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1/ We Pivoted a few yrs ago. This is the story- mostly my feelings. It has never been told publicly.

This will be rambly and represents the chaos in my head at the time. There is [hopefully] no advice here. I don’t know if we did it right.
2/ It was so hard for me to find inside stories of how a pivot actually happened that I wanted to capture ours. When you google ‘companies pivoting” you find 20/20 hindsight fluff. Trust me, this is not helpful in the midst of a pivot.
3/ I don’t want to glamorize this. It was a living hell. It was the worst experience of my professional life. Did the pivot even “work”? It certainly seems like we are on a dramatically better trajectory than we were pre-Pivot. But let’s wait another decade before deciding.
4/ The word Pivot (capital P) has always been a scary concept for me. I think it has felt like an indication that nothing is working so instead we throw spaghetti at a wall. My perception was <5% of Pivots work - I don't know the real stat.

I feel shame about the word.
5/ My co-founder @roryeakin and I were 100% in this thing together throughout the Pivot. Many of the emotions I felt were shared between us.

The point of this TS is to give the raw version of what I felt, so I'll resist the temptation to hide behind a "we" in some instances.
6/ First let me set the stage: Our Pivot began in early 2016 and lasted more than a year. At the time we had just raised our Series C ($30m in Q4 2015) and our business was an investment marketplace (co's would list and raise equity from family offices, funds and accr investors).
7/ Leading up to the Series C we had 8% compounded monthly growth rate of GMV since our Series B in early 2014 (key metric for a marketplace). Not amazing growth but not horrible at that stage. January 2016 was a great month.
8/ Something was wrong though. We had no idea why we were growing. To be frank, no growth initiative we tried had the intended effect. We were just growing. That sounds great to some, but it was terrifying.
9/ The board knew my fears and had complete visibility but hard to know the diff btwn typical paranoia of a founder and valid concerns. One BoD member said he believed marketplaces really work when they grew without you knowing why. Rory & I struggled to believe that in our case.
10/ I feel regretful for not being more forceful and yelling at the top of my lungs “SOMETHING HERE DOESN’T SEEM RIGHT.”

Then it happened. February 2016.
11/ GMV came off the rails. Feb was <50% of the prior mo with no clear reason. Seasonality? Com? Diff team? No, no, no. Honestly- I don’t know. But my fears got amplified 10x. We were direct with the board and shared our concerns that we were worried it wouldn't get better.
12/ I remember sweating a lot. I remember feeling a pit. I remember for the first few months after the start of the downturn always- *always* - feeling terrified.

Imagine feeling like that for an entire day. I felt that way for months.
13/ The next several months were horrible. I felt embarrassed, helpless. No one on the team knew what to do and they looked at me and @roryeakin to fix it. We couldn’t. We hadn’t identified the clear drivers of growth.

I feel so much shame to admit that, but it’s the truth.
14/ It would be hard for me to convey the crushing fear I felt every day. At one board meeting I struggled to keep it together emotionally. The board could see me shaking- literally could see my hands trembling.
15/ During the downturn I slept so little that my vision -for weeks at a time- was foggy. It wasn’t because I was working late. I just couldn’t sleep.
16/ I just asked @roryeakin to described. This was his response: “The most vivid detail to me was just the feeling of powerlessness. It was so hard to feel like there were no dials to turn, no way to work harder or change team or process to make it work.”
17/ A low point came at a board meeting at USV’s offices. I arrived 11 minutes before the board mtg started. I went to use the restroom. Took off my jacket, used it as a pillow and set a 10 min alarm. I slept with my head in front of the toilet until the bell rang.
18/ That is what a pivot looks like.

Not this.

19/ I remember the extreme loneliness I felt even though I had a partner. Sometimes loneliness isn’t about the partner, it is about you.
20/ During the Pivot it was about me. I didn’t have a group of CEOs yet that I felt comfortable being open with about my fear. Also I didn’t have relationships that I thought I could get real vulnerable (and experienced) advice from.
21/ It’s hard to convey the pressure I felt from having just raised the Series C- wanting to do right by investors, wanting to be a confident leader for the 45 employees that worked at CircleUp. We were burning money each month but the model clearly wasn’t working.
22/ No chance we could raise again because the metrics had fallen off a cliff. I felt trapped - like I was the captain of a boat that was sinking …. slowly but definitely sinking.
23/ There were several times I locked myself in a conf room with no windows and just did 0. Sometimes watched youtube. It felt better to escape. I’m embarrassed to admit that but I want to because if another CEO had told me she did it as well I would have felt less alone.
24/ I don’t know why we didn’t do it earlier, but in September 2016 @roryeakin and I began to schedule large blocks of time together to go into a conference room by ourselves to take more drastic steps.
25/ We had met 100x before about performance- but we both knew these meetings would be different. Somehow the feeling of helplessness inspired some amount of action.

“No sacred cows” we both said.
26/ And as if there wasn’t enough stress … we were in the middle of moving to an office 3x the size. We knew that would compound the problem.

@roryeakin and I decided to do this work from the new office. Unfurnished, massive, and by ourselves. It was bizarre imagery.
27/ We created a doc that just laid out our strengths and weaknesses. Simple, yes. But that was the action we could think to take..

They are below- I haven’t changed a single word.
28/ If you are a student of marketplaces you would look at that list of strengths and weaknesses and take a long sip of water awkwardly. Then another. We had no hope as a marketplace.
29/ BUT making the list made me feel better. It gave me more energy than I had in 7 months. I felt hope. Hope that we were taking a new step forward. I find that hope can thrive in the face of fear. I still had plenty of fear.
30/ The Ah-Ha was that we realized we had been focused on the question “how do we make the marketplace work?” We were asking the wrong question. We shifted it to “How can we build CircleUp to serve our mission?”
31/ If you’ve met me you know I greatly value persistence in myself and those around me. This was the moment I realized that persistence was more valuable in serving an end-state (our mission to help entrepreneurs thrive) than a specific solution (the marketplace).
32/ My mgmt coach @edbatista has an awesome saying: “you can’t drive a parked car.” What those meetings did with my co-founder was help us to snap out of it and start moving in a new direction. This seemed like the beginning of something new- of hope.
33/ But not so fast. We proposed to the board that we apply our technology in a new way - deprioritize the marketplace and concentrate on investing out of funds we would raise.
34/ The basic logic was that we thought Helio was working and finding amazing consumer companies- but the marketplace had too much friction in the near term to monetize the technology effectively.

The board hated the idea.
35/ My head was spinning. I was going through a living hell, we had somehow figured out how to patch up the holes in the ship and the board didn’t like our new suggestion?? I remember yelling in the BoD mtg. (Not cool of me)

That intensified the isolation I felt.
36/ In retrospect I don’t think I did a good job of walking the board through our decision. That was my fault. I was so focused on moving on to the next step I really hadn’t properly explained our thinking. I own that.

In a time I needed others I was alienating myself.
37/ Four months later we had another board meeting and they agreed to begin a transition to move away from the marketplace over time. Still- we lost months and that is on me.
38/ As we began the transition I remember feeling so nervous and anxious. Constantly. How would the team react? How would investors feel after the Pivot? Friends and old classmates, my family, everyone.
39/ I had been given so much to build the company - amazing investors, a great team, a family and wife that supported me so much. I was SO privileged.

I asked myself 5x a day: Why would anyone believe in me again? I never came up with a good answer, which still haunts me.
40/ We had to do a round of layoffs. We had fired people in the past- but this wasn’t firing. These people had done nothing wrong. I was the one that had made the mistakes. When we announced the layoffs to the company I cried in front of the entire team.
41/ @roryeakin and I took countless reference calls to ensure the future employers of these solid teammates that it was our fault, not theirs.

Then it was out in the world. I had to answer lots of questions (I didn’t have answers), I had to write a vision blog.
42/ We had to send the teammates that remained to the biggest trade show of the year to face the entrepreneurs we were trying to serve. It felt like my shame was now on full display. I cringed every time someone asked about the “shutdown” of the marketplace.

I still do.
43/ Midway through the pivot my wife gave birth to our second child. I would love to tell you that a light came down from Heaven and I saw wonderful perspective. I’m sorry- that’s just not what happened. I felt more stress and anxiety. I was still looking at trees not forest.
44/ I remember one of our execs talking about how hard it was that we were Pivoting a Series C business. This wasn’t pivoting a seed stage co. - we were 5+ yrs in. You know about tech debt? We were dealing with tech, brand, investor, and culture debt, … all at once. He was right
45/ I remember another executive staying on weeks after we announced the transition. We were letting him go but he agreed to stay on to help. He thought it was the right thing to do for our entrepreneurs and our mission.

The professionalism was remarkable. I didn’t feel worthy.
46/ A year after the Pivot we ended up raising another large round from some fantastic investors. They believed in our new vision, as did the majority of our existing investors/board. That meant a lot to me.

[We never announced the round - you won’t find it on Crunchbase]
47/ I should mention that many VCs and founders would say “why pivot? why not just shut it down and start over with a fresh cap table, no organizational debt or product/tech debt?” I thought about it.
48/ The two key reasons we didn’t were 1) Helio- we think that core asset could be special, 2) We didn’t think it was the right thing to do to our team and investors. Both judgements might have been wrong but I feel good about our intentions.
49/ If you’re curious on our vision for the future (i.e. after the pivot) - it is below. We monetize the technology by leveraging it to invest out of funds (equity & credit) that we control.

CircleUp is an investment platform powered by technology. medium.com/@ryancaldbeck/…
50/ Then there is the glamorous version of our story - how we couldn’t have built our brand with entrepreneurs or our data asset that is core to Helio without the marketplace, while true, has been told with no vulnerability.

So I’ll spare you.
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