Thoughts On...

The Pivot

Pivot is a term used to describe the ability for a business or product team to change course in response to feedback and certain market conditions.

It is extremely rare that your first idea or startup will be successful. It is usually the case that after a few tries you get closer to success. You increase your chances of success by undertaking customer development and identifying patters in the ways people interact with your product. A good team paired with a lean or agile philosophy is in the best position to pivot. This why you usually hear that investors will usually bet on an A team with a B idea versus a B team with an A idea. The A team will find ways to adapt and eventually turn their B idea into an A idea.

There are far too many examples of startups changing course. Many of which are documented in Jessica Livingston’s Founders at Work. However, I’d like to share some notable examples below.

Groupon the social shopping and group discount promotion platform started off as The Point. The Point is a community site that allows that helps individuals organize for collective action. Examples include getting everyone to petition for a cause or to collectively pool money together to support a cause. CEO Andrew Mason and his team quickly identified a popular use for The Point platform. The community would form groups for collective purchasing which would result in a discount. The team quickly realized that this would be a good opportunity to create a site that solely focused on discount group purchases. They realized there was a positive response and large uptake in the new solution and started diverting staff from working on The Point to working on Groupon. Nice pivot!

Other notable examples Flickr, PayPal and Youtube. Flickr was originally a video game that had a photo sharing component to it. Caterina Fake and team realized the photo sharing was the most popular part of the game and spun it off into Flickr.

Max Levchin started PayPal as a Palm Pilot cryptography and payment processing company. They built online component so that people could manage their Palm Pilot money transfers and send money via email. The majority of customers were enamoured by the online component and Max had pivoted to become an online payments company.

Youtube, started off as a hot or not with video. Chad Hurley and Steve Chen realized that their site had a broader application as a video sharing site and successfully repositioned the site.

Rarely will your 1st products be the best. The point is to get something out there, get feedback, identify usage patterns and use this information to build your successful product. Might take you have few tries. Go out there and build something great.