Leaders Share the Riskiest Business Decision That Paid Off

by Dora Wang on Jun 9, 2015 8:00:00 AM

Leaders Share Their Riskiest Business Pivot That Paid OffOrganizational change can be a big risk, but it’s a risk that can come with great rewards for your company. And sometimes changing is the only way your company can grow. These business leaders were faced with this reality and had to embrace a new direction — but in the end, their companies benefited.

Learning From Struggle

Felix Estevez, owner of FeelXtra Mobile Spa, had a different vision for his company from what it is now. The Orlando-based business was originally intended to provide chair massage services at a kiosk in the mall. However, “After several attempts to get inside the malls and having no success, I decided to shift my whole business model and go mobile.”

Estevez focused on his core business idea: “to be as convenient as possible to my clients that mostly don't have time to go to a spa.” So when the mall didn’t work out, “I thought that if we were to provide our services in the comfort of our client’s home or even office, they wouldn't have to go out of their way to get these services.” People don’t often have time to go to a spa, so this business model lowers the barrier of entry by letting them stay at home.

The new strategy worked. The company developed word-of-mouth buzz and has grown from 4 therapists to over 25.

Estevez’s advice for other business owners is, “Think of the problem that your product or service is trying to solve and solve it no matter what gets in the way.”

Alexander Ruggie, Public Relations Director for 911 Restoration, shares a similar story of taking lessons from obstacles. “We started out as a carpet cleaning operation with one location in 2007 at the height of the Great Recession. That took a toll on our business,” Ruggie says.

However, the company was proactive. “In an effort to survive the storm, we pivoted to become more than just a carpet cleaning shop and instead rebranded to become restoration masters.”

Such a move isn’t easy, but once the company adjusted, it thrived. “Now we have over 60 locations around the country, and we did over $27 million in sales last year alone.”

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Wiping the Slate Clean

Jamie Diamond, Public Relations Manager of inDinero, describes the challenges that CEO Jessica Mah overcame. “We launched in 2010 as a Mint.com for business — charging customers $20/month to keep track of their basic finances for their business all in one place. Even though we launched to much fanfare and funding — $1.2 million — we ran out of funds in 2012 and realized this model was a failure.”

Mah needed to regroup, so she “laid everyone off, moved in with her parents, and thought hard about what to do. She studied for and passed the U.S. IRS Agent test to better understand accounting, all in one month. Then she interviewed tons of former and future clients and found they'd happily pay us more for more services. She relaunched us from a simple software-only accounting solution to an unlimited, full-services team and software that charged a sliding scale flat fee to small businesses. In 2014, we had $3 million in revenue, and we're slated to double that this year.”

Sometimes, when the going gets tough, you need to have faith in your strategy and push through — but other times, knowing when to stop and find a new path is the boldest choice.

Taking a Leap

And sometimes you have to make a choice that, to outsiders, seems like the wrong one.

Craig Wolfe, President of CelebriDucks, “decided to take our foreign competition head on by becoming the only one in our industry making our products in the USA.” This was a unique move, not only because all other rubber duck companies manufacture overseas, but also because the general industry of small hand-painted toys is mostly gone from the U.S. as well. Says Wolfe, “We're actually making them in New York City where, as it turns out, some of the first rubber ducks were invented in the 1800s!”

“I knew from the start that it would be a very expensive and big risk. But I never knew just how much the technical skills had been lost here and how much work it would take to get it all reestablished.” The short-term challenge has paid off, though Wolfe jokes, “If I didn't own the company 100 percent, I would have been fired.”

Wolfe describes himself as a big fan of Milton Hershey, “who failed in business so many times that it seemed there was no hope for him.” Among the lessons that he learned from taking this risk, the biggest is “that nothing is impossible if you really hang in there and have faith in your vision.”

Lori Cheek, Founder and CEO of Cheekd, experienced four years of struggle building her company “with the wrong partners, lots of bad decisions, and some major rookie mistakes.” In 2013, she applied to the show Shark Tank and was summarily shot down, being told to quit her “hobby.”

However, after the episode was aired, Cheekd’s website received over 100,000 unique visitors and dozens of emails from interested investors. Since then, Cheek has found a CTO “who’s helped facilitate and finance the new face and technology behind the new Cheekd. The newly launched dating app allows users to solve missed connections with a new technology that was not available when the patented Cheekd idea was launched in 2010. It was only a matter of time and I’m thankful I didn’t take the Sharks’ advice to quit and move on.”

Cheek describes her business as “the most powerful thing that’s ever happened to me.” She’s taken a leap, first by leaving her previous career in architecture and design to become an entrepreneur, and additionally by ignoring the people telling her no. Her advice for others is, “Be brave and take the risk!”

Some of the decisions you make as a company leader can feel like teetering over the edge without a net, but sometimes you just have to close your eyes and take the leap. Have you made a bold move that paid off like these business owners?

 

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This post was written by Dora Wang

Dora is an employee engagement researcher for TINYpulse and managing editor of TINYinstitute. Having grown up in Texas, she is now firmly settled in Seattle, where she spends her free time reading comic books, wrangling her three cats, and (of course) rooting for the Seahawks.

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