Samsung Dried Fish. The Nintendo Love Hotel. Youtube Dating Service. At one stage, these were all the main products for these companies. Until they successfully pivoted.
Even global brands don't always get it right in the startup phase. The thing that sets them apart from myriad failed startups is the strategic change to a new product or service—better known as a pivot. Even successful, established companies need to pivot when trends, consumer behaviors, or technology advances.
Think Kodak or Blockbuster — the poster brands for failing to pivot when technology surpassed their business models.
A pivot may be dictated by unusual circumstances (Covid-19) or customer feedback. This year we have seen many businesses having to pivot. This includes offering online versions of their service (gym classes, cooking lessons) to, in some cases manufacturing new products (hand sanitizers, masks).
Some of the best-known brands started offering a far different product or service from what they ultimately become famous for. Quite fortuitously, they pivoted before falling into oblivion. Here, a look at the origins of these brands and how they successfully pivoted.
Where would we be today without Instagram? There may not be any influencers or photos of food.
Instagram is the most widely used photo app for the iPhone, but initially, it was called Burbn and was primarily a check-in app.
The founder, Kevin Systrom, saw that users weren’t using the app for its original purpose (checking into places) but for sharing photos. Taking into account customer preferences, he took a risk and rebuilt a version of the app that focused solely on photography.
This is an excellent example of watching what your consumers do and changing direction based on that.
Long before Mario and Luigi, Nintendo began as a playing card company in the 1880s. From there, it tried its hand at many different products including; vacuum cleaners, a taxi company, instant rice, and in a strange move for the brand — a love hotel. Love hotels are popular in Japan for couples who live with their parents and need a room to hire for the purposes of —well, love.
In 1977, after a century of seemingly random products, they took notice of the growing trend for electronic games and consoles and released their own console.
Ever since that has been their focus.
Just think—you could have had the opportunity to stay at Mario and Luigi’s Love Hotel.
This popular group buying discount site started life in 2007 as The Point. Creator Andrew Mason wanted a fundraising site for social good. People could donate to a project, and once the funds raised reached their goal or tipping point it would be activated. Somewhat similar to what GoFundMe is now but just for charitable causes.
This initial idea didn’t work, but Mason ran a project alongside it applying the concept to local deals. People could pledge to buy a product or service, and once a “tipping point” was reached for the number of people, the discount would be unlocked for all.
There was far more interest in this side project than The Point, and so Mason focused all his efforts on what would become known as Groupon. Just like Instagram, Mason looked at what his consumers were doing and pivoted towards that.
The employees were given two weeks to think of a new idea. They were asked;
“If you were to start a new company today, or reinvent Odeo, what would you build?”
Thankfully for them, us and Donald Trump, a young employee named Jack Dorsey, came up with the idea that became Twitter.
Would you buy a Suzuki loom machine? Guaranteed to produce high-quality silk?
From 1910 for twenty-five years, that is what Michio Suzuki manufactured. However, being an innovator and entrepreneur, he wanted to look at other products as a means to reduce risk and diversify.
He decided on the automotive industry, and now Suzuki is a leading manufacturer of motorcycles and cars.
Tune in, hook up
That was the original slogan of Youtube. It started as a video-based dating service. Its users would upload short videos in which they would describe their ideal partner and what they were looking for and in turn search other videos in the form of online swiping.
This proved to be an absolute flop, so the founders posted an ad on Craigslist in a few cities offering to pay single women $20 to upload videos. This didn't work either, and the founders knew they needed to do something differently.
“OK, forget the dating aspect, let’s just open it up to any video,” said co-founder Steve Chen. They uploaded an eighteen-second video of a visit to the zoo and Youtube had begun.
This is an excellent example of having the right technology but pivoting the consumer application. Who would have thought this thrilling video above would be the successful pivot that Youtube needed.
When you think of Samsung, you don’t think of an exporter of dried fish and flour. Yet in 1938, that was the origin of this now huge Korean company. Much like Nintendo, Samsung took a while to find its identity selling, among other things, textiles and insurance.
It only moved into electronics in 1969 when it produced the first black and white Samsung TV. This was a success, and they quickly moved into computers, VCRs, and other electronic goods.
Far more profitable, and presumably better smelling than dried fish.
We all know Wrigley gum, the business started by William Wrigley Junior at the end of the 19th century and now synonymous with the historic Wrigley Field. Home to the Chicago Cubs and one of the first-ever stadium naming right deals.
Its origins were actually in soap and baking powder. Wrigley was a salesman who as a marketing promotion gave away free chewing gum to all his customers. Either the gum was tremendous, or the soap was terrible — but either way, his customers just wanted the gum.
Seeing this, Wrigley ditched his product range and just focused on selling chewing gum.
In 2004 Jeremy Stoppelman and Russel Simmons devised an automated system for emailing recommendation requests to friends. The idea came about when Jeremy had the flu and found it challenging to find a doctor that was recommended.
Its first few months were a flop, and they failed to find many users outside the founders’ network. What they did find by looking at usage data was that users didn’t respond to requests but did spend time on a small feature of the product — writing unsolicited reviews of businesses.
Just like other businesses above, Jeremy and Russel decided to hone in on the one very popular feature of their product — and the site’s popularity immediately soared.
Businesses fail for many reasons. A bad product. Poor management. Terrible marketing. Many of them, however, could have survived if they recognized what they were offering needed to be changed.
In many cases, the answer is before their eyes. Their current customers' actions are telling them. Instagram and Yelp, for example, saw their users focusing on just one small part of their offering so used that information and honed in on what was working.
Youtube had the right format and distribution but was using the wrong execution of the product. They only needed a small pivot.
Some of the examples above did complete 180s and moved into non-related products on the whim of the founders.
The one thing they all had in common was the pivot. And never before has the act of the pivot been more crucial than in 2020.