Making the Turn – Leveraging a Pivot into Growth

I read a post today from Bijan (Spark Capital) that talks about how the progression of a startup is “hardly ever goes straight up and to the right”.  There are also statistics out there that the business models of approximately 80% of very successful startup companies have had some sort of pivot in their lifecycle. 

Couldn’t agree more. Why a pivot? And how can companies leverage a pivot in their model to accelerate growth?  


Why so many pivots?

Startups exist to solve problems in a new way. The “new” part of this means that more often than not, you are trying something that hasn’t been done before, with the goal of building something from nothing. You are often attempting to solve a problem that either is a new one (eg. a changing media landscape creates new challenges) or one that can be address in an innovative manner because of a changing environment (eg. new technol

ogies enable advances where they were not possible before – such as broadband internet penetration and or smartphone adoption enables an array of new solutions to existing problems).

Because of the “newness” of creating a startup, there are many questions for which you will not have answers. You have to be able to make assumptions based on as much data, advice, and instinct as you can muster from your team, advisors, investors etc. And you do your best to execute like hell from there.

But along the way, as you are in the guts of building your solution to the problem that you are trying to solve, you learn a TON about the market in which you are now deeply and personally involved in.  Even if you have prior experience in that market, you will learn more and from a different perspective than you have had before.  You may recognize new opportunities or issues with assumptions that you had going into your venture.

An example:

One example of a company that went through a pivot is Fab started out as Fabulis, a social network built on top of Facebook geared toward the homosexual community.  Founder Jason Goldberg is a serial entrepreneur and a very product-oriented person.  He led the company to build, iterate, and innovate quickly.  But at some point along the way, he and his team recognized an opportunity to build something different that might address an even larger market opportunity: a design-oriented commerce company.

Once Jason and his team made the strategic decision to pivot, they worked like mad to build an entirely new property quickly.  They relaunched as – and grew extremely quickly.  They recently raised a large round of funding at a high valuation, a testament to the traction they are building.

Key need: Self-awareness

One of the biggest lessons to take from the Fab story is that they had the guts and self-awareness to identify issues, recognize a larger opportunity, and deploy resources aggressively to pursue the new opportunity. Having the self-awareness to make change is, in my opinion, the most difficult part of this process. Not everyone and not every company is self-aware enough to recognize ones strengths AND weakness, successes AND failings.  When you are in the trenches, it is extremely hard to be able to pull your head up long enough to look around and see what is really happening out there.  You can get so internally focused that you can often miss what the market is telling you.  The fact that some 9 out of 10 startups fail to achieve success is an indicator of a lack of self-awareness sometimes in startups.

Guidepost: Core Values

One thing that can help guide a company through a pivot is your set of Core Values. A company is often founded on a core belief or core philosophy. A belief that something is really needed, that a certain trend will emerge and prevail. In Fab’s case, a focus on design and on creating a great consumer product experience applied both pre-pivot and post-pivot. Despite the upheaval of a changing your model or business, core values can hopefully act as a guidepost through to the other side.

Leveraging a Pivot

So let’s say you are a startup, you’ve built something, you’ve identified a larger opportunity, and now you are pivoting. How can you leverage a pivot and turn it into accelerated growth?


First, you hopefully used market feedback and data to tell you that there was “gold in them thar hills” when you identified the potential pivot. As an example, in the case of, they found that one of the most popular categories of live web cam video content being broadcasted and consumed by their community was video gameplay content.  They decided to leverage this finding to create an entirely new property called Twitch.TV – a gaming discovery and gameplay community. 

Why create a whole new site? In order to fully go after the new opportunity (eg. gameplay) Justin and the rest of the folks recognized that they had to build a new browsing, viewing, and community building experience focused on the audience that was going to be using it.  Rather than having more general purpose video recording, playing, and browing features, Twitch.TV is squarely focused on gamers and their needs. This level of focus also makes it easier to feature advertisers who want to reach this audience.

Making the Turn

Something that isn’t often discussed in terms of companies making a pivot is that it is often a gut-wrenching, soul-searching, painful experience in which many people inside the company can lose faith.  Some people are just not able to “make the turn” either mentally or in terms of the skills that may be needed for the new direction of the company versus the older direction. People resist change. People may feel burned out and exhausted, or they may feel disgruntled and disenfranchised. These are natural feelings. As they say, feelings are not right or wrong, they just are. 

But how someone responds to these feelings can be positive or negative. If a person bucks up and decides that they have the energy, drive, and passion to push forward (hopefully with as clear a mental slate as possible) then people can make the turn.

A company though, in order to survive if it has gone down this path, has little choice other than to Make the Turn, fizzle out, or plateau. In my opinion, in the life of a truly entrepreneurial technology startup, to grow is to survive. To plateau is to fizzle.  At Visible Measures, we made a pivot at the end of 2010, and it was a seriously long and arduous process to get to the other side (and by the way, we are still at the beginning of what we hope is a massively long journey). But we closed 2011 with almost 500% revenue growth over 2010 and about 3X the staff.  It has been amazing to see how the company now is so aligned around our new strategy. 

Making the Turn is hard, and few companies can pull it off. History is littered with the names of companies who could not do it.  Why is it so difficult?  Making the Turn requires a company to 1) rally as much of itself and its team together toward the new direction as it can 2) inject new talent, blood, energy, and skills where needed, and 3) go for it with total conviction.  Failing at any of these steps most likely means trouble.

Yes, it is extermely difficult to leverage a pivot into growth, but that is what Making the Turn is all about.




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