Five Super Successful Tech Pivots
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Fail fast and pivot faster. Tech startup history is littered with pivots — when a company ditches its original product offering and changes direction. And while too much pivoting can be a sign a startup is thrashing in the shallows of the deadpool, it can be the start of something big. Really big. Here are five super successful tech pivots from recent startup history…Close Panel
Five Super Successful Tech Pivots
Fail fast and pivot faster. Tech startup history is littered with pivots — when a company ditches its original product offering and changes direction. And while too much pivoting can be a sign a startup is thrashing in the shallows of the deadpool, it can be the start of something big. Really big. Here are five super successful tech pivots from recent startup history…
In 2009 a mobile shopping app called Tote landed on the scene with the aim of making shopping faster, easier and altogether fun-er by giving people the tools to window shop on their phone. The app did price-tracking. It was location savvy. It let shoppers save their favourite items so they could coveted stuff in one place. But it was held back by a crucial piece of the mobile shopping puzzle: low-friction payments.
Nowadays a mobile shopping app launches every few minutes (or so it seems). But in 2009 the m-shopping market wasn’t so ripe for the taking, and Tote stumbled.
But, from the ashes of those early m-shopping ambitions, arose another startup idea — directly fueled by the collections of items Tote users had been amassing. That was the genesis of Tote’s pivot to Pinterest in 2010. And boy did they hit a home run with that one. Earlier this year the visual social network was being valued at $5 billion, after raising a $200 million Series F funding round.
Beyond cold hard cash raised (and value perceived), Pinterest can also take credit for the widespread ‘Pinterestification’ of web design, inspired by its dynamic tiles-based format which reforms itself to accommodate different screen sizes.
Twitter is now among a (relatively) select group of tech companies that have attained publicly traded company status. Yet the mighty microblogging behemoth started life as a humble side-project of a whole other startup. That was podcast directory, Odeo, which aggregated thousands of channels of recorded chatter, letting its users create pod playlists and also offering tools so they could record their own podcasts in the browser. Which all sounds very 2006.
Twitter — or twttr, as it was initially christened — was immediately distinct from Odeo’s business. And indeed ended up taking on a life of its own that entirely outlasted and eclipsed the former. Messaging! Who’d have thunk it?!
“A sort of ‘group send’ SMS application” was how TechCrunch’s Michael Arrington described twttr in July 2006 when it launched. His at-the-time verdict on parent business Odeo? “A total snoozer”.
Twitter may be finding it tough to live up to shareholder growth expectations these days, post-IPO, but the product’s influence has spread far beyond the initial Silicon Valley test group that got to play around with it on that fateful July night in 2006. Mainstream media is especially wedded to its brief, info-packed format. And Twitter as a customer service and feedback comms channel is now the norm. It’s also played interesting roles in various political conflicts as a public platform for protest and alternative views.
Google acquired a little known company called Android back in 2005. The startup had been founded in 2003, with the intention of building an operating system for cameras. Its initial vision was to create an ecosystem of smart cameras which connected to PCs and from there linked to Android-powered datacentres to offer cloud storage for photos.
That was Android’s initial pitch to investors, according to co-founder Andy Rubin.
But by the time Google acquired the company it had pivoted from a platform for cameras to one that focused on mobile handsets, encouraged by the downward trajectory of camera sales and the healthy growth in mobile. Rubin and co decided the camera market was too small for their startup business. They needed to think bigger.
And the rest, as they say, is history.
Android today accounts for circa 80% of global smartphone market shipments. Such has been the success of Android in spreading that — ironically — it has indeed found its way onto cameras, such as the Samsung Galaxy NX (pictured left), not to mention pushing into all sorts of other devices, from cars to refrigerators to smartwatches to plain old landline telephones…
The Google vision now is for Android everywhere. But Android’s initial pivot to mobile handsets positioned the startup as an acquisition target for Mountain View — which in turn helped them spread their software to all corners of the globe, and expand beyond even the expansive mobile market.
Our definition of ‘success’ may be a little warped here, but viewed through Wall Street-tinted glasses, an IPO is an IPO. The most famous of group buying sites — which at one point spawned an Attack Of The Groupon Clones — began life in 2007 as consumer activism site The Point.
Its twist (and precursor to the infamous Groupon model) was that anybody could create a campaign but participants pledged to take action only when enough other people had pledged to do the same thing — or when the campaign reached a tipping point.
Despite raising over $6 million in funding, The Point never really took off, so its founders decided to try applying the basic idea to commerce, pivoting to a new name and business in late 2008. Groupon would offer heavily discounted daily deals from local merchants, with each deal proceeding after enough people had committed to purchasing the coupon.
This led to rapid growth for the newly pivoted company and a spew of funding rounds, seeing Groupon raise in excess of a Billion dollars before floating on the NASDAQ in November 2011.
Since then the company has had somewhat of a torrid time, with investors questioning if Groupon’s business model is as short-lived as the daily deals it pioneered, and as the public company struggles with the transition to mobile and expansion into other areas of local commerce.
Possibly the Mother Of All Pivots, Nokia started out life in the late 19th century as a wood pulp mill, before expanding over the next one hundred years into the business of rubber, cable, forestry, electronics and power generation.
However, it was the early 1980s, with the establishment of the GSM standard, that Nokia set off on a journey that would see it make its biggest pivot and subsequent dent in history, almost single-handedly helping usher in the modern mobile phone as we know it.
By the mid-90s it had divulged of all non-telecommunications activities, including paper, PC, rubber, footwear, chemicals, power plant, cable, aluminum and television businesses, to establish itself as the world leader in mobile phones, a position the company enjoyed for more than a decade.
But with a deluge of new competition, epitomised by Steve Jobs unveiling the iPhone on June 29, 2007, Nokia was caught complacent and wanting, eventually exiting the handset business entirely with the sale of its Devices & Services business to Microsoft in April this year.
Today the company’s focus is networking, maps and technology R&D. The latter, of course, points to another possible pivot in the making. Nokia is dead. Long live Nokia.