Dalton Caldwell explains what makes a successful business pivot: it typically builds on founders' existing expertise (it gets "warmer" rather than colder) and arises from insights gained while pursuing an earlier idea. He illustrates this with Segment (a product that evolved from university software to an event-routing JavaScript tool) and references Airbnb's iterative growth experiments. He advises founders to pivot when they run out of credible growth ideas, but to keep trying when they still have multiple promising growth strategies to test.
Chapters
Usually a successful Pivot gets warmer instead of colder from what you're an expert at, and somehow builds on what you learned on the prior idea. In the example of Segment, which is obviously a really big successful company, they started with something to tell your professor you were confused in class. It was like software that they sold to universities, and then they ended up pivoting to something kind of like a mixed panel competitor after, like, two years. And it's because they didn't. They learned about how analytics works running their first idea, and then no one wanted to adopt their Mixpanel competitor. And so they were like, we should make this JavaScript thing that you embed on your website that can send events to multiple endpoints at the same time. So that way people would be willing to try our mixpanel competitor side by side with Mixpanel to show that it's better. And then they were like, oh, yeah, no one actually wants that. They just want this JavaScript to send events to different locations. And so there's no way those founders could have started with the final idea. You get what I mean? There was no universe where they would have made up the idea for Segment because they didn't know anything about how analytics worked. But because they were grinding for multiple years and became experts on these things is a side effect of their earlier ideas. They ended up with really good, unique insights.
I think that's a really important point there is. You don't need to necessarily have that experience before you start the company. Could come from trying to build the company.
Exactly.
A big question people are always wondering is like, should I pivot? Like, is this the time to pivot? Is this. Should I keep trying this idea? What's your advice there?
I would look at how many more ideas the founder has on how to make it grow. Like, if it's not going well and you're out of ideas, that is usually a good time to pivot. But when there's a, you know, you have like half a dozen or a dozen really good growth ideas that you haven't tried yet. Try them. Right? Like, hey, give it a shot again in the Airbnb story, right? They. They tried all sorts of stuff, including cereal and conventions. Like, they had a bunch of zany ideas on growth and they didn't run out of them. I think when there's still gas in the tank on an idea, that might be a reason to stay the course. And when, when, when literally the founder is like, yeah, I don't know, I guess maybe we should pay influencers or something. When that's when. That's the kind of ideas they're coming up with. Let's. That might be a better sign to pivot.
