The coronavirus and economic crisis have certainly challenged many entrepreneurs to do some serious re-evaluation of their business models. One of my friends compares it to being a toddler playing at the beach, getting knocked down by wave after wave after wave. More often than not, this has resulted in more hopscotching than simple pivoting when it comes to business models. Rather than incremental changes, known as pivots, entrepreneurs are being forced to reinvent their businesses on the fly as the pandemic creates seismic disruptions in society and in the economy.
Typical Pivots
Significant pivots in business models are common during the early days of a new venture. We pivoted the business model of every startup I have ever launched once we opened for business and received feedback from the market. In the days when we relied on formal business plans to guide our startups, some of these pivots could be rather jolting. Today’s business modeling tools facilitate a more incremental process of pivoting during early days of a new business. Steven Blank refers to this as the searching stage of customer development.
Once the searching stage leads to a clearer picture of what the market truly needs our business model to be, the execution stage begins. This is where the focus shift from customer discovery and pivoting, to scaling and building business infrastructure.
Hopscotching the Business Model
The disruptions being caused by the coronavirus and the governmental policies that are following the outbreak, force established businesses to jump, or hopscotch, to a new version of their business model or even a new business model entirely.
Some of these are more survival strategies. For example, distilleries across the country have shifted some or even all of their production capacity to making hand sanitizer. Such efforts have helped ease the temporary strain on the supply chain for hand sanitizer until the market can stabilize. Restaurants, with their dining rooms temporarily closed, are turning to curbside service, grocery sales, home delivery, family take-out meals, and so forth to bridge the gap until they can return to business as usual. Boutiques have found that people are buying fewer new outfits, as we are mostly working from home. So many have decided to make face masks a fashion accessory.
Some changes in business models look to be more permanent. I have already highlighted changes in travel and music that are likely to be more permanent post coronavirus. I plan to look at other industries over the coming weeks.
How to Navigate the Need to Hopscotch?
So what is an entrepreneur to do during such a crazy time?
Steve Blank suggests using a tool called the Market Opportunity Navigator to help uncover new opportunities for a business to pursue amid the coronavirus. In his blog post, Blank offers a great case study to illustrate how a healthcare company discovered how to hopscotch its business model.
Ted Ladd offers a process in a column at Forbes that is helpful.
The first step is to deconstruct your business model to its core parts using the Business Model Canvas. As I tell my students, the business modeling tools we have at our disposal today are not just to help you launch your business. They are powerful tools to help you navigate your business through the many changes that are likely to come in the future, even in “normal” times. This article in the Cape Cod Times offers some specific things to consider when deconstructing and re-evaluating your business model.
Next, Ladd suggests that entrepreneurs reimagine each part of the business model, using creative thinking processes, to reinvent each part of the model in the new world created by the pandemic.
Finally, Ladd suggests that, just like you did at the startup stage, you need to work with your customers (which may be entirely new customers) to test and refine the new elements of your business model.
SCORE offers three tips for those hopscotching their business models:
- Don’t forget the need for quality in what you offer, even if it is a temporary change in your model.
- Stick to what you know — don’t forget your core competencies.
- Don’t leave your old customers behind.
The Need for Resolve
One of the first blog posts I made as the coronavirus crisis began to unfold was about resolve. As I stated at the end of this post:
The resolve we are seeing among entrepreneurs will pay off for our economic future. It will take time and hard work, but these entrepreneurs are the ones who will lead us into our next economic expansion….and we will have one!
To ensure this bright future, don’t just get ready to pivot — get ready to hopscotch!
During 2020 all businesses have had such a upside down twist. Who could have ever predicted where we are at today. I think it’s great so many companies are thinking outside the box to keep their organization stable. I love the mask fashion and delivery from so many stores. You offer some great tips here: remember quality, stick to your core, keep your old customers happy and coming back. I would say most companies that are still thriving in this new climate have been doing these things. This is an era of change. We shall see what innovation comes from it.
Seemingly everything in our world has changed amid the pandemic, and businesses and their operations are no exception. It has been crazy to watch the world change so quickly in front of our very eyes. Unfortunately, not every business has been able to navigate pivoting and hopscotching like some restaurants or stores have. Those who have survived during this changing time in our world have done so by being time-conscious and thorough with their pivoted business models. Change is inevitable, but it is unfortunate that such drastic change had to happen so fast that not all businesses were able to catch up.
I think often as entrepreuners we begin our journey with an idea that we think will shake the culture and society we live in. However, often we are quickly humbled by how much we don’t know in the industry or at the very least we find out things we were not expecting in our industry. With that said, when things feel manageable and under control than we may loose a bit of prospective about the hardwork and humility it takes to be an entrepureneur. It is not until things start to shake (and as 2020 revealed it may not have anything to do with business but the world and its macro trends) that we are reminded that our business needs to have a clear vision but also have the ability to be flexible in adapting to what the culture and society around us demands and needs in the face of the shaking ground.
I love the analogy that you described at the beginning of this post, because it’s so true. It’s not just that the sun is a little brighter than planned or the water is a little cooler, it’s that the waves are completely knocking you down, over and over again. Now that we are a couple years out from this original shock of the pandemic, I think most companies have done their hopscotching in whatever ways they were going to. But as the world keeps on changing, it’s super helpful to have these tips and tools available to us.
I love this quote, “being forced to reinvent their businesses on the fly” because that is exactly what my park district had to do when we opened our outdoor pool for the summer. It seemed like everyday we had new guidelines and had to change our policy to match it on the fly.
It’s helpful that you bring up the difference between pivoting and hopscotch. In such a time of uncertainty and change, I appreciate that you related these business model shifts to a lighthearted activity. While the unknowns of the future can be scary, it can also be fun to uncover new ways to serve your audience and navigate changes.