Startup Veterans to Share Battle Scars at “The Power of the Pivot”
When you’re old and gray, leaning back in your rocker watching the sun go down, and you think back on your days as a startup founder, which moment will you remember most clearly?
Chances are it won’t be the day you signed the incorporation papers, or the day you got your first seed investment, or even the day you released your product. It will be the day that came a year or two later, when you and your team realized something just wasn’t working, and you made one of the hardest choices of your entrepreneurial careers: you pivoted.
Almost everybody does it sooner or later. Take my word for it—I’ve interviewed hundreds of founders in my time, and it’s the rare startup that sails straight from the concept phase to market success without tacking at least once. Indeed, startup advisors like Steve Blank argue that flexibility is actually a startup’s main virtue. From this point of view, the whole purpose of a startup is to hack together beta products, gather customer feedback, and change direction as many times as it takes to find the right market.
The more startups I’ve profiled, the more I’ve come to realize that their pivot stories are what define them—and that there’s a lot to be gained from sharing these tales. That’s the idea behind The Power of the Pivot, an event we’re staging at PARC in Palo Alto on December 4. There isn’t yet a “science of pivots,” but we’re going to spend the afternoon studying the right and wrong moves, so that when your time comes, you’ll have a better chance of sticking the landing.
What is a pivot, exactly? How do you decide whether and when to pivot? Should you tinker with your product, your business model, or both? Our speakers have done it all before, and they’ll be generous in sharing their insights and experiences.
The detailed agenda for the event is here. If you’re a startup founder or employee and you haven’t bought your ticket yet, I urge you to do so now. (The saver rate expires November 13, but there’s also a special startup rate of $75 that will continue to be available after that.)
I’ve hand-picked the presenters at our event to represent a broad cross-section of the Bay Area innovation community, spanning consumer and enterprise technology, life sciences, and cleantech. I know they’ve got great stories to share because I’ve written about most of them:
—Steve Hoover, CEO at PARC (which is hosting the event), was brought in last year to solidify PARC’s business as a contract R&D operation separate from, but wholly owned by, Xerox. PARC’s partial spinoff in 2002 was a risky pivot for the famous organization, and Hoover’s job is to make sure it continues to bear fruit.
—Steve Blank is a renowned thinker on entrepreneurship whose two books, The Four Steps to the Epiphany and The Startup Owner’s Manual, have become standard references for beginning entrepreneurs. He argues that there’s an emerging entrepreneurial management science stack that parallels the skills learned by traditional MBA students—and he’s bringing that to life by instituting “Lean LaunchPad” courses at universities around the country and on the Internet.
—Rich Aberman, co-founder and chief operating officer at WePay, realized that the company’s original group payments platform was too narrow, and that there was a huge opportunity to go after PayPal in the area of online payments for small businesses.
—Andy Chen co-founded PowerReviews to offer e-commerce companies a free way to let their customers post product reviews. But the startup’s first idea for monetizing that service—aggregating the reviews at a central site and earning affiliate sales commissions—didn’t work. The company threw out its old business model, started charging for the review platform, and did so well that it got bought recently by former competitor BazaarVoice.
—Cheryl Yeoh recently attempted the dreaded Triple Lutz of pivots: she changed her startup’s name, location, and product all at once. Her New York-based company CityPockets had started out as a marketplace for unused daily-deals vouchers from the likes of Groupon and LivingSocial. But the service didn’t catch on the way Yeoh had hoped, so she pivoted to helping consumers find online coupons via a Pinterest-style sharing site. The startup moved west to join Dave McClure’s 500 Startups program and, to top it all off, changed its name to Reclip.it.
—Conrad Burke thought his company Innovalight could use its understanding of chemistry to build premium solar panels that were more efficient at converting sunlight into electricity—and he went so far as to build an assembly line. That was right before Chinese companies hugely ramped up solar panel production, causing prices to plummet. Burke realized that the company could do better as a supplier than as a manufacturer, and its “silicon ink” technology is now used by numerous panel makers. DuPont validated Burke’s decision by buying the company this summer.
—Sunil Nagaraj believed he could tap the power of Facebook to create a “data-driven dating” site that would automatically match people based on information in their Facebook profiles. Cool idea, but the dating app, Wings, never got enough “likes” on Facebook to go viral. Nagaraj and his team used some of the lessons they’d learned to start a new site called DateBuzz where members could enhance their profiles through feedback from other members. But that, too, was a non-starter. Today Nagaraj is a senior associate at Bessemer Venture Partners, and he’s agreed to talk about what went wrong at Wings and DatbeBuzz—and how to recognize when a pivot has failed.
—Will Price guided his company, Flite, through an epic pivot in 2009. Under the name Widgetbox, it had built a marketplace for embeddable Web apps called widgets. Competition from Facebook and Apple made that business untenable, and the company nearly shut down. But with help from alpha customer LinkedIn, the company reinvented its widget technology as a platform for building interactive display ads. Now you’ll see the company’s technology at work on sites owned by Conde Nast, Orbitz, Microsoft, Toyota, Procter & Gamble, and many other big brands.
—Adam Wiggins’ company Heroku is famous as a platform for other companies Web applications, and when Salesforce.com bought it in December 2010 for $212 million, it became the biggest exit ever for early investor Y Combinator. But did you know that Heroku actually started out as a tool to help non-programmers learn the Ruby on Rails Web development framework? Wiggins will share the whole story behind the company’s extremely well-timed pivot.
—Leighton Read is an Xconomist and a venture partner at Alloy Ventures, where he invests in companies researching new drugs and building tools for pharmaceutical R&D, and chairman of Seriosity, a startup using game mechanics to help enterprise employees deal with information overload. As the founder, co-founder, or CEO of three life science companies—vaccine developer Aviron, peptide drug maker Affymax, and protein therapeutics company Avidia—he’s been through his share of reckonings and pivots. He’ll talk about the realities of pivots in the biotech business, and the surprising lessons tech entrepreneurs can learn from their peers in the life sciences.
—Our closing speaker, investor and serial entrepreneur Duncan Davidson, is managing director at Bullpen Capital, a seed-stage fund that specializes in funding early-stage companies in mid-pivot. Most angel-backed startups “do not simply blast off,” according to Bullpen, but need a little extra funding “to get their model right before lift-off.” Davidson, a veteran of major strategic pivots at Covad Communications, SkyPilot, and Xumii, knows a thing or two about how to scout out these companies, and how to help them get off the launch pad.
At The Power of the Pivot, our speakers will tell the sometimes gory, often inspiring details of the pivots they’ve engineered or witnessed—and they’ll share what they’ve learned about how to come out the other side stronger. Check out the full agenda here. This is designed as an educational event, so as always, there will be plenty of time for questions, conversation, and networking. I hope to see you at PARC on December 4!