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Home / Leadership / Strategic Planning / Embrace the Right to Pivot
Embrace the Right to Pivot

Embrace the Right to Pivot

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Oct 10, 2014 By Dave Berkus

Plans don’t often work as devised. We are not always smart about the market or the product. Great teams are not bound by their original product or marketing plan. Greatness finds one definition in management’s ability to “pivot,” or change the plan in reaction to its early response from the marketplace.

Investors celebrate teams that quickly find the flaws in the original plan and reallocate resources in another direction before more wasted effort. Even the term, pivot, seems to call up images of a light-footed dancer able to move so very quickly in any direction.

My favorite example of a world class pivot comes from the CEO and board of one of my most successful investments. Green Dot Corporation was formed by an entrepreneur in the year 2000 to create a product to permit those without credit cards to purchase items on the Internet. Think of it: to shop on the web, you must have a card, not a nine digit routing and bank account number. The young, inexperienced entrepreneur had two assets that attracted me—rights to use the MasterCard name on this new product, and a laser focus to make this work in any form possible.

Over the years, that vision changed dramatically several times as the world’s first debit cards were invented by the firm, positioning the card to be used by the un-bankable, those unable to obtain credit cards or in some cases even checking accounts. The firm grew to dominate its new field, create an infrastructure to allow any of its 70,000 retail stores to simple activate or load the card with money from any cash register. It replaced Western Union as the preferred way to send money across great distances. And it built a billion dollar market and then some—where it might have been restricted to a small percentage of that.

And we who held early stock celebrated together the ringing of the NYSE opening bell the day that often pivoting company went public.

This article was originally published by Berkonomics

Filed Under: Strategic Planning Tagged With: Dave Berkus, Planning, Reinvention, Strategy

Dave Berkus

Dave Berkus

Dave Berkus is a noted speaker, author and early stage private equity investor. He is acknowledged as one of the most active angel investors in the country, having made and actively participated in over 87 technology investments during the past decade. He currently manages two angel VC funds (Berkus Technology Ventures, LLC and Kodiak Ventures, L.P.) Dave is past Chairman of the Tech Coast Angels, one of the largest angel networks in the United States. Dave is author of “Basic Berkonomics,” “Berkonomics,” “Advanced Berkonomics,” “Extending the Runway,” and the Small Business Success Collection. Find out more at Berkus.com or contact Dave at dberkus@berkus.com

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