The world is always changing, and sometimes technology, culture, or some other force makes it so that the old way of doing things just isn’t going to work anymore. On the other hand, this also means tremendous opportunity, and every once in a long while businesses have the chance to get in early on something that’s going to revolutionize an industry and take off like a rocket.

Today, we want to highlight a few of the best product-line pivots in history, as well as some of the most hilariously bad pivots. Hopefully, there’s a lesson in it for all of us to know when to change tactics and when to stay the course.

Good Pivot: Nokia

When I say “Nokia” you probably think of cell phones, and for good reason. In the 1990s and early 2000s, Nokia was a dominant force in the cell phone market, and even today, the company still pulls in $24 billion a year and has a global influence, even if it has diminished from its peak. But what if I told you that this technology success story began as a Finnish paper mill?

In 1865, a mining engineer by the name of Fredrik Idestam went into the paper mill business, and by 1871 he built a second mill on the shores of a Finnish river called “Nokianvirta” – thus, “Nokia.” Eventually, Nokia started using the mill not only to make paper, but also to generate electricity, which put them into business with Finnish Rubber Works, and later Finnish Cable Works. In 1967, these businesses which had run semi-independently finally merged into the Nokia Corporation. At the time, they did produce some electronics – namely television sets, early computers, and communication cables. But they were still a paper mill, after all, and yes, they did produce toilet paper.

It is difficult to overstate Nokia’s importance in the global communications revolution. In 1979 Nokia launched the world’s first international cell network, which linked Finland, Sweden, Norway, and Denmark. In 1987 Nokia released one of the first handheld mobile phones, and they continued to innovate in the market for decades after. By 2007, Nokia held nearly 50% of the market share for the cell phone industry, and they brought in $75 billion in revenue that year.

Then, of course, the iPhone was released, crushing every cell phone manufacturer in its wake.

Still, Nokia is a great example of seizing new opportunities in the market and focusing on what is working best. Electricity generated by hydropower was originally a random and fortuitous by-product of owning a paper mill. However, the leadership at Nokia was wise enough to see the increasing opportunities that arose from having access to electricity early on, and later, the opportunities that arose from having expertise in electronics.

The lesson? Don’t overlook the incidental aspects of your business. There might be an aspect to your company that has allowed you to gain a unique resource or expertise, and, if so, that could be a goldmine.

Bad Pivot: Sharper Image

Sharper Image was founded in 1977 as a catalog retailer selling jogging watches, and it quickly expanded into a huge company with a footprint in malls around the country, selling home products and random curiosities/gadgets. Its strength seemed to be products that incorporated cutting-edge technology, even if it was in a sometimes gimmicky way, and they were also just cool. Sharper Image had a lot of brick and mortars, they had a thriving mail-order catalog, and they even had an early website. By 2003, Sharper Image had 140 stores and was pulling in over $750 million in sales.

Sales started steadily declining in 2004, however, which was not good considering how rapidly they had expanded into new physical locations. There were some internal shake-ups with leadership, and things went south. So what did this company do to turn it all around?

Trump Steaks.

To be fair, this was just one product out of many, and the company didn’t sink just because of Trump Steaks. But man, was it a bad idea. A company known for selling massage chairs, futuristic fans, and other home technology products suddenly began heavily promoting a line of extremely overpriced flash-frozen steaks featuring real estate magnate Donald Trump.

To quote the company’s CEO Jerry Levin, “We literally sold almost no steaks.”

The failed venture was symptomatic of a larger problem. Sharper Image felt like it was trying too hard, that they weren’t the effortlessly cool company it had once been. Instead of revamping the brand, money was thrown around, debts and inventory accumulated, and the company declared bankruptcy in early 2008 after their stock went to zero.

They were sold for parts, and, ironically, some pretty good pivots were made by the new investors that focused on licensing home and technology products (not steaks) instead of producing them. Today, they sell online and are doing alright.

The lesson here? Even in a business known for fun, luxury, and coolness, the company still needs discipline in its branding and decision-making processes. Sharper Image relied heavily on the opinions and intuition of its founder, and at a certain point, that wasn’t good enough.

Good Pivot: Nintendo

“Nintendo” is, in many ways, synonymous with “video games.” When we think Nintendo, we think Mario and Luigi, old arcade games, GameBoy, the Nintendo Wii, and the Nintendo Switch, but Nintendo has a rather colorful history of finding its way into this category. It was founded all the way back in 1889 – and it (obviously) wasn’t selling video games.

Nintendo began in Kyoto, Japan as a decorative playing card company founded by Fusajiro Yamauchi. Yamauchi had a head for business and quickly figured out how to manufacture his cards, and he eventually built a distribution company that took his product all over the world. In 1959, Nintendo began selling cards with licensed Disney characters on them, perhaps foreshadowing the coming days when licensing popular cartoon characters would become a major part of their business. By the 1960s, Nintendo began manufacturing other games besides just playing cards.

The breakthrough came in 1970 when Nintendo released the “Beam Gun,” an optoelectronic toy that revolutionized the toy market in Japan. This technology was leveraged to create virtual clay-shooting arenas, which were a big hit for a while. From there, Nintendo developed projector technology to pair with their products, and as early as 1974, Nintendo was manufacturing arcade-style video game machines and shipping them all over the world.

Nintendo has had to pivot, rebrand, and innovate many times over the years, but as one of the earliest players in the video game space, it’s all been in that direction since. Even though video games seem like a massive departure from playing cards, the Nintendo pivot has a lesson to teach us:

Some pivots lead to other pivots. These things can take time. It isn’t always a drastic, all-or-nothing decision to take your company into a wholly new direction. Cards to board games to electronic toys to projectors to video games actually makes a lot of sense. Sometimes the chain of innovation keeps moving for a while, and we as business owners need to keep up. Cards to video games isn’t weird at all, when viewed in context.

However, it’s worth noting that at various times throughout its history, Nintendo has also sold or manufactured vacuum cleaners and instant rice, and at one point they were selling taxi services and “love hotels.”

…That part is, admittedly, pretty strange.

Bad Pivot: Hooters

We saved the best for last. Yes, we are in fact discussing the notorious restaurant chain Hooters, which has made a brand out of employing waitresses of a certain appearance, but it isn’t their restaurants that are in focus here – it’s a hilariously bad pivot that they attempted in the early 2000s, which flopped spectacularly.

If you had to guess what this bawdy restaurant chain decided to move into, you might think food delivery service, frozen food products at the grocery store, or even some kind of cross-over cooking entertainment content.

But you would be wrong. No, in 2003, Hooters launched an airline.

And, believe it or not, it did experience some success at first, but by 2006 the venture was defunct. Turns out that there is more to aviation, air traffic logistics, and aerospace engineering than in-flight meals and Hooters girls shadowing the stewardesses.

Hooters Air offered direct flights for a flat rate to a select number of destinations, which was an attractive offer to consumers, but they had some problems.

For one, the airline industry was still recovering from the fallout of 9/11, and a lot of people were still wary about flying too often. Also, there was increased competition in the low-fare space, which was an integral part of the Hooters Air value proposition. Add to this the rising price of jet fuel, changing regulations, and a brand image that likely alienated key demographics (such as families), and you have a disaster on your hands.

Hooters Air declared bankruptcy, citing a $40 million loss.

If there’s a lesson in Hooters Air, it’s probably this: Just because you can do something doesn’t mean that you should.

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