That’s generally what pivoting means, going from chemical to digital cameras for example is a similarly huge jump even if the customers largely stay the same you lost a huge revenue stream from selling and or processing film and now need to spend a lot more on R&D.
Also, the transition from film to digital was more gradual than it appears, as many features now thought of as digital-only were actually available on late generation film cameras.
A pivot suggests a sudden and radical change in course. Slack feels like one, companies that have switched from manufacturing to (apparently unrelated) software feel even more so.
I’d also say Nokia doesn’t feel like a pivot. They were a company that did anything internally for which they did not find adequate solutions on the market. They produced a lot of different things over the decades and the radio business is one that found external success and grew over time. Do we consider large conglomerates to have repeatedly pivoted as different portions of their business waxed and waned?
Going from manufacturing pencils to building aircraft doesn’t make use of existing workforce, equipment, or customers so why not just expand into a new industry and keep the old one as long as it was possible? Netflix or digital cameras on the other hand eats into their customer base. Someone buying a digital cameras is no longer buying film from you, it’s a destructive transition.
If we take this approach EVERYBODY has pivoted. Walmart has online sales that are "eating into" their in store sales. CVS has home delivery, eating into their foot traffic...
Survivorship bias means you see a lot of company’s that have successfully pivoted, and the brands that failed often get bought up after the fact.
But while Kodak did sell cameras, Kodak sold cameras mostly to drive sales of their film. The film and chemicals were their high margin product ranges.
The pivot to try to drive their earnings mainly from their cameras was a fundamental change of business model in a way that Netflix shift to streaming (or Walmart or CVS online and delivery) wasn't. It turned a long term recurring high-margin revenue stream into a punctuated low-margin revenue stream. (not that they could have prevented the eventual collapse of their film business)
That doesn't matter, the organization is the people in it, if you have to make huge reorganizations in what the people at your company do then that is a huge pivot that is dangerous and likely to fail. Digital companies are not like other companies, you are thinking of companies where brands is the main thing and you can just slap together a new product in a year. It doesn't work like that in normal businesses, Kodak couldn't just say that all their factories specialized on making goods related to old cameras be repurposed to digital cameras.
Some of the expertise can transfer over, but if that is not your competitive advantage it doesn't matter. Kodaks competitive advantage was not camera lenses etc, so they had no way to pivot to digital cameras. Digital cameras destroyed the business they were good at.
> If we take this approach EVERYBODY has pivoted. Walmart has online sales that are "eating into" their in store sales. CVS has home delivery, eating into their foot traffic...
No, not everybody has pivoted. Lots of companies failed to pivot and died. Walmart is aware of this and has started to build expertise around digital sales already, because Walmart doesn't want to die in case digital sales overtakes physical sales.
And they still make basestations and exchanges to this day. So they kainda are at their roots.
You mean serving video to a pc? Because I also think about the infrastructure/last mile. And it’s one thing to have 10000 customers and quite another to have 10000000 (or whatever #)
I still think it was a pivot but not for that reason. Evolving can still be pivoting. Netflix shifted their business from providing physical media to streaming media.
Before Blockbuster/Hollywood Video came to my town there were dozens of the video rental stores, all of which were mom-and-pop operations.
Nintendo tried to stop video game rentals during the NES era but failed - there was legislation banning video game rentals that was not passed and then they sued blockbuster for making photocopies of their manuals. I think I remember reading that rental stores having to send multiple employees into multiple stores to purchase Nintendo games because Nintendo had an agreement with retailers not to sell multiple copies of the same game to a single person to discourage rental and reseller purchases.
https://en.wikipedia.org/wiki/Compulsory_license#United_Stat...
That's (part of) why videos typically had that "not for rent" / "only for home viewing" stuff. There's a difference between you lending or renting out a dvd once, versus this being a business model.
How this works out exactly in a US legal context, you ask? Well: always follow legal advice from strangers on the Internet. Also IANAL.
Reed Hastings allegedly barred the delivery team executives from his leadership meetings when they were responsible for 100% of the companies revenue. It was a massive, legendary pivot.
Pivots are nothing else but evolving to suit the market, at the cost of an established existing business or use case.
> Would we consider a publisher as pivoting because they now sell ebooks and run news websites instead of printing books and magazines?
I don't see why not, except that their legacy/core businesses are still or until recently responsible for the majority of their revenue [1]. I think there is a difference between adding a new distribution channel and altering the fundamentals of the business. The pivot for publishers has been more from ads -> subs.
[1] https://www.nytimes.com/2020/08/05/business/media/nyt-earnin...
It'll happen as soon as the fragmentation is worse enough for people to loose interest and willingness to pay for them separately.
Because no authority dictates the meaning of "pivot", it looks like the concept diverged and became wider:
- "pivot" as switching from a unprofitable or failed business idea to a profitable one. A "phoenix rising from the ashes" type of pivot often associated with startups that finally figured out the elusive "Product Market Fit" instead of shutting down. This seems to be the original meaning popularized in 2011 by Eric Ries "Lean Startup" book : https://www.amazon.com/Lean-Startup-Entrepreneurs-Continuous...
- "pivot" as any change in business focus whether the previous one was profitable or not.
In that sense, IIRC Netflix's founder had the early vision to offer streaming services (one day in the future), so it wasn't a pivot. It was part of the plan.
I mean he named his company "Netflix". Does that sound like DVD delivery? No, it sounds like inter(net) + flicks.
If Netflix counts as a pivot, I feel like every company more than a few decades old should be on the list. IBM for sure, car companies because they now sell electric cars, banks because they now offer online services...
In a similar vein, how would you describe the move of just about every primary, secondary and tertiary educational institutions to online teaching?
I don't consider that a pivot. It was necessary to continue to deliver the basic added value of these institutions. However, that did require a whole slew of new skills from teachers. So sure, YMMV.