Businesses pivot for a variety of reasons. It could be because it has transpired that your business model is flawed, you’re unable to generate a sustainable revenue, or your customers simply don’t like or no longer need what you’re offering. Or, perhaps, circumstances have changed or new technologies have developed enabling you to spot opportunities that simply didn’t exist when you started out.
For me, it was a case of ‘right place, right time’ and trusting my business instincts to change course, as my old company was operating in a tough and declining market. However, I might have continued if it wasn’t for recognising and being open to a new sector that would afford me the opportunity to help small businesses in a way that I could not have done previously. It was a perfect storm of factors underpinned by a genuine market need in a fledgling but fast-growth industry. In my experience, it’s often how things go in business.
A media guy by trade, I started my career in media sales back in the early ‘90s, before launching one of the first online media sales agencies in 2000, then launching a publishing company in 2004. This meant I was running both companies, with the publishing firm producing three B2B entertainment magazines, an award ceremony, various conferences and client websites.
Despite having a profitable few years with the publishing company, the 2008 crash happened and its effects quickly reverberated through the industry. The print market was looking unsustainable, so I decided it was time to get out. I sold the publishing company to a competitor and all the staff bar three went to work with the new publisher. I was left with the now sponsorship agency (pivoted from the media sales agency – that’s another story!), along with a cool, quirky office space by Spitalfields, with nobody in it.
Thinking we would get lonely, and wondering what to do with all the space, somebody suggested renting out desks was the new ‘thing’, so I thought I’d give it a go. I advertised the desks on Gumtree and they were snapped up in no time, rented to entrepreneurs and small businesses looking for a central but affordable base. That’s when I realised I could be on to something.
A new direction
The Brew started as a side project, but I soon discovered that co-working was becoming an industry itself, providing a more flexible alternative to serviced offices. I also enjoyed meeting other entrepreneurs, and realised I was in a unique position to help them, by offering genuinely cost-effective, beautiful workspaces, at the same time as nurturing and supporting them in building their businesses.
Seeing the struggle facing freelancers and small businesses to keep up with the ever-increasing office rental prices, and using this as the main driver, I soon decided that the co-working side-project was the real deal. In 2012, I brought on four investor/directors for the company’s seed investment.
We now have five business clubs across East London, with some 500 Premium members, 1,500 Nomad members and almost 15,000 people in our virtual community, drawn from across London’s business landscape.
So, what advice would I give to others considering a pivot?
- Understand why you’re doing it: Pivoting can seem essential, either because whatever you’re doing isn’t working, or you see an opportunity that looks better. But you need to make sure you’re pivoting for the right reasons. Weigh up the pros and cons carefully before deciding where you have the greatest opportunity. It also helps if you’re already passionate about the area you’re going into. For me pivoting to The Brew meant I could pursue my interest in working with and supporting small businesses. If you can leverage any pre-pivot energy, or knowledge base for your new sector, it will make for a much smoother transition.
- Get under the skin of your new industry: Make sure you have a good idea of how the new industry works before taking the plunge. That means doing lots of research: reading around it, finding out who the movers and shakers are, understanding the key metrics, and being realistic in how you implement this new found information.
- Create a business plan: Just like with a new business, creating a business plan is a must for your new venture. How will your new company be structured, how much money will you need to get off the ground and what are your financial projections? That way you can understand if you have the cash to make it work, and if you don’t, then you need to plan your fundraise.
- Have you got the skills: Your new business idea needs to fit within the realms of your skillset and crucially that of your employees. In my case, people weren’t so much of an issue but for many businesses it’s important to make sure your current staff have the right skills to take your business in its new direction. The same goes for any current investors – are they going to support and buy into your new idea?
- Have a proof of concept: I found it hugely helpful to start The Brew as a side project, to test the idea before committing fully. You don’t need to go in all guns blazing straight away. Instead, start small, set yourself a timescale to gain some traction and if it doesn’t show potential, move on. Having real-life results and figures will also help you no end when you come to source investment to expand.
- Maximise your existing infrastructure: When I started The Brew, I was able to use a lot of our existing infrastructure and processes from the publishing business and this helped enormously. You can keep a lot of the back-office functions the same, such as accounts, advertising, marketing, CRM and design. It saves you a lot of time and work when getting off the ground.
- Get the communication right: Articulating your new vision to staff and investors at the right time is essential to ensure they’re bought into the change early-on. That means developing a convincing and inspiring pitch, outlining the new plan, while acknowledging the importance of the hard work they’ve put in so far.
Saying goodbye to a company you’ve worked so hard to build is never easy, but business is all about trusting your instincts and if something isn’t going well, it’s often best to change course. Get it right and It could be the best decision you ever make.
Andrew Clough is founder and managing director of The Brew.
Further reading on pivoting
