Why Startups Make Major Pivots Before They Succeed
What makes you successful tomorrow may look nothing like the product you’re building today
I’ve been an entrepreneur for over 20 years, a founder or leader at 13 startups, and an advisor or consultant for dozens more. When I consider the products and companies that I’ve found success with, and compare the final results to the original idea, I see the same two signals every time:
- The original idea was a winner.
- The way I interpreted, productized, executed, and delivered that idea was nothing like what I had originally imagined when I set out to build a company around it.
While the idea matters, it’s what you do with that idea that makes the difference between success and failure.
The rise of the perpetual pivot
If you ask why companies make major changes to their product on their way from idea to pilot to every subsequent version after that, the short answer is: Because they can.
We live in a time when it’s never been easier to change a product on the fly. Sure, some types of products are easier to re-release to market than others, but it’s not just about the ability to change the product itself. The ways we sell, deliver, use, and respond to products have also seen innovative technical advancements across the board.
That’s the key. Those technical advancements allow any maker of any thing to quickly get information on the success of that thing in the market. Data that used to take weeks or months to compile and analyze now takes seconds ; it can even be analyzed in real time.
One that data is known, the decision to make changes becomes a simple question of math: Stick with the losing horse or pivot and produce a winner?
I’m reminded of that again as I set out to build Teaching Startup. I call this a new venture, even though it’s been around since 2013. This is my third iteration of Teaching Startup. Same idea, but different interpretation, different product, different execution, different delivery.
And thankfully, different result.
Interpretation: An endless supply of problems, an endless demand for solutions
Teaching Startup always intended to solve the same problem: There needs to be a better way for more entrepreneurs to get more advice on more objective issues.
That may seem like a crisp problem statement, but it’s really dozens of problems disguised as a single statement. The devil is in the interpretation of the details.
The first iteration of Teaching Startup was invented when I sold ExitEvent, a product also dedicated to improving access to information and services for entrepreneurs. Teaching Startup was initially launched as a product to formalize and enhance education in entrepreneurship through programs and content.
Again, that sounds like a concise solution, but it was far too broad to ever work.
In trying to tackle all of the reasons why entrepreneurs weren’t getting more objective advice, and in trying to solve the issue by providing a product as broad as “education,” I was kneecapping a great idea with a loose interpretation, which resulted in an unlovable and unwanted product.
But there were pieces of that product that worked, and I kept those pieces when I pivoted.
Productization: The right solution for the right problem.
I sold ExitEvent partly because I was also in the process of building another startup, Automated Insights, for which I had co-invented a platform that created human-sounding stories and articles out of data.
Automated Insights was a solution in search of a problem. And there too, our misinterpretation of the problem resulted in an amazing product that nobody would buy.
We were creating sports articles around sports data, and publishing those articles to the web. It was a technical marvel, but one with no need to exist, because every major and most minor sporting events were already covered by human reporters. Cool product, no value.
Then we put our product to work for Yahoo Fantasy Football. Being able to write and publish 13 million fantasy matchup recaps within a few short hours crystallized the productization of our idea and technology. Our product was intended for situations in which humans could not produce the same content — which was any situation that produced a lot of data in a short amount of time. In the mid-2010s, with the onset of cloud computing, mobile broadband, and IoT, this was quickly becoming a thing.
So we pivoted. We stopped being a content company and became a data company, a pivot that completely and positively transformed our business.
Execution: The right product built and fulfilled effectively
Not all pivots are about pivoting away from disaster; some pivots are about pivoting toward opportunity. Those are my favorite kinds of pivots.
My current startup, Precision Fermentation, makes hardware and software to monitor the fermentation process for everything from beer to spirits to any other fermentation product — a wide landscape. Over the next year — and we’ve already started down this path — we’re pivoting from a monitoring product to an automation product.
The beauty of an execution pivot like this one is that all the parts are already there. It’s the right idea, interpreted correctly, productized and well on its way to refinement, and now all we have to do is execute.
But make no mistake, that’s going to require an overhaul.
Without giving too much away, what we need to do next is pivot from one kind of company to another, from one that puts science at the forefront to one that sells technology and time. I’ve spent the last three months planning the pivot to automation, and if we do it correctly, we go from an interesting play to a game-changing play.
The details are all in the execution. You won’t see much change in the product; you won’t see much change in the company; but on the inside, it’s like a total renovation. We’ve got data where we didn’t have data before, we’ve got initiatives using that data instead of experiments to collect it, and levers to pull instead of guesses to make.
Proper execution isn’t like going on a diet to lose weight; it’s changing your lifestyle to stay healthy. It requires a total transformation, from operations to build to marketing to sales . It’s a pivot that doesn’t directly impact the customer like a product pivot would, but one that is just as dramatic and all-encompassing to the customer in an indirect way.
Delivery: A change that seems easy on paper
Back to Teaching Startup. Once I had pivoted to something more correctly interpreted and productized, I was off to the races, right?
Kind of. The second version of Teaching Startup, launched in 2015, produced a lot of hype and excitement, but it was exactly the kind of hype and excitement that can signal the beginning of a big failure.
The second version was an audio and video podcast. Launched at the beginning of what we now know to be a massive explosion in podcasting, that iteration got a lot of attention, including various offers from venture capitalists and reality show producers.
But there were a number of problems, mostly revolving around the fact that the medium lent itself to solving a new problem: People really like to talk about startup, but there’s no value in talking about startup.
A lot of people think there is, but here’s the problem: The kind of entrepreneur that is serious about getting better and smarter at their craft isn’t the kind that has time to sit through a 60-minute podcast. Plus the production wasn’t lending itself to the mission. Startup advice isn’t relationship advice. It has to be delivered differently.
So the current (and final) iteration of Teaching Startup changed the delivery from video to email. And while that seems like a small wrinkle on paper, the pivot resulted in a big change in how the product is positioned, messaged, used, accepted, and appreciated.
And of course, my hope is that it’s ultimately the difference between success and failure.
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