The Effectiveness of Three Startup Business Pivots in a Pandemic Period

Pivot business is nothing new for startups. Usually, this action is taken when a business is difficult to progress or does not develop. In the Covid-19 pandemic situation, not a few startups have pivot. This is not because the business is not growing, but has to be done to save the business.

The pandemic has hit all business sectors, especially the aviation, tourism, and business sectors hospitality. As a result, many startups that depend on this sector for their main income are forced to rethink their business and take new steps.

Eight months have passed since the Covid-19 outbreak in Indonesia. DailySocial interviewed three CEOs of three Indonesian startups about their realization and effectiveness pivot business during a pandemic.

Market research before pivot

Before talking about effectiveness and realization, do pivot must be accompanied by thorough readiness for the target market and business model to be explored. In his interview with DailySocial, Kedai Sayur, Medigo, and Izy admitted to conducting market research and surveys first.

It should be noted that the three startups both play in the Business-to-Business (B2B) segment. Different, fine Izy and Kedai Sayur decide pivot to B2C because of the pandemic. Temporary, the pivotThe one that was planned since 2019 was actually affected by the pandemic.

Izy's business model intersects with hospitality where it provides digitizing services to encourage increased consumption of hotel and accommodation guests through the platform. For example room service and laundry.

Izy started pivot since April 2020 after conducting simple market research with several clients and related parties to obtain initial input. With the same business model, Izy opens a new market by venturing into modern retail and residential settlements.

Meanwhile, Kedai Sayur, which initially served B2B, such as vegetable vendors, cafes, and restaurants, inevitably entered the B2C segment or end users. Social restrictions resulted in a decrease in visitor transactions at restaurants and cafes, so managers had to reduce the volume of food orders.

"Here we research the market to determine consumer behavior, the need for fresh products that are in demand, and how lifestyle-his. This is because the behavior of B2C and B2B consumers is different," said Adrian Hernanto, Co-Founder and CEO of Kedai Sayur.

In the case of Medigo, initially this platform attempted to connect the entire ecosystem in the health industry from upstream to downstream with hospitals (RS) as an initial approach.

Given the hospital bureaucracy that requires a long integration process, Medigo finally pivot with a focus on clinical management only. In December 2019, Medigo build Smart Clinic and inaugurated it in February 2020.

"When we develop clinic management system At the beginning of 2019, there were more than 300 clinics registered. It is just usageit's still small. Here we started our research and surveyed the clinic to find out what the problem was. Is technology the main problem or is there something else that can't be solved?" said Medigo Indonesia Co-Founder and CEO Harya Bimo.

On the way, Medigo encountered difficulties in executing pivot. Smart Clinic is run with two business models, namely building it yourself and collaborating with clinics Existing. Problems arise when a pandemic hits.

"When we wanted to build a second Smart Clinic, the situation was not possible because the model had to be monitoring, renovation, where necessary high touch. Meanwhile, we have to low touch because at that time there were social restrictions. Here we are rethinking the strategy pivot and models partnerships us," said the man who is familiarly called Bimo.

Realization pivot during the pandemic

Nearly eight months since the pandemic broke out in Indonesia, the three startups above revealed that they have reaped positive results or responses from the new services they offer to the market.

Even though pivot This is temporary, Co-Founder and CEO Izy Gerry Mangentang admits that he has managed to pocket the income. However, his party has not been able to share more details regarding the increase in revenue because it is related to internal data with its partners.

"For core products/services, we will remain the same as before, namely focusing on the hotel industry. However pivoting This will be very useful in the future to be able to complete the Izy platform and ecosystem," he said.

Meanwhile, Kedai Sayur recorded an increase in sales with a demand of more than 50 percent after entering the B2C segment. According to Adrian, demand continues to increase because people are getting used to buying food, vegetables, and fruits online.

Apart from sales, said Adrian, the company also recorded other positive responses. For example, the number of customer complaints from Kedai Sayur continues to decrease every month, followed by an increase traffic engagement and the addition of new users through social media. "To maintain customer satisfaction and loyalty, we accelerate the delivery process from H+2 to H+1," he explained.

Medigo's entry into the clinic's supply chain also recorded a significant increase. At the beginning of the social restriction period, his party did not immediately reap a business increase because during that period people tended to be afraid of going to hospitals or clinics.

However, its services began to experience an increase with its peak in May rising to four times compared to April. He claims that since May until now, the increase has more than quadrupled. "Even we already have margin healthy every month. So, our income is higher than burn rate us," he said.

Effectiveness and metrics used

By optimizing the right technology, operations, and business model, both Medigo, Izy, and Kedai Sayur reveal that pivot it works effectively. However, there is still room for improvement in the future.

In measuring effectiveness pivot, Adrian said that his party does not only rely on metrics traction or the number of transactions alone. They are trying to maximize Customer Relationship Management (CM) by utilizing quality data to get better business prospects.

Previously, Adrian had mentioned that data plays an important role in reading a trend or phenomenon in the digital era. In the context of a pandemic, Adrian said data can show trends in demand for orders or product prices in certain areas.

"Biggest challenge pivot to B2C is Yago's defensive effort great in bringing [name] brand to the wider community with diverse characteristics. Therefore, we pay close attention to details that can be meaningful updates to improve our services going forward."

However, added Bimo, his party does not rely on metrics Sales only to measure effectiveness pivot this. Since its inception, Medigo has established interactive in the ecosystem healthcare as its "North Star Metric". This means that this metric is at the core of its main business growth.

"Pivot we are very effective because it is not only measurable from commercial only, but also non-commercial. It's free if non-commercial good, but can't be monetized because the business model doesn't support it yet. After pivot, [metric non-commercial] the interaction on our platform has gone up tremendously," added Bimo.

According to him, success pivot This can be maintained if the two metrics can run with each other. "We manage many clinics where the patient's medical records are stored in our system. If one hospital can do it handle 900 patients per day, we can hold 60 clinics with 100 patients per day each. This is our 'North Star Metric' to encourage interaction healthcare stakeholders, " he concluded.