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Perseverance vs. Pivot vs. New Vision

Perseverance and resiliency are some of the essential, and most admirable, qualities in an entrepreneur. The ability to stay executing on an idea and leading a team while battling hostile market conditions, competition and unexpected events is, by most psychologists, considered almost irrational but is also the source of success of many companies. Sometimes, despite great efforts, products fail to get traction. At that point, entrepreneurs will face one of the most difficult decisions in the startup life: persevere on a specific idea or implement a change of direction which the industry knows as “pivot”.

Pivoting is one of the most over-marketed and misunderstood concepts in the modern startup world. Mistakenly, entrepreneurs tend to associate pivot with ANY change in the direction of the business which is far from true. Understanding what a pivot really is might help us deal with the process in a more efficient way. From all the definitions of pivot I’ve encountered, I tend to familiarized myself with Eric Ries of the “Lean Startup” fame. By Ries’ definition a pivot is a change in strategy without a change in vision.

Let me try to explain….

Vision is one of the key elements in the DNA of a company. A vision clearly details how a specific aspect of the world should be improved or changed. In order to execute to a specific vision companies use different strategies and products. Oversimplifying things, we can think of a little formula to express the dependencies between vision, strategy and product.

Vision= Strategy + Product

In some contexts a product can be seen as a specific part of the strategy. I prefer to establish a small distinction between product and strategy. From my standpoint, I think about products as the physical materialization of a commercial entity that reflects a portion of the company vision while I typically associate strategies with softer elements such as engines of growth, sales, marketing, etc. I am aware this definition is not 100% accurate but I find it very helpful to strategize and implement changes on different instances of a company.

Understanding the dependencies between product, strategies and vision can help entrepreneurs to embrace change at different levels. Successful startups very frequently adopt drastic changes in products and strategies in order to better execute on their vision. This is the classic example of pivot. In that sense a company can pivot by embracing a different engine of growth, focusing on a specific feature of a product, go after a specific segment of the market, etc.

Contrary to pivoting, sometimes companies completely change their vision to focus on different areas. A change on the vision of the company should not be considered a pivot and, instead, should be seen as almost a new business. A classic example of a change in vision, and one that people often associate with a pivot, was the transitional process that the podcasting company Odeo established to create a real time information platform that ultimately evolved onto Twitter.

Embracing the distinction between pivot and a change in the vision of the company might help entrepreneurs understand that, although painful, pivots are a necessary element to correctly execute to the bigger vision of their companies.

 
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Posted by on June 12, 2012 in Uncategorized

 

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Is Fear Holding You Back? Embrace It!

Yesterday Salesforce.com acquired Buddy Media for a reported $698M. While researching the nature of the deal, I came across this inspirational video on which Buddy Media’s cofounder Mike Lazerow reveals how he has faced death multiple times due to a chronic heart condition known as ventricular septal defect. In the video, Lazerow explains how this condition helped to live fearlessly and become an entrepreneur after near dying when he was 19. As the central theme of the video, Lazerow uses his experience to ask a simple question “Is fear holding you back”.

Watching the video, made me think of how many times entrepreneurs make or don’t make decisions based purely out of fear. Being an entrepreneur is not a rational task by any stretch of the imagination. Quite the contrary, in the first years of your company stress, loneliness, pressures will become part of your daily live. Throughout that process, we are constantly battling our fears, venturing into unknown areas and facing risks that will test the strength of our confidence.

There is no silver bullet for battling the fears you experience while building your company and I am certainly not an expert on the matter. However, after taking a few punches myself and learning all I can about cognitive theory I can probably list a couple of useful thoughts.

Knowledge and Calculated Risks vs. Stupid Over Confidence

I find knowledge one of the most powerful weapons to fight fear. When you are knowledgeable about specific subject, you are automatically increasing the chances of making intelligent decisions and implementing the right strategies on that area. As an entrepreneur, you must devote a considerable amount of time to acquire as much knowledge as you can about different areas of your business: technology, market, sales, venture funding, history as well as complementary subjects: history, psychology, economics, etc.

Knowledge give you the ability of taking calculated risks. When facing important decisions, it’s key to consider different fall back strategies that account for secondary scenarios. In his latest book: The start-up of you, LinkedIn founder Reid Hoffman advocates for always having a Z plan in case A, B…..Y plans don’t play out according to plan ;)

I firmly believe that deep knowledge and the ability of making decisions based on calculated risks are key elements to achieve success as entrepreneurs. Confidence without knowledge is a very fragile ship to stay on when facing a storm.

Embracing Fear

Over the last two years, I found that fear is one of the most powerful artifacts an entrepreneur can use to drive important decisions. In a previous blog post, I advocated for the need to always doubt and challenge your reasoning when making difficult decisions. In my opinion, embracing fear will keep you aware of the importance of the task at hand and will drive you to take steps you never considered before. As an entrepreneur, there are a lot of fears that will keep you up at night but none of them should be more important than the fear of not building a relevant product or living a relevant life.

The key to deal with fear is not to fight it or ignore it but to embrace it and, more importantly, to never let it paralyze you.

 
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Posted by on June 5, 2012 in Uncategorized

 

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