How to pivot a business from X to Y to Z (ft. Reliance - O2C to telecom to technology)

1. Irrespective of core competencies, invest in sectors that are ripe for disruption. 

How to identify new opportunities ?

Observe the young generation - "Jio is a creation of the young, by the young & for the young"

How much to invest in new opportunities ?

Target such that 100% of company revenue comes from new businesses (that's pivoting)

In 2016, RIL planned to invest $55 billion till 2018, a sum equal to its current market cap, to expand capacity in petrochemicals, refining and establish the telecom business

2. Exceptional stakeholder management at the highest level of power.

Promise - Mr. Mukesh Ambani dedicated Reliance Jio to realising Prime Minister Narendra Modi’s vision for a digital India for 1.2 billion Indians. India is ranked 155th in mobile broadband Internet access among 230 countries and with the launch of Jio, India's rank will be among the top 10

& 

Execution - with eKYC, in a few weeks, any Jio customer carrying an Aadhaar card will be able to walk out of a Jio store with a working connection within 15 minutes. 

3. Do not settle until you have something that makes "customer fall in love" (Inspired by Amazon) that eventually disrupts incumbents.

FREE calls, FREE national roaming and cheaper Internet access will help it rapidly ramp up to 100 million users (Reference: Airtel, the market leader in 2016, had 256 million users)

Customer convenience: Users of other networks can switch to Jio from September 5 using mobile number portability (MNP). 

4. No limitations (Problem solving mindset)

Reliance wanted to popularize the 4G LTE technology but large majority of Indian in 2016 still used feature phones that lacked the technology. Moreover, large sections of society couldn't afford smartphones. Reliance killed both the birds with one stone by launching super-affordable 4G LTE smartphones under LYF brand. 

5. Have a clear vision for new business - For the successful working of a machine, all its major components must be identified & oiled well. In the pivot from O2C to telecom, the major 'Digital life' components for Jio were - 

A. Jio Network

B. Jio Devices

C. Jio Application & Content       

D. Jio Service Experience 

E. Jio Tariffs 

Smooth functioning of each pillar within itself and with others leads to successful realization of the business vision. 

6. Nurture Internal & External Partnerships - Wisdom is differentiating the agents to collaborate with (& to what extent) & agents to compete with.

Internal - 

• Reliance Retail combines with Jio services to provide e-commerce
• TV18 Broadcast, Hathway Cable & Datacom and Den network (all separate Reliance properties) merges to make Network18 media & Investments (Feb, 2020)

External - 

• Partnership with Viacom18 in Media & Entertainment  
• 87.6% stake in Fynd - connects brick & mortar stores with online stores & customers

7. One man's trash is another man's gold (Get the best deal for previous business venture) - 

Case in point A. In order to sell 20% stake to Aramco (one of largest company in world by revenue), Reliance focused on separating its O2C business & RIL turned free cash flow (FCF) positive in December 2019. Aim is to make Reliance debt free by March 2021. 

Case in point B. Jio-BP is a new joint venture company, held 51 per cent by RIL and 49 per cent by BP, that will assume ownership of RIL’s existing Indian fuel retail network and access its aviation fuel business. The deal is worth INR 7000 crores.

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