If there’s one word every startup founder can associate with, it’s agility. When faced with rapidly changing market conditions, winners and losers are often decided by their willingness to adapt, even if that means having to completely reinvent the business. This, of course, is known as the pivot; business leaders who are able to pivot at the drop of a hat earn the distinction of being agile, something every startup founder strives for.
Although no two business pivots are alike, they all have one thing in common: a leader who isn’t afraid to take risks in the face of uncertainty, especially when the entire company is on the line. We teamed up with the BMW Hot Lap Pitch to profile three founders who pivoted their companies at the right time and turned them into blazing successes.
The many false starts of Instagram
It’s hard to imagine a world without Instagram, but the photo-sharing app had humble beginnings in 2010 as Burbn, an app that let users post pictures, check in at locations and make plans with friends. Kevyn Systrom, the founder, was able to raise $500,000 from prominent venture capitalists, but despite quitting his job and adding Mike Krieger on as a co-founder, Systrom wasn’t getting the traction he needed to sustain growth.
The app was bloated with too many features and had come to resemble Foursquare, making it hard for Burbn to differentiate itself in a crowded app store. After looking at the data from their users, Systrom and Krieger quickly discovered that photo-sharing was the most popular feature on the app, so they scrapped Burbn and pivoted to Scotch, their first standalone photo-sharing app.
After months of prototyping, the pair launched Scotch, a social media app designed primarily for photo-sharing, but it quickly failed due to poor design and performance. Instead of giving up, however, Systrom and Krueger rebuilt the app from the ground up as Instagram and added several features that allowed users to try distinctive photo filters and post pictures in as little as three taps. In just three months the app had reached 1 million users and continued to attract new ones at breakneck speed, which is often attributed to its stability and clean design—two things that were far from the norm in 2010.
In 2012, Facebook bought Instagram for $1 billion, and today the photo-sharing app has become a substantial growth engine for Facebook’s revenue with 700 million active users.
The comeback of Priceline
Priceline, the US travel giant and owner of holiday reservations websites like Kayak and Agoda, enjoyed huge successes in the dot-com era as a bidding website for airline tickets. Their bullishness on the company’s future even led them to sell discounted gasoline and groceries, but after the events of 9/11, domestic travel spend sharply decreased, forcing Priceline into a freefall.
In an effort to turn things around, Jeffery Boyd, Priceline’s general counsel, was promoted to CEO and his tenure marks one of the most impressive corporate comebacks of the last decade. Among his most notable changes was dropping the ‘bid on flight prices’ service the company was built on and pivoting to emphasize hotel reservations over flights. Boyd also eliminated booking fees and prioritized international expansion by acquiring Booking.com—two key decisions that put immense pressure on the competition and allowed Priceline to get a foothold in international markets.
Soon enough, Boyd’s efforts started paying off, and under his leadership Priceline went from nearly being delisted from the NASDAQ stock exchange to collecting 80 percent of their revenue from international sales and earning a profit of over $2 billion.
The minification of Devialet
In 2010, Pierre-Emmanuel Calmel, a French entrepreneur with a background in electrical engineering, bet all his savings on a hybrid analogue-digital amplifier that would bring a new sensory experience to the listener. He pitched his innovation to Nortel, the telecommunications company where he worked, but was turned down, so he quit his job and founded Devialet to build a working prototype.
Together with his eventual co-founder Quentin Sannié, Calmel raised €1.3 million to build his amplifiers, which he priced at $15,000 a pop. Calmel and Sannié quickly realized that their ability to grow was stunted by the low demand for high-end amplifiers, so they looked for other ways to make use of their patented technology.
The pair set their sights on consumer devices that featured audio, including smartphones, televisions and cars. To accomplish this pivot, Calmel redesigned his amplifier and shrank the technology down to a microchip in order to fit the technology with highly compact form factors. At the same time, Calmel and Sannié partnered with companies like Sharp and Renault to begin rolling out their technology and secured additional funding from a number of investors including Jay-Z.
Today, the Paris-based company employs over 200 staff members and generates €60 million in annual revenue. The company hopes to embed their chips into cars first, followed by televisions and then smartphones. “One day, “ Sannié told Bloomberg, “everyone will own a Devialet.”
In the fast-paced startup world, speed and agility is everything. So for the Hot Lap Pitch, BMW sent nine founders to the racetrack, and gave them each one full-throttle lap in the M550i—the fastest 5 Series ever built—to pitch their startups to a team of VCs for a chance to take the stage at Disrupt NY.