unfortunate startup pivots. a short list.
recently I've been working with startups via SPEEDRUN, our program to invest $750k each into preseed/seed startups (btw, 13 more days to apply to SR4 in SF!) and the topic of pivoting often comes up.
Some thoughts on what doesn't work:
- going from B2B to consumer. The founding team's superpower is selling to enterprise customers, and having a deep network in a specific vertical. But now you want to pivot to an AI meme maker focused on cute animals? Yes, I understand your daughter loves the idea. Yes, I realize you've always wanted to build something in consumer. But this is very hard. (Interestingly enough, consumer to B2B pivots tend to go a lot better, in the world of great B2B software UX, PLG motion, etc. The other way seems to be bad though)
- let's add chat/social/notifications. If a product isn't working, retention sucks, rarely does adding more social features help -- no matter how buzzy the features are. And no matter how many notifications they might fire off. The opposite of love is ambivalence, not hate, and similarly the opposite of PMF is low retention. So usually if you add secondary/tertiary features to a leaky experience, people generally won't engage with them. If you add sharing and invite features to a leaky product, your users won't be excited either. A better pivot is to do the strong-form version, and make the new the main thing, not add them as features
- chasing AI or web3 or some other trendy tech. If your core experience isn't working, adding AI or web3 as an additional complication won't fix retention. Instead, you might get a bit of novelty effect and a spike of users who are curious to try your product, but a haphazard addition of some novel tech won't engage them deeply enough. They often feel "bolt on" and both customers and investors can tell the difference -- particularly when compared to your competitors' products that are "native" to that ecosystem.
- premature platforms. Let's say you're trying to build a social app for yoga enthusiasts. Your product doesn't work, so then you decide to "zoom out" and make it so your social app can support any wellness community. This an example of a premature platform, where there's a lack of a killer app -- a lack of a demonstration that you have the collection of the right features -- and you try to zoom out to support anything. If a specific example won't work, then a whole lotta not working verticals won't help you. In contrast, very broad/horizontal apps often work by zooming in and getting more specific/actionable. Zooming in generally beats zooming out, because your value prop is that much more specific
- going from paid to free. You build a product, and no one seems to like it. So then you make it free, as a business model pivot. Do people now show up in droves? Funny enough, I've never seen this work. If people don't care about your product, nor the upgrades/subscription/whatever, they are usually so indifferent they won't even spend the time even if it's free. This is why freemium and free ad-supported products ultimately still have to work on user acquisition, think about CAC, etc. Unless the product is so obviously amazing and it's in an existing market where "free" can be disruptive, generally this doesn't help much. The converse of this is also true -- more products should probably be paid/premium products, and should charge more for what they do
So what kinds of pivots work? Look, startups are very hard and by the time you are thinking of changing the idea, on one hand, that's to be expected (it will change often!) but on the other hand, you might be in the death throes of the company.
But as a general principle here are some ways I might suggest thinking about pivots:
- is the product working at all, for any segment? You might dig into your top users and just try to understand them better. Could you build an entire product just for this group? This is a "zoom in" pivot that gets you solving a more specific problem
- are people having trouble understanding your product because it's in a new market? Are there any existing product categories that are nearby? Could you pivot into that, and try to conform (at least 70%+) with a category customers understand, and then try to innovate in just a few places?
- have you learned a "secret" about your market that, now knowing what you know, would make you start out differently? If you deleted all your code, fired your whole team, and started over with a fresh idea, what would that idea be? Should you just be doing that?
- are there any competitive products in your space that are successful? If you were to dramatically invert one feature of their product, but otherwise mostly try to fast-follow them, what would that product look like?
Sometimes I know how to ask the questions but don't have the answers, but those are a few places to start!
And finally, if you are interested in having more of these kinds of conversations, come work with me via a16z SPEEDRUN! See below for more about the program, and how to apply.
recently I've been working with startups via SPEEDRUN, our program to invest $750k each into preseed/seed startups (btw, 13 more days to apply to SR4 in SF!) and the topic of pivoting often comes up.
Some thoughts on what doesn't work:
- going from B2B to consumer. The founding team's superpower is selling to enterprise customers, and having a deep network in a specific vertical. But now you want to pivot to an AI meme maker focused on cute animals? Yes, I understand your daughter loves the idea. Yes, I realize you've always wanted to build something in consumer. But this is very hard. (Interestingly enough, consumer to B2B pivots tend to go a lot better, in the world of great B2B software UX, PLG motion, etc. The other way seems to be bad though)
- let's add chat/social/notifications. If a product isn't working, retention sucks, rarely does adding more social features help -- no matter how buzzy the features are. And no matter how many notifications they might fire off. The opposite of love is ambivalence, not hate, and similarly the opposite of PMF is low retention. So usually if you add secondary/tertiary features to a leaky experience, people generally won't engage with them. If you add sharing and invite features to a leaky product, your users won't be excited either. A better pivot is to do the strong-form version, and make the new the main thing, not add them as features
- chasing AI or web3 or some other trendy tech. If your core experience isn't working, adding AI or web3 as an additional complication won't fix retention. Instead, you might get a bit of novelty effect and a spike of users who are curious to try your product, but a haphazard addition of some novel tech won't engage them deeply enough. They often feel "bolt on" and both customers and investors can tell the difference -- particularly when compared to your competitors' products that are "native" to that ecosystem.
- premature platforms. Let's say you're trying to build a social app for yoga enthusiasts. Your product doesn't work, so then you decide to "zoom out" and make it so your social app can support any wellness community. This an example of a premature platform, where there's a lack of a killer app -- a lack of a demonstration that you have the collection of the right features -- and you try to zoom out to support anything. If a specific example won't work, then a whole lotta not working verticals won't help you. In contrast, very broad/horizontal apps often work by zooming in and getting more specific/actionable. Zooming in generally beats zooming out, because your value prop is that much more specific
- going from paid to free. You build a product, and no one seems to like it. So then you make it free, as a business model pivot. Do people now show up in droves? Funny enough, I've never seen this work. If people don't care about your product, nor the upgrades/subscription/whatever, they are usually so indifferent they won't even spend the time even if it's free. This is why freemium and free ad-supported products ultimately still have to work on user acquisition, think about CAC, etc. Unless the product is so obviously amazing and it's in an existing market where "free" can be disruptive, generally this doesn't help much. The converse of this is also true -- more products should probably be paid/premium products, and should charge more for what they do
So what kinds of pivots work? Look, startups are very hard and by the time you are thinking of changing the idea, on one hand, that's to be expected (it will change often!) but on the other hand, you might be in the death throes of the company.
But as a general principle here are some ways I might suggest thinking about pivots:
- is the product working at all, for any segment? You might dig into your top users and just try to understand them better. Could you build an entire product just for this group? This is a "zoom in" pivot that gets you solving a more specific problem
- are people having trouble understanding your product because it's in a new market? Are there any existing product categories that are nearby? Could you pivot into that, and try to conform (at least 70%+) with a category customers understand, and then try to innovate in just a few places?
- have you learned a "secret" about your market that, now knowing what you know, would make you start out differently? If you deleted all your code, fired your whole team, and started over with a fresh idea, what would that idea be? Should you just be doing that?
- are there any competitive products in your space that are successful? If you were to dramatically invert one feature of their product, but otherwise mostly try to fast-follow them, what would that product look like?
Sometimes I know how to ask the questions but don't have the answers, but those are a few places to start!
And finally, if you are interested in having more of these kinds of conversations, come work with me via a16z SPEEDRUN! See below for more about the program, and how to apply.
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