If it isn't going to work, just shut it down(99d.substack.com)
99d.substack.com
If it isn't going to work, just shut it down
https://99d.substack.com/p/if-it-isnt-going-to-work-just-shut
119 comments
I burnt years of my life following advice like this when I was young and didn’t know better.
If your formula is sufficiently wrong, which is the rule not the exception, you can’t make up for it with perseverance.
There’s a selection bias in these stories you hear. Stories about people who gave it their all and failed aren’t popular.
If your formula is sufficiently wrong, which is the rule not the exception, you can’t make up for it with perseverance.
There’s a selection bias in these stories you hear. Stories about people who gave it their all and failed aren’t popular.
If your formula is sufficiently wrong, which is the rule not the exception, you can’t make up for it with perseverance.
You can make up for it by examining your formula and experimenting with changes to it though, even when something is hugely wrong. Persevering with the same thing when it doesn't work is stupid; understanding that and trying to fix it is not. It's what startups call pivoting.
You might still fail if you pivot but you'll definitely fail if you stop.
You can make up for it by examining your formula and experimenting with changes to it though, even when something is hugely wrong. Persevering with the same thing when it doesn't work is stupid; understanding that and trying to fix it is not. It's what startups call pivoting.
You might still fail if you pivot but you'll definitely fail if you stop.
> You might still fail if you pivot but you'll definitely fail if you stop.
I think this is a skewed way to look at it, because it doesn't take into account what happens once you failed.
Fail your startup after a year, get hired as an employee and grow your career for a few years, and you have immensely more chances to be in a good place to succeed than if you choose to push and spend years before failing your startup.
Failing is the rule for startups, by far not the exception. Persevering at some point becomes sunk time fallacy, not something to be proud of.
I think this is a skewed way to look at it, because it doesn't take into account what happens once you failed.
Fail your startup after a year, get hired as an employee and grow your career for a few years, and you have immensely more chances to be in a good place to succeed than if you choose to push and spend years before failing your startup.
Failing is the rule for startups, by far not the exception. Persevering at some point becomes sunk time fallacy, not something to be proud of.
Yes, "failing" is not the right word, for the people in the startup. "Doing something else instead" is a better word
This is good life advice also, the key is self-examination and having the open mindedness to see and act on errors.
Someone once said "Startups don't die, they commit suicide".
I was working on a small bootstrapped product for some 3 years. I had great opportunity at the time, because I was still young and living with my parents and I didn't have to work for money at the time. I got some pushback after launch, but I was tired of the sacrifice and started freelancing and moved out to live on my own. I never formally declared that I quit, I just thought that I would do it in my off time. I had little imagination that this would practically meant that I'm quitting because I was not getting anything done with that approach. 2 years later, I decided to get back to it again. I started laying low, go back to living with my parents (this time I did earn money though), but I unlocked some 40h/week for my product experiments. After some 6 months of experimenting with the old idea and realizing of how horrible the code was, deciding to rewrite it from scratch, I came upon a related, but different idea that I have found actually to be useful myself and I saw just how superior it was to the previous idea and how it solved pretty much every problem with the old product. I also made many mistakes with the old product launch, that was just due to being too inexperienced (being too greedy with the price, not marketing to enough people - and of course, giving up way too quick).
I'm still working on the new product. Not sure if it will succeed in any way but I do not want to lose momentum. I'm learning tons. While working on the current idea, I have 2 new ideas for bigger products. I guess if it fails I will try the VC route with something new. BUT do I wish I could go back in time to the time when I stopped, I would be 2 years ahead and likely launching the new product now.
My story is of someone who did not succeed yet. If I persist and not die too soon (like literally die), my story will fall under "survivorship bias".
I was working on a small bootstrapped product for some 3 years. I had great opportunity at the time, because I was still young and living with my parents and I didn't have to work for money at the time. I got some pushback after launch, but I was tired of the sacrifice and started freelancing and moved out to live on my own. I never formally declared that I quit, I just thought that I would do it in my off time. I had little imagination that this would practically meant that I'm quitting because I was not getting anything done with that approach. 2 years later, I decided to get back to it again. I started laying low, go back to living with my parents (this time I did earn money though), but I unlocked some 40h/week for my product experiments. After some 6 months of experimenting with the old idea and realizing of how horrible the code was, deciding to rewrite it from scratch, I came upon a related, but different idea that I have found actually to be useful myself and I saw just how superior it was to the previous idea and how it solved pretty much every problem with the old product. I also made many mistakes with the old product launch, that was just due to being too inexperienced (being too greedy with the price, not marketing to enough people - and of course, giving up way too quick).
I'm still working on the new product. Not sure if it will succeed in any way but I do not want to lose momentum. I'm learning tons. While working on the current idea, I have 2 new ideas for bigger products. I guess if it fails I will try the VC route with something new. BUT do I wish I could go back in time to the time when I stopped, I would be 2 years ahead and likely launching the new product now.
My story is of someone who did not succeed yet. If I persist and not die too soon (like literally die), my story will fall under "survivorship bias".
What would you do differently? How do you know now that you were wasting your time?
These moments make you more powerful than ever to be able to articulate why those precious (auto corrected but worked) times were not the myths you heard.
These moments make you more powerful than ever to be able to articulate why those precious (auto corrected but worked) times were not the myths you heard.
> How do you know now that you were wasting your time?
For me, this is very hard advice to give, and I usually equate it to running.
When you run, it often hurts after a while. There is a kind of hurt that you just need to push through, and then there is the kind of hurt that will cause bad or long term damage.
It’s sometime hard to know the difference. You can sometimes quit when you shouldn’t have, and you’ll probably cause an injury or two figuring out the other kind.
Over time you learn what “fake pain” and “real pain” are - in my experience - only after the fact and learning from the past.
This is bad advise so don’t follow it, but I’ve found quitting first, and then feeling horrible about yourself when you find out you shouldn’t have allows you to collect more data than pushing on something that will never work for X years.
For me, this is very hard advice to give, and I usually equate it to running.
When you run, it often hurts after a while. There is a kind of hurt that you just need to push through, and then there is the kind of hurt that will cause bad or long term damage.
It’s sometime hard to know the difference. You can sometimes quit when you shouldn’t have, and you’ll probably cause an injury or two figuring out the other kind.
Over time you learn what “fake pain” and “real pain” are - in my experience - only after the fact and learning from the past.
This is bad advise so don’t follow it, but I’ve found quitting first, and then feeling horrible about yourself when you find out you shouldn’t have allows you to collect more data than pushing on something that will never work for X years.
Persevere when winning is worth the cost and quit when it isn’t.
Joint pain 20 miles into a 26 mile race? Keep going. Joint pain 10 miles into a 15 mile training run? Quit. Feeling like you’re blowing out your ACL during a race that isn’t at the olympics? Quit. Muscle pain during any type of run? Keep going, that’s growth.
Depending on the startup or project you’re evaluating, there are models you can run to decide if what you’re doing is ever going to be worth the pain. SaaS for example has a growth ceiling you can calculate based on a few key metrics. Would be a shame to keep pushing on something that even theoretically doesn’t have the potential to achieve the goal you’re after.
Joint pain 20 miles into a 26 mile race? Keep going. Joint pain 10 miles into a 15 mile training run? Quit. Feeling like you’re blowing out your ACL during a race that isn’t at the olympics? Quit. Muscle pain during any type of run? Keep going, that’s growth.
Depending on the startup or project you’re evaluating, there are models you can run to decide if what you’re doing is ever going to be worth the pain. SaaS for example has a growth ceiling you can calculate based on a few key metrics. Would be a shame to keep pushing on something that even theoretically doesn’t have the potential to achieve the goal you’re after.
Just to add, you should never have joint pain, even if you run a marathon. Adjust your running form. At the end of a tough race your muscles should scream at you and some tendons might hurt, but if your joints hurt, you're doing something wrong.
In my case joint-pain (petellar tracking) wasn't my running form, it was that running was the only exercise I was doing, so one of my quads was stronger than the others. I balance it out with yoga and swimming now and can run without injury (knock on wood)
I think a lot more people persevere past the point of salvation than persevere against long odds and succeed. There's no clear cut answer to determining 100% of the time, in the moment, if failure is a foregone conclusion, but that doesn't mean you should stick it out until the bitter end. Since most startups fail anyway, if you're already near failure mode then the bias should be in needing an extremely compelling reason-- beyond blind perserverence-- to keep going. Otherwise just salvage anything that might be salvaged and try something else with the new benefit of experience.
"What would you do differently" is easily answered with "anything but the thing that just failed."
"What would you do differently" is easily answered with "anything but the thing that just failed."
> I think a lot more people persevere past the point of salvation than persevere against long odds and succeed
One would hope so, that's the definition of long odds!
One would hope so, that's the definition of long odds!
Yes, I realized that semantic issue when I wrote it :). But I figured the meaning was clear enough anyway and I would have tried to hold my ground rhetorically against a counter argument purely on that basis, though I do enjoy arguing from positions where I can't possibly wrong.
Guess: when you validation of the problem, validation that there is money to fix the problem, but don't yet have validation that your particular solution or business mode has product-market fit.
Though I've worked at a few startups, I don't have enough experience to know to know the above generally applies. But if there isn't a market for your product, no amount of effort is going to fix it. I don't mean existing market, sometimes good products make their own category ... but you need to have evidence that is true.
Though I've worked at a few startups, I don't have enough experience to know to know the above generally applies. But if there isn't a market for your product, no amount of effort is going to fix it. I don't mean existing market, sometimes good products make their own category ... but you need to have evidence that is true.
> If your formula is sufficiently wrong, which is the rule not the exception, you can’t make up for it with perseverance.
It's not a simple decision, at least based on my personal experience. If you have a good team, a good market, and economics that let you exist in the market until you get the product right, it's worth hanging in there for a really long time. The reason there's "selection bias" on persevering is that it's how a lot of companies actually succeeded.
It's not just tech, either. There's a reason why people like Eddie Cantor said "It takes 20 years to make an overnight success."
It's not a simple decision, at least based on my personal experience. If you have a good team, a good market, and economics that let you exist in the market until you get the product right, it's worth hanging in there for a really long time. The reason there's "selection bias" on persevering is that it's how a lot of companies actually succeeded.
It's not just tech, either. There's a reason why people like Eddie Cantor said "It takes 20 years to make an overnight success."
Certainly true, but start ups pivot and find success all the time. Or redefine what success is if they're early enough and wind up in great lifestyle businesses that'll never be unicorns or deca unicorns or whatever.
I guess the moral of the story is really be sure that you are holding a losing hand, and that you can't play go fish instead of poker.
I guess the moral of the story is really be sure that you are holding a losing hand, and that you can't play go fish instead of poker.
“All the time” is quite a vague non-quantitive phrase though.
How many startups successfully pivot? How many fail? What is that as a percentage? Personally I think that’s a more useful indicator of risk when deciding.
How many startups successfully pivot? How many fail? What is that as a percentage? Personally I think that’s a more useful indicator of risk when deciding.
Those who persevere succeed can tell the stories about perseverance saving their company.
Those who persevere and fail may tell how not quitting early enough continued the agony, but also can tell how just a bit more help could have led them to success, but odds were just all stacked against them.
Those who saw a failure coming and quit are likely not to tell much about it, there's no glory at it.
This all produces a kind of evolutionary / social pressure to persist and maybe win even when the chances are slim. The winner takes all. The losers persist at their (and, in a sense, everyone's) expense of "malinvestment", but they, and the price they pay, is handwaved away and forgotten. Evolution is about advancement of a species, not of a particular organism; progress is about advancement of an industry, not a particular company.
I'm with the "wind it down properly if it's not working" crowd though. One reason is that you have to fire people, and it's nicer to still be able to give them some severance pay.
Those who persevere and fail may tell how not quitting early enough continued the agony, but also can tell how just a bit more help could have led them to success, but odds were just all stacked against them.
Those who saw a failure coming and quit are likely not to tell much about it, there's no glory at it.
This all produces a kind of evolutionary / social pressure to persist and maybe win even when the chances are slim. The winner takes all. The losers persist at their (and, in a sense, everyone's) expense of "malinvestment", but they, and the price they pay, is handwaved away and forgotten. Evolution is about advancement of a species, not of a particular organism; progress is about advancement of an industry, not a particular company.
I'm with the "wind it down properly if it's not working" crowd though. One reason is that you have to fire people, and it's nicer to still be able to give them some severance pay.
I did the same, persevered, and threw away 11 years on a company I should have thrown in the rubbish after 1. The only thing that saved my career afterwards was family nepotism.
It's often investors who push the "never give up" thinking because those 11 years just come out of their LP's bank accounts, not out of bedtime stories with their kids.
It's often investors who push the "never give up" thinking because those 11 years just come out of their LP's bank accounts, not out of bedtime stories with their kids.
I've been a technical advisor for several startups, I'd say that overall this advice is wrong.
Most startups stay in it way longer than they should.
I'm happy that things worked out in your example, but they generally don't. Mostly because founders reason with their feelings instead of applying logic, statistics and probabilities of success.
Most startups stay in it way longer than they should.
I'm happy that things worked out in your example, but they generally don't. Mostly because founders reason with their feelings instead of applying logic, statistics and probabilities of success.
It really depends on what the end game is. Diplomacy?
Might make sense to wait and see what kind of rocks you find.
Might make sense to wait and see what kind of rocks you find.
> They shouldn’t go through down-rounds, cap table restructurings, multiple major pivots, or team transitions. After all that, is it even the same company? No. They should just shut down and start over.
The article is talking about pivots not a lack perseverance ...
The article is talking about pivots not a lack perseverance ...
[deleted]
And that founders name? J. Robert Oppenheimer!
Survivor bias!
My first startup went through 2 majors pivots and eventually did quite well. The most valuable bit though was the experience. Second startup is in great shape thanks to that experience.
I think many founders give up too early. You wont learn if you don't go through some difficult experiences.
I think many founders give up too early. You wont learn if you don't go through some difficult experiences.
Keep in mind survivorship bias though. There are probably loads who pivot multiple times yet still end in failure.
It's tricky though, you often can't tell if you are in the survivor set or not until after all those attempts at perseverance. Its easy to assume that after N failures the company is not in the survivor set, but you can never actually know. So without perseverance, no one would be a survivor.
OP here. I think i mixed the message too much by putting pivots in the same category as founder transitions and down-rounds.
Pivots are fine. But when you're basically just starting over on a completely new business with less money and a demoralized team, your likelihood of success is significantly impaired. Successful pivots need to carry ~something~ over of value
Pivots are fine. But when you're basically just starting over on a completely new business with less money and a demoralized team, your likelihood of success is significantly impaired. Successful pivots need to carry ~something~ over of value
Yes. Letting them start over on something completely different is indulging sunk-cost fallacy. People were hired on the strength of being able to build X. If they are not who you would have picked to build Y, then getting them building Y anyway means you start out with a broken leg.
Not sure about this, it's very contingent on the specifics of X and Y as well as how specialized the hires were. Obviously it depends on the domain, but I definitely bias towards generalists of the Joel Spolsky variety (ie. "smart and gets things done") versus loading up on specialists early as it can often constrain the thinking in a way that hampers exploration when you're trying to find product market fit.
On the other hand, if the team works well together, maybe they would actually be good at building something different?
It seems like this will vary significantly depending on the team and the new plan. How valuable is it, really, to keep this team together?
It seems like this will vary significantly depending on the team and the new plan. How valuable is it, really, to keep this team together?
that's not really sunk cost fallacy? sunk cost fallacy in that case would be not pivoting when it's the best move looking forward, because you already spent so much time building and hiring for x (i.e. the sunk cost, which if not falling into the fallacy you should be ignoring for that decision)
You spent a potful of money, and got nothing. You can give the same people another potful of money, or give it to somebody else who demonstrates actually delivering something of value. Only sunk-cost fallacy says to give the former, exactly, another potful. They should get back in line with everybody else.
That just amounts to never cutting your losses & throwing good money (or time) after bad.
The fact that it's a difficult decision with risks of being wrong either way is not a good reason to avoid making it. If you're going to choose perseverance it should be a reasoned choice, not the result of inaction due to uncertainty in the face of a difficult choice.
Before "move fast & break things" became the slightly misguided mantra for SV the message was often wisdom, much more tempered by decades of startup culture, was "fail fast and move on".
Most will fail. If the only thing you have left is vague hope and a willingness to work hard and very little else then it's best to put that optimism and work ethic into a course of action where the preponderance of evidence doesn't already point towards failure.
Of course it's a balance, but don't be afraid of making a decision just because it isn't an easy one to make.
The fact that it's a difficult decision with risks of being wrong either way is not a good reason to avoid making it. If you're going to choose perseverance it should be a reasoned choice, not the result of inaction due to uncertainty in the face of a difficult choice.
Before "move fast & break things" became the slightly misguided mantra for SV the message was often wisdom, much more tempered by decades of startup culture, was "fail fast and move on".
Most will fail. If the only thing you have left is vague hope and a willingness to work hard and very little else then it's best to put that optimism and work ethic into a course of action where the preponderance of evidence doesn't already point towards failure.
Of course it's a balance, but don't be afraid of making a decision just because it isn't an easy one to make.
The pivot can be key - especially if you've built a team that can execute, identifying early that your plan won't work and pivoting to something else can help. And in the worst case, you've learned more.
It seems the prime directive to startups is "stay alive no matter how". If you can do that, eventually luck will find you.
It's when VCs enter the picture that this becomes complicated. VCs want their pound of flesh back generally sooner than you will get lucky.
It's when VCs enter the picture that this becomes complicated. VCs want their pound of flesh back generally sooner than you will get lucky.
That is very bad advice.
If I did shut evrything down once I hit some hard opposition, I'd never finish anything.
The better advice is, try, fail, try again util you succeed.
Success is overcoming obstacles.
I think the key part of that idea is learning from the failures. Analysis and objective opinions on what caused the failure
For those who (like me) didn't get the reference, the "Ship of Theseus" is a thought problem about whether, if every part of the ship has individually been replaced, it remains the Ship of Theseus.
https://en.wikipedia.org/wiki/Ship_of_Theseus
https://en.wikipedia.org/wiki/Ship_of_Theseus
Is the ship of Theseus a single thought problem, or is it a different thought problem than when it was first thunk since all the present thinkers are different?
That's a funny joke. It does make me think about concepts and organizations and how they can drift. I don't think the Ship of Theseus has drifted much, but I think it totally applies to organizations and who is a member, e.g. people who supported the French Revolution / a school board / people who identify as liberal or conservative, etc.
I know you're being flippant, but I don't know if you mean it, so I'll answer anyway:
It's the same thought problem, because thought problems don't have to be embodied in anyone and it hasn't significantly changed.
Also it's not the same actual thoughts across people, and basically never was.
So there's nothing in here that's been slowly replaced piece by piece. The paradox does not apply to itself.
It's the same thought problem, because thought problems don't have to be embodied in anyone and it hasn't significantly changed.
Also it's not the same actual thoughts across people, and basically never was.
So there's nothing in here that's been slowly replaced piece by piece. The paradox does not apply to itself.
Alternatively, Trigger's Broom.
https://www.youtube.com/watch?v=LAh8HryVaeY
https://www.youtube.com/watch?v=LAh8HryVaeY
Or Lincoln's ax.
One of my favorite ones. It comes to "identity". What does it mean to "be" (or not to be)?
This was written by a VC who has no track record as an operator or founder.
The only consistent advice I have ever gotten from the most financially successful people I know (many worth >$100MM) has been to never give up. Some of them took decades to get to even moderate success.
The last decade has been an illusion of how quickly you can get rich starting a company. It can take years to see payoff and it is not always obvious.
The only consistent advice I have ever gotten from the most financially successful people I know (many worth >$100MM) has been to never give up. Some of them took decades to get to even moderate success.
The last decade has been an illusion of how quickly you can get rich starting a company. It can take years to see payoff and it is not always obvious.
Well, yes, but let's bear in mind that there's a big confirmation bias there. Were these hundredaires more or less willing to give up than your ordinary founder who ends up with nothing after a few years to a decade at the wheel of a zombie company? Have they never given up on anything at all?
Extraordinary people can fail and regular people can make a lot of dough. I've met with a few billionaires myself and I have to say I didn't find them to be a different class of human. Just luckyer, from good families and with a very good sense of timing. Obviously very good at what they do. But fundamentally not that different from you and I.
Extraordinary people can fail and regular people can make a lot of dough. I've met with a few billionaires myself and I have to say I didn't find them to be a different class of human. Just luckyer, from good families and with a very good sense of timing. Obviously very good at what they do. But fundamentally not that different from you and I.
I am not by any means calling it an absolute. But the data points tilt in favor of working through the pain and difficulties instead of throwing in the towel at the slightest speed bump.
Consider another point of view then: how many people struck it big on their second, third, fourth startup?
Off the top of my head Uber was Travis' third startup. Does that make him a quitter or a perseverer?
At my age I known plenty of tech entrepreneurs who've been at it for 10 years with no big hits. Statistically some of them will eventually make it. I doubt I'll be able to say sincerely they were the ones with more grit. But I'm sure they themselves will say it for me :)
Off the top of my head Uber was Travis' third startup. Does that make him a quitter or a perseverer?
At my age I known plenty of tech entrepreneurs who've been at it for 10 years with no big hits. Statistically some of them will eventually make it. I doubt I'll be able to say sincerely they were the ones with more grit. But I'm sure they themselves will say it for me :)
Do you not see how their advice is tautological?
"never give up" coming from people who succeeded after decades of work.
It's obvious that a prerequisite for success is not giving up, but what about the people who didn't give up for decades and have nothing to show for it? I suppose they don't exist.
"never give up" coming from people who succeeded after decades of work.
It's obvious that a prerequisite for success is not giving up, but what about the people who didn't give up for decades and have nothing to show for it? I suppose they don't exist.
> Some of them took decades to get to even moderate success.
1. Was it worth it? I have moderate success, and I'm still making less than I would if employed.
2. Wouldn't it be faster if you did it with another idea/team? Pivots do some of that, but sometimes it's a structural problem.
Not to mention that many entrepreneurs try it when they're young and just plain don't have the experience necessary. Not sure what would be a good education on that, other than keep burning other people's money for 2-3-5 times.
1. Was it worth it? I have moderate success, and I'm still making less than I would if employed.
2. Wouldn't it be faster if you did it with another idea/team? Pivots do some of that, but sometimes it's a structural problem.
Not to mention that many entrepreneurs try it when they're young and just plain don't have the experience necessary. Not sure what would be a good education on that, other than keep burning other people's money for 2-3-5 times.
This has to be the worst advice I've seen on HN since 2008.
It assumes if idea #1 doesn't work out quitting is the best way to go. The reality is once you have even a small team of co-founders or a slightly larger one together you have a group of people who have _hopefully_ learned to work with each other well and can move unencumbered to explore and test a variety of ideas, develop insights and ultimately increase their odds of success. Sure, it's not guaranteed to work, but it's probably better than the next best alternative.
And oh, good luck just shutting down and re-rolling into a new company with investors and employees.
It assumes if idea #1 doesn't work out quitting is the best way to go. The reality is once you have even a small team of co-founders or a slightly larger one together you have a group of people who have _hopefully_ learned to work with each other well and can move unencumbered to explore and test a variety of ideas, develop insights and ultimately increase their odds of success. Sure, it's not guaranteed to work, but it's probably better than the next best alternative.
And oh, good luck just shutting down and re-rolling into a new company with investors and employees.
I think your reality is very far from the actual reality.
What I have witnessed with every single startup where I personally knew the founders was that the ideas were bad, the people were bad and the way of working was bad.
What I have witnessed with every single startup where I personally knew the founders was that the ideas were bad, the people were bad and the way of working was bad.
I'm assuming basic competence in other areas, product/eng/sales/design etc. if you don't have that AND you don't have a clear idea/insight, then certainly it will be hard to succeed.
What's the difference between a pivot and founding a new company?
Sometimes your company has some baggage (messy cap table, bad hires, a down round, etc), and pivoting brings that baggage along. On the other hand, forming an entirely new company takes time and effort that may not be necessary.
What do fundraising entities think when they see a company fold/exit somehow in a way that keeps the founder free, and the founder immediately found a "similar" company solving an "only" marginally different problem?
Sometimes your company has some baggage (messy cap table, bad hires, a down round, etc), and pivoting brings that baggage along. On the other hand, forming an entirely new company takes time and effort that may not be necessary.
What do fundraising entities think when they see a company fold/exit somehow in a way that keeps the founder free, and the founder immediately found a "similar" company solving an "only" marginally different problem?
This is the worst advice I've seen trending on HN for a while. Speaking as an angel investor, as well as a startup founder myself. In fact, I'd feel quite offended when people offer me the money back. Luckily it didn't happen to me yet!
I've seen dozen of early startups that went through a multitude of hard times (most of the time at the "finding product-market fit stage"), but pretty much all of those who kept going found mild to large success eventually.
I've seen dozen of early startups that went through a multitude of hard times (most of the time at the "finding product-market fit stage"), but pretty much all of those who kept going found mild to large success eventually.
On the other hand, Microsoft was just a BASIC vendor, Amazon was a bookseller, Netflix was mail oder DVD company.
Sometimes if you have a really good team/organization it makes sense to pivot based on the market.
Sometimes if you have a really good team/organization it makes sense to pivot based on the market.
Microsoft's BASIC evolved into Visual Basic and still exists as the .NET platform. Amazon still sells books. Netflix still operates their mail order DVD company. All three do a bunch of other things now, but those products allowed the companies to grow and expand.
I don't think expanding to other verticals is the same thing as a pivot, a pivot (imo) is when you entirely change your business strategy and product because the thing you were doing wasn't working. If you expand the definition of a pivot to any change in business strategy, then every company pivots all the time, and the term loses its meaning.
I don't think expanding to other verticals is the same thing as a pivot, a pivot (imo) is when you entirely change your business strategy and product because the thing you were doing wasn't working. If you expand the definition of a pivot to any change in business strategy, then every company pivots all the time, and the term loses its meaning.
Yeah, and also; Amazon knew (or, at least, Bezos says he knew) from Day 1 that books were only the beginning. They started with books because they're an extremely broad category (hard to stock one Barns & Noble full of every book), easy to ship, and they have a practically unlimited shelf life (versus clothes/technology, which experiences seasonal trends, or even food; all of which Amazon now does).
Big difference between "we think this is The Business, ope its not lets pivot" and "we think this is a good place to Start the Business and grow out of".
Big difference between "we think this is The Business, ope its not lets pivot" and "we think this is a good place to Start the Business and grow out of".
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What about the classic story of the AirBnB founders pivoting from selling cereal?
It seems like the metric for whether you decide to pivot or shut down depends on how many rounds you've done and how many employees you have.
Early on, couple of founders & handful of employees: maybe do whatever pivots you can to survive.
If you're a big boat and pivoting will require firing 80% your staff and starting an entirely different product, maybe consider just shutting down.
(If you've got solid revenue but are just unprofitable, none of this probably applies, you should try whatever you can to save the revenue stream)
It seems like the metric for whether you decide to pivot or shut down depends on how many rounds you've done and how many employees you have.
Early on, couple of founders & handful of employees: maybe do whatever pivots you can to survive.
If you're a big boat and pivoting will require firing 80% your staff and starting an entirely different product, maybe consider just shutting down.
(If you've got solid revenue but are just unprofitable, none of this probably applies, you should try whatever you can to save the revenue stream)
But selling repackaged cereal in cutesy boxes was never Airbnb’s long term plan. Can it be called a pivot at that point?
No it wasn’t Airbnb’s main line so I don’t consider it a pivot. I always thought it was a good lesson in being scrappy.
They needed some cash, had a good random idea and did it as a side project to raise some money. In the end it became a great story of chutzpah too.
Similar to how the band Vulfpeck found a loophole in Spotify’s terms and got a tour funded by publishing a silent album and getting their fan base to stream it at work.
They needed some cash, had a good random idea and did it as a side project to raise some money. In the end it became a great story of chutzpah too.
Similar to how the band Vulfpeck found a loophole in Spotify’s terms and got a tour funded by publishing a silent album and getting their fan base to stream it at work.
I wouldnt consider it a pivot in that case. Some business plans feel like an onion, there's always a layer more to it.
airbnb is a business model that has proven to be a great idea at one point. but I wonder if this is valid for every business idea? In other words, can every business model that has been followed for years be successful?
On the other hand, that advice would have killed off Tesla and SpaceX at least 15 years ago.
We can dream.
What's up with the weird Elon hate recently? I don't care for the guy one way or another, but it's just bizarre. Plus, I have friends that worked for both Tesla and SpaceX and from what I hear, apart from being big and corporate-y, it's a pretty awesome place to be at.
It is not weird. He is the world's biggest grifter. Precisely, a great deal more of what he says is a lie than is true, and he has profited more from his grift than anybody except (maybe!) Putin.
Pedo Guy. Hyperloop. Full Self-driving. Electric truck-tractor. Cybertruck. Sub-orbital passenger service. Sub-orbital freight. One-day turnaround. Mars Colonization.
(To be clear: Starship, even 1000 of them, is totally inadequate to colonize Mars, and barely enough, maybe, to maintain an outpost. And it takes 9, not 6 months to get there. And one ship could take 17, at most, not 100 people.)
Pedo Guy. Hyperloop. Full Self-driving. Electric truck-tractor. Cybertruck. Sub-orbital passenger service. Sub-orbital freight. One-day turnaround. Mars Colonization.
(To be clear: Starship, even 1000 of them, is totally inadequate to colonize Mars, and barely enough, maybe, to maintain an outpost. And it takes 9, not 6 months to get there. And one ship could take 17, at most, not 100 people.)
Of all the people to call a grifter you choose the one who's doing the most to solve climate change, pushing forward EVs and space, is employing thousands of great engineers and inspiring new generations of engineers?
Get a grip.
Get a grip.
Musk is doing very, very far from the most to solve climate change. He puts batteries in pathologically unreliable self-crashing cars. And burns thousands of tons of kerosene or natural gas in each rocket.
> puts batteries in pathologically unreliable self-crashing cars
I don't even own a Tesla or Tesla stock, and I can tell that you've got some serious issues going on. Calling Tesla cars "self-crashing" and "unreliable" is just flat out lying[1]. This website is not a Twitter echo-chamber, and it's certainly not your personal soapbox. People are going to call you out.
Get a grip, indeed.
[1] https://electrek.co/2021/12/21/tesla-model-y-achieves-highes...
I don't even own a Tesla or Tesla stock, and I can tell that you've got some serious issues going on. Calling Tesla cars "self-crashing" and "unreliable" is just flat out lying[1]. This website is not a Twitter echo-chamber, and it's certainly not your personal soapbox. People are going to call you out.
Get a grip, indeed.
[1] https://electrek.co/2021/12/21/tesla-model-y-achieves-highes...
Consumer reports identified Tesla's as the least reliable American car.
> Consumer reports identified Tesla's as the least reliable American car.
Going from "self-crashing cars" (which is a really serious allegation) to "cars that break down" (citing consumer reports of all sources); you keep moving the goalpost and are clearly not debating in good faith.
Good luck out there.
Going from "self-crashing cars" (which is a really serious allegation) to "cars that break down" (citing consumer reports of all sources); you keep moving the goalpost and are clearly not debating in good faith.
Good luck out there.
I said "unreliable" in my first post, which you quoted yourself. (See.) Consumer Reports is the most authoritative source on car reliability, and its absence.
And even you must be aware of numerous widely reported cases of Teslas autonomously ramming concrete barriers and stopped vehicles. There are even dramatic vids on YouTube. (See.)
We need not discuss the common "burst into flame, incinerating the vehicle down to the pavement".
Elon has enough money to buy shills, and does. He does not need volunteers.
And even you must be aware of numerous widely reported cases of Teslas autonomously ramming concrete barriers and stopped vehicles. There are even dramatic vids on YouTube. (See.)
We need not discuss the common "burst into flame, incinerating the vehicle down to the pavement".
Elon has enough money to buy shills, and does. He does not need volunteers.
> He is the world's biggest grifter
I mean, this is a bit dramatic, don't you think? Or do you not know who Jordan Belfort and Bernie Madoff are? Apart from annoyingly trolling Twitter, I don't really think Musk's really done anything that terrible.
Just seems like weird and reactionary "rich guy = bad" groupthink. I remember when everyone hated Bill Gates, but I guess now he's a humanitarian so it's totally cool.
I mean, this is a bit dramatic, don't you think? Or do you not know who Jordan Belfort and Bernie Madoff are? Apart from annoyingly trolling Twitter, I don't really think Musk's really done anything that terrible.
Just seems like weird and reactionary "rich guy = bad" groupthink. I remember when everyone hated Bill Gates, but I guess now he's a humanitarian so it's totally cool.
Bill Gates, Bernie Madoff, and Jordan Belfort are smaller grifters, the latter two much smaller. (Gates, additionally, was tight with Jeffrey Epstein for decades, also a much smaller grifter.)
Rich does not mean bad. Grift is bad. I think there is a difference. Or do you mean that nobody can be that rich without being a grifter? That might be true, but I don't think of Warren Buffet as one. Or even Jeff Bezos.
Rich does not mean bad. Grift is bad. I think there is a difference. Or do you mean that nobody can be that rich without being a grifter? That might be true, but I don't think of Warren Buffet as one. Or even Jeff Bezos.
How did Bill Gates grift anyone? I think you have some sort of moral chip on your shoulder. People aren't perfect, and I don't know enough about Bezos or Buffet, but I'm sure they've done some shady things in their past.
But the reactionary response is just very odd. I'm too busy, worried about my own life, plans, goals, etc. to so vehemently hate some random billionaire who doesn't even know I exist. If it was personal, I'd understand, but it just seems to be part of a certain zeitgeist to hate on the guy, and everyone does it without question.
But the reactionary response is just very odd. I'm too busy, worried about my own life, plans, goals, etc. to so vehemently hate some random billionaire who doesn't even know I exist. If it was personal, I'd understand, but it just seems to be part of a certain zeitgeist to hate on the guy, and everyone does it without question.
Missing the point. I don't hate Musk. (Anybody who does probably was fired during one of his tantrums.) I do recognize him as a grifter, for reasons. Can you understand the difference?
This isn't the place to explain Gates's failings, or Putin's; that's easy to look up.
I don't think you are using that word "reactionary" in any meaningful way. Have you ever looked it up?
This isn't the place to explain Gates's failings, or Putin's; that's easy to look up.
I don't think you are using that word "reactionary" in any meaningful way. Have you ever looked it up?
I used to work with an ex paypal employee who carried around a block of salt for Elon Musk. I never did get the full story. You could see the hate-lines coming off of the guy any time you accidentally mentioned the two in the same sentence.
On the Starship front, I don't doubt that he's moved the needle, but I think people are also glossing over that whole, "Send up multiple ships, have them all transfer fuel to another ship in zero G" bit. It's presented as a 2:1 thing but does the math work out for that, or is it three ships combining fuel into a single vessel?
On the Starship front, I don't doubt that he's moved the needle, but I think people are also glossing over that whole, "Send up multiple ships, have them all transfer fuel to another ship in zero G" bit. It's presented as a 2:1 thing but does the math work out for that, or is it three ships combining fuel into a single vessel?
More than 3. I am seeing 10.
I don't think the metaphor works well here. The argument that the ship of Theseus is the same is because even though each component has been replaced, it has been replaced by something pretty much indistinguishable from the original. One plank or rope or sail is much like another. I don't think anyone would claim it's still the ship of Theseus if you took all the wood and build something else out of it that wasn't even a ship anymore.
But in any case I don't see how invoking the metaphor in any way supports the op's argument.
pretty dumb article in my opinion. Part of being a good entrepreneur is struggling through hard times and figuring out a way to survive and make shit work when things aren't going well. If you follow this articles advice and quit at the first sign of trouble you won't get very far.
You can also lose face by doing what article suggests, which is "quitting". investors want a return on their money. They believe in your idea and management can make it happen. If management is no longer on board, what's to prevent investors from finding new management? Of course, easier said than done and depends on company stage. The downside (some risk capital) is small for an investor compared to the upside they're looking for, or that you're promising.
I've got 1/3 stake in a company I left over ten years ago. The co-founder still hasn't given up, even though the company still hasn't turned a profit. I think he might be from a wealthy family and is just keeping it going to feel good about himself. Or he's a member of a three letter agency and using the company for intelligence gathering (it's based in a country at odds with the US). Very strange.
Yes: e.g., Energy Vault (NRGV, $2B+) absolutely cannot work, and should be shut down immediately. Maybe give back whatever of the pigeons^Winvestors' money is left? Somebody should sue the founders for fraud.
The crane thing was actively stupid, and very obviously could not ever have worked. An investor who bothered to consult literally any mechanical engineer would have run a mile. Lots did, of course. But somebody bade the thing up.
The current "condominium for concrete blocks" scheme could probably be made to sort of work, for a while, until it breaks, but only at 100x the price of the storage that utilities will actually buy, instead, because they are not all complete idiots, and anyway have engineers on staff.
I expect NRGV to pivot to orbital beamed solar power, next, or orbital mirrors to light up your solar farm at night. Anything that would take a long time to prove can't work would meet their needs.
The crane thing was actively stupid, and very obviously could not ever have worked. An investor who bothered to consult literally any mechanical engineer would have run a mile. Lots did, of course. But somebody bade the thing up.
The current "condominium for concrete blocks" scheme could probably be made to sort of work, for a while, until it breaks, but only at 100x the price of the storage that utilities will actually buy, instead, because they are not all complete idiots, and anyway have engineers on staff.
I expect NRGV to pivot to orbital beamed solar power, next, or orbital mirrors to light up your solar farm at night. Anything that would take a long time to prove can't work would meet their needs.
Can you give a quick rundown why "the crane thing" could not ever have worked, and what exactly it was, separate from the "condominium for concrete blocks", which seems to be what is described in the Wikipedia article, but also uses cranes?
As a non-mechanical engineer, it's not obvious to me.
As a non-mechanical engineer, it's not obvious to me.
https://www.youtube.com/watch?v=iGGOjD_OtAM
https://www.youtube.com/watch?v=NIhCuzxNvv0
https://www.youtube.com/watch?v=XxGQgAr4OCo
By contrast, this is not stupid:
https://gravitricity.com/going-underground-why-gravitricity-energy-storage-makes-sense/
They are talking about sealing the shaft and compressing hydrogen into it. And, maybe storing heat there, besides. Both ideas are also simple, but they don't have to work for the product to be viable; if they do work, they add value. My impression is they added those so their solution could seem more "innovative": the weight in the shaft, by itself, is a sure thing, so probably missed out on some long-shot seed subsidies. Funding in the energy sector is not well aligned.
They will probably need to figure ways to get their cost lower. Batteries are approaching $200/MWh, with people expecting that to hit $100. Certain chemistries ("Form") are quoting $20, but are probably over-optimistic. 50 years operation with no degradation could beat a nominally cheaper system that needs the expensive part replaced regularly.
Compare it to water energy storage.
Water is 1kg/L. Concrete is 2.4kg/L. Therefore, the volume of concrete lifted is 40% the volume of water you would need to store the same amount of energy.
Here's the biggest water energy storage facility in the US: https://www.google.com/maps/place/Dominion+Bath+County+Pumpe...
Cost of the water for that facility? $0/L.
Equivalent cost for concrete? $0.15/L (https://www.google.com/search?q=concrete%20cost)
That facility has 14GL of water.
Replacing that water with concrete, you get $2.1 billion dollars. Which, ya know, actually compares favorably with the $4 billion (2022 $) that the pumped hydro facility costs.
But then you have to remember that the pumped storage facility has like a half-dozen or dozen pumps, and that probably made up a big fraction of the cost.
The equivalent lifting block thing would have... like thousands or tens of thousands of the motor/generator devices. I can't imagine the cost.
Water is 1kg/L. Concrete is 2.4kg/L. Therefore, the volume of concrete lifted is 40% the volume of water you would need to store the same amount of energy.
Here's the biggest water energy storage facility in the US: https://www.google.com/maps/place/Dominion+Bath+County+Pumpe...
Cost of the water for that facility? $0/L.
Equivalent cost for concrete? $0.15/L (https://www.google.com/search?q=concrete%20cost)
That facility has 14GL of water.
Replacing that water with concrete, you get $2.1 billion dollars. Which, ya know, actually compares favorably with the $4 billion (2022 $) that the pumped hydro facility costs.
But then you have to remember that the pumped storage facility has like a half-dozen or dozen pumps, and that probably made up a big fraction of the cost.
The equivalent lifting block thing would have... like thousands or tens of thousands of the motor/generator devices. I can't imagine the cost.
> like thousands or tens of thousands of the motor/generator devices. I can't imagine the cost.
? The number of motor/generator pairs is proportional to the charge/discharge rate of the system. I'm not saying that because I'm an insider or have any special knowledge, I'm saying that because nothing else makes sense. So the question is whether it's cheaper to maintain a bunch of cranes and miles of steel cable and pulleys or a water generator and pipes. And then things like how each responds to earthquakes and thunderstorms (water probably wins in the latter, but the former is a little more complicated).
? The number of motor/generator pairs is proportional to the charge/discharge rate of the system. I'm not saying that because I'm an insider or have any special knowledge, I'm saying that because nothing else makes sense. So the question is whether it's cheaper to maintain a bunch of cranes and miles of steel cable and pulleys or a water generator and pipes. And then things like how each responds to earthquakes and thunderstorms (water probably wins in the latter, but the former is a little more complicated).
I was thinking of the CGI render at the top of this page: https://qz.com/1355672/stacking-concrete-blocks-is-a-surpris...
You're right, linear may be a better use of resources, since you don't need thousands of towers, each with their own crane/generator system.
I don't know. But this is a battle against cost, in an industry where the required 10x or 100x is impossible.
You're right, linear may be a better use of resources, since you don't need thousands of towers, each with their own crane/generator system.
I don't know. But this is a battle against cost, in an industry where the required 10x or 100x is impossible.
The video shows roughly n^1/3 generators, which is still a little high but more manageable.
You also need hundreds of motors to shunt the blocks from their penthouse apartments to the elevators and back.
Hydro power dams and generating stations have been through thousands of serious earthquakes, worldwide, over more than a century. A condo penthouse packed with concrete blocks? Not so much. We have a lot of experience with earthquakes and stone blocks stacked high without mortar. The name for those is "ruins".
Hydro power dams and generating stations have been through thousands of serious earthquakes, worldwide, over more than a century. A condo penthouse packed with concrete blocks? Not so much. We have a lot of experience with earthquakes and stone blocks stacked high without mortar. The name for those is "ruins".
It doesn't work if there is any wind at all. Even with a dome over, it could store only a pitifully minuscule amount of energy. There are lots of YT vids about how stupid it is.
Compare to e.g. https://news.ycombinator.com/item?id=31736539 . Somehow people are unable to do even the most trivial reasoning about cost, where energy storage is involved: expensive stuff is expensive. Utilities will buy what is cheap to build, cheap to use, cheap to maintain, and reliable. NRGV checks zero boxes.
(Hydrogen and ammonia synthesis equipment will not be super-cheap, but its output burns in gas peaker turbines, and can be sold for hard cash.)
Even NRGV dropped the crane thing like a hot potato the moment they got their IPO cash.
Compare to e.g. https://news.ycombinator.com/item?id=31736539 . Somehow people are unable to do even the most trivial reasoning about cost, where energy storage is involved: expensive stuff is expensive. Utilities will buy what is cheap to build, cheap to use, cheap to maintain, and reliable. NRGV checks zero boxes.
(Hydrogen and ammonia synthesis equipment will not be super-cheap, but its output burns in gas peaker turbines, and can be sold for hard cash.)
Even NRGV dropped the crane thing like a hot potato the moment they got their IPO cash.
We decided to persevere through hard times by mostly annually checking 'is tech X / market X / milestone X being reached?', and then ahead of time updating the same 'in 1 year, will...'. Beliefs got validated, we went from default dead to default alive, and now growing & hiring without really caring about the frozen capital markets beyond how to help our customers through their side of it. Especially in something like category creation and deep tech, this can be a long marathon.
But it also comes down to personal goals. If I was in it for the $, we would have been Google employees years ago and many m&a offers earlier. Shutting down can be the right move, so depending on the goals, different questions to ask.
But it also comes down to personal goals. If I was in it for the $, we would have been Google employees years ago and many m&a offers earlier. Shutting down can be the right move, so depending on the goals, different questions to ask.
As always, all advice is wrong. While pivots are difficult to execute, many successful products came out of pivots like PowerPoint :
https://en.wikipedia.org/wiki/Forethought,_Inc.
https://en.wikipedia.org/wiki/Forethought,_Inc.
> Founders often want to “reward” their early investors and find salvage value while investors see major pivots and restructurings as leaving them with free “option value.”
I think more human, personal elements are probably at play before this conclusion. Moreover, I think this mentality the OP is suggesting is good is actually wrong and actively harmful.
> For almost all of them, it won’t be worth it. When things get really messy for seed companies, it’s almost always already a lost cause.
The "almost" in this sentence is the actual key. How do you know? By not doing everything you can to find out you run the risk of the opposite reputation: Gives up easily, not willing to put in the work, fair weather founder, etc.
I think more human, personal elements are probably at play before this conclusion. Moreover, I think this mentality the OP is suggesting is good is actually wrong and actively harmful.
> For almost all of them, it won’t be worth it. When things get really messy for seed companies, it’s almost always already a lost cause.
The "almost" in this sentence is the actual key. How do you know? By not doing everything you can to find out you run the risk of the opposite reputation: Gives up easily, not willing to put in the work, fair weather founder, etc.
Aren't investors really investing in the team talent to find pmf? In this case, is it practical to advise them to quit? If there's blood in the streets, it's just time to be a vampire.
Book is a nice read, have some good advice but it's so unrealistic. One example: somebody finds out about event-driven architecture and in a weekend (or a week?) they successfully refactor a complex system with multiple disparate components that now can produce the reports or whatever they needed, I was shaking my head.
I don't know that that's valid advice. I know at least one friend whose startup was founded on one premise, which failed quickly, and left the team with enough runway to pivot to an eventually successful, and completely different, business.
Simply watching ‘Dragon’s Den’ will reveal how ludicrously passionate people are about some of the worst ideas.
I don’t really agree with the article, though. If it’s not achieving the results you want, it doesn’t inherently mean it’s a bad idea.
I don’t really agree with the article, though. If it’s not achieving the results you want, it doesn’t inherently mean it’s a bad idea.
It is going to work. I can feel it in my gut. I just need to keep myself and a few of generations of my offspring working on it for 150 years or so. Easy peasy.
Do investors have any evidence based reason to think a company has a better chance the second or third try, or a worse chance for that matter?
Does past performance matter?
Does past performance matter?
So, I would think that startups do have a better chance on first and second pivot. After all, by the time it's time to pivot, the startup will have more staff than when it started, the social relationships will be established, and the staff's skills understood. It's a huge advantage compared to the day the startup is founded.
> Does past performance matter?
If a startup is pivoting, that means that "past performance" is negative. Does it say anything about future performance? Maybe it says "they'll fail and fail and fail again", or maybe it says "they've learned some lessons and now are staffed appropriately for a pivot".
Investors have to put time in to understand what they might be investing in.
> Does past performance matter?
If a startup is pivoting, that means that "past performance" is negative. Does it say anything about future performance? Maybe it says "they'll fail and fail and fail again", or maybe it says "they've learned some lessons and now are staffed appropriately for a pivot".
Investors have to put time in to understand what they might be investing in.
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This is the model of Noubar Afeyan’s Flagship Pioneering: place tons of little bets, give them enough money to falsify the hypothesis. Don’t even name the company yet. It’s just an experiment. If it won’t work, kill it and move to the next one. If it does work, call it Moderna and sell a billion mRNA COVID vaccines.
"It's not their money anymore. Don't you dare give up."
He didn't, he persevered, and the company had a fine outcome years later. I would not blindly follow OP's advice.