Pivoting

Key Questions

What is a pivot?
How do I know if I should pivot?
What leads to pivots?
How do I get the team to buy into a pivot?
When should we scale?
What are the risks of scaling too early? Too late?
What are the risks of scaling too fast? Too slow?
How do we scale?

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Steve Blank: Vision vs Hallucination – Founders and Pivots

(5 min read.) Steve goes through some common mistakes startup founders make when it comes to pivoting. He notes that what founders consider a vision often turns out to be a hallucination, and they tend to want immediate action, which they frequently call a pivot. Steve makes the point that a pivot should not serve as an excuse for the lack of a coherent strategy or impulse control. He offers tips to founders prone to confusing vision and hallucination, such as sitting on any new insights for a few days and finding people outside the company to brainstorm with.

Reid Hoffman: The Startup Pivot

(20 min read.) Reid dives into the topic of pivoting, arguing it is the rule rather than the exception. Noting that pivots are an integral part of the entrepreneurial process, he asserts that any startup aiming to be a long-term success will need to reinvent itself and pivot multiple times. According to Reid, the most important thing is decisiveness because a pivot requires a willingness to make fundamental changes, which may involve completely breaking with the past. His key point is that building a great company requires the boldness to acknowledge the need for pivoting, the ability to get the entire team on board, and a 100% commitment to the pivot.

Elad Gil: A Brief Guide to Startup Pivots (4 Types of Pivots)

(9 min read.) Elad, in this article, outlines four types of pivots for startups: (1) Market Pivot – Changing direction within the same market without new insights, often due to insufficient product/market fit. (2) Product Repositioning – Refining or focusing on successful aspects of an existing product, like Instagram’s focus on photos. (3) Internal Tool – Adapting tools created for internal use into standalone products, as seen with Slack and Yammer. (4) Complete Reinvention – Shifting to a completely new idea, which may involve restarting the company. Successful pivots require careful management of founders, employees, investors, and customer perceptions.

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Reid Hoffman: How to Scale a Magical Experience – 4 Lessons From Airbnb’s Brian Chesky

(7 min read.) Reid offers four lessons learned from a conversation with Airbnb co-founder Brian Chesky, who shares how his company won over customers and scaled to its present-day size. Acknowledging that almost every startup founder dreams big, Reid notes that in order to scale, they must first do things that don’t scale at all. He boils down the insights provided by Brian to the following four lessons for founders eager to scale: pay fervent attention to users, design a mind-blowing experience, create a magical experience and then figure out which part of it can scale, and take advantage of the time before you scale.

Reid Hoffman: How to Know When to Scale and How to Do It

(6 min of 33 min video.) Answering the question of how and when to scale, Reid explains the concept of blitzscaling and what underpins the decision to do it. He emphasizes that a startup should first resolve the product-market fit issue before it considers scaling. According to Reid, one part of the decision to scale is driven by a combination of offensive and defensive thinking, and the other involves determining how each key element (customer acquisition, revenue model, support model, etc.) is growing a company and how to get them to global scale relatively fast.

Christine Kim: Strategy at Scale: Designing and Scaling Uber Eats

(31 min listen.) Christine shares five lessons learned from her time at Uber, where she led the product team that launched and scaled Uber Eats. These valuable lessons, which are widely applicable to the product development process, are: start small, revisit old ideas, identify the “land grab” moment, be prepared to cut your losses, and keep it simple. Christine notes that her five-year run at Uber has ultimately taught her the importance of entrepreneurs embracing their own challenge stories and never getting too comfortable with success.

Steve Blank: Why Pivots Are Pivotal to Your Success

(3 min read.) Steve takes issue with a Cowboy Ventures analysis that concludes the vast majority of unicorn startups did not pivot. He argues that virtually all of them pivoted on some element of their business model and that pivots are vital for a startup. According to him, a pivot is not just changing the product; it is a substantive change to one or more of the nine business model canvas components. A key point he makes is that startups focused solely on product pivots limit their strategic choices.

Steve Blank & David Weiden: To Pivot or Not to Pivot and More

(28 min video.) In this video Steve Blank engages in a discussion with David Weiden, a partner at Khosla Ventures, about the concept of pivoting in startups. Steve underscores the significance of recognizing the necessity for a substantive change in a startup, termed as a pivot, before financial resources are depleted. He emphasizes the founder’s crucial role in foreseeing and adapting to such changes as a key determinant of success. Steve’s insights shed light on the proactive approach needed for founders to navigate the dynamic landscape of entrepreneurship effectively.

Lenny Rachitsky: How to Kickstart and Scale a Marketplace Business

(9 min read.) The article introduces a six-part playbook for kickstarting and scaling consumer businesses, developed through extensive research and interviews. It emphasizes paradigm shifts, brainstorming, and strategies employed by successful companies. These include solving personal problems, exemplified by Dropbox, Etsy and other successful startups. The text delves into founding stories, showcasing how solutions stemmed from personal experiences and needs. Key steps outlined include identifying specific audiences, crafting pitches, finding early adopters through non-scalable methods, iterating for retention, and building growth engines. The strategies are illustrated with examples from prominent companies like Uber, Tinder, and Twitter, highlighting the importance of passion and curiosity in entrepreneurial success.

Garry Tan: 6 Startup Growth Strategies From a Forbes Top VC

(8 min video.) Tan discusses essential strategies for startup growth, emphasizing the need to triple revenue for two years, then double it for three to achieve $100 million in annual revenue and an IPO. Key growth tactics include leveraging sales and marketing, focusing on PR for visibility, employing content marketing like OkCupid’s data-driven articles, and optimizing SEO, as Zapier did with connectors for cloud services. Tan also highlights the potential of Google ads and social media, noting the success of brands like Fenty and Aviation Gin. Strategic partnerships, such as Microsoft’s with IBM, are also crucial. Tan encourages founders to explore these methods to drive their startup’s growth.

Steven Cohn: When and How to Pivot Your Product Idea

(44 min video.) Cohn emphasizes the importance of pivots in startups, viewing them as essential strategy adjustments rather than failures. He shares insights from his startups, including BuyYourFriendADrink.com, which evolved through several pivots and merged with LivingSocial, and Validately, which shifted focus to UX researchers. At Winware AI, Cohn uses machine learning to provide product managers with actionable insights. He highlights the need for continuous learning and adaptability, likening his entrepreneurial journey to Rocky Balboa’s perseverance and resilience.

Hiten Shah: Three Types of Pivots

(17 min segment in 40 min video.) In the video, Hiten discusses the evolution of a document search tool initially designed for ease of finding and sharing documents. User feedback highlighted a crucial need for better access control, prompting a shift from document search to access management. He explains different types of pivots—problem, product, and customer—and stresses that pivots should be driven by customer insights and market opportunities. He emphasizes the importance of pricing research and emotional resilience during pivots, advising founders to confront discomfort in customer feedback to unlock significant growth.