Pivoting for Growth: How Founders Spot Opportunities and Adapt

Summary

Build Your Business Podcast: Episode Summary

Title: Pivoting for Growth: How Founders Spot Opportunities and Adapt
Release Date: May 2, 2025
Hosts: Matt Reynolds & Chris Reynolds
Podcast: Build Your Business: From Fear to Freedom

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Introduction

In this insightful episode of the Build Your Business podcast, hosts Matt and Chris Reynolds delve into the crucial topic of pivoting in business. They explore when and how entrepreneurs should pivot to seize new opportunities, drawing from their extensive personal experiences and offering actionable strategies for sustained growth.

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Understanding Pivoting: When and How to Pivot

Matt initiates the discussion by defining what a pivot entails for business owners. He explains that pivoting isn't always a drastic 180-degree shift but often a subtle 10- to 25-degree adjustment in response to emerging opportunities and market changes.

Matt Reynolds [00:39]: "The most important thing for us is to go where the opportunity is and solve problems."

Chris echoes this sentiment, emphasizing the founder’s primary role in problem-solving to drive business success.

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Personal Experiences: Brightcore’s Transition from Banking to Insurance Software

Chris shares his journey with Brightcore, detailing the multiple pivots the company underwent. Initially focused on banking, Brightcore faced challenges as market demands evolved, prompting a strategic shift toward the insurance sector.

Chris Reynolds [02:05]: "We pivoted multiple times. First, our focus was entirely different before we settled on banking."

He recounts how their expertise in banking systems laid the groundwork for transitioning into insurance software—a market they found vastly underserved at the time.

Chris Reynolds [08:26]: "We built a quoting system for insurance agents, and it was a game-changer because online quoting didn't exist for small insurance carriers."

This pivot exemplifies recognizing and capitalizing on underserved markets, a critical element for successful business transformation.

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Personal Experiences: Matt’s Gym to Online Coaching

Matt recounts his experience of pivoting from running an in-person gym to establishing a thriving online coaching business. Initially, his gym attracted local clients in Springfield, Missouri, but the potential was limited by geographic constraints.

Matt Reynolds [17:02]: "I started online coaching, which expanded my client base from a local area to a global audience."

He highlights the importance of leveraging existing expertise and adapting services to meet broader market demands, a move that significantly increased his revenue and scalability.

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Key Strategies for Successful Pivoting

The Reynolds brothers outline several strategies essential for effective pivoting:

1. Identify Underserved Markets: Look for gaps where customer needs are not being met.

2. Capitalize on Existing Strengths: Use your current skills and resources to enter new markets.

3. Maintain Revenue Streams: Ensure that existing revenue sources remain stable while exploring new opportunities.

Chris Reynolds [28:36]: "Don't stop the thing that's driving revenue. Use it to support new ventures."

Matt adds that having multiple revenue streams can facilitate smoother transitions and reduce financial risks during pivoting.

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Importance of Metrics: NPS and Churn

Monitoring key performance indicators is vital in deciding whether to pivot:

• Net Promoter Score (NPS): Measures customer satisfaction and loyalty.
• Churn Rate: Tracks the percentage of customers who discontinue using your service.

Matt Reynolds [25:35]: "If your churn is 10% every 10 months, you have to replace a hundred percent of your clients—That's bad news."

They stress that low churn rates and high NPS scores indicate strong product-market fit, signaling a healthy business foundation for potential pivots.

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Adaptability: Early vs. Later Stages

The conversation highlights the differences in pivoting during the early versus later stages of a business:

• Early Stages: Easier to pivot with smaller teams, allowing for quick decision-making and implementation.

• Later Stages: Requires careful change management to align larger teams with new directions.

Matt Reynolds [38:38]: "When you're young, you can pivot quickly. As you grow, it becomes more about strategic expansion."

Chris emphasizes the importance of adaptability regardless of the business stage, noting that ongoing market changes necessitate continual reassessment and adjustment.

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Recommendations and Takeaways

To conclude, Matt and Chris offer valuable advice for entrepreneurs considering a pivot:

1. Assess the Opportunity: Ensure the new direction offers significant growth potential and aligns with your strengths.

2. Test the Waters: Validate the pivot through market research and pilot projects before full-scale implementation.

3. Maintain Flexibility: Be prepared to iterate and refine your approach based on feedback and market response.

Chris Reynolds [41:02]: "A good pivot opportunity is happening when the market has shifted and you can capitalize on it without abandoning your existing revenue streams."

Matt underscores the importance of not becoming overly attached to a failing idea, advocating for strategic pivots that enhance business sustainability and growth.

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Final Thoughts

This episode serves as a comprehensive guide for entrepreneurs navigating the complexities of business growth and adaptation. Through personal anecdotes and strategic insights, Matt and Chris Reynolds illustrate the art of pivoting effectively, ensuring long-term success and resilience in an ever-evolving market landscape.

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Notable Quotes:

• Matt Reynolds [00:39]: "The most important thing for us is to go where the opportunity is and solve problems."

• Chris Reynolds [08:26]: "We built a quoting system for insurance agents, and it was a game-changer because online quoting didn't exist for small insurance carriers."

• Matt Reynolds [17:02]: "I started online coaching, which expanded my client base from a local area to a global audience."

• Chris Reynolds [28:36]: "Don't stop the thing that's driving revenue. Use it to support new ventures."

• Matt Reynolds [25:35]: "If your churn is 10% every 10 months, you have to replace a hundred percent of your clients—That's bad news."

• Matt Reynolds [38:38]: "When you're young, you can pivot quickly. As you grow, it becomes more about strategic expansion."

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This detailed summary encapsulates the essence of the episode, providing listeners with a clear understanding of the hosts' perspectives on pivoting, supported by real-world examples and practical advice.

Transcript

[Chris Reynolds]

You're listening to the Build you'd business podcast, powered by Turnkey Coach, where we help business owners find freedom over fear.

[Matt Reynolds]

I'm Matt Reynolds.

[Chris Reynolds]

And I'm his brother Chris Reynolds.

[Matt Reynolds]

Join us as we help build your business and move from fear to freedom together. You're listening to another episode of the Build you'd business podcast where we take you from fear to freedom. We're your co host, I'm Matt Reynolds. It's my brother Chris. Hey man. Welcome to the show.

[Chris Reynolds]

Hey. Hey.

[Matt Reynolds]

We are going to dive right in as we always do. The topic today is when and how you should pivot. There are times in your business life, most of you, almost all of you, will think the business that you're starting is this is X and it actually turns into Y and it's not usually 180 degree turn, it's a 10 degree, 20 degree, 25 degree turn, sometimes it's 180 degree turn. And both of us have a lot of experience there. And so when should I pivot? If you're considering that, if you're thinking about, for whatever reason, you've got these big 30,000 foot view, things like landscape changes, technology changes, obviously AI is changing. So many things. Markets change. You know, macroeconomics have a massive impact on founders and entrepreneurs. The customers often need to evolve, like competition grows, whatever that thing is. There are reasons to pivot. But I think the most important thing for us in our experience, in our life of business ownership is that you go where the opportunity is and you go where the opportunity is to solve problems. We've said our number one job as founders is to solve people's problems as well as solve the problems of the business or the staff or whatever the thing is. And so I want to let you run with that a little bit, maybe some of your experience there.

[Chris Reynolds]

My first company, Brightcore, we pivoted multiple times. First of all, the company didn't start as a name called Brightcore. It was called something else completely. And we were focused on a different business. So we, when we started, I was actually working as a network administrator for a bunch of credit unions in Missouri. And you know, they asked us to do some moonlight work. We did it and then it kind of became a little bit of a thing. But it wasn't like a lot of a thing. It was a little bit of a thing.

[Matt Reynolds]

Right. It was still in the banking sector.

[Chris Reynolds]

Yeah, it's all banking. And I, I was, I knew that business. I'd been a, a teller and then moved my way up into Sort of running the network administration of. Of all of these credit unions. And so I thought this was the business that I'd be in. I could see a lot of opportunity there. And, you know, it looked good. The thing is, and this is such a. This is such a hard. Like, when I'm thinking about this from other people's perspective, I'm realizing, you know, like, how long do you stay focused on a thing and go like, it's going to turn good, it's going to turn good, it's going to turn good. Because there's some grind to being a founder that does look like that. Right. And there is some period of time that you have to be the one that says this is going to work when everybody else says it isn't and all of that. But when an opportunity shows up and you don't have a schedule full of work, basically, so you've got capacity. You have the opposite of the problem that you and I have right now. You have capacity. In that situation, you always take it. Okay, as long as if it's anywhere close to you, you take it.

[Matt Reynolds]

If it's in your wheelhouse and in your skill set. Yeah, we swing for the fences when the opportunity comes to hit the home run.

[Chris Reynolds]

Yeah. And the thing is, like, there are so many examples of why this is the case, but I do, like, baseball is a great example where. This is one where Bezos talks about, you know, in. In baseball, sometimes you get up and you can knock out, you know, a home run, you get one. Sometimes you get up and there's three guys on base and you grand slam. But in business, every so often, you stand up and you get to score 10,000. Right. And that's just. How many swings at the ball do you get?

[Matt Reynolds]

You also have lots of strikeouts. You also have lots of ground outs. You have ones that don't work, but you never get the opportunity to ever hit the home run or the grand Islam or the 10,000. If you don't get in the batter's box and swing for the fences, that is the greatest separator. And that comes back to that original point you were making, that founders have a grit to them. I am not going to give up grit. No matter how hard this is now, if it's still really hard and you're 10 years in and you are just grinding and it's not growing, you probably should have pivoted five years ago. So, Scott, there is a time limit to this.

[Chris Reynolds]

I agree. I agree.

[Matt Reynolds]

It's not gonna take off. You likely are not gonna Be a million dollar business overnight in your first month.

[Chris Reynolds]

Right.

[Matt Reynolds]

It's gonna take some hard work and there's gonna be a lot of learning process there. But as you've gone through this, when the opportunities come, they're not maybe exactly what you do. And you can take that time to think and consider like, you know what the opportunity here is actually way better than the opportunity that I have now.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

You gotta swing for the fences.

[Chris Reynolds]

Yeah. So let me actually tell you how it went down and that, that maybe that's the best way. Rather than pontificate, I'm just gonna say this is what happened and maybe that will help everybody get it. So I'm in the banking business. I've got tremendous amounts of expertise in the technological systems that surround the banking. My business partner, our cousin.

[Matt Reynolds]

Yep.

[Chris Reynolds]

And I were talking about this, Phil, and I was saying like, man, I don't know if there's enough customers here that are going to buy from us specifically at this point in time because the market for this looks like, first of all, we were very young and banks don't like very young by default. Sorry, banks, but you don't. And so we were probably didn't have the appeal that I would have today. Today I could walk into a bank, probably sell this exact same thing and be fine.

[Matt Reynolds]

But all couldn't then Internet times. And you guys were doing everything online.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

And that the biggest thing was, yeah.

[Chris Reynolds]

We were doing E statements. And I think, you know, there's just a ton of regulation around it and you know, if you wanted to get into big, bigger ones, it was going to be harder and harder to do. So we're talking about this. And I did two things. I went on the road for, call it three days. I visited every single one of the customers that were in that I was already supporting. Right. Part of my wheelhouse, already part of my world. And I talked to every one of them. I pitched the CEO, I explained what we were doing. I, I said, you know, we built this E Statement. It was an E Statement product. We built this E Statement product for this company and this other company and they're loving it and it's fast and it's saving them tons of money. Like surely you want this too. And I did the economics and explained it or whatever. They didn't want it. And I was like, we'd rather print.

[Matt Reynolds]

Out the statements and mail them to all of the our customers.

[Chris Reynolds]

Right. Actually their argument at that time was, was very simple. It was, we'll wait until our current providers provide it. So like you in the curve, you know, of potential customers. You have your first movers and then you have people that come on later. And then you've got these laggards that's in everything. Right?

[Matt Reynolds]

Right.

[Chris Reynolds]

What I found out was that especially in banking, there's a lot more of those. There's a lot more laggards that are around, right. Cause it's just a very.

[Matt Reynolds]

The chasm. There's a great book called Crossing the Chasm which talks about this very thing. The chasm in banking is really, really wide.

[Chris Reynolds]

Huge, huge cross over.

[Matt Reynolds]

That is very difficult in that industry.

[Chris Reynolds]

So I'm nervous about this, right? I'm like, oh, well, I guess maybe this is it. This is my first run at a business and we get one of the CEOs of one of the credit unions who did do the estatement product. And I owe her a debt of gratitude. She came to me and said, we, I am on a board of an insurance company, a very small insurance company in Nixon, Missouri, and they need some of your help. They think that you could, you could potentially provide some help. So I'm going to set up a meeting. And I was like, great, let's do it. Right? So step one, I was already feeling a little bit about the business one, right. And then somebody pitches me a big old fat ball and I'm like, right, I'm going to hit that as hard as I can.

[Matt Reynolds]

Yeah.

[Chris Reynolds]

So Phil and I show up to this place and we are ready to go. I mean, we have done everything we can do. We've done our homework. We've got everything lined out and we talk to these guys and it is a universe and a set of words I have never heard in my entire life.

[Matt Reynolds]

Right.

[Chris Reynolds]

Insurance at that point in time was just almost incomprehensible to me. Words that I had never, like, those were my dad's words. And like, I didn't, I didn't know those words. And so, you know, I'm looking at this and I'm going, well, this is a place where old, entrenched, old businesses have been surviving, right? So they had all this technology that was super old, Right. I love those businesses.

[Matt Reynolds]

Yeah. And they had a lot of cash.

[Chris Reynolds]

They had a ton of cash. Insurance companies job is to invest cash, right? That's what they do. And so every opportunity there looked right? And I, I just looked at it and said, well, I don't know anything about insurance, but I bet I can become an expert in three days. So I. Which you're going to hear this a lot I think from, from me as we go on in the podcast, there's a almost ridiculous optimism here that is obviously not right. Was I an expert in three days? No.

[Matt Reynolds]

No.

[Chris Reynolds]

Did I know, I don't know 10x what I knew the three days before? Yeah, I did. And I did that because I didn't stop, I just did it. I did it for an unreasonable amount of time that no one else would do.

[Matt Reynolds]

If we're going to get this contract, I've got to learn about this industry enough to be able to know what they actually need.

[Chris Reynolds]

Yeah, they got a three ring binder. Okay. This is like early in, in tech, web and everything else.

[Matt Reynolds]

Right? Right, Yep.

[Chris Reynolds]

Yeah, this would have been 2004. Okay, yeah, 2004. And so in 2004 I get this three ring binder that is literally this thick of their agency quoting manual, which is what they were giving for those of you listening.

[Matt Reynolds]

It's like two and a half, three.

[Chris Reynolds]

Inches thick, probably three inches almost.

[Matt Reynolds]

You're watching and you should be on YouTube. You can see that.

[Chris Reynolds]

So this thing is like, you know, this thing is enormous. And it's insurance stuff. So it's talking about rates, talking about rating tables, it's talking about, you know, why deductibles work the way they work in this particular context or whatever.

[Matt Reynolds]

I go back to the math, the equations to how do you take a. How you interpolate between 24 year old pay way more than 25 year old versus whatever. Right. You got it all that's in there.

[Chris Reynolds]

It's that stuff. And so I go home and I read it from COVID to cover and I don't stop. I remember I put my headphones on. I mean, I didn't have any kids or anything. I was like, wow, it's like 24 or something at that point in time. I was young and so I read this thing from COVID to cover. When I get done, I understand generally how this thing works. Right. There's gaps in my knowledge. I'm sure there's corner cases and all these things. But this customer was a very, they were very happy to help anytime I asked a question. They wanted to teach, I wanted to learn. So we went through this process and built a quoting system where that would allow their agents to quote insurance policies. Phil and I built it just the two of us. There were no additional employees. It's just us. Us. We built this thing in, I think it was like two months, something like that.

[Matt Reynolds]

And if I remember right, that insurance company prepaid for the work because you said this is going to take a ton of work and we don't have the cash but we do have the skill. So we need you to front load some of this to be able to provide.

[Chris Reynolds]

What we did was at that time and I would probably use a slightly more sophisticated model today but at that time we just estimated how long we thought it would take and we made them pay that up front as in their mind as 50% of the total cost. So we were going to make like a 50% margin on it if we could. This was an intro opportunity and that was, that was what we were going to do. And we'll talk more about this and we talk about sales later but just FYI, if this is your world and your, and your area when you get a big fat pitch and you are ready to try to move into a new market, you're going to, you're going to do some pricing games a little bit because you, you need to, need to get paid. Don't get paid nothing for sure but you may need to adjust. You may, you may, it may not be a loss but you may make no money on it. You need to land the labor, land the contract. You're trying to get customer number one say, love these guys. This was awesome.

[Matt Reynolds]

Why is that important specifically for the insurance industry? Because I know, I've heard you say this many, many times. This is similar to many other industries.

[Chris Reynolds]

Yeah. Unbelievably tight knit. The small insurance carrier market is everyone knows everyone like you. Like there is no advertising in the traditional sense.

[Matt Reynolds]

Like you're not going to do social media insurance companies. Like no, that's not the work.

[Chris Reynolds]

So you're going to go meet all these people is what you're going to do. You're going to be boots on the ground, you're going to go to their office, you're going to, you know, whatever you got to do.

[Matt Reynolds]

Which means you have to make customer number one really happy, super happy because they're the ones that are going to then brag about you. That organic product market fit comes and then you can start to raise your rates and make more money.

[Chris Reynolds]

You got it. So they would go brag about us at the conferences where they're the speakers. That's the other thing. Like we were picking out the people who were most well known within the industry. And anyway, so we take this pitch, right And I'm kind of not thinking all that much. We're making a little bit of money on, on the estatement product with the banks but not very much. Definitely not enough for Me to like I can't support myself on it or anything like that. It's not gonna happen. And so we do this first one, it's a pretty big check for us for the first time that we've had that kind of check and we hit it out of the park. They had agents all across the state of Missouri that started using it and going like this is fantastic, everybody should have this. Like at that point in time online quoting especially for small insurance carriers didn't exist. Like we did that. And so when that happened that spread like wildfire. Now our pricing model was wrong. We didn't know like there are a million things that did not yet become Bright Core, the company that eventually you know got picked up by PE and you know all the other stuff that has has happened in the years since. But the key here was there was an opportunity. I was in a business that wasn't going to be as successful. For whatever reason people would probably think banking and like small credit union market probably looks a lot like a small insurance market. But for whatever reason there was better technology in the banking world and there was worse technology in the small insurance carrier world. And because that revolution hadn't happened yet, we were there to take the pitch. We said yes, even though I didn't know anything about insurance. Now I think this is probably one of the most important things for listeners to understand because this is the thing I see the most out of people that don't, that don't like where they don't. It never clicks for them that nobody knows what they're doing in a brand new business. Sure. That is not a weird thing. You don't need to go get qualified first. You're going to get qualified as you go as long as you have the base foundational stuff. So for example, I wouldn't have done this without being a programmer.

[Matt Reynolds]

Yeah, you had to have the development skills. You were really the primary programmer. Phil, our cousin was the creative guy. Designer, he's designer guy. And the combination of the two knocked it out of the park.

[Chris Reynolds]

That's what happened. And then that spread and ultimately turned into a full on policy administration system that does everything for these companies.

[Matt Reynolds]

Yeah, essentially. Essentially like a full CRM quoting software everything. Everything for insurance companies. And specifically the thing that I think that you hit that no one else was able to do is you've got the whatever they call it, the big seven or whatever like major insurance companies, you get state farms in the all and the geicos and progressives. It was not them, it was all of These like mutuals, farmers mutuals. It was these what I, what, 2 to 20 million in premiums somewhere in.

[Chris Reynolds]

That ballpark in the early years. That's exactly right. The size of the market for us was really small. Of course that's grown over time now. But like that, that was a market that was completely underserved. I mean, almost not served right like that. That's another example of another little clue as you're trying to figure out. Like, should I do the pivot?

[Matt Reynolds]

Yep.

[Chris Reynolds]

It's like if you are talking about an underserved or almost zero served market and there is demand there and, and there's money. Right. Like they, they're able to pay, that's always critical. And the market you're currently in or otherwise known as the opportunity cost. If I leave the thing that I'm currently doing, what do I lose in that process? And I think that is it. Right. Like get all that stuff together. You got it.

[Matt Reynolds]

Yep. Similar story. And I'll, I'll go really fast through this because I've told this some. My first business was an in person gym. I didn't know how to run a gym. We had 30 guys coming to my garage. We rented a place for $500 a month. Now I live in Springfield, Missouri. What is my client pool? We are strength coaches. We are private sector strength coaches. So imagine like what you would think a Division 1 or professional strength coach does we do in the private sector. We do it better, by the way, because we do it with general population and not complete genetic freaks. And so that gym grew and grew well. But ultimately my client pool is within 15 minutes of the gym in Springfield, Missouri. And so my first pivot at the end of 2015. So I started that in 2008. Sold at the end of 15 and I pivoted into online coaching, but it was all by myself. And you were a big part of that. Because I remember when I sold the gym and I was kind of like, what am I going to do next? You asked me, well, you're already online coaching, but you're not advertising it at all. And how's it going? And I was like, yeah, I'm making $100,000 plus a year on online coaching. You're like, hold on, you haven't advertised this at all? You haven't put your name out there at all on this? Nope. And so you said, you've made enough money selling the business, selling the gym that I think you should push all the chips. You've got a while to live and try to see if the online thing will work. And so I did. Well now that takes my client pool from Springfield, Missouri to the whole world. And I had already established myself as a professional strongman and good power lifter and a good strength coach. And so that immediately, I mean like overnight I was making more money online than I was in person. And so I made a pretty significant pivot from in person to online. What I knew I wanted to do was provide all of the great things about an in person coaching session, but do it online. So not just programming, which is what everybody else was doing, but technique breakdown and all that sort of stuff. Well then of course I grew to the point that I couldn't take on any more clients and so then I had to start to take on more employees. And we've talked about this in previous episode about how to hire your first employee. We started to hire more coaches and we just continued to expand and we just crushed in the B2C market in online coaching, wrote all the systems and SOPs, we had all the things in place. We provided the best service on the planet. We still do. And so that was my first pivot.

[Chris Reynolds]

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[Matt Reynolds]

Hey everyone, it's Matt Reynolds and I've got exciting news. The audiobook version of my new book, Undoing Urgency is officially live. If you're a business owner who's tired of hustle culture and wants to build something sustainable, this book is absolutely for you. But also we've had scores of five star reviews from non business owners, normal everyday people who receive tremendous value from this book because it helped them stop drowning in urgency and focus on the things that really matter in their life. I share in the book the mindset, shifts and practical tools that help me escape the constant pressure of urgency and create a business that actually supports my life, not the other way around. You can grab the audiobook now@ undoingurgency.com or just search Undoing Urgency on Amazon or your favorite audiobook platform. Go check it out and let's keep building Better Now. One of the warning signs that we Mentioned a little bit was when you start to see over time, over say a couple years, declining sales or stagnant growth or you feel like you've picked all the low hanging fruit for the target demographic that you have, that is another time where you go, well, I don't have to like completely leave the thing that I have, but somehow I've got to pivot or branch out into something that is a bigger, total, addressable market dam.

[Chris Reynolds]

That's right.

[Matt Reynolds]

And so for us, we had built software for ourselves that was never going to go to the market. And we decided, well, there's a. The online coaching continues to grow and grow and grow. I believe personal training and in person coaching and gyms are going to continue to shrink. I certainly think online coaching that is selling programs and that's all they do is going to die because AI does that. And so we had this way of coaching that created trust with our clients and they never left. And the churn was really low. And so, so we started to license out that software into the B2B market, continuing to provide the service in the B2C. Same business, right, still owned by Barbelogic. And you've got a B2C line and you've got a B2B line. And so that was another pivot for us. And so, and that pivot's been pretty big because we use you guys quite a bit. Is that the development cost of building your own software not just for you, but now for the grand market? And one of the things you guys did well that I think the reason that there was a need in the insurance industry with these smaller, smaller insurance companies was that I think other programming companies, development companies thought that, well, we're just going to have to rewrite new software for each one of these little companies. And you guys figured out how to essentially white label and make minor tweaks without major cost and get it out to everybody. And so we've been able to do the same thing with Turnkey Coach with our software. And so we've pivoted as well. And part of that is because we started to see like we were up and to the right in the B2C market for a long time. And then it started to slow down. There's kind of an asymptotic line and it kind of stagnates a little bit, plateaus a little bit. You're like, okay, so there's a thousand people out there that want our B2C service, but there are hundreds of thousands of trainers and coaches who could utilize this software.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

And we could license out that software to those coaches. And so that's one of the reasons we pivoted. The other reasons that are other warning signs, like, if your clients aren't happy, our NPS scores are off the charts. So that's not an issue for us.

[Chris Reynolds]

Again, by the way, that's a big one. But I think one of the things to recognize is if you aren't able to service your customers in a way where they are, like, glowingly happy, it's either the wrong business for you or it's just not right. Like, correct. That will never last. Right. You need to be able to deliver a ton of happiness to them.

[Matt Reynolds]

You know that pretty quick.

[Chris Reynolds]

You do.

[Matt Reynolds]

So you know that for us, we collect from both current clients and canceling clients. NPS scores. So Net promoter scores. If you don't know what that is, just look it up and we'll look at the details. Churn. Churn is a lagging metric, but a very quickly lagging metric. Like, you know how many of your clients churn last month on the first day of the next month?

[Chris Reynolds]

Yeah.

[Matt Reynolds]

And if your churn is 10 or 12%. If it's 10% every 10 months, you have to replace a hundred percent of your clients.

[Chris Reynolds]

That's bad news.

[Matt Reynolds]

If Your churn is 3% or 2.5% or 1.9%, you're golden.

[Chris Reynolds]

Yep.

[Matt Reynolds]

Right. So now. So Churn and NPS is a big. We also use a customer happiness index sort of thing. It's a little bit deeper for clients who've been with us a little longer. And. But you'll know with if your customers are happy. And by the way, if they're not happy, they're going to be emailing you anyway and they're going to be complaining. And so if customer. If you cannot serve the customer. Well, that's another good reason to pivot. If there's major market changes in technologies. Again, in online coaching, if you sell programs, if you sell a temp. I can't. I've done a bunch of trade shows over the last few months. The number of coaches I've talked to that are still programming their clients on Google Sheets is astounding.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

And I'm like, I don't understand that at all. And so then the crossover, which we'll do a podcast on this in the future, is on change management. They're just like, I've just used spreadsheets for so long.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

Moving to a software is just too scary and looks like too much work to do. But the reality is, is that if you're stuck in that and the market has changed so that you're writing templates, but now AI can write templates better than you can, then your version of the industry is dead or dying quickly. Right.

[Chris Reynolds]

It's on its way. Right. And I feel like a lot of things that happen here are just a question of when this happens and it will happen. It has happened. Certainly with AI, you have time, you have a little time, you don't have a ton of time.

[Matt Reynolds]

Yep.

[Chris Reynolds]

You should be pretty early in that process.

[Matt Reynolds]

Yep. Yeah. So then I think the next thing is, like, when it comes time to pivot, some of this depends on how big of a staff you have. If it's just you or just you and one or two others, it's a lot easier to get everybody on board because you can sit in a room with three people. But if you have to strategically clarify and help a staff of 20 or more why we are pivoting this way, that becomes difficult. And it takes some time to make sure that the messaging is correct, the messaging is heartfelt, and it's transparent, and it's not too scary. There's change management for them as well. Oh, we're not doing just B2C anymore. We're adding B2B. Like, that's a whole nother change. Or like, oh, we're not just doing banking software anymore. We're doing insurance software. There's change management there. Change management just means people hate change. And so you have to manage the fact that they hate change. And you have to help walk them through that step by step. And so being very clear in the strategy of where you're going and how you're going to get there, I think is incredibly important. And so what are some other major strategies that you guys have used in the pivoting from business to business?

[Chris Reynolds]

The biggest one is don't. What you did, I feel like, is such a good example of don't stop the thing that's driving revenue.

[Matt Reynolds]

Right.

[Chris Reynolds]

Like, you. Like, that's a different type of pivot. I. I almost classify pivots a bit differently. Like, early in your company's history, you're supposed to pivot. Like, that's normal stuff. And. And because of what you just said, there's one founder, there's two founders, like, whatever. Like, you can move super fast. Like, you're talking about this over co, and then it's done, right?

[Matt Reynolds]

Yep.

[Chris Reynolds]

When the company grows, it's a strategic expansion in some ways. Right. And that's different than What I would think of as like an early founder led pivot. When you do those communication becomes an enormous deal. What I think really has to happen is make sure in that type of context that you figured out whether or not either the original business has stagnated or whether it is just like that's the size of the market. Sometimes that's what you find. Like, guess what the size of the market is this. Okay, cool. But that's not. I'm not satisfied as a founder at that size. So I want to do some more stuff. I want to grow this thing to be bigger. And we're going to get into 10 tangential markets or markets that are very similar to the market that we're currently in. Adjacent and adjacent markets, whatever. I think that's a good play because you can use your own expertise already without growing new expertise. In the story that I told originally, I had to learn learn insurance. And some people may say, well, insurance and banking is both finance. That's true. I kind of had some background in finance. I can tell you right now that the banking background did nothing for me for the insurance side, like I needed to learn that business.

[Matt Reynolds]

Except you were able to continue to cash the checks.

[Chris Reynolds]

That's right.

[Matt Reynolds]

From the banking software.

[Chris Reynolds]

Correct.

[Matt Reynolds]

From the network administrator job. And how much crossover, how long did you do both? It wasn't that long. Six months or something.

[Chris Reynolds]

I think the Estatements product kind of stuck around for about a year when basically we discontinued it because we had too much work, basically. So we were just like, we can't. I can't keep supporting this thing. So I ended up kind of just giving it to the customers and letting them, letting them handle it. But the reason I did that was we were out of capacity. Like Phil and I had no more time. We were working around the clock to get this thing done. Which is also another signal that you have picked the right market. Right. You have found a market that is so hungry for food. And you're the guy out there selling food.

[Matt Reynolds]

Andrew says, my COO says, who is the one that helps really run our software? He says he knows when he gets up on Monday morning and he looks at his calendar and it's nothing but sales calls all week long. Then we're doing something right.

[Chris Reynolds]

You hit it.

[Matt Reynolds]

Then we hit product market fit.

[Chris Reynolds]

Yep.

[Matt Reynolds]

And so that's. That's it. Yeah. And now it. That also comes back to a previous episode of like, often unsustainable overworkedness and isolation because you're doing 10 sales calls a day. But for A short period of time, you're growing that company. Now, if you had taken everything that you did with the bank and when the opportunity came for the insurance, you shut down all of the banking stuff, I wouldn't call that a pivot. I just call that a new business. Now, you may have stayed under the same business name, llc, whatever, but ultimately that's the new business when you are able to continue. And this also comes back to it, as we've talked about in the personal life. If you have a day job that pays your bills and pays your living expenses, and as you start your startup, it starts to make money, but you don't live off that money. You don't raise your cost of living. You continue to just live off the day job and bank the money or reinvest the money in the new startup. The day will come when that money outpaces or crosses over what the day job is. It's actually the same in business. The day came when you were making more money in the insurance industry than you were in the banking industry. And that's how you knew it was time to, like, now I can shut that thing down. For us, our B2C business is now such a wonderful alpha tester, beta tester of the software changes that we're making that we tested out with our internal team first, which is, you know, between coaches and clients. I mean, we're talking about a thousand people and see what their feedback is. And then pretty quickly we can push it out to the market rather than just pushing it straight out to the market. So we have an opportunity that we are also, you know, we are coaches and clients ourselves, building software for coaches and clients. And so we're able to do that now. What paid for the development of the B2B software for us, one first and primary was the B2C business.

[Chris Reynolds]

That's right.

[Matt Reynolds]

Because it was a flagship product that was successful and was profitable. And then number two, we got lucky and we started landing military contracts that also paid for the development. So now what you're doing is you're using other revenue streams within the same business. Not I own the car wash and the, you know, and the Laundromat and all. And I think all those are great businesses and do it.

[Chris Reynolds]

That's a holding company.

[Matt Reynolds]

That's a whole different thing.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

So we took the profits from the products and services we already had to help build out the software that we needed. And then we also picked up the military and that helped do that. And then that really helped build that development of that Software so that we could take it to the B2B market. So, like you said, it doesn't feel like a massive pivot to us. It feels more like an expansion of what we have already been doing. We've sort of, and I say this very humbly, and knowing that we'll never be fully satisfied, we have essentially perfected online coaching. Now what we have to do is teach the rest of the world how to do it the way we do it. They don't have to coach the same lifts or sets and reps or things like that. But I'm talking about the system. The workflow, the efficiency in the software is the thing that everybody that starts using it comes back and says, oh, my God, you're saved. You've literally saved me. 2, 3, 4 hours a day, schedules full sales calls all day. 99% of the sales calls, they register on the call. Now we have product market fit. Now we have a flagship product that may just plateau and just be like, across the board, like, fine. But the B2B thing continues to go up and to the right.

[Chris Reynolds]

Yeah, that's it. Right. The whole concept here is when you find this as an opportunity, you take it. Right? Like there. There are places where you're not going to get that many more shots on goal, and you want to make sure that you take them. I realize there's a lot in that that is judgment, right. Like, what is a good opportunity versus just a crappy opportunity that somebody's throwing at you, Right. Like some random thing. And you have to. You have to exercise good judgment here to determine, am I just chasing something because it's different and I'm burned out and bored with the thing that I'm currently doing, or am I pursuing this because it is a real solid opportunity? And the thing is, as a founder, and especially if you are supporting yourself and your family and maybe other families on this, which you probably are probably pretty tuned in to, like, what's a good one versus not, right? Because, like, the risk is very high if you mess that up. But where you can have the business do what your business does, Matt. Where you've got a business that is the consumer of the product that you are creating, Right. That is the best possible opportunity that you could be in that. Like, do that every time I do.

[Matt Reynolds]

Because I don't have to test it with customers, Right. I get to test it with my own staff and my own clients who have been with us for many, many years and aren't going to leave.

[Chris Reynolds]

Yep.

[Matt Reynolds]

So we roll out a new feature. Do you like it? Do you not? I like this. I don't like this. Dev team jumps on, makes the quick changes. Oh, this is so much better. This is genius. Boom. Push out to the market.

[Chris Reynolds]

That's it.

[Matt Reynolds]

We can do that. Right. As opposed to having to go. And I think you told me like one of the things you never did was you never owned a small, a small insurance mutual.

[Chris Reynolds]

That's definitely something that if I would have stayed in the business longer, that's what we would have done it. We would have, we would have picked off a really small one so that.

[Matt Reynolds]

You knew you were building software for you first and that would carry over then to the rest of the market.

[Chris Reynolds]

I always wanted to be able to consume our own product because I. Here, here's the thing is the reason why you crave that as a founder, you need to be so close to your customers that you know already what it is that they're going to need before they maybe. Maybe before they tell you.

[Matt Reynolds]

Before they know.

[Chris Reynolds]

Right?

[Matt Reynolds]

Yeah, sure.

[Chris Reynolds]

And the only way that I could know that in that business is if I was literally using my own product on a regular basis. Figuring out where the bump are, figure out where the pain points are.

[Matt Reynolds]

Right.

[Chris Reynolds]

You never know that better than when you are the one consuming the product. And now you've got all the power to solve the problem. You have all the inputs you need from the business that's doing the consuming and then you have all the power to make the change because you own the business. That's the one that's serving the other one. Right. So it's the perfect chain to make a incredible product.

[Matt Reynolds]

Yep. Yes. The opposite of the drug dealer mentality. Right, the drug dealer. The rule is the drug dealer never uses their own product in business. If at all possible, you should always your own product, you should need it. You need to see where the speed bumps are and the roadblocks and all the things. Okay, let's tie this up. One of the things that's important, I think is adaptability. And we've talked about this a lot. If you are listening to this and you are a young early 20s entrepreneur, you don't have a family yet, the ability to be nimble. Let's say you don't have any employees or you were like you and Phil were, there's two of you, you could be very nimble and you can pivot on a dime as you get bigger. And Brightcore pivoted as it got bigger several times and we've pivoted. It actually has to look more. One, it takes more time, and two, it looks more like expansion than pivot.

[Chris Reynolds]

That's right.

[Matt Reynolds]

So you guys were actually able to just like, truly pivot, whereas for us, we expanded and just tweaked by 5% or whatever at a time as the business gets bigger. So you have the opportunity when you're young. And it's. It's one of the advantages you have over the bigger businesses is that you can pivot very quickly, whereas we can't.

[Chris Reynolds]

And I would say, you know, when it's just maybe you and another founder, or let's just say that the group is smaller than 5, probably it's like 5 or less or something. The other thing to remember is you massively increase your probability of success by making these businesses that are cash flow businesses. We've talked about this before because you have infinite pivots, right? You literally have infinite pivots. Like, the risk probably seems high when you're doing it, but it's not high because what you're actually saying is, I'm already making money over here. We're already good. I can grind it out and make money. The market's maybe not that big, but we know that we can do it. When you make a pivot and you've been making money, you're not living on investor money. You can make a pivot and just end up there again. Right. Sort of surfacing your own money.

[Matt Reynolds]

Even if you pivot almost completely away from what was original, the only thing lost is the time spent on the original business. Right. But there's always still so many lessons learned from a leadership capacity and a founder capacity. So you don't want to get yourself pot committed, I think, which is to take it from baseball to poker, where you're like, well, I keep putting money into the pot, so now I'm pot committed. Even though I know before the turn comes out or before the river comes out on Texas hold'em, I know I'm behind. Get out or change, it's okay to make that pivot. You don't feel like, well, I've just given them the last year of my life or 18 months of my life or 2 years of my life to this thing. And now it feels like the opportunity is actually really here. Especially if that's in an adjacent industry where you have capacity and you have skill set. Just make the pivot. Don't sit there and be the steel industry of the seventies in the steel belt who said, like, it's coming back, it's coming back, and it comes Back. It didn't come back.

[Chris Reynolds]

Yeah.

[Matt Reynolds]

Right. And so I think that's really important. All right, Any closing thoughts before we wrap it up? Takeaways for these pivots?

[Chris Reynolds]

Yeah, I just think the primary thing that you will struggle with as our listener will be, am I chasing something that. Because I'm bored with this other thing or because it's not.

[Matt Reynolds]

Yeah.

[Chris Reynolds]

And. And that is going to be. That's hard. Right. There is a lot of like, grind for a while and make sure that the, the market is there and doing the things it needs to do. A good pivot opportunity is happening when the market has shifted and you actually have a, you can go, you can keep doing the old thing. Right. So a pivot. A pivot is very rarely. We shut down a move just like we talked about. Instead, you need to know, do I love this opportunity so much that the amount that I'm currently working on the business is going to stay the same and I'm going to work extra on this new pivot thing to make sure that it's good to test the water a bit before we move into this next one. Like, if you're going to work that hard at it, it means the opportunity is probably pretty good. And you can test the water and then make the move.

[Matt Reynolds]

But the opportunity you should be able to see as a founder, the light of the end of the tunnel is I work the same number of hours or less and make significantly more money.

[Chris Reynolds]

When I, when I get fully switched over. That's exactly right.

[Matt Reynolds]

And I think that, I think barrier.

[Chris Reynolds]

To get to it, that I'm going to work extra to get there is the thing that should keep you from being like, I'm just chasing waterfalls or whatever.

[Matt Reynolds]

Like, that's right.

[Chris Reynolds]

Right. Don't do that.

[Matt Reynolds]

Exactly. And this is the right. But the opposite of this problem is a serial entrepreneur who says, anytime somebody says serial entrepreneur to me, and I'm sure there's some good ones out there, certainly Elon is a good one. But when I meet a 22 year old kid fresh out of college and I say, what do you do? He's like, I'm a serial entrepreneur. I'm like, cool, what businesses have you built? And then he's like, well, here's my ideas. Oh, no, you're not an entrepreneur at all. You're an idea guy.

[Chris Reynolds]

You're an idea guy.

[Matt Reynolds]

That's it. And you're trying to sell an idea. So. So the one place that I have learned a ton about this, that I. I would love to send listeners to is the founders podcast with David Sinra, which is an overview of biographies of the greatest founders of all time. All of them have incredible stories about pivots. Almost all of them.

[Chris Reynolds]

Yeah, that's true.

[Matt Reynolds]

Right? So we love like John D. Rockefeller. He was not a well liked person at the time. You think about this guy who built, made all this money in oil, mostly made his money lighting street lamps. And then electricity comes in and you're like, you can't light street lamps anymore because we have electricity. But at the same time the automobile explodes. It was like, oh, I could pivot there. I can pivot from street lamps to automobiles. Still oil. Right. And so all of these guys have these stories. So one read biographies and two, listen to founders podcasts. Those are great places to hear stories of others who have done it. Requires a significant amount of grit to not give up when the times are hard. But the payoff is tremendous if you do it well.

[Chris Reynolds]

And what this is, is pattern matching. It's actually good for you as a founder to do this. You should take the time to do it. It's a good opportunity. We've talked about this before. To put your headphones on and go for a walk. Listen to a podcast.

[Matt Reynolds]

Thinking time.

[Chris Reynolds]

If you want a recommendation on the longest I've ever even heard of someone sticking with an idea that was failing while they were getting punched in the face and then it later got successful, listen to the. One of the founders podcasts around Dyson.

[Matt Reynolds]

I was gonna say it has to be Dyson.

[Chris Reynolds]

Dyson.

[Matt Reynolds]

Dyson's amazing.

[Chris Reynolds]

I couldn't do it and I did it.

[Matt Reynolds]

He did it.

[Chris Reynolds]

He did it. He did it.

[Matt Reynolds]

He knew it was gonna work.

[Chris Reynolds]

Brutal.

[Matt Reynolds]

And it worked.

[Chris Reynolds]

Brutal.

[Matt Reynolds]

So there you go. There's another episode of the build your business podcast. Thank you so much for listening. We'd love a five star review on Apple podcasts or wherever you listen to our podcast. You should be listening to it and watching it on YouTube. We would love a like and subscribe or even hit that little bell so that you get notifications so that it comes up every time you pull up YouTube when a new episode comes out on Friday. Thank you so much for listening and we'll catch you guys next Friday.