By David Dorf-Oracle on Jun 20, 2013
One of the things our Retail Applied Research team tries to do is "fail fast." That doesn't mean we're trying to fail, but we want to arrive at a failure or success assessment quickly so we minimize investments in failures. But just because a project isn't deemed a success doesn't necessarily mean its a failure. In many cases we can pivot, reusing some of the knowledge and technology but applied in a different context. In some circles, entrepreneurs are encouraged to run with an idea until it fails, then pivot in a different direction. There are many famous examples of pivots, like the emergence of Fab.com from a social app targeting gay men or the pivot of Tote into Pinterest. Sometimes the original idea just didn't fit, and other times the market changed and required re-assessment.
The Austin-based start-up Digby has pivoted twice. Digby first created a mobile marketplace on the Blackberry where consumers could order products from multiple retailers in a single application. I once used it to order flowers for my wife. This was in the early days of smartphones when mobile commerce was in its infancy. Then when the iPhone was released, retailers wanted their own dedicated app so Digby moved away from the marketplace app and focused on mobilizing e-commerce sites, providing mobile apps to retailers supporting iPhone, Android, Blackberry, and Windows Phone. While that was a successful business, the market was shrinking because e-commerce vendors, like Oracle ATG, started offering mobile extensions so that third-party software was no longer needed.
Wanting to leverage all their experience with mobile technology, Digby next pivoted to Localpoint, a product that enables retailers to easily create geo-fences and provide direct marketing to consumers via their mobile devices. CIO.com recently gave them an honorable mention in their 7 Hot Mobile Startups to Watch in 2013. They seem to be making great inroads with retailers using this latest approach.
Conventional wisdom says you don't know what you don't know, so its best to dive in but be prepared to pivot. (Idea-driven vs Outcome-driven is an interesting debate and something retail labs should consider.) Agile retailers need to test (a step Ron Johnson skipped over) lots of concepts before finding the ones that work, and then not stay married to those concepts forever. And don't think this advice is limited to small companies -- large companies can pivot too.