From webshop to brewery, or from milk to insulation material: these are just a few examples of pivots we are familiar with at The Birdhouse. Many ‘young’ companies go through one or more sharp shifts in their idea. That’s why we’re devoting a series to pivoting in March. We show you what you can learn from BeerSelect, Hemp in a box, TechWolf and Human Reef.
“Our users remained central”
“The future looks promising”, laughs co-founder of BeerSelect Wout Meuleman when we ask him about his company. They support craft brewers from marketing to distribution. They raised 900,000 euros a few weeks ago. With that money they are going to build the biggest brewery in Ghent.
Their situation did not always look so rosy. “Initially we were a webshop for speciality beers,” says Wout.
“That model we had to completely flip. A scalable webshop in the food and beverage sector is not at all self-evident, because you have to address a huge global market and raise a lot of capital. The context just wasn’t there at the time to do that.“
That’s why they did a pivot. “We then went to our users, the breweries themselves. We asked them where their problems lay and they all came up with the same answers: marketing, ICT, internationalisation, sales and distribution. We then listened to our market and turned the business around.” So they did what Eric Ries called a
customer problem pivot
You keep the same target group but change your product on the basis of their needs.
Such a move was not easy. “All the other start-ups at The Birdhouse were moving fast and we had to take a step back. That was a mental blow,” Wout recalls. “Your start-up is kind of like your baby and when you pivot you’re basically saying that you’re not that happy with your baby anymore.”
Nevertheless, they hit it off and found their product-market fit. “A key reason for our success is that our vision remained the same: the brewers remain at the heart of it. We also surrounded ourselves with a critical mass of experts, especially the mentors at The Birdhouse. They dared to give us the occasional shot when needed,” he laughs.
“I wanted to keep doing my own thing.”
Such a pivot can of course be drastic, as Mathieu Hendrickx co-founder of Hemp in a box proves. Today they produce insulation material based on hemp. “Completely organic and on top of that CO2 neutral or even negative”, summarises Mathieu Hendrickx.
But before he threw himself into the insulation market, Mathieu was a dairy farmer. “The dairy industry is tough. But becoming an employee was not for me. I wanted to keep doing my own thing. Then I heard about hemp as an insulation material and we did a pilot project on my farm, that’s how everything got started.”
Initially, Hemp in a box mainly produced hemp insulation walls. Now they are venturing once again into another market: that of insulation materials.
“We still make walls, but fundamentally that is a smaller market. Insulation material has a much greater scalability, everyone needs it.“
Going from farmer to entrepreneur brought many changes for Mathieu. “Now we have to take into account the end customer. As a farmer you are mainly a supplier of raw material, milk or grain for example. So you never come into contact with the end customer. So as a farmer you have no experience with sales or marketing, whereas now we really have to convince the end customer. That’s a big difference.”
“If the value is higher, cut the knot.”
TechWolf is another startup from The Birdhouse’s current cohort. Today, they provide support to HR organizations on digital transformation, with an emphasis on AI. The idea didn’t just come about. “Our first idea was to set up a temp agency for IT students,” says Mikaël Wornoo, co-founder of TechWolf.
“But that soon turned out to be a bad idea. There was a lot
competition and a high administrative burden.
Nevertheless, behind the scenes, they had already built a software for their employment agency. “We saw that the real value of our idea was in the technology. We wanted as little administration as possible for the highest possible margin. And our technology was generating far more value than what we could achieve as an employment agency.”
according to Eric Ries, where you start from one part of your business and focus on that. “Of course, it wasn’t easy being stuck like that. In the end, you have to tie the knot. If you find that the direction of your pivot has more value than what you’re doing now, don’t fret too much about it and just make the decision.”
“Your impact as a consultant is too limited”
The last person we talk to about pivoting is Els De Geyter, co-founder of Human Reef. With their start-up they made a switch that is recognisable to many of us: they went from consultancy to a product. “We help companies move away from hierarchy and put an alternative model against it. Above all, we create clarity and improve transparency so that employees take responsibility in their businesses.”
As a consultant, Els developed an entire methodology for advising companies on these issues. But she also wanted more. “My big frustration as a consultant was that when I left I left nothing behind. Your impact as a consultant is limited and I wanted to change that. So we started building a software platform based on our expertise.”
This is quite common and a lot of start-ups finance their early phases through consultancy. Nevertheless, Human Reef never offered parallel consulting and software. “That was too confusing for our customers,” Els says.
“Our consultancy and software had the same approach. One of them had to act as a support for the other. Now the focus is on the
solution = product + expertise.
“That was hard. Most of the revenue from consulting is falling away. But nevertheless, this was the right decision for us, because it brought focus to the company. The platform is now in place and the first customers have already started. We hope to raise capital in the near future, and once we have that, we want to go full throttle as a ‘solution’ company.”