It turns out the traditional paradigm of developing a business plan and a product over a few years is becoming obsolete in favor of more flexible small business ideas. The Wall Street Journal recently reported on the idea of pivoting.
The Pivot: Flexible Small Business Ideas
For more technology and especially web based businesses, the most important component to their product development is customer demand.
For many, the exact recipe consumers will respond to can’t be determined ahead of time.
A number of companies including Groupon, Twitter and Instagram all started out as something else. In the course of initial customer feedback, they changed their product offering to what they’ve become today.
The Next Generation of Flexible Small Business Ideas:
Generally speaking, there is an expectation among venture capitalists that people in their 20s and 30s are better at these flexible small business ideas than their Baby Boomer counterparts.
Investors say the founders who made left turns are generally more experienced—and less fearful of failure—than past generations of tech entrepreneurs. The founders who change products and markets between one and three times raise more money than those who don’t, according to Startup Genome Compass of San Francisco, which tracks more than 13,000 Internet start-ups. In fact, they raised roughly 2½ times more capital than founders who changed products and markets either four or more times or not at all, its research says.
There’s also a graphic comparing companies that pivoted versus those that have persevered.
When Are Flexible Small Business Ideas Needed?
The graphic shows that there are successful companies that stuck with what they originally set out to do as well as those that needed more flexible small business ideas.
If you’re in a business that can change and adapt easily according to customer demand, then you should. Staying flexible within your mission is essential for long term viability.
Of course that doesn’t mean to chase ten rabbits all at once. Each of the companies mentioned only pursued one idea at a time. It was only when one idea was shown not to be effective enough that another one was adopted.
Jim Collins talked about this concept in a longer term strategy version in his book, Good to Great. He talked about how the most important thing was to get the right people on the bus and then figure out where the bus was going.
Regardless of your current business model, a strategy that includes flexible small business ideas has merit and ought to be considered.