In a recent interview, Mark Cuban (the owner of the Dallas Mavericks and a judge on Shark Tank) stated that “Once we open back up, it won’t be business as usual. It will be America 2.0. That’s the greatest opportunity ever for entrepreneurs.” It seems as though many business leaders do not recognize this reality and believe that once the coronavirus is past, we will return to business as usual. But what if we all return to America 2.0 instead?
Pivoting to a new business model
Now that many organizations have dealt with the immediate needs of responding to the pandemic, it is time for leaders to think about the future – as this HBR article appropriately describes. Unfortunately, too many businesses are still caught in fighting the daily fires and are not thinking about how to confront the new realities that await them. For many, the new reality does not just mean refining their current business. It means creating a completely new business model or “pivoting” in a major way.
As startup best practices indicate, the way to pivot or start a new product/service/business model is not to invest loads of money, time and people (as corporations have often done in the past). Rather, it is to create a number of small and quick experiments to test your assumptions about customer wants and needs.
It is imperative for businesses to explore what is next right now, especially with many businesses currently utilizing funds from the Payment Protection Program and having full staffs on hand. If businesses wait too long, many will not have the necessary time and cash to figure out what is next for their business.
Strategyzer just released a new book, The Invincible Company, which has a model that is extremely useful for this exact purpose – helping existing companies looking to innovate. They differentiate two portfolios of products/services/business models that all companies must maintain:
- Exploit — those products/services that your company has been built on; the focus here is continuing to grow them and driving efficiency in those services. This is what most existing companies are good at.
- Explore — companies must also always have a number of new business models that they are exploring to see which hit the target. A majority of these will never amount to a successful product/service, but it is a numbers game – you have to generate a lot of ideas to gain the few that will be a success.