Once upon a time the word “pivot” usually referred to an object’s point of rotation. Then, corporate America got its sticky hands all over it. The word even found its way in to Microsoft Excel — as in Pivot Table. But, the best euphemistic example comes from one of my favorite places for invention and euphemism — Silicon Valley. In this region of the world pivot has come to mean a complete change in business direction.
Now, let’s imagine you’re part of start-up company. At the outset, your company has a singularly great, world-changing idea. You believe it’s the best idea, since, well, the last greatest world-changing idea. It’s unique. You are totally committed. You secure funding from some big name VCs anxious to capitalize and make the next $100 billion. You and your team work countless hours on realizing your big idea — it’s your dream, your passion. Then, suddenly you realize that your idea is utterly worthless — the product looks good but nobody, absolutely nobody, will consider it, let alone buy it; in fact, a hundred other companies before you had the same great, unique idea and all failed.
What are you and your company to do? Well, you pivot.
The entrepreneurial side of me would cheer an opportunistic company for “pivoting”, abandoning that original, great idea, and seeking another. Better than packing one’s bags and enrolling in corporate serfdom, right? But, there’s another part of me that thinks this is an ethical sell-out: it’s disingenuous to the financial backers, and it shows lack of integrity. That said, the example is of course set in Silicon Valley.
It was about a month after graduating from Techstars that my co-founder, Lianne, and I had our “oh shit” moment.
This is a special moment for founders; it’s not when you find a fixable bug in your app, when you realize you have been poorly optimizing your conversion funnel, or when you get a “no” from an investor. An “oh shit” moment is when you realize there is something fundamentally wrong with your business.
In our case, we realized that the product that we wanted to create was irreconcilable with a viable business model. So who were we going to tell? Techstars, who just accepted us into their highly prestigious accelerator on the basis that we could make it work? Our investors, who we just closed a round with?
It turns out, our Techstars family, our friends, and the angels (literally) who invested in us became our greatest allies, supporters, and advocates as we navigated the treacherous, terrifying, uncertain, and ultimately wildly liberating waters of a pivot. So let’s start at the beginning…
In February of 2014, Lianne and I were completing our undergrad CS degrees at the University of Colorado. As we were reflecting on the past four years of school, we realized that the most valuable experiences that we had happened outside the classroom in the incredible communities that we became involved in. Being techies, we wanted to build a product which helped other students make these “serendipitous” connections around their campus?—?to make the most of their time in college as well. We wanted to help our friends explore their world around them.
We called it Varsity. The app was basically a replacement for the unreadable kiosks full of posters found on college campuses. Students could submit events and activities happening around their campus that others could discover and indicate they were attending. We also built in a personalization mechanism, which proactively suggested things to do around you based upon your interests.
A few months later, the MVP of the Varsity and a well-practiced pitch won us the New Venture Challenge at CU, which came with a $13k award and garnered the attention of Techstars Boulder.
The next couple of months were a whirlwind of change; Lianne and I graduated, we transitioned to our first full-time job (working for ourselves), and I spent a month in Israel with my sister before she left for college in Florida. We spent a good amount of our time networking our way around Techstars?—?feeling a little like the high school kids at a college party?—?but loving it at the same time. We met some incredible people (Sue Heilbronner, Brad Berenthal, Zach Nies, and Howard Diamond, to name a few) who taught us so much about our nascent business in a very short time.
We took as many meetings as we could with whomever would talk with us, and we funneled all of our learnings into our Techstars application. Through some combination of luck, sweat, and my uncanny ability to say the right things when standing in front of a large group of people, we were accepted into Techstars.
Techstars was incredibly challenging for us. The 3-month program was also equally rewarding. Lianne and I learned more about ourselves, our company, and our relationship with each other than we had in 4 years of undergraduate education together. About half-way through the program we rebranded Varsity to Native and started exploring ways to monitize the platform. The product had come along way?—?we had done some incredible engineering and design work that we were happy with.
Unfortunately, the problem with Varsity was absolutely zero alignment between the product that we wanted to build and the way that would bring it to market. One option was to spend the next 3 years grinding through the 8-month sales-cycles of universities across the country, which felt challenging (in the wrong ways) and bureaucratic. Alternatively, we could monetize the student attention we garnered, which we feared would cause discordance between the content students wanted to see and the content that advertisers wanted to show them.
Soon after graduating from Techstars, someone showed us Simon Sinek’s famous TED talk about how great leaders inspire action. Sinek describes how famous brands like Apple engage their customers starting with their “why” for doing business, which takes precedence over “how” they do business, and even over “what” their business does. At Native, we knew our “why” was something about helping people discover the world around them, and we now knew that the “how” and “what” of our current business wouldn’t get us there.
So, we decided to pivot.
Around this time I grabbed coffee with my friend Fletcher Richman. I explained to him the situation and asked for his advice. He offered the perspective that startups are designed to solve problems in the most efficient way possible. Basically, startups should be created to fill voids in the market that weren’t being solved by an existing company. The main issue was we had no problem to solve.
250k in funding, but nothing to fund? Do we give up, give the money back, and go get real jobs? Lianne and I weren’t done yet, so we went in search of problems worth solving.
Read the entire story here.