PIVOTS REQUIRE COURAGE

 

Ask most entrepreneurs who have decided to pivot and they will tell you that they wish they had made the decision sooner. I believe there are three reasons why this happens.

First, vanity metrics can allow entrepreneurs to form false conclusions and live in their own private reality. This is particularly damaging to the decision to pivot because it robs teams of the belief that it is necessary to change. When people are forced to change against their better judgment, the process is harder, takes longer, and leads to a less decisive outcome.

Second, when an entrepreneur has an unclear hypothesis, it’s almost impossible to experience complete failure, and without failure there is usually no impetus to embark on the radical change a pivot requires. As I mentioned earlier, the failure of the “launch it and see what happens” approach should now be evident: you will always succeed—in seeing what happens. Except in rare cases, the early results will be ambiguous, and you won’t know whether to pivot or persevere, whether to change direction or stay the course.

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Third, many entrepreneurs are afraid. Acknowledging failure can lead to dangerously low morale. Most entrepreneurs’ biggest fear is not that their vision will prove to be wrong. More terrifying is the thought that the vision might be deemed wrong without having been given a real chance to prove itself. This fear drives much of the resistance to the minimum viable product, split testing, and other techniques to test hypotheses. Ironically, this fear drives up the risk because testing doesn’t occur until the vision is fully represented. However, by that time it is often too late to pivot because funding is running out. To avoid this fate, entrepreneurs need to face their fears and be willing to fail, often in a public way. In fact, entrepreneurs who have a high profile, either because of personal fame or because they are operating as part of a famous brand, face an extreme version of this problem.

A new startup in Silicon Valley called Path was started by experienced entrepreneurs: Dave Morin, who previously had overseen Facebook’s platform initiative; Dustin Mierau, product designer and cocreator of Macster; and Shawn Fanning of Napster fame. They decided to release a minimum viable product in 2010. Because of the high-profile nature of its founders, the MVP attracted significant press attention, especially from technology and startup blogs. Unfortunately, their product was not targeted at technology early adopters, and as a result, the early blogger reaction was quite negative. (Many entrepreneurs fail to launch because they are afraid of this kind of reaction, worrying that it will harm the morale of the entire company. The allure of positive press, especially in our “home” industry, is quite strong.)

Luckily, the Path team had the courage to ignore this fear and focus on what their customers said. As a result, they were able to get essential early feedback from actual customers. Path’s goal is to create a more personal social network that maintains its quality over time. Many people have had the experience of being overconnected on existing social networks, sharing with past coworkers, high school friends, relatives, and colleagues. Such broad groups make it hard to share intimate moments. Path took an unusual approach. For example, it limited the number of connections to fifty, based on brain research by the anthropologist Robin Dunbar at Oxford. His research suggests that fifty is roughly the number of personal relationships in any person’s life at any given time.

For members of the tech press (and many tech early adopters) this “artificial” constraint on the number of connections was anathema. They routinely use new social networking products with thousands of connections. Fifty seemed way too small. As a result, Path endured a lot of public criticism, which was hard to ignore. But customers flocked to the platform, and their feedback was decidedly different from the negativity in the press. Customers liked the intimate moments and consistently wanted features that were not on the original product road map, such as the ability to share how friends’ pictures made them feel and the ability to share “video moments.”

Dave Morin summed up his experience this way:

The reality of our team and our backgrounds built up a massive wall of expectations. I don’t think it would have mattered what we would have released; we would have been met with expectations that are hard to live up to. But to us it just meant we needed to get our product and our vision out into the market broadly in order to get feedback and to begin iteration. We humbly test our theories and our approach to see what the market thinks. Listen to feedback honestly. And continue to innovate in the directions we think will create meaning in the world.

 

Path’s story is just beginning, but already their courage in facing down critics is paying off. If and when they need to pivot, they won’t be hampered by fear. They recently raised $8.5 million in venture capital in a round led by Kleiner Perkins Caufield & Byers. In doing so, Path reportedly turned down an acquisition offer for $100 million from Google.2