8 Startups On How They Knew They Had To Change Their Original Plan

There comes in a time the life of many startups when it starts to become clear that everything is not going according to plan. But how do entrepreneurs tell if they need to keep going all in on the original plan, or pivot to something new?

To find out how real-world companies deal with that decision, we asked eight successful young entrepreneurs from the Young Entrepreneur Council (YEC) when they realized they had to let go of the products, plans and strategies that they worked so hard to develop. The most common indicator? Customers made it clear they wanted something different.

1. As Soon As You Can

Smart companies almost always pivot, usually multiple times. You might change the product because it doesn't meet the needs of the market you identified. You might change the market you're targeting because another market finds the product more useful, will pay more money, or has a larger pool of prospects. You might change the revenue model to one more attractive to customers. One of your primary goals early on should be to find out which elements of your business model are flawed as quickly as possible, so you can correct the course with minimal wasted time and effort. The key to doing this is having data. Analytics, surveys, face-to-face interviews and more will help you make informed decisions and ensure any pivots you make get you closer to your goal. - Sean Johnson, Digital Intent

2. Find New Goals You're Aligned With

It's quite the blow to the ego when you wake up one day and realize, "Wow... this isn't working, and it hasn't been working for a while." But the good news is, when you know something isn't working, deep down, you usually also know what would work better. It's just a matter of allowing yourself to "go there" and tune in to what feels out of alignment with who you are and your mission. The way I do this is by thinking back to a moment when I was working on something using one of my "old" models and feeling really frustrated and irritable. I think of the words that were forming in my head at that time (usually, it's something like, "If only I could ____ instead"). That's the clue that tells me what I should change. And voila: you've found your pivot point. - Amanda Aitken, The Girl's Guide to Web Design

3. The Feedback-Induced Pivot

It is time to pivot when your customers are consistently giving you the same feedback that things would need to be different for them to purchase. It often takes six months to a year to determine whether or not you are on the right path. Too often, we see entrepreneurs pivot too early before they have talked to enough customers to constitute an adequate data sample. - Eric Corl, Fundable LLC

4. Don't Throw Out Your Code!

Pivots are an evolution of your business, but it doesn't mean that you need to entirely let go. It can make your transition easier if you view the pivot as setting aside your previous hard work to pursue a strategy that will be stronger. Especially for technology entrepreneurs, I caution against scrapping and forgetting the code you and your team have worked hard to develop, because it's likely that, even post-pivot, you can adopt or adapt something from the early version of your product for the pivoted deliverables. Shelve your products and plans to pursue your pivot full-force, but don't let go of them completely. - Doreen Bloch, Poshly Inc.

5. Your Customers Tell You What They Want

We started as a free-screenwriting-software company back in 2008. Our goal was to give away screenwriting software and convince producers they should buy screenplays from us. It wasn't until 2010, when Levi's came to us and said "Hey, you have a ton of writers on your screenwriting software platform (50,000 at the time), can they work on non-entertainment industry projects?" After we finished the project, we realized we were onto something, and more and more folks starting coming to us asking for help with blog posts, tweets and other written content - so we pivoted to Scripted. Our pivot was driven entirely by customer demand for our product. - Sunil Rajaraman, Scripted.com

6. You Need To Grow To Survive 

Pivoting is a big decision. The only time to consider pivoting your business is when a huge opportunity is in front of you. If you are going to make a major change to your organization, it's important to realize that this will affect everything else that goes on. Pivoting is not the way to fix smaller problems. The times when we've pivoted a business required looking at our entire operation and refocusing or even replacing sections. When we first launched Yodle, we intended the company to address all the Web services needs of small businesses. As we discovered what it would take to scale that business, we realized we should pivot and focus on just advertising and marketing. - Ben Rubenstein, Yodle

7. You Aren't In Love With The Future 

You're inevitably going to hit setbacks, so it's important to be motivated about reaching your destination. For that reason, you should pivot when you're not excited about the long-term direction you're heading in. Here's an example from my own business. I own a marketing company. And in the early days, we used to work only one-on-one with clients. When I looked into the future, I realized I would only be able to serve, at most, a couple dozen clients. I saw how this business model was limiting our growth and our overall impact, so we changed course. We pivoted to start offering self-service training in addition to one-on-one services. And we've been happier and more successful ever since. - Pete Kennedy, Main Street ROI

8. Your Product Isn't Connecting

First and foremost, it's always smart to listen to your customers. Their feedback is priceless, and a majority of businesses pivot because either their product/service is not connecting, or they can't monetize it. When a majority of customers keep saying your product is overpriced, it's probably true. If you are a service-based company that founded its business model on retainers, switch to a pay-for-performance model. These little things end up making a big difference. - Blake Beshore, Tatroux 

The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

Tags: Entrepreneur, Sean Johnson, Business model, Customer, Business, Small Business, Start Up, Steve Blank

3 Big Data Insights from the Grandfather of Google Glass

Who is Sandy Pentland?


MIT Media Lab Professor Alex ‘Sandy’ Pentland develops technology to measure, analyze and predict human behavior. Research of his own direct doing called Reality Mining uses data from cell phones and badges to understand how people communicate – the results of which companies and governments are already starting to use to improve their organizations. With sensors and cell phones, Pentland is monitoring the pulse of society.

In many respects, Pentland is also the grandfather of Google Glass , a prototype heads up display that literally makes digital data a lens through which we see society in the “real” world. The idea is to use the types of big data already gleaned from smart phones to help make real-time decisions. Some of Pentland’s former students – and present day Google X Lab employees – have helped make the Project Glass program a reality.

Pentland is also head of the MIT Media Lab Entrepreneurship program, and has co-founded or served in an advisory role to several big data analytics startups such as Ginger.io and Sense Networks. In addition to his many other roles, this gives him a unique perspective into the intersection of Big Data and entrepreneurship.

He was also named as one of the world’s most powerful data scientists on Forbes.

Pentland’s 3 Big (Data) Insights:From his MIT Media Lab office, Pentland shared three key insights about Big Data:


1) Big Data is about people.

SP: Big Data is principally about people, it’s not about RFID tags and things like that. So that immediately raises questions about privacy and data ownership.

I mean, this looks like a nightmare scenario unless there’s something that means that people are more in charge of their data and it’s not something that can be used to spy on them. Fortunately as a consequence of this discussion group at the World Economic Forum, we now have the Consumer Privacy Bill of Rights which says you control data about you. It’s not the phone company, it’s not the ad company. And interestingly what that does is it means that the data is more available because it’s more legitimate. People feel safer about using it.

2) Cell phones are one of the biggest sources of Big Data. Smart phones are becoming universal remote controls.
SP: Cell phones have a long way to go in getting smarter. As they get smarter they’re more your universal remote control. You use them for everything. You browse of course but you’re now paying bills with them, you’re using them to take the T [Boston's public transit system]. Not so much in this country but in other parts of the world, your phone is the way you interface through the entire world. And so it’s also a window into what your choices are and what you do.

We [the group] used some of the very first smart phones. Before that I ran the Wearables Experiments, where we decorated people with computers and sensors and things, before they had even cell phones. So that’s, for instance, where Google Glass came from. My students have now gone and finally built the things!

3) Big Data will be about moving past averages to understanding patterns at the individual level. Doing so will allow us to build a Periodic Table of human behavior.
SP: We’re moving past this sort of Enlightenment way of thinking in terms of markets and competition and big averages and asking, how can we make the information environment at the human level, at the individual level, work for everybody?

The way we think about our culture, our politics, our institutions, is in terms of these big aggregates that are pre Big-Data. They’re things that in the 1700s people could think about and observe out their window. Now we can look at the actual patterns of interaction, of exchange between people.

We are on this boundary between the descriptive science, pre-science, and the sort of scientific method we’re familiar with. We’ve had all of these sort of intuitions, and heuristics, and ways we’ve sort of learned to make things work, and now we suddenly have the data to begin to build the periodic table of human behavior.

And we haven’t done it yet. We don’t really know how all the pieces fit together and what the data is telling us. And that’s the sort of grand and glorious scientific effort that needs to happen before we can get to a point where we understand the building blocks of human behavior.

Tags: Big Data, MIT Media Lab, Google, World Economic Forum, Sense Networks, Pentland, Mobile phone, Forbes