Startups: It’s O.K. to Change Your Mind / Product
I’m not a football “guy”. Actually, the only thing I like about footballs are the inspirational movies, great quotes, and cheerleaders (yep, guilty). However, here’s a startup analogy involving football: having the ball, taking a hit, rolling [bouncing] (without touching your knee to the ground) and continuing your charge forward! That’s the mental movie I see when I think about startups.
Run. Run. Hit. Run. Hit. Hit. Run -> End Zone!
We get hit - stuff doesn’t work out - yet we keep pushing forward. The only time you stop is if you give up (i.e. knee touches the ground).
Note: Personal story about Flowtown below
Pivots
A product pivot is like taking a hit and changing directions. The idea is better described here using a basketball analogy - but I think it’s more than that. To me, It’s the equivelent of taking a hit (no product traction) and spinning (product pivot) to find another path at the end-zone (product market fit).
Customers Development
Created by Steve Blank allows startups to follow a methodology that should, in essence, reduce the amounts of time “hits” you need to take, to reach the end-zone (touchdown! [insert dance]).
Different Types of “Pivots”
I believe 2 types of “pivots” exist. Customer Development (feedback) led pivots, and Vision (management) led pivots. Arguably, the vision led pivots may have started by customer feedback - but it’s not so obvious on the outside. [again, I have no proof, other then what I have read].
Here are some examples:
Customer Development Pivots
- YouTube: Video Dating Site -> Video Site (/w Embed Feature)
- Flickr: Massive Multiplayer Online Game -> Photos (USA Today Story)
- Rapleaf: Reputation Engine -> Customer Insight for Marketers
- Imeem:
- Nintendo: Trading cards -> Electronic games
- Spokeo.com (feed reader for your friend to people search) http://www.techcrunch.com/tag/spokeo/
- tailrank -> spinn3r (consumer media company to b2b service provider)
Vision Led Pivots
- PotBelly Sandwich Company (Antique shop -> Sandwiches)
- TwitVid.com (Read below)
- Wikipedia: Life begans as nupedia, and vison led pivot to wikipedia.
- Berkshire Hathaway: Cotton mills to investments
- Pixar: Pixar Image Computer -> Animation Studio
- Apple: macs -> ipods -> iphones -> itablets (? I liked it, not 100% sure)
- .. and many tech startups {You know who you are, yes I’m talking about you. It’s all good - but recognize}
If you still want more, read: Surprising first products of 14 famous companies
Story: www.OneRiot.com
Two years ago, they launched as Med.ium - a browser plugin to allow you to view what your friends where navigating online in realtime - which they eventually pivoted to a real time search engine.
Listen to Kimbal Musk (Founder) talk about the pivot (@kimbal)
Story: www.twitvid.com
Adil Lalani (Co-Founder) via email: “Pivoting is something we’ve been doing for quite some time (although we never called it a “pivot”). So one example is my company: EatLime.com switching to TwitVid.com. Here’s an article that briefly talks about our switch to twitvid: Twitter Hype Trickle-Down Provides Boost To TwitVid ( btw that valuation in the article is old. )”
Our Pivot: Flowtown.com
We thought we were listening to the market, but we realized there was a HUGE difference between what we thought people wanted, and what they were willing to $ pay for (= how we measure traction). We had 700+ registered accounts, however, only a small percent converted to paid accounts (very small).
Long story short. We threw out 3.5 months of code (video), built a new solution www.flowtown.com and brought it to market (pivot).
The results: 11,063.35% increase in revenue in our first month. That should tell you how bad it was before ;-).
Conclusion
- Decide what traction means to you.
- Do Customer Development (CD) (or whatever you choose to call it)
- Don’t be afraid to change directions (a.k.a pivot)
- Don’t drop your knee [quit]. Ever!
P.S. For the record, doing a pivot doesn’t always work. Just saying.
P.P.S Thanks to the following peeps who provided insight to the examples above.
Jon Boutelle, Co-Founder of Slideshare.net
Jason Calacainis, Founder of Mahalo + ThisWeekInStartups.com
James Sherrett, Founder & CEO AdHack
Jon Bischke, Founder of EduFire
Marcus Nelson, Salesforce.com
Richard Mordini - Javaelin VP
Helen Zhu, Founder of Chictopia
Christiaan Vorkink - True Ventures
Jonathan Abrams, Founder of Socializr, Friendster
John Anderson, CEO of GroupCard
Joshua Brewer, SocialCast.com
Garry Tan, Co-Founder of Posterous
Arjun Dev Arora, Founder of ReTargeter
Rodney Carvalho, Founder of ScrumNinja
Julien Genestoux, Founder of SuperFeedr
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11 Responses for "Startups: It’s O.K. to Change Your Mind / Product"
I guarantee that I’ve got typos and information that might not be correct. If so, let me know via email or comments and I’ll do my best to update.
“Actually, the only thing I like about footballs are the inpirational movies,…” Did you mean inspirational movies? What’s your email, I’ll email it next time.
One of the biggest difficulties is also the psychological, which you don’t touch on in much detail. Not everyone’s as scientific as you
This can manifest itself in a number of ways. One is an entrepreneur who refuses to deviate from his initial idea, preventing finding optimum revenue because he stubbornly believes in his first concept. The other is refusing to quit, long past the time you should have and then never making it out. There are many more.
Another example of a pivot is Patagonia, started as a climbing equipment company, moved into clothing. Plus, it’s one of the most environmentally sound out there, so inevitably I like it.
Dan,
As you and I discussed at F4F we’re just diving headlong into a pivot right now that’s vision/mgmt-led. This will be my second such pivot and the first one was a tremendous success (back in 97-98) so I’m hoping I haven’t forgotten how to get it done. Jury is still out…
But pivoting is a great alternative to waking up on your back looking up at a cliff.
This is a general issue with all businesses in a world of creative destruction — a term which Joseph Schumpeter popularized nearly a century ago. One way to think of strategic business management is “decision making under uncertainty”. In that context, your job as a leader is to constantly develop and test hypothesis that help dispel the uncertainty around what the market will reward.
A very recent example is EA, which is laying off lots of people even as it pivots into social gaming with the Playfish acquisition. The perceived-safe course would have been to stay on the pre-existing course while the market evolves, but I’m impressed that the leadership of EA is bold enough to so dramatically pivot a very large organization — a much harder task than pivoting a startup.
@Raj Creative Destruction <- I love it. That concept also triggers a conversation I was with a friend who asked me how we wanted to position Flowtown in the market (re: segment / vertical). His suggestion was “you need to do it in a way that if your closest competitor did this, it would cannibalize their business”. I’m not sure if that falls into the same ideas as Creative Destruction, but it certainly reminds me of the Innovators Dilemma and the importance to spin out innovation from the “mother ship” - especially when it challenges the current business model.
EA is a great example, and you’re right - kudos to the leadership team for making such a hard decision.
Great post. So many examples. This is really key. I don’t know why so many startups feel bad about changing direction. In terms of customer dev, it is key. So much so, that for I almost think it should be the 1st thing seed programs do. Before you write a line of code, work up some wireframes and a pitch deck and go talk to people. You do need to have vision. The market won’t tell you everything. But if you want to be lean and capital efficient, you need early allignment with what the market wants and will pay for.
If you write a piece on hi-tech Canadians working stateside or startups to watch on the East Coast I’m going to litigate : )
Agree that the football analogy is stronger than using basketball. The thing about football is that you use the kinetic energy of the person hitting you to help you spin. You don’t try to avoid the contact, merely re-direct it.
Nice work.
Marc, Thanks! I’ve heard that Paul Graham starts each Y-Combinator class by asking if anyone wants to change their mind / product / idea. There’s many examples of companies mid-stream (within YC) that “pivot”.
I also agree with starting with a powerpoint deck. Steve Blanks recent post amplifies this (different context though).
“Lessons Learned” – A New Type of Venture Capital Pitch
http://steveblank.com/2009/11/12/“lessons-learned”-–-a-new-type-of-vc-pitch/
DM
[...] with the Lean Startup and Minimum Viable Product (MVP) theories evangelized by Eric Ries and a slew of others. A basic understanding involves stripping your grand idea down to a MVP, and [...]
As someone in the early days of his startup my goodness I can say that it’s essential to be flexible with your offerings. If I stuck exclusively to the ideas I had when I first conceived of my products I wouldn’t be making any money at all. Thanks so much for this article–it reminds me to stay flexible.
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