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Switching Gears: 6 Startups That Successfully Reinvented Themselves

Nicole Fallon

A big part of running a startup is knowing that change is inevitable. Market conditions, consumer demands, technologies and the economy could shift at any time, and entrepreneurs need to be ready to adapt — or be swallowed by the competition. But sometimes that adaptation requires you to fundamentally alter the business model you started with. Here's how six companies decided it was time for a change, and what they did to make a successful pivot.

When Phil Masiello started in 2013, he and his co-founder set out to take on the big national razor brands by offering razors of the same quality online, at a better price than in-store. At first, their price differential (up to 50 percent), convenient free shipping and money-back guarantee earned the favor of early customers. But soon, the big players began to drop their prices, which gave less of an edge. Masiello's startup was only retaining about half of its existing customers, but they weren't losing them to online competitors, he said — they were going back to the trusted national brands they'd used before.

The shift: Instead of trying to beat the industry giants at their own game, decided to join them. The company still sells its own line of shaving products (its Ultimate Shave brand) but they also carry and sell recognized brands like Gillette and Schick.

The result: Expanding the product offerings on has lowered acquisition costs, exposed the company to more customers and made organic search much more efficient, Masiello said.

"We are in a better position to compete because now we provide a total solution to the customer and multiple options," he said.

What they learned: "You always need to keep your eyes on the changing marketplace dynamics," Masiello said. "If you conceptualize a model that cannot change along with the changing world, you need to rethink your model."

Bright Funds

Bright Funds, an all-in-one platform for charitable giving, matching and volunteering, began its life as a consumer-focused offering. The company knew that social consciousness was a huge driving force among consumers, especially younger ones, who want to make a real difference in the world. Individuals could support causes that were important to them with a single donation through the platform's connections to high-impact projects and carefully researched nonprofits.

Because of the smaller sums individual donors tend to give, their impact is often limited. Bright Funds members and enterprise organizations began to approach the company about opening up its platform to business entities to power corporate- and employee-giving programs.

The shift: Larger-scale donations and the increased impact they would have presented too good an opportunity to pass up, so Bright Funds changed its focus to corporate donations and employee matching.

"We had the right technology to make the pivot without losing what we had already built," said Ty Walrod, CEO of Bright Funds. "By partnering with companies and empowering their employees to create meaningful, lasting change, there was an opportunity to be a larger-scale source of nonprofit funding."

Though the addition of a B2B solution took a significant investment of time and resources, Walrod said it has been worth it to meet the needs of companies and charity-minded employees that are looking for an easy way to give.

The result: Walrod said Bright Funds has achieved early product/market fit with dozens of enterprise customers, all while maintaining its initial vision and mission.

What they learned. "Make sure the opportunity you are pivoting towards significantly outweighs the original market," Walrod said. "After that, don't straddle the fence. Make a decision to pivot, then go all out and capture that opportunity."

Celsius Holdings

Since Celsius Holdings Inc. was founded in 2004, health-conscious consumers have turned to the beverage company for a clean, natural energy drink to supplement their diet and exercise. But likemany companies in a highly competitive market, Celsius began to stagnate. It was not seeing revenue growth and the cash burn was growing exponentially. 

"As Einstein said, 'If you keep doing what you have always done, you will be what you have been,'" said Gerry David, CEO of Celsius. "It was time for change."

The shift: Rather than one major shift, the Celsius team enacted multiple changes to all different aspects of the business, all with the common goal of increasing revenue and profit. This involved some tough decisions in terms of staff and company culture, and not everyone was eager to embrace the changes, but David and his team knew these difficult choices had to be made.

"You had to step out of the 'vacuum' you were working in and see clearly through ... a third party's eyes what needed to be done," David said.

The result: The last three years have yielded record revenue and, David said, the company has had its first profitable quarters in 11 years. Celsius now has a solid team with aggressive goals for the future, he said.

What they learned: "Making the decision is the easiest part," David said. "Accepting the changes that need to be made and executing those changes are not always easy. Be prepared for extreme stress and long hours, but in the end it's worth it."


Back when TheSquareFoot first started, the real estate listing platform made its revenue from landlords and property managers who paid to have their available spaces listed. This model worked in Texas, but when the company expanded to the landlord-driven New York City market, they hit a wall: Manhattan property managers already had enough demand that they didn't need to pay for listings elsewhere.

TheSquareFoot also realized that the tenants who used its site needed more than just a listing search engine: They needed someone to guide them through the leasing process. It was a hard lesson to learn, but co-founder Aron Susman and his team finally accepted that their initial business model was flawed, and they needed to find a new approach.

The shift: TheSquareFoot transformed itself from a tech platform to a tech-enabled service business. Although the overall real estate industry remained unchanged, the company introduced a new vertical — the full-service real estate marketplace.

"Tenants were looking for knowledgeable brokers, so that's what we became," Susman told Business News Daily.

Though the company had to learn how to do this from the ground up, Susman said that the value of being a full-service marketplace was much greater than being a listings platform alone.

The result: Not only has TheSquareFoot introduced a new revenue stream with much greater potential, but now it's able to bridge the gap more thoroughly between potential tenants and the space they want.

"We're building more symbiotic relationships in the commercial real estate community," Susman said.

What they learned: "Before you make a pivot, consider why you're doing it. Are your intentions solely revenue-driven or is your new business model solving a problem? If you listen to the market and focus on the client experience, the revenue and opportunities will follow."


Logistics and transportation franchisor Unishippers spent 25 years growing its business and acquiring new franchisees. The model worked until the company sold all its geographic-based franchise territories.

"In order to stay competitive, the company would have to make a fundamental change to the franchise model," said Kevin Lathrop, president of Unishippers.

The shift: Unishippers realized that small-business transportation needs didn't always stay neatly within the assigned territory boundaries, so in 2012, the company introduced a new National Franchise model. Ultimately, the shift was about more than selling additional franchises, Lathrop said — it was about helping existing and future franchisees compete on a larger scale.

It wasn't easy to convince all franchisees that the new model would benefit everyone, but Lathrop said the trust that had been built between the corporate office and franchise owners over the years helped everyone feel supported during the transition.

The result:The new model has been in place for three years now and the company continues to grow in both size and revenue. Unishippers has sold more than 70 franchises to new owners since the shift, 12 of which are national franchises.

"The National Franchise model has opened up the Unishippers opportunity to many prospective franchisees that were once locked out due to a lack of available territory and investment size," Lathrop said.

What they learned: "Put yourselves in the shoes of the people who will be most affected by the change," Lathrop said. "Be sure to keep the lines of communication open after the transition and actively listen to the feedback, whether it be good or bad. Success ... comes from including all constituents in the implementation of major changes."


Entrepreneur Jon Loew was going through a period of severe medical difficulties when he developed the idea for KeepTree, a private video messaging platform that allows people to record and schedule videos for specific dates in the future. With its patented FutureSend technology, KeepTree users could record messages for loved ones to be delivered, often posthumously, on milestones like birthdays, graduations and weddings.

Loew and his team wanted to keep their business growing, so they began to think of other ways people might be able to use FutureSend. Their thoughts turned to gift-giving, and the impersonal nature of gifts that are purchased online and shipped directly to the recipient.

The shift: Although KeepTree remained intact, Loew channeled some of his resources into a new company called Vift, which uses the same technology to coordinate a video message that arrives when a gift does. Vift targets e-commerce retailers and offers its product as tool to drive sales, improve marketing and increase customer acquisition. This new focus on the B2B market has been a learning experience for Loew and his team, who are used to speaking about their technology from a consumer's perspective.

"Consumers get the emotional aspect of sharing a video that can be re-watched for years, but now we had to communicate to companies why integrating our service gave them a measurable competitive advantage," Loew said.

The result: Vift launched in late 2015 and has already been adopted by several retailers, who have reported higher revenues and an increase in gift purchases since integration, Loew said. They are preparing to launch with two major U.S. brands in the coming weeks, and global brands are considering now using Vift.

What they learned: "Focus on your strengths. It's a much smoother transition into new products, services or industries if you can take what you're good at and build from there."

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Nicole Fallon Member
Nicole received her Bachelor's degree in Media, Culture and Communication from New York University. She began freelancing for Business News Daily in 2010 and joined the team as a staff writer three years later. Nicole served as the site's managing editor until January 2018, and briefly ran's copy and production team. Follow her on Twitter.