
No One Fails Anymore – Everybody ‘Pivots’ - mcone
https://mobile.nytimes.com/2017/08/29/magazine/in-our-cynical-age-no-one-fails-anymore-everybody-pivots.html
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jondubois
The problem is that investors are too easy when it comes to giving second,
third, fourth, fifth, sixth chances... And they absolutely suck at giving
first chances to the right people.

Investors just sit there and assume that the right people will find them, but
they don't. The right people are too busy working to be chasing down investors
24/7.

The first-timers who end up getting funded over and over again are usually the
ones who network 24/7 and their only real talent is seducing investors who
confuse their well-rehearsed talk for passion and intelligence.

~~~
thowaway222
Look, let me explain this as someone who's seen a lot of this: VCs make money
on, approximately, the 2&20\. 2% of the deposit and 20% of the exit.

Here's why that matters: Most VCs will NEVER EVER SEE THE 20%.

Most VCs suck, and they don't have any good exits, or often any exits at all.
So they know they'll never get the 20%.

Therefore, being rational optimizers, they try to suck that 2% dry by creating
new funds (for their firm) and new funding rounds (for their investments). The
investment is always just about to get big, we just need another round for
more runway!

HN tends to focus on the like 5 VC firms that make money as opposed to the 995
that don't. All kinds of shady stuff happens to these investments on life
support, like kicking back money to the VC, paying for "business" travel for
the VC, yadda yadda. The founders have no incentive at all to talk about it,
since they need to get money for the next idea and it's all a reputation
thing.

~~~
godzillabrennus
Don't forget the .001% of VC funds that are fraudulent.

As an entrepreneur, you should vet your investor as much as they vet you.

I've seen someone claim to be a General Partner in a VC Fund that had $50M in
capital. They ran around offering to sign investment deals with companies that
had terrible ideas.

Only later did it surface that the person was GP in a fund with no money. The
agreements signed weren't worth the paper they were printed on.

Entrepreneurs taken by this person invested in things like legal fees to
negotiate terms and lost all that cash.

Couple that with the fact that most Venture Funds don't give their LP's a
return and venture funding is a terrible business to be in if you are smart.

More and more people are waking up to this.

I've seen people go from thinking they want to start a VC Fund to starting a
business like a Venture Studio.

A Venture Studio typically forgoes the 2% management fee's for managing the
fund and deploying capital.

However, the Venture Studio will usually own a dev shop or marketing agency
that they do all the work through.

They make their money on the professional services side.

Not sure if this will be more successful but it's something I see increasingly
common.

~~~
sevenfive
Wait, how do the fraud VCs make money?

~~~
godzillabrennus
They don't make money from the VC fund.

My guess is that the go down this route because of ego. After it bimbos they
use the fact they were a GP in a VC fund to accelerate their career.

After all being a GP in a VC fund you must be good at raising money? Most
leaders in business aren't exposed to scammers like this. They would most
likely consider the fraudster for a more senior role.

------
timothycrosley
Way to spin trying new ideas and having determination to find a way to succeed
despite failures in a negative light? The fact this has become the norm is
good! People used to think that all the smart people just came up with a good
idea all the sudden out of luck, and never failed. The reality is the people
who succeeded in the past in spectacular fashion, are the same people who
failed over and over again in spectacular fashion (pivoted).

~~~
derping69
This is the New York Times we are talking about, a company that got blindsided
by the internet and social media. NYT is firing editors and renting out office
space to stay solvent, it makes sense they would write this article

[https://www.bloomberg.com/news/articles/2016-12-16/new-
york-...](https://www.bloomberg.com/news/articles/2016-12-16/new-york-times-
to-sublease-headquarters-space-in-revenue-search)
[https://www.washingtonpost.com/news/morning-
mix/wp/2017/06/3...](https://www.washingtonpost.com/news/morning-
mix/wp/2017/06/30/the-new-york-times-is-eliminating-its-copy-editing-desk-so-
hundreds-of-employees-walked-out/?utm_term=.0da188f259a5)

~~~
QAPereo
Can you think of any major old media company that didn't take it in the pants
over the internet? I'd argue that there is something to be said for the ones
that managed to survive at all.

~~~
adventured
Sure, there are some.

SiriusXM (27 years old) is financially the only music subscription service
that is thriving in terms of printing cash. Not only did they not take it in
the pants due to to the rise of the Internet, their fortunes have radically
improved over the last 15 years and they've perpetually added to their
subscriber base. While Pandora and Spotify bleed red ink by the barrel, Sirius
earned $800m in the last four quarters (with $1.5b in operating income).

Fox and its various properties transitioned just fine and have had several
record profit years in the last five years. The stock of Twenty-First Century
Fox, Inc. has been hovering near all-time highs (its stock history going back
to 1989) the last three years, and that's after spinning off the smaller
Newscorp.

Disney has thrived big time in the Internet era. They're far larger than they
used to be. Their market cap is five times larger than it was in 1995 (and
that's with a modest 17 PE ratio).

CBS Corp's stock is near an all-time high (spun off in 2005) and their sales
are as well.

Thomson Reuters is doing just fine in the Internet era. They didn't take it in
the pants at all. They're a century old media company (156 years for Reuters,
83 for Thomson), whose stock is at all-time highs, and their operational
condition is strong. They're presently worth 10x what the New York Times is.

~~~
QAPereo
So a satellite radio company, two major tv networks, Disney, and... T-R is a
really solid one IMO, I can't deny it.

------
phoenixstrike
...including this article, which pivots from Cernovich to Silicon Valley to
politics and Trump.

A far more interesting discussion would have been about the rampant neurosis
of above-average (nationally speaking) educated young people in tech that rate
themselves as being better than they actually are, leading to a deathly fear
of failure and accountability (leading to "pivoting"), perhaps (IMO) coming
from the psychological reluctance to take a good hard look in the mirror and
admit that they are not as good/better than others as they think they are.

~~~
leroy_masochist
Wish I could upvote this one twice.

The weight of expectations on the shoulders of talented young people, ginned
up by years of ersatz "success" in getting good grades and getting into
college and getting more good grades and maybe even getting some seed funding
-- this is the real "invisible hand" of SV. I feel like people in my parents'
generation were acculturated to be happy with a house, a steady job, a car in
the driveway, and beer in the fridge. Our generation by contrast seems as if
it is populated by people who will consider themselves a massive
disappointment if they don't turn out to be the next Zuck.

~~~
PeachPlum
Or, as my dad has repeatedly said to me "why can't you make something like
Facebook and be rich?"

~~~
thomasjudge
[https://waitbutwhy.com/2013/09/why-generation-y-yuppies-
are-...](https://waitbutwhy.com/2013/09/why-generation-y-yuppies-are-
unhappy.html)

~~~
mjevans
While I think the infographics of that article are pretty accurate, I believe
that this article doesn't benefit from the recent focus on income inequality
and the massive schism of the 1% of the 1% from the other 99.99% of the
population.

I agree that expectations are a little unrealistic, particularly with anyone
born after the early 90s, but also for many born after the late 70s.

However the quality of life, slack time, and slack resources for happiness
that other generations did experience during periods of prosperity are
measurably lacking today.

It is not unrealistic to feel unhappy about this; but what continues to amaze
me is how ignorantly and emotionally many vote. Blatantly ignoring candidates
who's platforms are arguably better able to deliver successful change in favor
of candidates who sell them an easy bubble of illusions.

~~~
PeachPlum
Platforms offering change are abundant.

Platforms that delivered change not so.

I'm curious as to how you are so sure you can distinguish illusion.

~~~
_Tev
You can easily distinguish what is clearly an illusion or lie that is not
going to work.

But you're right that recognizing which platform will actually work is very
hard.

~~~
PeachPlum
When it comes to economics one can find a plausable theory from a Nobel Prize
winner to fit numerous competing platforms.

And social science isn't as solid as that.

I would say there are more equivocal problems than unequivocal and society
looks for a leader to make gut feeling decisions. The only discriminator is
the success of previous gut feeling decisions or even "it went wrong but it
sounded good".

------
memco
“Anything we don't like, we'll turn it into a happy little tree or something;
we don't make mistakes, we just have happy accidents.”

—Bob Ross

~~~
Raphmedia
“Success is the ability to go from failure to failure without losing your
enthusiasm.”

—Winston Churchill

~~~
pier25
[https://quoteinvestigator.com/2014/06/28/success/](https://quoteinvestigator.com/2014/06/28/success/)

~~~
Raphmedia
Interesting!

------
uptownfunk
Yes, exactly, because we have to maintain this glowing facade that we're just
crushing it all the time instead of acknowledging the everyday struggle or
even _gasp_ failure.

I don't pick my friends based on their successful startup ventures, or if
they're some 100x "rockstar" dev. Some of my best friends from high school are
still finding their way in life in their 30s, and I for one don't give a sh*t
how many times they have to "pivot" before they get to where they want to be.

------
jedberg
It's really easy to tell if a company pivoted or failed. If they ran out of
money, they failed. If they still had money and started doing something new,
they pivoted (and their previous product failed).

------
to_bpr
Probably one of the lowest quality posts I've seen remain on HN's front page
for quite some time.

To pivot is to fail, to recognise one's failure, to pick oneself up and try
again in another direction. On a personal level it's admirable. On a business
level I've no opinion as these pivots are all privately funded.

When the NYT is publishing these weird, poorly written and badly strung
together political rants, is it any wonder they're "losing" in the age of new
media?

------
vonnik
This is an inane column, but I think one point on semantics needs to be made.
Silverman assumes that failure and pivot are totally synonymous, and that
pivot is just a cynical euphemism for failure. I think that they're are
differences. Failure connotes a durable state that has repercussions. Pivot
means we're still moving and we may be able to redirect some of our old
momentum in a slightly new direction.

------
mjfl
Would you fault a genetic algorithm that does more than one iteration? Why
would you expect that your initial set of parameters / business model be
optimal? That's just a silly way of thinking.

------
nipponese
One's stubborn tenacity is another's embarrassing coverup.

------
pier25
As long as you still have cash floating around

~~~
Animats
Right. Pivoting is using the leftover assets from your previous failure to try
something else. The alternative is liquidation.

YC tries to give startups so little money that they can't pivot. They fail
fast and are flushed out of the ecosystem quickly. The alternative for a VC is
an army of zombies - companies that can cover their expenses, but not pay back
their investors. Zombies still need investor attention, and owning too many
zombies can choke a VC firm.

------
sriram_sun
Only donkeys don't change their minds. Interestingly, I've heard donkeys are
pretty intelligent creatures.

~~~
jessaustin
Animals that are correct don't _have_ to change their minds.

------
louithethrid
The whole idea of risk, winning and loosing is very warped from the outset. We
come from small groups with very limited ressources. Taking risks, making a
plan, always involved the power structure. There always could be only one
plan, one chieftain executing it, else there be civil war and group breakup.
If the plan failed, there where to options- the situation and the power
structure would be salvaged, and the failure nver happend. And/Or a scapegoat
would be found and ousted for the failure - a principle we declared
responsibility (although undoing the damage would have been.. slightly more
responsibe).

Anyway, if you didnt sleep throughout your statistics classes, you know also
that our perceptions of likelihood for plans to fail or succeed, our peception
of luck- is also totally off.

So what actually is a good plan? A good plan, is not one particular chain of
actions, and tree of scenarios growing out of that base-scenario - but a
investment into a likelihood enhancing environment for a whole overlapping
forrest of such scenario trees.

Take the idea of a book-shop for cooking recipes in medieval europe. That
sounds like a great plan. Its what your family would support, and thus you
would buy scribes and set out on this adventure.

Now take the plan of selling printing presses. Everyone of your son and
daughters could march of, producing there own version of a book-shop. You do
not invest into a single "plan" and your shuffeling of investments, into
succeeding or away from dieing branches of the scenario, might look like
cowardice, indecisivness and pivoting - but in reality, you are just aware of
human limitations and overcome them.

For founders this is a dangerous way of thinking. Because at the larval stage,
a company is that tribe, that family, in desperate need of the ilusion of one
plan, one scenario, the ilusion of a chieftain knowing what tomorrows weather
will bring. But keep that forrest in the backyard of your mind, and when
nobody is watching - plant some seeds. There might grow a forrest.

------
hahahsnap
.50 cents: I think most of the good 20% went to google and facebook and got
into comfort zone of corporate politics when they were young in their 20s and
they ended up having great compensation which make them stay there forever.

------
watwut
Pivot means you are changing what you do. Failure means you are in debt,
company don't exists anymore and you are dealing with consequences. Not the
same.

------
smrtinsert
As soon as the guy from Digg "pivoted" I equated the two. I assumed everyone
did.

------
sbussard
This article pivoted from talking about pivoting to bashing Trump

------
gt565k
What... this title is ridiculous.

You fail, that's why you pivot.

Hence the saying.

"Fail fast and pivot"

Pivoting just means you've taken some industry knowledge from your failed
attempt at a product, and you are applying it to a new product or market fit
by pivoting on your original idea. (at least in the context of start-ups /
product development)

There's no pivoting without failure.

Also:

> Trump’s innovation is to have mined a deeper vein of cynicism, exhausting
> the weary tropes of polite political discourse. He is the ultimate pivoter,
> aimlessly following his own impulses as his administration is mired in daily
> absurdities.

WTF? Trump is the ultimate pivoter? Are you serious? This article is just
ridiculous.

Someone needs to learn the definition of pivot.

~~~
nxsynonym
You can't afford to not Pivot. Especially in tech, where the landscape changes
so drastically and frequently. You must adapt or die quickly.

Failure is not a badge of honor, or something to aspire to. It happens, and
should be dealt with accordingly, and should not define a person or idea - but
it shouldn't be glorified.

The entire point of the article was "Trump changes his mind a lot". Supports
will call that adapting, detractors will call that failure. Does it matter how
it's labeled?

~~~
roceasta
Yes. The realistic alternative to pivoting isn't beating yourself up in a
press conference or something like that: it's self-sabotage. People self-
sabotage so they can pretend they never tried and thus avoid seeing themselves
as failures.

------
orionblastar
This is a problem in American Culture. Nobody wants to be wrong and admit to
making mistakes and failing so they learn from it. Instead, it is "saving
face" to say I pivoted instead of I failed.

I ran two startups one in the mid-1990s and one in 1999-2001, I gained
experience as a President and later Vice-President to let my business partner
get more experience as a President. I have degrees in computer and business
areas as well and combine the two.

Thing is I failed because the first business did not have a credit card system
and we took checks that later bounced. (You'll find people who do this on
purpose to get free stuff from a small business because we can't afford
lawyers to collect on them.) and also we sold computers and computer services
trying to do databases and make software. Big Box stores ate our lunch with
$300 PCs via Internet Rebates and ours was $700 but with better quality parts
so the PC lasts longer. We tried the same thing with the second company and my
business partner got sick with a heart attack (he survived) but the business
suffered as a result and closed.

Yeah I failed twice, but I keep on trying to do better and I'm in the St.
Louis MO area and cannot relocate, and of course not on the west coast where
all of the action is apparently.

I got a friend who tried to offer computer services in the Branson MO area,
most of them don't even use a computer out there, and entertainers go without
work when out of season and apply for unemployment, etc. You have to time the
seasons of Branson when the shows are popular and then save expenses when they
are out of season. Plus most people there just buy from Wal-Mart for the
computer needs.

Yeah, location really matters. He had to join his wife's Antique FLea Market
store and close down his computer store and get into the Flipping business of
driving to garage sales to buy stuff cheap for the flea market, etc.

In my area after the Ferguson riots (just a few miles from my house) the
economy is still trying to recover.

I try not to get into politics, treat everyone as an individual and hope for
the best. I've worked for FORTUNE 500 companies and mid-size to small
companies as well.

Look at Steve Jobs' career. He failed many times. Apple ///, Apple Lisa, even
the first Macintosh was a flop and he left Apple in 1985 to found Next. He
would brag that he just asked people and they gave him what he asked, but
trying to get Computer Stores to sell the Apple 1 computer made him get
rejected a lot. It was only when some VC saw potential in the Apple 1 that he
got money to make it go live and sell via mail order. Also Apple kept bleeding
money until it bought Next and got Steve Jobs back, and while Next was a
failure and mistake, merging it with Mac OS to make Mac OSX and later going
from PowerPC to Intel chips worked. Without Steve Jobs failures, there would
be no iPod or iTunes, and no iPhone and iPad. Sure Apple wasn't the first to
invent the smart phone etc, but they made them easier to use and better than
the competition like Blackberry and Windows CE phones.

Instead, culture does not forget or forgive, this is against compassion and
empathy, and in a way hate based.

As a baby, we did not walk we crawled first, and in learning how to walk we
kept falling down until we could control balance and put one foot in front of
another. We forget stuff like that, and social anxiety is put on people who
fail and make mistakes, and then nobody learns anything and people keep making
the same mistakes and failure and try to hide them.

Does that make sense to anyone? In Steve Jobs failures, he found a way to make
a success out of them. He only did so after he went back to school for a
business degree after leaving Apple.

------
tinym
Well; good?

