
The Pivot - pdsull
http://dilbert.com/blog/entry/the_pivot/
======
ritchiea
What really bothers me about this type of thinking is the assumption that
every team is equally talented & motivated. I might go as far as saying the
talent/intelligence landscape is somewhat homogenous but having been around
early stage startups for years now there is definitely a power law
distribution of motivation & organization. It's a lot easier to say you will
do anything to succeed and act the part and struggle and listen to your
investors like they're bosses and let your startup die out while going through
the motions than it is to be relentlessly resourceful. It also benefits to be
self critical and unattached to an ideal of a product in a way to allow your
product to be what your users respond to rather than some stubborn vision.

All this to say, there are definitely a ton of bad startups out there, people
who see an easy fundraising landscape, take advantage of connections or even
make them. Or people that get to a certain point and don't really want to face
reality. Instead of floating all the platitudes we float about there being
lots of talented teams, it would be nice to see some honesty. That a lot of
startups have a founder or two that isn't that dedicated but is there because
he/she isn't sure what else to be doing. That a lot of startups are a vanity
project of one of the founders and the founder doesn't have the modesty to
actually sell to users/potential employees. That at a lot of startups there is
friction between the founders that puts the product in danger because they
have equal-ish power but between them lack a coherent vision for the future.

And a lot of these companies with bad foundations have brilliant founders.
Just because companies are founded by smart people doesn't mean they have a
strong foundation. That is something we should be honest about. This isn't to
say that it doesn't take luck, but there is a lot that helps to get right that
a lot of startups aren't getting right off the bat.

~~~
grayclhn
Just to add to your first point: it's hard for people to recognize that there
can be a huge difference in ability between the best and the 20th best team.
They can both be great, but the 20th best team is _much less great_ than the
best one.

This goes against most of our intuition (at least, mine), because there's
essentially no difference between the 10,000th and 10,020th most talented
teams. But it becomes obvious when teams are put in repeated direct
competition with each other. e.g.: how many people expect the US (ranked, I
think, 13th in the world) to beat Germany (ranked 2nd) in the world cup?

------
callmeed
_> And then they find out that success in the start-up realm is mostly luck.
They discover this by trying great ideas coupled with great execution and
failing._

While I believe this (the luck part), I'm not sure most startup folks do. Or,
there is at least some severe cognitive dissonance going on when they begin to
discover it.

Even "the pivot" itself was made popular by The Lean Startup–the book that
many take as the _formula_ for startup success (very much the antithesis of
luck).

Yes, you have to hustle. Yes, you have to build something people want. Yes,
you should have an awesome team. When you combine all those things _and still
fail_ , most people will blame something besides just luck. ("I couldn't get
funding", "Google changed their algorithm", "I couldn't hire the right person
for X")

Of course, when a 9-figure exit happens to someone who can't code as good as
you and didn't go to as good a school as you–then it was _most definitely
luck_.

~~~
paul
I think a lot of it comes down to how you define "luck". Finding the right
investor or employee involves a lot of luck, as does getting helped or hurt by
a Google algorithm change. Google itself was lucky that it raised a lot of
money shortly before the tech crash that killed off many of its competitors.

A better way of understanding the startup world is that everything has a high
degree of uncertainty (which you can call luck), and so the smart strategy is
to remain as agile as possible, and continually learn from the market in order
to refine your strategy and vision. I prefer to think of it as Newton's method
of product/market discovery, and the most successful startups are those who
are able to iterate the fastest.

~~~
yesbabyyes
Luck is what happens when preparation meets opportunity, at least that's what
Seneca said.

------
wdewind
For those of us not working on cat photo sharing products for the ever
shifting consumer market there is considerably less luck, throwing random
stuff at the wall, and pivoting involved. B2B SaaS is pretty nice. Join us on
the dark side :)

~~~
wlievens
The big question is: how do you discover and identify a good b2b problem that
needs solving in the first place.

~~~
freshhawk
Got some great pithy advice about this a while ago: find something still being
done with paper and fax machines.

There are a ridiculous number of them out there.

~~~
GFischer
There are some interesting legal barriers to overcome in some of those cases.

In my country, faxes are legally recognized as evidence, but email isn't, so
there's a strong incentive to fax documents.

A law recognizing electronic signatures might help things, but it's still
pretty cumbersome.

I tried to build a solution for "escribanos" \- the U.S. approximate
equivalent is notaries, but they're specialized lawyers actually - and the
legal hurdles proved impossible to overcome.

Stuff that is being done with fax machines out of ignorance would be a better
place to start, but there you have to face conservatism (an admittedly easier
barrier than legal obstacles).

------
devindotcom
If you remove the questionable assumption that most of the ideas are good,
isn't it rather kind of institutionalizing "throw enough shit at the wall and
some of it will stick?"

~~~
smacktoward
Well yes, but as Serious Businesspeople, we need a Serious Business Word to
describe the shit-throwing process.

Like "pivot."

------
noname123
Man can't wait for someone to build a pivoting web framework on Github, where
I can build a subscription based service and then switch whatever the product
is with the data schema, and the pricing and the description page changes.

Basically a framework that already has Stripe/Paypal payment integration to
charge a user's CC, a schema for a informational or subscription-based product
that I can modify pricing and description for, and some front-end templates to
modify the landing page and call to action and A/B testing analytics for me to
optimize on conversion.

Kinda of like A/B testing but hedging my bets and executing all of my business
ideas at once!

~~~
nileshtrivedi
We need a DSL for creating tech startups!

------
aresant
"Building a product for the Internet is now the easy part. Getting people to
understand the product and use it is the hard part."

This feels like a meta-Dilbert joke about how business guys perceive
technology & development.

As if the "product" is somehow separated from "getting people to understand. .
. and use it"

------
e40
_Success simply can 't be predicted to any level of statistical comfort._

There are, however, a small percentage of people that consistently succeed. I
met a guy like this, and I came to find out he had eliminated a lot of the
risk of his software ventures by having a ready-made market for his company
among his friends in the venture/banking world. I saw him do it a few times
and realized that it was cheating, in a sense. I could replicate the first N-1
steps he did, but that last one required an _in_ with the right crowd, which I
didn't have.

~~~
imgabe
Given a large enough population with random outcomes, of course a small
percentage will consistently succeed.

~~~
nickpinkston
It's not ALL luck - some people do way better than rolling the dice alone
would suggest. Of course, it's very hard to measure this and know if you're
one of those people.

~~~
imgabe
I'm not saying it's all luck, but if you have a million people rolling dice,
some percentage of them will have a lucky streak doing "better than rolling
dice would suggest". A random outcome doesn't mean every individual gets the
average result every time.

~~~
rmrfrmrf
Is this actually true? I know it's definitely not true if a million people are
rolling dice forever -- each die should land on 1-6 with equal frequency.

Given a limited number of rolls, though; say, 20 rolls per person; is there
actually a consistent, measurable percentage of people that will outperform
others? Somehow I doubt it.

~~~
imgabe
Let's say you have a million people. They each roll a 6 sided die. The odds of
getting any one number are 1/6\. The odds of getting any given number 5 times
in a row are 1/6^5 or about .0001286. Out of your million people, 128 of them
will probably roll e.g. 3 five times in a row. It doesn't mean they have a
particular talent for rolling 3s. If you get the million people to roll 5 more
times, probably a different set of a million people will roll all 3s.

I'm not saying there's no skill involved. There are certainly things you can
do to guarantee failure. But if someone has 5 successful startups in a row,
it's not easy to distinguish them from someone who rolled 5 3s in a row. The
population of people who've done startups is pretty small, relatively
speaking.

~~~
voronoff
This is reminding very much of the debate around the Efficient Market
Hypothesis, as to whether traders can be systematically good vs. just
repeatedly lucky. There is a lot of lit on this issue.

------
natural219
This is a great blog post, but I want to point out that this is not a new
idea, just a way to express an old idea using new terms ("pivot", "startups",
etc.)

What Scott is trying to express is that, in a capitalist economy, money is the
goal. The process of getting money, once technical innovation is subtracted,
is called Marketing. The process of doing Marketing is to understand
psychology -- given a set of craftable stimuli, how can you influence the ape
to swipe her credit card.

~~~
jasoncartwright
Absolutely - just happens faster.

Nokia was a paper mill (1865), Suzuki made looms (1910), Mannesmann produced
steel tubes (1890), and Berkshire Hathaway did textile manufacturing (1839)

------
crawshaw
This notion of commodity technology doesn't apply to every startup. Boston
Dynamics was not a company slapping together commodity technology and testing
user behavior.

But it does apply to a lot of startups. And that's why I work for a big
company, because I'm here for long-term big change, not fashion and profit.

------
haomiao
What the author (and really everyone in the Valley) is referring to as "luck"
is that fundamentally the whole process is stochastic: there's an unavoidable
randomness. Probability is involved. Now, mini rant here: whenever people talk
about something being random there's a sense that it's COMPLETELY random: the
probability distribution is uniform and anything can happen. Lottery tickets,
throwing dice, flipping coins. And, not to put too fine a point on it, that is
COMPLETELY, UTTERLY WRONG.

Saying there's probabilistic uncertainty in something doesn't mean the
distributions are uniform. It just means given all the inputs you can't always
predict all the outputs. No matter what you do, no matter what happens, the
result can be one of many things. 1 or 0. Success or failure.

This doesn't mean you can't DO SOMETHING about it though, and that's precisely
what people are doing. Figure out the patterns, cut through the uncertainty,
and try to find your way to the promised land.

What the author's describing using the language of social science and valley
speak is the same thing that the machine learning/AI/robotics community
learned in the past few decades. They started out with formal logics and rigid
rules, and they learned that to succeed in a random world, you have to embrace
the randomness. Build it deeply into your systems and processes and all of a
sudden you start performing better than your wildest expectations.

Model, measure, evaluate, pivot, repeat. That's pretty damn familiar. What's
it describing? A closed loop control system. Change the terminology a bit and
you're talking about a Kalman filter with a feedback controller. What's a
learning algorithm but a way to fit patterns to noisy, partially random data?

And that's what this is all about. Luck doesn't mean it's all random, just
that you can't control everything. And being good doesn't mean you eliminate
the randomness, it means finding the patterns and making randomness work for
you.

Is there randomness in poker? Sure. Of course. But there's a shit ton of skill
too (I know, because I don't have any of it). Don't confuse a poker game for a
game of dice.

------
Spearchucker
In 2010 Ross Anderson pointed out (stated rather emphatically actually) that
security is driven by only two things - psychology and economics. Software is
no different.

Security Engineering -
[http://www.amazon.co.uk/gp/aw/d/B004BDOZI0/ref=mp_s_a_1_2?qi...](http://www.amazon.co.uk/gp/aw/d/B004BDOZI0/ref=mp_s_a_1_2?qid=1402956046&sr=8-2&pi=SL75)

~~~
plainOldText
Or if you want to read it online for free:
[http://www.cl.cam.ac.uk/~rja14/book.html](http://www.cl.cam.ac.uk/~rja14/book.html)

------
nbarry
It reminds me of Jim Collins' concept (not original to him, I know) of
shooting lots of little bullets and seeing which one hits, rather than wasting
gunpowder on one big cannonball before you're even sure you're aimed in the
right direction.

Except he mostly used that concept to describe how companies decide which
individual products or strategies to focus on, while the idea of a pivot is
that you shift your entire company to do something else. (Reminds me of
another Collins metaphor - it's important to get the right people on the bus
first, and then you can decide together where to drive.)

------
JoeAltmaier
The internet is a psychology experiment? Well, maybe a tiny fraction of it.
You know, those spammy pages where they promise something amazing if only
you'll enter your email address.

I'm not sure we need more of that. Its like someone pretending to sell brushes
wanting in your house, who keeps glancing around casing the joint while
blathering some spiel.

As a model for qualifying internet product plans, its going to suffer from
self-selection of the customers - you know, those lonely people who will talk
to anybody, even a brush salesman, and will tell them anything they want to
hear.

~~~
michaelmior
Experiments are far broader than landing pages for nonexistent products. The
same thing applies to building a working product and realizing it's not what
your customers want. Or building a small feature that turns out to be a
product in itself.

The entire product development process is a bit of a psychology experiment.
Try to understand what your customers want, build it. Learn from it. Repeat.

~~~
JoeAltmaier
A small bit of feature isn't much different than nothing. So the salesman
shows you a brush - but his sample case is empty. Same issue - its a hoax,
designed to waste my time so the guy can case my house, my computer, my needs.

~~~
michaelmior
Not what I meant. Suppose a company produces brushes. But they find out there
a lot of people buying their brushes just to remove the handle and attach it
to other things because they happen to really love the handles. Maybe the
brush company is in the wrong business.

~~~
imjustsaying
Right. Which is the advantage of targeted advertising based on user profiles -
the customer sees a product they might actually need instead of being offered
a free iPhone.

------
silverlake
Consumer internet startups are like Hollywood entertainment. No one knows what
TV shows or movies will be successful. The industry tries to make smart bets:
invest in big name directors or actors, or sequels or copycats or cheap
reality shows, but it's still a gamble. Successful shows come out of nowhere.
So they keep trying random shows every season and see which ones stick.
Doesn't this sound like Silicon Valley?

~~~
bengali3
I agree that it is similar, but that's the nature of all businesses, right?
Prior performance is used all over the business world to justify decisions.
I'm sure you've heard "Nobody ever got fired for buying IBM" Investment =
risk, everyone wants to minimize it while maximizing the upside.

From this blog post, it sounds like the ability to pivot smart and fast ( fast
failing.. that rings a bell..) could enhance ones probability of success. And
the ability to pivot away from your 'baby' into the scary unknown again takes
a special kind of skill - Letting Go aka: know when to fold 'em.

------
klunger
This phenomenon was identified in the academic literature on entrepreneurship
some time ago. It is called "effectuation". This site has a decent explanation
of why and how it occurs: [http://effectuation.org/](http://effectuation.org/)

------
burnte
Here's my problem with Scott Adams: he thinks he's a lot more clever than he
really is, and he is down right smarmy about it. I've been in the dot-com
start up pressure cooker, I'm in another start up right now. The one I was
part of over a decade ago needed to pivot and failed, miserably. It didn't
have to, but it did. We had great people and a solid foundation, but needed to
reorient. We didn't due to management, and it went tits up in no time. Tens of
millions of dollars flushed down the toilet. The one I'm part of now, we've
only spent a little over $100k, and after a couple setbacks, we're realizing a
pivot is needed, but one that actually will save the core of the company and
make it more successful.

Scott Adams comes in and discovers the idea of pivoting, paints it as a
startup concept that he can see through and discover how it's being misused,
and writes another pretentious blog post about it. Pivoting has been a
business tool for centuries. Nintendo used to make playing cards, Nokia made
rubber products and paper, Berkshire Hathaway was a textile mill, AmEx did
mail. They all pivoted when the time called for it.

What these startups are doing is realizing they have an idea that for whatever
reason, they can't pull off. Maybe it's a bad idea, maybe it's the wrong team
for the job, whatever. So rather than break up the company, they SAVE THE
COMPANY. Just like a human who changes jobs if the need arises, so do
companies, which are run by people. They get together as a team, and figure
out what they did wrong, and what they can do to fix it, and pivot. They come
up with a new plan to save the company.

And now Scott Adams makes the realizations that some startups are based on bad
ideas, that some react to the market to survive, and that others have taken
this as a lesson to realize the objective is to find success rather than hold
on to your core idea until you die. And he shares this with us as the
benevolent braintrust he is. Scott, open a business textbook written anytime
since 1900. This is not a unique nor new idea.

Oh, and the Internet IS a technology, it's one that enables many things, like
psychological/market experiments, but it's still a technology. Don't think so
hard next time, Scott. You'll hurt yourself.

~~~
sirdogealot
I missed the part where Adams championed the pivot as the greatest business
innovation of all time.

He starts out the article rather casually: "You might be interested in some of
the things I've discovered.".

If you don't generally care what he has to say, why did you bother to read it?
He was only commenting on an interesting aspect of our industry.

You don't see too many car companies pivoting to motorcycles, for example.
Learning about "the pivot" is interesting reading to a lot of people, just
maybe not for you and I.

------
trhway
>building product X and selling the company to Google for a billion dollars.

Oh no! it was my secret business plan which i have for several years been
working on in my mind during all these hard-to-stay-awake afternoon hours in
my cubicle ... opsss... at my desk at highly collaborative (ie. noisy) and
innovative (no sane person would do such a space for him/herself) open space
at BigCo-s

------
golergka
> Every entrepreneur is now a psychologist by trade. The ONLY thing that
> matters to success in our anything-is-buildable Internet world is
> psychology. How does the customer perceive this product? What causes someone
> to share? What makes virality happen? What makes something sticky?

That sounds like marketing, not psychology. Of course, marketing is heavily
relying on psychology, but still.

~~~
duderific
Marketing is psychology, for all intents and purposes. Nothing is purchased
without a decision at some point filtering through a human brain. Marketing is
simply the business/economic side of psychology.

------
aleem
Pivot as per the blog post seems to be a mix of extending, innovating and
leveraging what you have. I am not bothered by the exact strategy since the
concepts are all relevant.

Before the word pivot was being bandied about, Microsoft had Hotmail and
Hotmail had something like 200 million users (over decade ago).

Microsoft released a Hotmail notifier that got prime real estate in your
system tray (next to the clock). Most companies knew that the the system tray
and the desktop were both prime real estate. The Hotmail Notifier tray icon
solved a genuine problem: users knew right away if new mail had arrived.

In a future release the Hotmail notifier got extended to a chat application:
MSN Messenger. Since Hotmail had lots of users, it managed to take over ICQ
and AOL fairly quickly. MSN Messenger tried hard to market other services and
products via a constantly displaying ad unit.

Messenger then assigned a blog to every user that could be activated within a
few clicks. A new blog post by a user would be indicated by a star (internally
they were referred to as "gleams"). I recall Microsoft claimed to have become
the largest blogging network shortly thereafter though this was probably a
numbers game because very few were active bloggers. Microsoft also had other
ambitions such as Passport, Shopping, etc but they failed to translate/convert
users from the chat window to the browser window.

I am not sure if either of those scenarios qualify as pivots in the classical
sense. MSN outlived Hotmail though not for long. Passport got mixed reception.
MSN shopping didn't take off but Microsoft threw a lot of things out there,
hoping something would stick. This is also what Scott's post seems to suggest
though I am not sure if this is such a great idea as its costly. MSN has made
a loss in nearly every quarter.

One observation I drew from this is that if you have passive users, you can do
a lot more with them. Social browsing is passive (chat, FB and even email back
when chain mails and mail groups didn't face competition from Orkut or
Facebook walls). You can throw games, videos, pictures and interest-based
activities like restaurants and reviews at passive users. Mail is not a
passive medium anymore. That's why Google Drive seems to make sense only some
of the time, when I need to collaborate on Google Docs. At other times, it
gets in the way, for example, when I want to download certain attachments.

Active users rarely deviate from their goal. This would be mostly Google
Search users who want to complete the goal of finding something as quickly as
possible. These users are definitely much harder to funnel into other
services.

To capitalise on active users it seems that innovation is key. Google search
added the calculator, conversions, weather, scoreboards, etc. I suppose the
pivot here is using the search box as user-friendly command line sans the
strict syntax. However, forcing these users down a different funnel such as
Google+ didn't work well.

------
spektom
From my experience, pivoting does not motivate people who work for a start-up
on a salary basis. Once you've made something, which you start liking, your
bosses (start-up founders) tell you that they are going to pivot to a
different direction. That simply drives away any sense of satisfaction by the
work you've done.

------
peterwwillis
So, at a basic level, a pivot is just a field experiment without a control? Or
is it an observational study?

~~~
yid
It's just another step in a stochastic optimization algorithm.

------
ejain
There's a difference between pivoting to a random new exciting idea when the
previous idea doesn't pan out, and pivoting e.g. when you discover that your
product happens to have a feature that a significant number of people are
willing to pay for.

------
mhartl
I wonder if there's a way for startups to systematize Adams's insight that
"[e]very entrepreneur is now a psychologist by trade" by hiring professional
psychologists.

------
drb311
Software can now provide just about any user experience quite easily, so the
software industry is now all about figuring out what experiences people want.
Is that all he's saying?

~~~
duderific
It's an important point, and it's not just the software industry. If two
companies X and Y provide exactly the same or similar service, but company X's
user experience is superior, it will probably win out. Consider that Dominos
just released the ability to order pizza via a voice operated app. Their pizza
is not going to be any better than it was the day before, but by giving people
a (supposedly) better way to order, they may be able to take market share away
from Round Table or whoever.

------
cpncrunch
I'm a little disappointed...I expected to see a cartoon.

------
deisner
Pied Piper needs to pivot:
[https://www.youtube.com/watch?v=M1vfXoUNDYA](https://www.youtube.com/watch?v=M1vfXoUNDYA)

------
drivingmenuts
"quality is less important than speed"

So, we're producing crap ... but it's really quick crap quickly crapped.

------
yiedyie
TL;DR

> _Internet is no longer a technology. The Internet is a psychology
> experiment._

------
MichaelMoser123
it has something to do with psychology; it seems that companies that do an ICQ
like messenger are going to make it big; Skype, whatsapp, facebook, you get
the idea.

------
triplesec
do remember that this guy is a comedian... so this I see as pithy satire more
than actual analysis. As such it's pretty good

------
dueprocess
It doesn't sound like a psychology experiment Scott is talking about, but a
"stumble-upon" strategy. Psychology is a little more elegant than just pivot,
pivot, pivot.

------
matznerd
does anyone else think his site design looks similar to youtube?

