Small business: why it pays to adapt

Entrepreneurs must be ready to change their minds about what works and what doesn’t, and change their business model accordingly.

How much do you know about the Silicon Valley start-up Odeo? If the answer is "nothing", you're far from alone the company disappeared almost ten years ago. But you might be more familiar with its founders, Noah Glass and Evan Williams they helped to found Twitter. When Odeo, a podcasting company, saw its existence threatened by the dominance of Apple, its founders began to work with Jack Dorsey and Biz Stone to develop an internal text-messaging service for a wider audience. Twitter took off, while Odeo was quietly sold.

This is a classic example of a "pivot" a complete change of strategy for a business struggling to make its current model work. The term is often associated with tech firms, which may pivot several times as they struggle to find a purpose that resonates with customers, but it's a technique that anyone can embrace. Take William Wrigley, who founded the chewing-gum empire in the 1890s he started out selling soap and baking powder, offering free gum to attract customers. When buyers turned out to be more interested in the gum than the soap, Wrigley took the hint.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.