The best pivots come out of what the last year taught you. Management usually has the answer already. My job is to ask the question that surfaces it.
Some businesses need a pivot, not a plan. A rapid diagnostic separates the model’s real economics from the noise, and finds the revenue the assets can still realise.
Two video gaming businesses, one on pay-per-view and one on token-wagering, were pivoted onto sponsored revenue models, doubling revenues within a year. Building revenue viewer by viewer had been hard work while a slew of game publishers needed to deploy marketing budgets, and a host of brands were eager to reach mid-income twenty-somethings: the leagues held the loyalty of exactly that demographic.
The full story →Independent analysis of decline is worth as much as analysis of growth; vendors of declining businesses have less incentive to get it right.
The vendors of a TV rentals business projected 30% annual attrition: a sunset asset, priced accordingly. Working with the sponsor, we co-developed a contrarian thesis: 30% was a short-term blip we could explain, and the loyal core was declining at nearer 10%. Meanwhile the service model was much further from becoming sub-scale. The business could be bought cheaply and run for cash. The investment returned over 5x across a nine-year hold.
The full story →Stopping is also an answer, and good governance helps that decision emerge before more capital follows an old thesis.
A children’s radio joint venture between three partners had a sound thesis on paper, but the platform’s route to viable distribution scale was out of reach. The JV board called it, further investment stopped, and a buyer with a portfolio of similar assets emerged, enabling a soft landing. If governance works, bad outcomes are much easier to avoid.
The full story →The method in full, in the investment lifecycle articles: Deal Foundations and Enabling Infrastructure.
The numbers will say whether to pivot, resize or stop.
I don’t need any detail. I will set up a short call. No charge, no deck, and no follow-up unless you ask for it.