When – and how – to pivot your business model

Johannesburg, 22 Jun 2021

We asked Heavy Chef’s Fred Roed to explain when – and how – to pivot your business model. Here’s what he had to say:

Anyone who knows me, or read some of my writing, will know I’m a huge fan of Jim Collins. I’ve read Good To Great several times, and continually drop Collins’s aphorisms in conversation to the point that it’s probably irritating many of my friends. That said, I feel the accomplishments that my business partners and I have achieved have been shaped (in part) by the principles that Collins shares in his remarkable biography.

One of the key themes throughout his work is that business should be based on sustainable and authentic principles. These principles will ensure you continue to grow, regardless of what life throws at you.

It’s a journey

Looking back over the past year, I believe this reliance on growth kept Heavy Chef alive during a particularly challenging period. It also sustained a team that’s become a strong foundation for future growth.

Our initial business plan was written back in 2009. The idea I presented to my business partners was ‘education for entrepreneurs’, delivered in short, bite-sized chunks. This would be called ‘Heavy Chef’. However, we were running a successful digital marketing agency at the time. We wanted to focus some of our attention on the Heavy Chef project but the agency was doing so well. So we followed the money a little longer.

In 2013, we sold the agency to a progressive software company, thinking that Heavy Chef could be developed with our combined capacity. Sadly, it was not to be. Again, things got busy and Heavy Chef didn’t get the attention it deserved.

That is, until 2016. After 13 years in the digital marketing industry, I resigned and took a sabbatical. Now I had the time to act on the idea of an entrepreneur learning platform! I took a few months to weigh up the risks of starting an untested model, in a very difficult sector. Then I took the plunge.

Heavy Chef was born

Our initial challenge: deciding whether to run as a business or as a charity. This decision took about a day. It seemed hardly appropriate to create a ‘non-profit’ while teaching people how to make a profit. On 16 September 2016, Heavy Chef (Pty) Ltd was registered.

The strategy was simple. Step one – build a community. Step two – offer as much value to this community. Step three – convert this community into subscribers that pay.

The right people on the bus

Again, leaning heavily on Jim Collins, we set out to ‘get the right people on the bus’ (Good To Great). Our ‘Big Hairy Audacious Goal’ (Built To Last) was to create the most accessible learning platform (in the universe) for entrepreneurs. Why did we want to do that? Because we know entrepreneurs can change the world for the better. What’s more? They do it more efficiently than anyone else. In South Africa and other emerging nations, this is invaluable.

“Heavy Chef’s job is to empower remarkable entrepreneurs to start things. And then empower them to succeed.”

Step one – build a community

The first step was hard. It was all about hosting events. Community events are fairly simple to do – at least they were for me and my team. Our first paid event was in June 2017, featuring Aisha Pandor, CEO of SweepSouth, and Michael Deon, CEO of Augmentors.

Fortunately, the first few events did well enough to receive attention from brands interested in serving the same audience. From the outset, even though we weren’t making sustainable income from event ticket sales, we were profitable on the back of partnerships with companies like PayFast, Xero, Whipping The Cat and Yoco. We also forged strong relationships with lifestyle and product organisations like Workshop17, Sir Fruit, Backsberg, Creed Living and goodleaf.

In 2018, Discovery came knocking and suddenly we were making great income for our tiny team of five.

Step two – offer value

The second step was to offer value, while at the same time kick off with building the learning platform. 2019 was a great year for us. Facebook joined as a partner and we integrated with several communities – serving over 30 000 entrepreneurs and a further estimated 500 000 entrepreneurs and business owners through our partner networks. We were feeling bullish. Our events were going like gangbusters and we were ready to kick off step three: convert paying customers.

Know when to pivot

Just as we were starting to put money aside, we experienced a sudden, unexpected double whammy. Heavy Chef was hit by the pandemic that precluded people from being close to each other. There went our events! Then Discovery decided not to renew their partnership with us (on good terms, but painful nonetheless).

In April 2020, just over a year ago, I found myself again quoting Jim Collins: “We need to confront the brutal facts, but never give up hope!”

Without the ability to draw attention to events, we were in a tenuous position. We needed to decide: do we carry on? The answer was a no-brainer: of course, we’d carry on. We believe in entrepreneurs. And we believe in our own entrepreneurial ability too.

We quickly decided we needed to fast-track the development of the learning platform. With our income limited to the support of our partners, how would we finance anything? We formulated a plan – a plan that, frankly, would take a miracle to pull off.With some superhuman effort, our tiny team from Khayelitsha, Langa, Mowbray, Hout Bay, Sea Point and Pretoria managed to achieve our goals.

New partners

In June 2020, Retail Capital and xneelo came to our rescue. Soon after, we started hosting online events and found, much to our surprise, they held significant advantages. We could scale these events and we could host international speakers at a fraction of the cost.

By the end of 2020, we hosted a hybrid online/offline event, showcasing the team’s new abilities to harness the power of live-streaming to an audience around the world. The event was our most successful ever, with several thousand people downloading the recording.

And now? While we’re halfway through 2021, we’re still a long way from being comfortable. But that’s okay, discomfort makes you hustle and work harder.

Five valuable lessons we learnt:

  1. Terrible knocks can reveal awesome opportunities.
  2. Having the right team is essential – half the team offered to take salary cuts to keep going.
  3. The soft stuff is important – your purpose and your values. These things kept us grounded and working together as a team.
  4. The hard stuff is also important – we’re razor-sharp focused on our goal to become the best, most accessible entrepreneur learning platform in the universe. This gave us something to work towards.
  5. Jim Collins is awesome!

In fact, that last point can form an alternative version of a TL:DR

Basically, if you’re an entrepreneur reading this: Go forth and read Jim Collins.

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