Your past was never meant to create history, but to build the future.
You’ve decided to ignore the date on the calendar and throw caution to the wind saying that today is a brand new day. That’s right, a new beginning can happen at any time, at any moment.
Last week I wrote about how to recognize when a pivot is needed in life or in your startup. If you are going to pivot, then the next natural question is: what direction should you take?
Oftentimes with founders, they need to pivot but are not sure in which direction or how. I am defining pivot for a startup as either changing WHO you are serving or WHAT the product is.
Many people do not know that Kabam started as a corporate social network, then built fan communities for TV shows and sports teams, then moved into Facebook gaming and finally sold as a top mobile gaming company for over a billion dollars in 2017. A lot of experience in one company, making me an expert in a very very very very small slice of the world, very small. Total number of pivots: 3.5
Reflecting on each pivot, we looked at the following things:
- Core Competencies
- Building on Passion points
Looking at each one of these for your life and your startup can shed some light on which direction you should take. And hopefully, the direction you take is forward.
The most important thing was making something that people wanted. It was clear that our first try — our corporate social network — no one wanted.
Within 8 months, we had done three product iterations, thousands of welcome emails and only had 1400 registered users, 20 cease and desist letters, and 5 daily active users which were probably our moms. It did not take a genius for us to know that no one wanted our product.
At this point, opportunity knocked for us and many other developers. Facebook opened up their Developer Platform to third-parties. Facebook held a hackathon and within one weekend app developers had millions of users from a few hours of building apps. It was like the old adage, if you can’t bring people to church, you should bring church to people.
For us, it became:
If you can’t bring users to you, then go to where the users were.
This fundamentally changed the culture and trajectory of our company. We decided to focus on Facebook and at the same time change our product. Using Facebook made discoverability easy because that’s where the users were. Our userbase began to grow, we gained traction and soon we had a market. [a]
Markets are like gravity, they win every time.
Building a startup is just plain difficult. Any advantage you bring to a space can be the difference in helping the company progress and stay alive which is a requisite to grow.
At YC I was able to work with some of the brightest founders, and whenever a team was trying to figure out what to pivot to we’d always ask them: 1) what are the things you’re good at that hopefully not a lot of people are good at and 2) why or what makes you want to chase the new idea? The goal was to discover some hidden talent or secret advantage they had that could give them an edge.
Because no one wanted to use our corporate social network, we spent a lot of our time sending (un)wanted Welcome emails to people. Soon we found that we had a little bit of traction among the IT departments of small and medium sized businesses. [b] There were some that were willing to pay us to license the product in their company. In order to provide this type of product and company, we needed a completely different team with different competencies. We needed to become sales people that did cold outreach. After a few weeks of “smile and dial” posters in front of us, we decided this wasn’t core to who we were, and we did not like it enough to build that competency. A few years later, Atlassian, a company that makes internal social networks,would go onto IPO for over a billion dollars — a great team meets a great market. It was not our team or our market, we had our sights set on something different.
In life, a strengths-based approach helps you go forward in choosing what your core competencies are as a person. Choosing something you are already good at gives you advantages that are not afforded to others. If you have strengths in things that are valuable and not as many people know — even better.
Building on Passion Points
The usual life advice is to “follow your passion”. However passion, like energy, can wane over time. Is this something that can sustain the ups and downs or enable you to cover living expenses? Instead, when considering change, think about why you really want to change and what value aligns with it. You can’t go wrong by following your values. Passion points though are incredibly valuable as they can indicate what you value.
Building a corporate social network was all about our users enhancing their reputation at work. But this wasn’t something that people were so passionate about that they would go home to google more information. This is problematic from a marketing point of view at that time since we were working in a space that people did not naturally look for, it was hard to “benefit from SEO marketing”.
We began taking a closer look at what we spent time googling in our spare time and discovered the following:
Every Monday we would leave early to watch 24, a popular TV show at the time and then spend Tuesday morning talking about it. We’d debate theories using points we researched on the internet. We discovered that there was not a place on the internet where we could find out about our favorite TV shows. There was no Rotten Tomatoes or Flixster for TV. This also meant it must be difficult for show creators to get in touch with their audiences and fans. Thus, the idea for Watercooler’s community apps for TV shows and eventually sports apps was born. We grew these communities on Facebook to over 30 million registered users and when ABC network wanted to distribute their TV shows on Facebook, they did not call Facebook, they called us.
Passion points are clues to what your values are, which guide the direction of the pivot. When considering a pivot, we started with ourselves and our own interests to find an ecosystem where we could provide value.
When faced with a pivot, we looked at these three things: markets, core competencies and passion points. These can help guide the direction to which you need to go.
Regardless of how you fail, when you fail or why you fail, may you always fail forward.
[a] Much has been written on the most important ingredient of startup life. I am in agreement with Marc Andressen, the former founder of Netscape and now prominent A16Z venture capitalist: “When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins.When a great team meets a great market, something special happens.” https://pmarchive.com/guide_to_startups_part4.html
[b] Our stats — 5 daily active users (DAU) — is pretty dismal for a consumer company (B2C), which is how we are building it. For a B2B company, this might be okay given that pilots matter and the person purchasing the product may be different than using the product. Usage does matter in B2B but revenue does seem to trump all.