

Like the saying goes that if something is not measurable, one cannot manage that particular thing. When you have a benchmark set for yourself, a performance related target, and certain goals, then you go on the path of realising those particular goals and getting to the next level. So the most important part in this entire cycle becomes a timely periodical assessment of the situation.

Let me give an example of a Fintech startup led by a woman entrepreneur. They have a PVP policy which stands for whether to pursue versus pivot. The point of having this was to analyze their business model on a quarterly basis and examine if it is time to pivot or not. Many times the environment in which a business is running changes drastically, affecting the startup founders badly. It is very important for startup entrepreneurs to overcome these challenges and adversities and come out much stronger.

Therefore, timely assessment is very much important in order to do the necessary course correction as you go ahead. One should apply tactics, examining situations around you and then quickly adapting. One can also get advice from their mentors, advisors, and make the necessary moves in the direction that you become successful and you take your startup to the next level.

There is a difference between an obstacle and an impossibility. Towards that, when is the most appropriate time to Pivot?

Pivoting is not an independent activity, it includes assessment of your performance and revisiting your business model periodically. What you are doing by revising and assessing your business model is that you are revisiting the aspects like technology, marketing modules, vendors, team management, logistics and finance help that you are getting. In short, it will give you a heads up regarding your business status and you can improve accordingly.

Pivoting is like an experiment, whenever you change your business model, in a way, you are pivoting slowly. Pivoting is like a holistic thing, like a trial and error method that entrepreneurs use and change their status quo into something new based on what is happening around them.

Now when we talk about obstacles and adversities, healthtech, which indirectly benefited from the pandemic, is the most pivoted sector. Startups in the health tech sector have come up with innovations like disposable ventilators which nobody thought of before COVID.

Please suggest ways on how startups can be sustainable and scalable, thus thriving through any adversity?

Sustainability is the function of three elements:

Innovation

The first fundamental aspect is the innovation, trying to create some kind of unique deliverable and patent-able, which has IP (Intellectual Property) attached to it. Once you build that uniqueness into your business model, at least in technology, for next one year you have that first movers advantage. After this you have to rethink about new challenges that are faced by your customers and build products to address those particular challenges.

Increase Customer Base

The second aspect is the focus on increasing the customer base. The agility, the speed of operation matters when it comes to getting more and more market shares which is a sure shot formula to be a sustainable startup.

Solve a Long Term Critical Problem

The third and the most important aspect about being sustainable is whether you are trying to solve a long term critical problem faced by your customer. If you are talking about problems which are faced by, hypothetically, say 1000 people around so you can probably do the business with those 1000 people. But your product should be such that it should be addressing a common problem or a pain point that is faced by your customers.

Create Value

Ultimately the fourth important point is the value that you create by giving your unique product, capturing market share, and solving long term problems. That is what I think about sustainability, it is a step-by-step process and will only come once all these aspects are taken care of.

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Pivoting is like a holistic thing, like a trial and error method that entrepreneurs use and change their status quo into something new based on what is happening around them.

- Mr. Krishnakumar Devnally

Audience Asks

Before pivoting, there are a dedicated set of customers. Can you suggest some measures to retain those customers?

The idea of pivoting is not to completely change your focus from the particular set that you are trying to address. Wherever you are talking about doing business with a certain target market, you are assessing not only the problems but also the strengths of your internal team. So when it comes to matching your strengths with how you can address the problem, your normal customer base remains the same. While pivoting, you should ensure that you are trying to pivot in an area which is pertaining to your areas of strength as well as pertaining to probably the problems of the same customer that you are trying to address.

How to have investors’ confidence in your pivoting strategy since it has its own risk especially in this VUCA world?

Looking at it from a different perspective, when I look at investors, I look at the investor being a strategic partner rather than just putting his money into my startup. Whenever I approach any investor for my startup, I ensure that I am talking to a person who will not just bring in the money to the table but he will also bring in his expertise, his connections, and his wisdom along with the money. So if you ensure that your investor is a strategic investor, he will always help you pivot. So I think we should go to an investor, take his inputs and then pivot.

Yes, over a period of time you can probably acquire new territories, new customer base just to expand your business but I think pivoting doesn’t mean giving away your own customers. Moreover, the best way to retain customers is to have effective communication with them and maintain honesty in your deliverables.

Are you willing to take that risk?

As Mr. Devnally says, “Entrepreneurship is about two aspects, one is the urge of creating something new and the second is the willingness to take risks. Many times we engineers are good at creating something but where an engineer fails is taking that risk. So unless you are able to take risks, you don’t become an entrepreneur completely. That is why many of the people fail in spite of having great ideas.”

So take that risk, and be honest with your customers, your stakeholders and investors. Watch the full video to understand the correct way to pivot in this VUCA world.

The post How Pivoting Is Important For Startups In This VUCA World? appeared first on Dutch Uncles.

Why Ezetap Pivoted to SaaS Model?

Roopali Kotwal — Fri, 07 May 2021 06:05:05 +0000

A successful start-up and a solution provider go hand-in-hand these days. With the onset of Covid-19 pandemic, we need start-ups that offer a product or service as per changing needs of the marketplace and act as per the need of the hour i.e., following the most important social distancing norm.

How Ezetap is Addressing Evolving Consumer Needs?

‘Ezetap’, is one of the start-ups that is addressing the evolving needs and requirements of consumers by offering a payment solution for delivery. It offers ‘Ezetap Device’, a light weight card reader which can be plugged into any smart device or a smartphone device used by a retailer.

Near Field Communication (NFC) Card payments (Ezetap low cost NFC enabled device), Integrated dynamic QR code payments for retail, Static QR Code, SMS Pay-link and Bulk SMS are some of the easy ways the startup has implemented to help the consumers. Ezetap serves the use Cases like remote payments. The Unique Selling Point (USP) of the solution Ezetap provides is the direct reconciliation. The payment received can be updated on the billing system of the merchant immediately. Also, provides the digital receipts thus, providing a customer-friendly and environmental-friendly service.

The start-up aims to become the single solution for businesses to complete the financial transactions with their customers by using every method the customers want to use.

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The aim for ‘Scalability’ led to the need for changing the business model to ‘SaaS model'.

Ezetap: Reason to ‘Pivot’ to SaaS Model

Ezetap started its journey from a single payments offering model to a SaaS business model.
So what made Ezetap to ‘pivot’ to a new model? Abhijit (Bobby) Bose, the co-founder of Ezetap, a merchant payments platform, realised at a very early stage that India is an emerging market and a country like India is very different from the United States. In the US, the payment company makes money through transactions. However, in emerging markets like India, there was no margin and so the management had to take a decision to ‘pivot’ the business model to Software as a Service (SaaS) model i.e., payments had to be transferred to the software business.

Basically, Ezetap is a kind of Amazon Web Services (AWS) of digital payment for business in India. They permit the business to plug into payment infrastructure and for that Ezetap charges the Software as a Service fee.

With the changing times, Ezetap realised it is the time to deliver an enhanced payment network. In a way, the aim for ‘Scalability’ led to the need for changing the business model to ‘SaaS model’ i.e. Software as a Service (cloud-based software technology).

What’s in it for me?

The path taken by Ezetap is to assess the consumer needs, understand where the company stands and decide the business solution. To ensure growth and scalability, this startup considered the strategies to pivot. Amidst these chaotic times for businesses, it is very important for entrepreneurs to analyse how to direct their businesses towards growth and sustainability.

As a small business entrepreneur, one must always be ready to pivot to a sustainable solution for her/his venture. Understanding from many entrepreneurial journeys, one can gain a reasonable understanding and have a larger perspective on strategies for business transformation.

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What is a ‘Pivot’ in a Business?

Roopali Kotwal — Mon, 26 Apr 2021 11:35:04 +0000

What does Pivot mean?

Pivot means a modification in the business strategy. This shift is applied to test a new approach for the startup business model post receiving feedback. In simple words, change in the startup idea for the business to survive in the market is ‘pivot’.

Why a Startup Might Need to Pivot?

Charles Darwin’s Theory, ‘Survival of the fittest’ explains a ‘pivot’ in a business well. The primary reason for companies to ‘pivot’ is ‘survival.’ When the current products or services are not meeting the needs of the market, a change in the direction of the business to be visible in the market, improve the revenue and survive is a must. However, ‘pivot’ shall only be considered after exhausting all the possible options.

Warning Signs to Decide ‘When’ to Pivot

The immense competition, stagnant company progress or a change in the business perspective can result in a ‘pivot.’ As an entrepreneur, you must watch out for the below warning signs to decide when to ‘pivot:’

Customer is Unable to Understand the Value

If you repeatedly explain to your customers how your product is solving their issues but, they still do not understand product value on their own. It means a market for your product does not exist as of now.

Product is not Scalable

Scalability is important for business survival. Therefore, if the product is not scalable with the available finances you may or may not have, a new approach may be required.

Product is not competitive

Products or services provided by your startup are good but still not good enough to motivate a client to switch. So, it may be time to work on the competitive edge.

Only a Part of the Product is useful

If part of the product provides a solution to the client but the product as a whole does not, you shall consider a shift in the business idea.

Customer isn’t Promoting the Product

First customers’ vs Future customers’ expectations will vary. Your first customers may not think that your product really provides a solution to their problem or maybe are unaware of their problems leading to a lack of passion to promote the product. Hence, the time to make a shift.

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Charles Darwin’s Theory, ‘Survival of the fittest’ explains a ‘pivot’ in a business well. The primary reason for companies to ‘pivot’ is ‘survival.’

What’s in it for me?

Absence of agility and adaptability to the customer need will result in business failure in the long run. Start-ups will need to adjust to the fact that they must make progressive changes to improve the product. Twitter is a perfect example of a ‘pivot’. Twitter – a popular social media platform to send short instant messages and updates is a pivot from a podcasting company known as ‘Odeo’ that could not compete with Apple’s iTunes.

In today’s times, Pandemic due to the outbreak of coronavirus became the main reason for many start-ups to make a ‘pivot.’ A Bengaluru based Space Designers Startup, 10by10 builds sustainable and smart solutions for both customers and the environment. Inspired by Do It Yourself (DIY) methodology, they designed ISO.POD, an instant isolation portable room to protect people/consumers against further infection.

Many businesses and their solutions became irrelevant as the demand changed and the start-ups which saw the opportunity in the pandemic as a ‘blessing in disguise’ survived.

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Adapt at the Speed of Change: Types of Business Transformation and Why

DU Desk — Mon, 01 Feb 2021 10:43:57 +0000

Ninjacart, the fresh produce agriculture supply chain company in the B2B space, during last year got funded by the world’s largest retailer – United States based Wal-Mart. It was a sign of phenomenal progress that Ninjacart could achieve as Wal-Mart tries to expand its presence in the B2B segment in India. But, maybe Ninjacart would not have been able to come this far, if they had been what they had started as. It all boils down to a successful business stransformation strategy. Ninjacart started as a B2C fresh produce company, which calls for extreme deep pockets with the cost of acquiring and retaining a customer highly expensive.

Ninjacart realised that pretty early on and pivoted quickly and established a highly integrated supply chain through which they could partner with thousands of neighbourhood shops to fulfill their needs of fresh produce on a daily basis, taking out significant pain of sourcing fresh produce.

These kinds of business transformation strategies are increasingly being explored by many start-ups after they realise that either their primary business model may not see them through or for some of them pivots are essential to take on fresh competition and maintain the edge in the market-place.

Many start-ups face this dilemma on a regular basis. They face numerous challenges of declining revenues – some due to internal and some due to external factors. As an entrepreneur when you are up against such a wall, there are options on how you can pivot, how you can transform your business- totally changing the face of the existing business model, add on a new flavour to re-energise the business, or go for radical changes of exiting non-performing business divisions.

There are many instances of companies which started as a pure online market-places but had to create a hybrid model of also having physical brick and mortar presence and create a differentiation in the minds of consumers. Pepperfry, Zivame and a host of online businesses transformed their business and added significant brick and mortar presence to differentiate and be ahead of the competition.

There is a constant need to be innovating and one should not shy away or hesitate from pivoting which helps one in being nimble and relevant.

Asian Paints, which for decades has been focusing on paints, underwent a well-thought business transformation. It added home décor as a new category. Asian Paints has a phenomenal understanding of customers’ requirements, their tastes and the spending patterns. It was only logical to expand and add a new line of business and stay relevant in the fast-evolving marketplace.

Many entrepreneurs hesitate to pivot their business models as there may be an impression that their initial business model was a failure. It never is, as the world is changing fast and one cannot have legacy issues plaguing us. Entrepreneurs need to innovate aggressively and proactively to be ahead of the curve and identify trends which the consumers will be keen to adopt.

The aspect of business transformation is increasingly being embraced by many entrepreneurs who are agile in their thinking to capture new areas of growth and don’t want to hand over their market to competition on a platter.

The shift to shared economy across the world – shared mobility, shared living spaces – are all a testimony on how legacy business ideas are being turned upside down.

Mahindra and Mahindra Group is aggressively transforming the business and innovating to be in the shared economy space. They are aligning with brilliant entrepreneurs in the shared mobility space. Hero MotoCorp is aligning with start-ups in alternate fuel mobility.

These are only some of the instances of how large companies are open to embracing change. Start-ups should have a keen sense of what is working and what is not and the quicker you address the faulty part, the better it is.

As an entrepreneur, one must realise that disruption is the name of the game and how innovative thinkers are constantly bringing in disruptive solutions to manage their business for change.

It is not only during a crisis in an organization that one has to look at business transformation. Given the fast-evolving ecosystems, transformation – major or minor, entrepreneurs need to be always awake to changes.

Transformations not only help an organization to be future ready, it will empower one to reorient how one’s organisation will create value to all stakeholders.

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It is not only during a crisis in an organization that one has to look at pivoting. Given the fast-evolving ecosystems, entrepreneurs always need to be on their toes.

Importance of Business Transformation

Start-ups which look to revamp the business model should take the opportunity to bring paradigm change in how the organization approaches new problems. Incremental changes may not suffice in the highly disruptive business ecosystem. One needs to put in significant strategy frameworks for the sustained transformation process and be ready for disruption and nimble turnarounds.

Business transformation is not a one-time step. It is a process which has to blend seamlessly and the team should be clearly aware of the process and exact role they should be playing. It is a perfect platform for a start-up to clearly understand the prowess of the team and to what extent resilience and stamina can be proved.

The transformation process involves decisions that will clearly indicate the path towards sustained growth, how the culture can be ingrained to take on challenges and the range of improvements a start-up has to go through.

When should you look for pivot?

It is not only during crises that one should think and implement a strategy towards pivoting the business model. Pivots can be implemented even when an organization is growing steadily and should be thinking about how to look at the next big transformation. Start-up entrepreneurs should be keenly observing the winds of change sweeping the sector in which they are playing and how they can be ready for the next big disruption. Another important aspect which will force the entrepreneurs to pivot can be as a result of regulatory and policy changes.

Business Transformation Strategies

Pivoting plays an important role in how institutions are built and expanded. It should be a rather deeply thought-out process of how and when a start-up should pivot and what strategies should one adopted as one goes through business transformation. Blindly, either getting into a new business model just for the sake of survival is fraught with dangers and all impulsive decisions are best avoided.

A calibrated and deliberate method of analysing the weak areas should be identified and should be given a fair bit of understanding on how it can be mended as soon as possible.

It is essential that entrepreneurs assess current strengths and how they want to explore and get into new business segments. One needs to have the right mindset to effectively balance between the old and new business model as dumping the legacy business lineage on a spur is best avoided.

Ideating on the new business model requires greater propensity, requires forethought to position better in a new business and then to disrupt the segment. Transforming into a new business on the likes of Ninjacart requires relevant skill sets of resilience and if you are pivoting like Pepperfry to build in an extension to your business model you need to bring in the experience wealth of building the right ecosystem partnerships and has to tread cautiously about over investing in silos which do not create business value.

While ideating on extending the business model with a pivot, it is essential to have the capacity of new investment and should not be overstretching to damage the core business through reduced focus. Start-ups need to plan to expand themselves as they create additional capacities by finding new avenues.

Another interesting business transformation is that of Swiggy and Zomato extending their services from delivery from restaurants to pick and delivery of various things besides enabling last mile delivery of essentials from various retail outlets.

It was more of a reaction during the onset of Covid-19 that Swiggy and Zomato accelerated this pivot and quickly enabled these new services and have since established, to take the competition right to Dunzo’s door step.

Start-ups which are staring down a barrel need to pivot into new business models to capture the resulting new opportunities and strive to reinvent ahead. For many entrepreneurs, this pivoting will require a transformation focused around growth, which is the main driver of long-term success in transformations.

Entrepreneurs who are against the Covid-19 crisis and thinking on how effectively they can sustain their businesses should not be dissuaded by the external crisis and should aggressively push for growth by business transformation. Reimagine your business models for the post Covid-19 world and you will find opportunities to transform for growth.

The path to pivot is extremely tricky. One needs to take a fresh look at your business. One of the ideal suggestions is to try to get an outsider’s perspective which can be helpful when identifying opportunities and challenges. This will help break free of the traditional process and mental blocks. This fresh perspective will help the organization fine-tune the pivot, identify the silos which are creating obstacles to the growth and lead the company towards transformation.

It is important as start-ups initiate the pivot strategy, they should be taking a long-term view, an exploratory approach to growth, and investing in a company’s capabilities.

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The path to pivot is extremely tricky. One needs to take a fresh look at your business. One of the ideal suggestions is to try to get an outsider's perspective which can be helpful when identifying opportunities and challenges.

Entrepreneurs should also still value the values of culture which shape the team to respond to change by influencing how individual employees handle decisions. Start-ups should invest heavily on building cultures that instill a sense of purpose and think holistically about change.

Entrepreneurs who embark on the pivots should also be still the thinking that the process of re-energising as an ongoing capability, especially since the basis of competitive advantage is changing faster than ever. Start-ups should lay the groundwork and be ready for subsequent transformations, if required, and develop an adaptive nature. Each step of pivot should be added into the knowledge base as the start-up scales in the fast-changing ecosystem.

The execution of the business transformation process in a start-up should ensure that it can address not only the immediate challenges but should enable you to be prepped up on a stronger platform to innovate and pursue new opportunities.

Pivot is a tight rope way and it should be done with utmost caution. The impact of transformation can go pretty awry if executed with haste. It requires perfect integration, alignment that the teams should be prepared to manage.

The risk of tripping during the process is high and entrepreneurs need to have focus and stamina to see that the disparate segments can focus towards an alignment for the tide to rise for all. This will lead to sustainable change that endures.

The management should put in place proper roadmaps for the pivot and think through the process to get it right rather than just defining the goal of pivot.

It demands a comprehensive approach and links business strategy to the goal and executional regimen to create new value. Entrepreneurs embarking on the pivot should lead from the front and importantly prioritize to extract value. It is not enough to have a plan and let it roll, but entrepreneurs should regularly monitor, measure and analyse value being created on a regular basis.

Pivots are a significant exercise in the lifecycle of a start-up and the entire process is better managed if it is broken down in digestible capsules with each segment having its own targets which dovetails into the larger vision. This kind of
step-by-step approach to keep solving one challenge after another will lead to better project management of complexity which will be incremental backed solid grounding.

Transparency is another extremely important aspect which is required for successful pivots. The senior management should articulate the vision and strategy pretty much clearly across the organisation and ensure that everyone is onboarded in the journey. If the same is not done, there is lack of clarity which will ultimately result in less efficiency and dilution in value creation. Resourcing and aligning managers to be champions of the change initiative is the next key for smooth execution.

Expert Connect

Ram Nutakki
Co-Founder of Dutch Uncles | Global
Reach out to him to discuss your challenges of business transformation

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