Feels the customer feedback flowing through him, a founder does. Sees the bank account shrinking. Pivots before too late it is.
I’ve been thinking lately about starting a blog called “If Yoda Were a VC.” But it’s probably a terrible idea, so to get it out of my system, I’m trying something different: I’m organizing an Xconomy event designed to help startup founders turn into pivot Jedis.
A pivot, of course, is what startups do when they figure out that their current product, service, or business model isn’t working, and they’ve still got some capital left to play with. There’s absolutely nothing wrong with this—in fact, knowing how to pivot is probably one of the most crucial skills for a startup to have.
To the real Yodas of the startup world—people like Steve Blank and Mike Maples—a startup is really nothing more than a machine for finding a viable business model. Which means that almost every startup is going to end up killing a lot of ideas before it finds the one that deserves to live. “Death is a natural part of life,” they would probably say (as Yoda does in Episode III). “Rejoice for those who transform into something new.”
The art and technique of the startup strategy shift will be the whole theme of Xconomy’s “The Power of the Pivot” event on December 4. It’s an afternoon event that will take place at PARC, the renowned R&D center in Palo Alto. Tickets are available starting today.
I’m extremely pleased that our keynote speaker for the event will be Steve Blank himself—the co-author of The Startup Owner’s Manual, the author of The Four Steps to the Epiphany, and one of the instigators of the National Science Foundation’s new I-Corps program for university-based entrepreneurs.
As Steve wrote in a recent blog post, “A founder’s skill is knowing how to recognize new patterns and pivot on a dime.” But not on every dime—there’s also some skill to knowing when not to pivot. In his talk, Steve will share some of the pivot stories he’s accumulated from his own days as an entrepreneur and from the thousands of startups he has advised over the years.
Also contributing to the program, and telling the stories of their own successful (and unsuccessful) pivots, will be the founders and CEOs of some great Silicon Valley startups. Here are the folks I’ve signed up so far:
* Rich Aberman, co-founder and chief operating officer at WePay
* Sunil Nagaraj, a senior associate at Bessemer Venture Partners who founded Triangulate, the creator of dating sites Wings and Datebuzz
* Will Price, the CEO of Flite
* Cheryl Yeoh, co-founder and CEO of Reclip.it.
And we’ll have more names to announce later. It’s no coincidence that these are all folks who’ve been featured in the pages of Xconomy: when a startup decides it’s time to reinvent its product, its business model, or both at once, it always makes for a dramatic business story.
After all, it takes a special combination of courage and vision to admit to yourself (and your investors) that you were wrong, throw out the product you’ve been building for months or years, and start over. “Great startups have the guts to take aggressive pivots,” Mike Maples said at a Founder Institute showcase event in 2010. “Those that have trouble are those that can iterate like crazy, but don’t know to what end—that didn’t have some higher-order purpose for existing as a company.”
The higher-order purpose is what keeps a startup focused through a pivot. Very few startups that attempt drastic, leap-of-faith transformations come out the other side with a winner—though, of course, there are exceptions that prove the rule (e.g., Stickybits’ transformation into Turntable.fm).
Maples’s partner at Floodgate Fund, Ann Miura-Ko, shared what I thought was a really smart definition of a pivot in an interview with Xconomy last year: “The whole concept of a pivot is to keep one foot grounded and move the other foot… A pivot, for me, is taking one component of your business model and changing it somehow. There will be ripple effects on the other parts, but it’s really just one element that’s changing. We talk about pricing pivots, product pivots, a lot of types of pivots. But if you are scrapping the entire thing, that’s not what I’m talking about.” In that case, Maples and Miura-Ko say, founders should probably just give the money back to their investors.
If you join us on December 4, young Padawan, I guarantee you’ll come away with new answers to questions like these:
* What’s the difference between a product pivot, a business model pivot, and a whole-company pivot?
* When is a pivot justified, and when is it just a “mulligan,” to use Mike Maples’ term?
* Can a startup pivot too frequently, or too many times?
* How can you tell if you’re one of the Living Dead—a company that needs to pivot, but is afraid to?
* Pivoting is stressful—how do you ride it out without succumbing to panic?
* Flexibility is great, but how do you hold on to your higher purpose through a pivot?
Of course, we’re assuming that attendees will bring a lot of their own experiences to the discussion—so we’ll also want to hear from you about your own pivot stories and strategies. Sign up for The Power of the Pivot now to get the early-bird rate. (And check out the discount available to startups less than three years old with 20 or fewer employees.)
We’re grateful to PARC for agreeing to host this event, and to Silicon Valley Bank for sponsoring it.
And, just to convince you that my original Yoda blog idea was bad, I’ll leave you with this instruction. “Try not to attend Xconomy’s pivot event. Do, or do not. There is no try.”
