Making a Pivot

by Michelle McDonald Pride

Before a strategic rebrand, our business was called Trading Hope. We were growing, but well aware of looming trends in the marketplace and patterns in our business that indicated a future decline in revenue. A mentor to me half joked and half warned that if we did not change something, we would soon be called Fading Hope. Our rebrand was an outward representation of a major strategic pivot.

Some of the most well known brands have successfully pivoted. Wrigley Gum used to give away pieces of gum on the soap they sold. Facebook and YouTube began as dating sites. Even Avon began as a book business that gave away free perfume with a purchase. While these examples are drastic, they are all incredible pivots that recognized the advantage of changing strategy.

Being able to pivot as a social enterprise is one of the most important, yet difficult concepts to approach. How do you pivot your social enterprise without sacrificing your impact? Most social entrepreneurs do not begin their business based on a market need and opportunity; they begin based on targeting a social problem or a particular community group in need. The entire business model is often upside down. For this reason alone, pivots are of critical importance for social enterprises.

What is a pivot

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Starting Lean: Soft Launches Help Avoid Hard Landings

by Mike Baer

Adapted from material developed for a Third Path Initiative training module.

A very common story among highly excited entrepreneurs goes something like this: get a great idea, build the product, go whole hog to market, wait and lose a lot of money. It’s equivalent to the leadership anti-mantra “ready, fire, aim.” I call this the “emotional/entrepreneur syndrome” where any action is preferred to analysis and patience.

Contrast that with a less common but much wiser approach. Get an idea, test the idea, check out the landscape, build a sufficient product to try out, go lightly to market, listen, and adjust. Boring? Not at all…unless you just get off on failure.

This approach has been called many things over the years. It’s not new. Soft opening. Soft launch. Lean startup. Trial and error. Jesus put it this way:

For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him… – Luke 14:28-29, ESV

Out of context, I admit but true nonetheless. Take your time and do it right.

Here are the steps I’d use if I was doing another startup. After my initial ideation, testing the market, and market research, I’d: Read more

The Power of Dignity Restored: Business in the Heart of a Community

Read Part 1

Getting to Market with a Detour

From tree to table, the average coconut oil has likely changed hands 9 times. Each change of hands hikes up the price and disconnects the consumer from the farmer. By the end, a hierarchy of profits has left the farmer, who usually needs it most, with the least amount of money. “On one side, we see the farmers making so little from their work while the middlemen and big oil companies reap the profits. Then on the other side, many in the West are asking questions of brands like: Who are the people behind the brand that actually made this product? How are they treated? Is my purchase feeding an oppressive system or helping people? We saw an opportunity to benefit both sides.” remarked Erik.

Dignity has had a goal of connecting the local farmer to the global export market, but did not always know how reaching that goal would unfold. A successful Kickstarter campaign in May 2015 provided the necessary funds for Dignity to detour from their original plan of selling in bulk and instead develop their own brand for retail sales. They became the direct bridge between the farmers as well as factory workers, and the end users. This tangible connection between customer and producer has shaped the position of their brand in the market. Read more

Restoring Dignity Through Business: Dignity Coconuts’ Story

“We’re fighting this multi-billion dollar evil with a peashooter,” Stephen told Don as they wandered around the exhibition hall at an anti-human trafficking convention. At every booth they were encountering stories of abuse and human suffering. There were also stories of rescue and restoration… However, the sheer scale of global slavery seemed to dwarf the efforts of those at the front-lines fighting against it. Most organisations working with trafficked communities can only provide jobs for 5, 10, 20 or so people. This is great and essential work; giving meaningful work and a stable livelihood is central to people getting out and staying out of slavery. Yet the need for stable jobs far surpasses the supply. Don and Stephen came away with a burning question: How can we employ a growing number of people vulnerable to, or rescued from, human trafficking?

A year later in 2009 Stephen Freed and Don Byker left their long-held positions and set out to research business opportunities. They realised that if they were really going to tackle the underground slavery industry, they would need multiple, substantially-sized businesses that could employ hundreds or thousands of people. They looked at micro-enterprise solutions, but realised that there is a limit to how effective those can be. Not everyone is an entrepreneur with aspirations to own their own business – and micro-businesses rarely scale to create thousands of jobs. As they researched they found, as economists have discovered, that the key to solving poverty and bringing widespread economic development to communities is a growing number of SME-sized businesses. Read more

5 Lessons Learned About Developing Products and Finding a Market

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I’m developing a business plan for a BAM company. What are some ideas, tips or resources you would suggest as I conduct market research and analysis, especially in a BAM setting?

~ Anticipating Analysis

Dear Anticipating,

Start with “Why”

If I could ask you to understand anything about this, I would encourage you to understand the “why.” Motives determine outcome. If the company motives don’t line up with solid business principles, undergirded by correct biblical understanding; your hard work may never get past a good read by the intended audience. It could end up in a desk drawer. Or worse, it could alienate an entire culture, damaging years of relationship building. And please, whatever you do…don’t spiritualize motives. Just because we choose to spiritualize a motive does not justify it in God’s eyes. Nor does it guarantee successful execution. The sage advice of noted author and TED speaker Simon Sinek provides great clarity on the reason we want to start with the “why.”

Lesson Learned #1 – Ask lots of bad questions which lead to really good questions, and Google comes in handy at this point.

Get your Planning Head on Straight

Once you have clarity and understanding on the “why”, you are better equipped to move forward with the “what and how.” The “what and how” has everything to do with proper planning, researching, testing and… fingers-crossed… implementation. It’s important to know, as one mentor previously mentioned, when to set the planning aside to start testing assumptions. Read more

Developing a Flight Plan for Your Business

by Mike Baer

Adapted from material first published on the Third Path Initiatives Blog.

Values. Vision. Purpose. Operating Principles. Those are pretty lofty altitudes in your business development process. They are all necessary; just as a solid foundation is necessary if you are going to build a home that lasts. However, with the foundation laid it’s time to begin executing on what you actually want to do.

We call this Flight Planning. It’s part strategic plan and part market plan and part organizational plan and mostly action plan. Over the last 20 years we’ve seen a large number of startups and small businesses achieve amazing results by devising and then doing this simple 3-step process.

Step 1: Set Targets and Objectives

The first step of the Flight Plan is to determine where you actually want to be in the next year (Objectives) and the next three years (Targets). It’s useful to set the information out, as follows. Read more

How The Foundry is Helping Freedom Businesses Find a Market

The answer is always the same… “We need marketplace access.” We work with Freedom Businesses – companies that have a focus on combatting slavery and human-trafficking. This answer is often given in response to the question, “What do you need most as a Freedom Business?” Marketplace access is a consistent, ongoing need for all companies, Freedom Businesses and BAM companies are no different.

What this question does not take into account is whether that market access is for retail, wholesale, white labelling, production only, or any other creative way to enter the general market. What we have found is that marketplace access is really a coded way to say, “We need money and therefore we need sales.”

The reality is that Freedom Businesses do need a market: real markets that are based on quality products and not just the marketing of the brand’s story or relying on ‘sympathy purchases’. While it is important to relay that story with dignity and deep purpose, the story should not take the lead over the product. The product needs to be able to stand on its own merit, with a real market, if the business is to truly succeed.  Read more

6 Product and Market Bloopers: What to Do and Not to Do

Some things are learned the hard way. Mistakes are part of life. But we can also learn from others’ mistakes and hopefully avoid them. We asked BAM practitioners in very different sectors in different parts of Asia to share a lesson they had learned about developing their product or service. Here is their BAM blooper reel:

1. Don’t jump from your idea to… we’re going to do it!

Do your research. Don’t do, “I’m just believing God” and not do your homework. Take time to do some basic surveys and cost comparisons. We’ve always done market research and surveys, asking: is it out there, what’s the competition, how long have they been around, what they are charging? If there is nothing out there then look at a nearby country or look at a product that is close to the one you want to offer. We’ve seen businesses come in with a ‘good idea’ and just go ahead, with no research. One man I met came in with an idea for selling waffles, a business he’d done before. However, he was very badly advised by a local consultancy. He only had one product and here in this country if you don’t have at least 10 things on your menu no one will come in and buy. I walked into his shop and saw in five minutes that it wasn’t going to work as a business. He’d spent his retirement money and closed up after only 6 months. – Ron Read more

Business Planning and Market Research for a BAM Company

Once a month, our panel of mentors answer your practical business questions. Send us your questions!

 

Dear BAM Mentor,

I’m developing a business plan for a BAM company. What are some ideas, tips or resources you would suggest as I conduct market research and analysis, especially in a BAM setting?

~ Anticipating Analysis

Dear Anticipating,

The basic idea of a business plan is to help you think through all of the different issues that will make a strategic difference to your proposed business. There are literally hundreds of issues to think about and that can be daunting. The business plan helps you structure your thoughts, assess the risks and opportunities and, perhaps most significantly, helps you see what you still need to research and learn.

 I’ll try to address some of the most significant issues for a cross-cultural BAM startup.

 Almost everything in a business starts with the market:  Read more

How to Create a Value Proposition

The value proposition is a clear statement of what value you offer, to whom, and in what way. It is different from a mission statement because it focuses on differentiation, or the compelling reason why customers should choose you and not your competitor.

Over the next few years the forces of competition will intensify – even for BAM businesses. Although there is growing evidence that some businesses can offer a premium product or service and simultaneously reduce unit cost, this ‘increasing returns’ phenomenon is a mainly a characteristic of the knowledge economy (e.g. for an internet based service where the variable cost is very small). Usually a business has only two positioning choices: increase margin by lowering costs and charging what the market will bear, or increase margin by premium pricing based on a distinctive value proposition, consistently delivered, which gives customers a compelling reason to purchase.

A value proposition must be written in clear language using simple words, so that all your employees can work out the things they must do to deliver it consistently. A clear proposition will make resource allocation choices easier for you. When money is tight, you will want to spend on the things which maintain or extend your value proposition. The value proposition will also act as an attractor for new customers – it will define your position in the market and give you a reputation and therefore a brand. It will unify the actions of your board and employees and it will act as a deterrent to competition; the key to becoming a “price setter” in the market because you can then control your margin. Read more