Gini Dietrich

Pivot Your Business: What Hitchcock Can Teach Entrepreneurs

By: Gini Dietrich | November 11, 2013 | 
31

Pivot Your Business- What Hitchcock Can Teach EntrepreneursBy Gini Dietrich

In the movie Hitchcock, there is a scene where he is lamenting to his wife, Alma, that no one wants to make the movie Psycho because it was a large departure from his previous movies.

Though he suggested an inexpensive budget and a fast timeline, Paramount Pictures still rejected him, claiming their sound stages were booked, though the industry was in a slump.

So Hitchcock and Alma, while sitting by the swimming pool in their backyard one afternoon, discussed the pros and cons of making such a movie, particularly without a movie studio behind them.

He begins to build the case for going back to making the movies the way they did when they were younger…by putting everything at risk, making a pivot, and going for it.

He looks around their property and says they should make the movie themselves.

Alma, who is still in her bathing suit, says, “Even the swimming pool?”

And so they do. They put everything at risk – even the swimming pool – and go back to Paramount Pictures to put up the money to make the movie.

Hitchcock tells the studio executives he has made a pivot: He will personally finance the project and film it at Universal, if Paramount will simply distribute.

They agreed to this arrangement and the movie was made.

Psycho, of course, was one of Hitchcock’s best movies and he and Alma not only didn’t have to give up their swimming pool, it was nominated for several awards (though it never won an Oscar) and is considered one of the greatest movies of all time.

The Blockbuster Story

I tell this story because it’s a fantastic entrepreneurial story (and an even better movie, if you haven’t yet seen it).

Here is a couple who is fat and happy. They’re accustomed to getting their way in Hollywood. Hitchcock has already earned respect and a reputation. And yet…

Everyone told him no. The movie couldn’t be made. Audiences weren’t ready for nudity (the shower scene) or masterful suspense or large, elaborate (expensive) scenes.

But he found a way. The pivot he made was to risk his family’s entire livelihood because he knew he was right…and it worked.

But when you look around the business world today, you see some in trouble (BlackBerry) and others completely go out of business (Blockbuster).

Blockbuster saw the change coming with Netflix and Amazon and Hulu and Redbox, but they stayed their course. They never veered from their nearly 30 year strategy, which was built to rate the popularity of its older films and immediately check the availability of new releases.

By 2002, the video-renting giant had more than 8,000 retail stores, but was soon faced with increasing competition from Netflix.

Rather than launching a video streaming service then, they refocused on their retail stores, a decision that landed them into bankruptcy just eight years later. (For the record, when a large brick and mortar organization competes with a nimble, virtual one, it’s hard for the former to compete in today’s world.)

By the time the DISH Network bought them out of Chapter 11, they had only 1,700 stores remaining. The announcement last week that the rest will be closed is neither surprising nor sad.

Blockbuster had the opportunity to buy Netflix in 2000, develop video kiosks before Redbox, and even had the inventory to beat other video streaming organizations to the punch.

They did none of these things and instead focused on the investment they had made in the stores, a decision that kept them fat and happy for a while, but eventually failed completely.

Pivot Your Business

It’s important to stay on strategy, of course, because it’s very easy to be distracted by the shiny, new penny.

But when your strategy is completely wrong, it’s time to pivot your business, not ignore external factors that are changing the game.

If you run an organization, your job is to watch industry trends, imagine new products, tweak the strategy, and fail fast.

Take Spin Sucks Pro, as an example. We really thought there was a need for PR and marketing pros to gain online education through courses versus webinars and white papers and the like.

It turns out we were right, but that no one was willing to pay for it (sort of a big factor in creating a for-profit business).

So we put an immediate hold on the development of the online courses and are rethinking the strategy (which is part of the reason Clay Morgan was hired).

As the entrepreneur and the brains behind that idea, it was a really difficult decision to make. But, if I set aside my ego and the money we’d already invested, I knew it was the right decision to make.

Because, sometimes, your strategy is wrong (or changes) and, instead, you have to pivot the idea.

Learn from Hitchcock…not From Blockbuster

Think about what Hitchcock did: He knew his strategy was right, but he couldn’t find the investors. So he pivoted his idea, took some risk, and made it a success.

It’s scary to do. In some cases, you’re changing everything that’s worked in the past.

But if Blockbuster had paid attention to external factors, made the hard decision to close some of their stores in lieu of a mail service and streaming, and focused on the future, who knows where they would be today.

Most likely not out of business completely.

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

  • I have done the pivot for sure. But there is something unique to Hitchie’s, Blockbuster, and your situations. Hitchie and you own your business. Blockbuster was owned by shareholders. In big business just running a big business keeps you employed even when you fail. For example Robert Nardelli ran Home Depot into the ground. Then he was hired to run Chrylser into the ground. and now is fat and happy in private equity. The blockbuster managers most likely didn’t have major fortunes to lose. But Hitchie and you obviously have more skin in the game.
    It is a real big problem because major brands over pay upper management. Just look at how many banks failed but their C-Suite kept all the riches they built up destroying their company.
    My point is owners will pivot faster than managers because what is at stake is so much more dear to them than they are for managers.

    • Howie Goldfarb To me the lynchpin is always whether or not a company (of any size) truly has a fix on culture & collaboration.
      An interesting thing about Steve Jobs / Apple that few people mention is that he kept the same team of talent around for a long time. They could have all helmed their own companies and made millions, but were immensely loyal to him because he believed in the power of the work they were doing together, and was dedicated to building visionary things. And to your point, it’s true anytime but especially when pivoting: don’t entrust your vision to people who have none or aren’t incentivized to use / create it.

    • Howie Goldfarb The CEO of Blockbuster certainly had the opportunity to pivot. He had the opportunity to buy Netflix. Turned it down. He had the opportunity to innovate and instead focused on the retail locations. The decisions he made were the demise of the corporation entirely. It’s not just the people who own – or invest – in the business. It’s those making the decisions.

      • ginidietrich Howie Goldfarb  In some ways, he reminds me of people in the newspaper industry.  I remember comments like, “Nobody will list their stuff on a free classified site” when Craigslist launched. Or Ebay. Or Monster.
        I don’t blame anyone for letting one “new thing” go by, but when it keeps happening, you just aren’t paying attention anymore.

        • ClayMorgan ginidietrich Howie Goldfarb Agreed Clay – and great point about the newspaper industry.
          Its scary to go a different direction than you originally planned. But things can change in an instant – or in Blockbusters case – over many years. Sometimes you have to take big risks for big rewards or you may end up going bankrupt.

        • yvettepistorio ClayMorgan ginidietrich Howie Goldfarb do we know the CEO of Blockbuster was the owner or just an employee? And if just an employee where is he now just curious.

        • Howie Goldfarb I’m pretty sure he was a hired gun

  • I think the key point in this story is Hitchcock believed in the film and he made what changes, deviating from what he thought was the original plan, were necessary to see it to fruition.
    Spin Sucks Pro is the same. We both believe in it – it is just going to be done differently than we originally thought.

    • ClayMorgan Which is totally fine with me…we’ll get it there!

    • ClayMorgan For me the workflow is – having the idea, being true to the idea, and inviting the right people to join you in executing it….the kind who will both recognize the time to pivot and care enough to make it happen. Those are rare.

  • I think the scarier part of the pivot happens when it’s a significant departure from what you always imagined the niche your business occupies. As you well know, it’s been on my mind an awful lot these past few weeks and that identity crisis, while absolutely terrifying at face value, hold tremendous opportunity.

    • jasonkonopinski Couldn’t agree more. In SF/Silicon Valley things move quickly, so I’ve already seen / learned from successful and not so successful pivots. What’s interesting to me is that when a startup goes under, it’s not often for lack of good ideas. The biggest problem is not ideas but execution, or as our product manager said to me the other day “once you’ve got a good idea and you can see it works, then it’s time to be boring, over and over.” 
      In that environment collaboration and people become your most crucial asset, and create the opportunities. Have you read anything about Everpix lately? Kind of an interesting companion to this… I read this piece and thought, wow, scary but also instructive – http://www.theverge.com/2013/11/5/5039216/everpix-life-and-death-inside-the-worlds-best-photo-startup

      • JoeCardillo jasonkonopinski I just had a conversation with a friend about entrepreneurship. He asked me why I thought he wasn’t an entrepreneur (to be fair, he did ask the question…I didn’t just blurt it out). I said it’s because, while he has FANTASTIC ideas, he gets too bored to see them executed. You have to have both.

        • ginidietrich JoeCardillo I’d say that a lot of people who imagine themselves to be entrepreneurs get dazzled by the excitement of generating fantastic new ideas, then either suffer under the weight of execution or simply abandon it all together. If you’re sitting on a pile of cash, that’s cool, but committing to a vision? That’s even cooler when you invest the time, energy and tears to see it through.

        • jasonkonopinski ginidietrich JoeCardillo What’s interesting is that something like Everpix can look so promising and still end up falling apart. Supply and demand aren’t the sexiest concepts, but they are real and determine how your business does. 
          ginidietrich How did your friend respond? I’ve tried to have that conversation before, it’s a hard one

    • jasonkonopinski You already know this about me, but my feeling is if you’re comfortable, you’re doing it wrong.

      • ginidietrich And I absolutely agree with that, despite the white-knuckle ride.

  • Just at those moments when we (or at least me!) are ready to toss in the towel, along comes ginidietrich with inspiration and a Hitchockian kick in the pants!  Thanks & looking forward to seeing what’s the pivot means for AD!  An interesting aside is that a pivot turn in dance is performed on the ball of the foot – so basically, Raise Up, Turn and Get ‘er Done!

    • lizreusswig Exactly! So raise up, turn, and get ‘er done!

  • I’ve been discussing this very thing a lot lately. And you are right — when you’re comfortable is precisely when it all starts to crumble. I think one of the hardest things to do is to walk away from what you think is a good idea, and even more so if you’ve invested money into it. I really struggle with that one. I find myself thinking “but maybe if I just do _______, things will be different.”  Kudos to for pivoting.

    • TaraGeissinger It’s hard in anything…relationships, work, hobbies. Maybe if I just try this…

  • Love, love, love this post. The Pivot Theory(r) also applies quite handily to life in general. Some of the best changes I’ve made in my personal life have been *major* pivots. Scary as all get’out – but ultimately successful – and definitely the right choices. 🙂

  • Fabulous post, Gini! I love, love, love Hitchcock. Such a brilliant mind. 
    I’ve found that pivoting has several tough points. First, you have to be on the look out for opportunities to pivot. Second, you have to evaluate if a pivot is necessary. Third, you have to make the decision to actually pivot (if necessary) … I’m curious to know if you have criteria you look to as potential indications of an opportunity to pivot?

  • rdopping

    Great post and even better thinking. I covered a similar topic this week asit relatest to the changing tide technology is spurring in the interior design business. I strongly believe we are on the brink of massive change in our industry and the firms like ours who are on board and entrepreneurial in mindset will slowly start to take over.
    Sure, we can convince ourselves of anything but there are way too many indicators demonstrating the shift technology is having on all aspects of business.

    • rdopping I think you’re right…and it covers all professional services firms. Very, very interesting times ahead.

  • philipshaun

    I like
    the way you described the topic with such clarity. Thanks for Describing
    Everything. http://www.autoalati.com

  • philipshaun

    I am
    really glad to be here.I hope to see more great articles here in the future
    too so keep it up and good luck to all of you!
    http://www.travel-prescott.com

184 Shares
Buffer16
Tweet98
Share23
Share30
+117
[postmatic_subscribe_widget]
[postmatic_subscribe_widget]