Lesson: Zero to IPO with George Northup

Step #3 Switch: When to pivot

It's hard to know when to stick it out or when to change. I think that there's trial and error in this. All of us probably here in the Valley talk to entrepreneurs all the time, friends with a business idea. They keep on talking what they're doing. And then the next time you see them, they have a different idea. It's completely different, and you have to catch up with their business model. I do think in Silicon Valley we tend to over-pivot. There's a level of ADD in the Valley. The reason is because sometimes it's easier to switch than stick with it.

For me, I think the way to look at it is you start with a theme for a need that's out there. If it's in the B2B world, there's a business need or a pain that has to be solved, and there's a theme around this. And so, if you believe in that pain or the need that's out there, you may work on how you productize and how you change the product. But your underlying theme is the same which is we need to solve this. We may change how we solve the problem or how we go to market. So that's one way to look at the B2B.

With the B2C, it's a little more complicated because a lot of this is about consumer trends and brief periods of popularity of different applications and things like that. But I would say for the B2C area, I think that one has to keep on going back to themes about what's popular and why, and also, what are the use cases that are evolving. And those become the ongoing themes.

You may think about how you will differently productize the apps or the way to market, things like that. So I think it's okay to adjust how you're solving or addressing needs, and I think it's very important to think carefully in advance about what you're really solving more than anything else.

The other thing I would say is that sometimes you'll see that people will be working on solving a problem, then realizing they've built something that solves another problem entirely. I'm not sure that this is a great example, but if you look at the oil industry, traditionally they went vertically to drill and extract to the oil. There's this other stuff, that was kind of shale oil that was economically not justifiable to harvest. For a number of reasons, we moved to a model today where we have fracking and where they're now doing horizontal drilling to get that out. So that's an example where the need was out there for oil, and a methodology changed to get that oil. I think the underlying issue is that, at the very beginning, you have to decide what's important to solve out there. This could be B2B or B2C. You have to have conviction in that at the very outset. And then I think it's okay to change how you solve that problem. But I think it's a problem if you keep on changing the issue or the need that you're dealing with.