Mental Pivot #62: The Business of Pivoting

Pivots as a necessary pattern of improvement, celebrating failure with your peers, and viewing the world through a Gaussian vs. a Pareto lens.

Jan 28, 2022

Pivoting isn’t plan B; it’s part of the process

—Jeff Goins, The Art of Work

My entire career has been pivoting from company to company. Some people call it lack of planning or direction, I call it flexibility and good improvisation skills.

—Justin Kan (entrepreneur, Twitch founder)

Saying that you’re pivoting your business might elicit eye-rolls from some people or come off sounding like a cliché to others, but I always enjoy hearing stories about people who evaluate new information, make bold decisions, and flexibly change direction.

Viewing the pivot as cliché misses the point.

Yes, it’s an oft repeated pattern, but we see so many examples in the business world because pivots are necessary. It’s rare that a business idea or product emerges fully formed on the first attempt. Twists and turns are par for the course. The pivot allows you to adapt and change direction.

A good pivot is the natural consequence of persistence, experimentation, and constant learning (no doubt there are countless examples of ill-conceived pivots too, but that’s my focus here). Pivots are also the result of reading important signals, like traction, market reception, and customer feedback. Pivots also demonstrate that we don’t have all the answers at the outset. Indeed, they remind us that we need to constantly evolve and adjust our approach. Lastly, pivots illustrate that progress towards a goal can be messy and convoluted—the process isn’t a straight line. There’s something comforting and entirely relatable about this latter point.

The following is the story of a business pivot I’m particularly fond of. It illustrates many of the characteristics of a good pivot outlined above.

Success is not a straight line, it’s much more of a dance and being open to possibilities.

—Arianna Huffington (author and entrepreneur)

In the early 90s, an ambitious entrepreneur named William moved to Chicago to go into business for himself. He was 29 years old, married, and had a young daughter. The young man had extensive experience working for his father’s successful scouring soap company back in Philadelphia. Given his knowledge of the product and industry, he decided to set up shop as a distributor of soap products in his new home city.

Being a shrewd salesman, the young man was a proponent of offering a “free” bonus product with each purchase (he called them premiums). “Everybody likes something extra for nothing,” was one of his mantras.

His first free offering was an umbrella with every box of soap.

Using bonus add-ons was a powerful incentive for generating sales. It also allowed William to increase the overall price of the bundled offering and boosted his profit margin (so much for free).

Eventually, he switched from umbrellas to bundling baking powder with his soaps. He also discovered, to his dismay, that his customers had a greater appetite for his baking powder than his soap. But William was no fool. Being attentive to market demand, he pivoted from the soap business to the baking powder business.

The baking powder business flourished. But now William needed something new to bundle with his baking power product. He cast about for a new bonus offering to sweeten each transaction.

This time, he turned to chewing gum and offered two packages of chewing gum with each baking powder purchase.

Once again, William’s free bonus soon eclipsed the primary offering. Customers were more interested in his chewing gum than his baking powder. Fortunately, he was still sensitive to market feedback and made one more big pivot.

William abandoned the baking powder business and went all in on chewing gum. In 1893, he launched two new products, Juicy Fruit and Wrigley’s Spearmint Gum. It took additional decades of hard work, luck, and good decision-making to leapfrog his competitors. But eventually, his namesake company, the William Wrigley Jr. Company, became both a beloved brand and the largest manufacturer of chewing gum in the world.

As William Wrigley Jr. said in a 1922 interview, “There you have the story. There is no rule in this game except to use the best judgement you have, think hard, act quickly…”

Not bad for a former soap salesman who managed a deft series of pivots.

Note: You can find the account of Wrigley’s origin story in an interview by S.J. Duncan Clark, “Make a Good Product for a Fair Price—then Tell the World” in Illustrated World, vol.37, March 1922. The amazing HathiTrust Digital Library has a free digitized archive of this defunct magazine.

Now onto this week's recommendations…

Thinking Tools:

35 Things Nobody Told You about Becoming Successful: Organizational psychologist Benjamin Hardy presents a long-form compendium of wisdom. It’s a useful but overwhelming list that’s perhaps best bookmarked for future reference.
Big Skills: Morgan Housel writes about how ordinary skills used in concert can combine to create something spectacular. It’s similar to the idea Scott Adams talks about in his books where good + good > excellent.
Let’s Celebrate Our Failures: Rhaina Cohen shares the story about a group of academics who create a shared spreadsheet as a way of chronicling and sharing their failures. As the participants discover, “rejection stings less when it’s reframed as progress and handled communally.”
We Need to Let Go of the Bell Curve: South African businessman Adrian Gore examines the disconnect between viewing the world through a Gaussian lens (where decisions are based on bell curves and playing to the average) and the “Pareto reality” (where outliers and the long-tail hold an outsized impact on outcomes). He offers tips for employing this approach in three key areas: innovation, risk management, and managing people.

Reading Enrichment:

Make Free Stuff: Max Böck laments the present-day web where “interaction is designed to extract value from your visit” and the “culture that sees the web purely as a business platform.” He urges readers to embrace the ethos of the early web and share our creativity and content for the sake of it. The recent popularity of the online game Wordle, which is not monetized, is a testament to this idea.
On the Insanity of Being a Scrabble Enthusiast: “Once your brain is attuned to anagrams, you start seeing them everywhere. When I see “New York,” my brain rearranges it into WONKERY. The “Hamptons” become PHANTOMS. A street sign reading “right lane” becomes EARTHLING.”
The Prisoner Who Revolutionized Language with a Teacup: Amidst Mao’s Cultural Revolution of the 1960s, a Chinese engineer, Zhi Bingyi, was sent to prison (a “reeducation camp”). While imprisoned, he developed a system to digitize Chinese characters for use with computers.
The Prisoner-Run Radio Station That’s Reaching Men on Death Row: Keri Blakinger visits a prison in East Texas to learn about 106.5 FM “The Tank”, a low-wattage radio station run by the prisoners and broadcast to their 3000-some peers. In part, it’s a story about the universal desire for connection and community.

Odds & Ends:

Product Hunt’s 2021 Golden Kitty Awards celebrate the best new apps, websites and digital utilities of the year. There are multiple award categories (e.g., best audio app, best no-code tool, best productivity tool) and browsing the list of nominees and winners is a great way to discover some cool new apps.
The 20 Internet Giants that Rule the Web charts the top internet properties over the past 25 years (in 5-year increments). Through it, you can witness the evolution of the web landscape. Remember GeoCities, Excite, Lycos, and Tripod? I do.
Card Stacker Bryan Berg is a virtuoso at using ordinary playing cards to construct monumental buildings and fantastic landmarks. He’s parlayed his talent into corporate gigs and trade shows. His website is a gallery of his creations. If you want to see his techniques in action, watch his videos to see how he erects these structures.

Cross-Promotions:

Refind is a content discovery tool that sends curated articles to your email inbox or via mobile app (iOS and Android). Focus your attention on what’s really relevant to you.
The Sample: A newsletter discovery tool. Based on your interests and feedback, The Sample sends a new newsletter recommendation to your inbox on a daily or weekly basis.

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