In my previous career as an airline pilot, I relied on failsafe systems, ensuring that even if one system fails midair, there are multiple backups.
As an entrepreneur, I build my companies on similar principles to captaining an airliner: the philosophy of hedging your bets and ensuring that you never rely on a handful of customers or a geographical region, thereby avoiding becoming too dependent.
Having run numerous successful business in the past, and having weathered the usual ups and downs, I thought I had it all figured out, but enter Covid-19. No amount of preplanning could have prepared us for the havoc and economic tsunami that was unleashed.
As a travel-tech start-up facilitating the hotel industry, I woke up one day and thought “Ok – this is it. Everything I have worked for over the last ten years is going to be wiped out”. Hotels are closing down, international travel is practically at a standstill and no one is going on-line to make travel and hotel bookings.
According to Skift, a leading travel news platform, the largest seven public online travel agencies will lose upwards of $11.5 billion in revenue this year, while the IMF projections indicate that the global economy is expected to contract by 3% in 2020. So, why would anyone need the service we provide at Hotel Data Cloud (HDC); a centralised global database for descriptive hotel content?
Making sure that the hotels’ information and pictures are updated across all travel websites and travel agent databases, doesn’t really work as a business model if no one travelling. So, now what do we do?
This question is one that a lot of business owners are having to ask themselves – What can we do to ensure our business survives the crippling effects of Covid-19? The answer, while simple, is one that many companies shy away from or take too long to implement: Pivoting. The ability to accept the market realities have completely changed, seeing where the most traction is and shifting to a new strategy. Essentially, it’s a business reboot when your original business assumptions change drastically.
The decision to pivot is a very difficult one, as it not only involves shifting to a new strategy, but can also drastically change the whole company structure, offerings and ideology. It’s not a decision to be taken lightly, but desperate times call for desperate measures. In our case we had to re-shift our focus and look at how HDC could assist hotels in the post Covid-19 recovery phase to actively regain customer trust and interest. We decided to accelerate the introduction of an Artificial Intelligence and Machine Learning based recommendation engine, specifically designed to help hotels engage and retain customers once people start traveling again. We used this as the USP to pitch for additional funding and at the peak of Covid-19, were able to secure AED 1.3 million in seed funding.
Additionally, we also initiated a Covid-19 preparedness program whereby we added over 90 health and safety relevant attributes to our platform, so hotels can now actively communicate their Covid-19 precaution measures to their travelers.
This initiative resulted in the United Nations World Tourism Organization (UNWTO) officially recognizing HDC as a healing solution for tourism. While the decision to pivot, proved to be a critical business continuity move, and the lifeline that we needed, it was one of the hardest things we had to do. In order to make a successful pivot it doesn’t matter if you read the market wrong in the first place, or if you did everything right and where hit with a global pandemic, at the of the day, it’s the fact that you recognised that things needed to change.
During our pivot, I learned some key lessons along the way that were the cornerstone of our business survival. And while one size doesn’t fit all, there are some learnings that are universal when a business is executing its own pivot.
The sooner the better
Many companies are slow to act and have a fear of pivoting, as it signifies accepting that your current business proposition may not be working and also, the fear of sunk costs kicks in. However, companies have to change if they are to evolve and survive – and fast! The key to business survival is to be timely and not miss the boat. The businesses that will survive the COVID-19 era are the ones that are quick to accept the harsh realities and implement the necessary changes to reflect the needs of the times.
Consider integrating technology platforms
With the lockdown in effect and people being encouraged to stay at home, the majority of people are now on-line and looking at alternate and innovative solutions. When exploring ways to pivot it’s important to explore new technology as a way to stay competitive and meet customer expectations. Digital transformations are now being adopted and accelerated throughout companies, even in industries known to be less innovative. A pivot is a great opportunity to get rid of legacy systems and procedures.
Build on what you’ve done
It’s important that you identify the areas that can be enhanced and salvaged, once the new course has been set for the company. The ideal case scenario is a redirection of resources and efforts, towards the new goal, so that you can limit the input of cash and resources, rather than having to start from scratch.
Growth opportunities must be at the heart of your pivot
One of the biggest takeaways from COVID-19 has been the need for businesses to meet an emerging customer need or mitigating a pain point. This signifies a tremendous growth opportunity and expansion into a new path, so businesses must be able to assess the different opportunities that are presenting themselves. Many times, companies sell products they think customers need, but in reality, it’s not what customers want, so let your customers be the guiding force.
Customer feedback is key
Feedback from customers is a great indicator for whether you should pivot or not, and the direction that pivot needs to take. If there is a drop in demand or consistent complaints, then it’s a sign that something needs to change. Many times, customer surveys provide that invaluable insight that sets the foundation for a critical strategy course correction. If all customers are mentioning the same concerns and issues, then addressing that is the starting point for the pivot.