Cameron Chell here again. Last week, we talked about why “impossible” doesn’t need to exist in startup-land. If you missed it, you can find it by clicking here.
Today, I want to take it one step further and talk about the true mark of finding a successful startup.
That’s knowing how to “pivot.” A pivot is a change in course that helps a startup avoid certain pitfalls or take advantage of better market conditions.
As such, there are a couple of types of pivots that we need to consider. There’s a pivot that happens because of necessity and there’s a pivot that happens because of opportunity.
Generally, if you are going to pivot, you are going to want to be pivoting for the second reason and not the first. More times than not, startups are pivoting because their original assumptions, their original product market fit and the original work that they’ve done with customers hasn’t turned into revenue.
We’ve seen that time and time again in 2020…
Did the market change in general (i.e. COVID-19)?
Was there poor budget management?
Premature personnel or infrastructure scaling?
Were there too many assumptions made and not enough testing?
Was there too much testing and not enough assuming (getting to market)?
Did they lose a key strategic partner?
Did the availability or capacity or capability of the team change?
A pivot in any of these scenarios is done out of necessity rather than opportunity. While a pivot out of necessity is certainly more stressful, it can still yield great results.
Still, the best kind of pivot is one made because of opportunity. Here’s why…
And the company my team and I are currently building is the perfect example…
When we saw the pandemic unfolding, we saw the potential to develop a new kind of health measuring technology for drones. This tech would allow public safety agencies to do things like measuring social distancing or measuring mask wearing.
We were even able to develop the technology to a point where it could measure elevated body temperatures, heart rates, respiratory rates and blood oxygenation levels.
It was incredible to find that you could do all that from a drone. However, the real opportunity continued to evolve. We were able to take that tech and provide the same product on two other platforms; one from fixed cameras.
This basically means we can measure vital signs as people are walking into stadiums, going into schools, entering their office buildings and more. Imagine being able to understand what the potential infectious disease risk is in any physical location. (It should be noted that the tech does not identify people).
It also works on mobile cameras, where the technology can be applied for telemedicine, enabling medical practitioners to measure vital signs simply through the camera of the phone.
Draganfly still has an incredible business in the drone space, but expanding into the health measurement space is taking off into its own multi-hundred-million-dollar opportunity for the company.
This is an example of a pivot based on opportunity. It involves growing and adapting in order to serve a new market need.
But we’ve also made pivots because we had no other choice. Here’s an example…
The technology had a bunch of signal processing issues and wasn’t eagerly accepted by the market. In short, it just wasn’t working out. But the experience gained by the management team helped them realize the bigger opportunity was in providing data on all the different aspects of a well location operation.
That evolution has led to a product and service that gives companies a much better sense of exactly what is happening down the hole and all over the well site. They have better insight into who is doing what on-site; what a contractor’s equipment is doing; whether they are on time; and even whether a particular function occurred properly.
In a time where the Oil & Gas industry is focused on efficiency, reducing costs, and protecting the environment, this product is becoming essential. As a result, our company is now absolutely knocking it out of the park.
This is an example of pivoting out of necessity.
This is why successful startups know when and how to pivot.
When you’re looking for companies to invest it, it’s crucial that you find ones that have proven they can pivot.
And if they haven’t pivoted, it’s important you have faith in the founders that they can pivot if needed.
That’s all from me for now, but I’ll be in touch again soon to talk about the best advice I’ve ever received from another angel and entrepreneur.
Talk shortly,
Cameron Chell
Today, I want to take it one step further and talk about the true mark of finding a successful startup.
That’s knowing how to “pivot.” A pivot is a change in course that helps a startup avoid certain pitfalls or take advantage of better market conditions.
As such, there are a couple of types of pivots that we need to consider. There’s a pivot that happens because of necessity and there’s a pivot that happens because of opportunity.
Generally, if you are going to pivot, you are going to want to be pivoting for the second reason and not the first. More times than not, startups are pivoting because their original assumptions, their original product market fit and the original work that they’ve done with customers hasn’t turned into revenue.
We’ve seen that time and time again in 2020…
Why do pivots happen?
A startup not generating revenue fast enough is the ultimate reason that companies most often have to pivot. There are many factors that could have contributed to this.Did the market change in general (i.e. COVID-19)?
Was there poor budget management?
Premature personnel or infrastructure scaling?
Were there too many assumptions made and not enough testing?
Was there too much testing and not enough assuming (getting to market)?
Did they lose a key strategic partner?
Did the availability or capacity or capability of the team change?
A pivot in any of these scenarios is done out of necessity rather than opportunity. While a pivot out of necessity is certainly more stressful, it can still yield great results.
Still, the best kind of pivot is one made because of opportunity. Here’s why…
Finding opportunity, understanding necessity
When a company pivots as a result of opportunity, there is usually something that has changed or that they’ve just discovered in the market where a product or team has a greater chance of success or larger opportunity then with the original product or plan.And the company my team and I are currently building is the perfect example…
Draganfly – now more than a drone company
We are building a company called Draganfly (OTCQB: DFLYF) (CSE: DFLY) (FSE: 3U8) that builds commercial drones, develops specialized drone software, and performs contract engineering services.When we saw the pandemic unfolding, we saw the potential to develop a new kind of health measuring technology for drones. This tech would allow public safety agencies to do things like measuring social distancing or measuring mask wearing.
We were even able to develop the technology to a point where it could measure elevated body temperatures, heart rates, respiratory rates and blood oxygenation levels.
It was incredible to find that you could do all that from a drone. However, the real opportunity continued to evolve. We were able to take that tech and provide the same product on two other platforms; one from fixed cameras.
This basically means we can measure vital signs as people are walking into stadiums, going into schools, entering their office buildings and more. Imagine being able to understand what the potential infectious disease risk is in any physical location. (It should be noted that the tech does not identify people).
It also works on mobile cameras, where the technology can be applied for telemedicine, enabling medical practitioners to measure vital signs simply through the camera of the phone.
Draganfly still has an incredible business in the drone space, but expanding into the health measurement space is taking off into its own multi-hundred-million-dollar opportunity for the company.
This is an example of a pivot based on opportunity. It involves growing and adapting in order to serve a new market need.
But we’ve also made pivots because we had no other choice. Here’s an example…
Cold Bore – changing the landscape of the Oil and Gas industry
Another type of pivot is one made out of necessity. The example that I will draw on here is a project we have called Cold Bore. Cold Bore was originally developing a technology to transmit data at a high speed from downhole sensors on well sites to the surface using sonic waves.The technology had a bunch of signal processing issues and wasn’t eagerly accepted by the market. In short, it just wasn’t working out. But the experience gained by the management team helped them realize the bigger opportunity was in providing data on all the different aspects of a well location operation.
That evolution has led to a product and service that gives companies a much better sense of exactly what is happening down the hole and all over the well site. They have better insight into who is doing what on-site; what a contractor’s equipment is doing; whether they are on time; and even whether a particular function occurred properly.
In a time where the Oil & Gas industry is focused on efficiency, reducing costs, and protecting the environment, this product is becoming essential. As a result, our company is now absolutely knocking it out of the park.
This is an example of pivoting out of necessity.
Management’s ability to pivot
Certainly pivoting because of opportunity is a lot more fun and not as stressful. Pivoting out of necessity is generally much more stressful and is done for different reasons. The underlying understanding is that it really still comes down to management. Does management have the ability to pivot? This is one of the key measures we consider when we look at our Angel investing.- Has this management team pivoted before?
- Do they have enough bench strength to be able to pivot?
- Are they thinking about potential pivots?
- How does the team react and operate under pressure?
This is why successful startups know when and how to pivot.
When you’re looking for companies to invest it, it’s crucial that you find ones that have proven they can pivot.
And if they haven’t pivoted, it’s important you have faith in the founders that they can pivot if needed.
That’s all from me for now, but I’ll be in touch again soon to talk about the best advice I’ve ever received from another angel and entrepreneur.
Talk shortly,
Cameron Chell
Follow @angelsandentrepreneurs
