• Saturday, April 13, 2024
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How startups are exploring product shifts to stay afloat

How startups are exploring products to stay afloat

Pivoting to other businesses and products is offering a lifeline to startups in Nigeria.

These startups, trying to survive difficult economic and business conditions, are finding hope in exploring new business opportunities. Startups like Gokada, OurPass, Kippa, Stears, and Taeillo all exemplify this adaptation.

From shifting from one business model to another to changing product offerings, startups are increasingly embracing pivoting as a pathway to sustainability.

Adedeji Olowe, founder of Lendsqr, explained, “Pivots may happen when a side experiment has become successful enough to be worth focusing on.”

Earlier in 2024, reports broke that Kippa, a financial management startup, was pivoting from fintech to edtech. The move was unsurprising because of the company’s struggles in the past year. According to local media reports, Zilla, a Buy-Now-Pay-Later company, also paused its BNPL services to focus on a cross-border payment product, Zillawire. In 2023, OurPass, an e-commerce one-click checkout company, pivoted to business banking.

Exploring new businesses will help startups survive, Olowe noted. “Smart investors are welcoming to pivots because if these startups don’t pivot, they will die with the investors’ money and dreams,” he said.

Abass Suara, a strategy and corporate innovation consultant, told BusinessDay that startups consider the terrain and capabilities before changing ships. “Also, the customer segments, value proposition, partnerships, and revenue streams must be considered,” Suara said.

He added, “Identifying the market opportunity and how the new direction aligns with the company’s core strength and long-term goals.”

According to other experts, some startups have products with no longer relevant use cases, and it is good to re-strategise to avoid demise. In a report, Founders Factory Africa, an early-stage tech investor, highlighted indicators that show when a startup is ready to pivot.

“There are several key indicators that signal the right time for a startup to pivot – when valuable insights and customer feedback gained from current products or market conditions signal a need for a pivot when only one or two products in your portfolio enjoy traction when there is a need to change target audience, among many others,” it said.