The last edition of Inside the Mind spoke to Mark about how pivoting stood the test of time to become one of the most important principles in startup businesses. As we journeyed through WinFax’s story, we discovered just how impactful a successful pivot can be. Today, we want to look a bit more into the practical side of pivoting and how market disruptions occur.
How Disruption Happens
The term is commoditized to the point where, like pivots, we sometimes forget what it means. At its core, an industry disruption is something that completely changes the way it operates. Often, but not always, it results in what we call a “creative destruction”. Examples of this would be Netflix making Blockbuster obsolete or Craigslist destroying the Classifieds section of the newspaper.
Mark explains that to disrupt, entrepreneurs need to think outside of customer habits. That the solution exists in a way few are open to seeing. Despite their recent PR issues, Uber remains a great example of a disruptor. They were able to take the market by storm, and effectively disrupt the taxi industry by looking at a problem in a way no one else had. Before it came onto the scene, a variety of companies had tried to automate bits of the taxi system by taking either booking, payments or fare calculation digital. While this improved on the previous version, it didn’t solve the underlying customer frustrations.
What customers were looking for was not an easier way to book a taxi, but a more convenient and comfortable experience. Uber enabled that by turning any ordinary driver into a taxi. When everyone looked left (taking parts of the process digital), Uber looked right (solving the customer’s pain point).
How Hopper Is Disrupting the Travel Industry
When Hopper first approached us over 10 years ago with their intention to disrupt the travel industry, their model wasn’t nearly as sophisticated as it is today. Their product mix was varied and didn’t fully address the underlying problem they were looking to solve: A simple way for customers to get best prices on travel.
To understand why this was the pain point people wanted solved, we need a bit more context into the travel industry. When travel agents dominated, here’s what the process looked like:
- Customer calls in
- They give the flight agent details of their travel
- Flight agent does the research
- Flight agent calls with a number of options
- Customer picks their options
- Flight agent sends the customer their tickets and invoice. Done.
As the internet became more of an everyday tool, the travel industry started to change. The growth of the internet led to a first generation of travel software. Instead of calling an agent to book a hotel or flight, customers now had the ability to book it themselves. This gave them more control and autonomy over their itinerary. However, while cutting out the middleman yielded lower prices, the amount of time consumers spent on trip planning increased dramatically. Not exactly a 10x solution.
So, how is Hopper truly disrupting the travel industry? To put it simply, instead of just replacing the “travel agent” with an online form; they use data to become an intelligent mobile agent that gives consumers everything they need to make the best travel decision. After testing a few models, they found that the most common, difficult decision travelers had to make were flight prices. Customers all but yelled out “that’s what we want!”
When everyone was looking left (digitize the travel agent), Hopper looked right (help customers make the best decision on flights).
“Be willing to swim against the tide!” – Mark Skapinker
In a similar fashion, Brightspark is looking at a market ripe for disruption: the wealth management industry. With an experienced team that has successes on both the entrepreneurial and VC side, we practice what we preach. We’ve tested and measured the market, pivoted to better serve our investors, and now we’re disrupting the market by giving accredited investors the opportunity to join VC-grade deals on an individual level.
The wealth management industry is at a crossroads right now. Between volatile public equity markets, competitive and inflated real estate markets, and funds that lack experience or transparency; we’re giving investors what they really want: The highest quality deals in private equity, backed by an experienced team that works with the investment from beginning to end.