Startup School 2019 - 013 Dalton

SUS2019 YC创业课 转型
转型是改变idea，idea的PSI三要素中SI可以变P不能变
如果要改变P就是做另一件事情了，个人感觉不如承认失败，再寻他途。

Pivoting just means changing your idea.

When you're at the earliest stages of your company, especially prelaunch or very near after launch, changing your ideas constantly is kind of the norm.

Pivoting usually implies changing a product that is fully live and has customers.

if ((how well things are working) / (# of months of concerted full-time effort))
< (excitement to work on another idea) * (confidence of new idea will work better)) {
you_should_pivot()
}

Good reasons to pivot
• I hate working on it
• It's not growing
• I'm not a good fit to be working on this idea
• I am relying on an external factor outside of my control to make my startup take off
• I'm out of ideas on what to do differently to make it start working

Good reasons not to pivot
• trying to run away from doing hard work
• trying to dodge the sales part
• You read an article about some hot new trend that is popular with investors and want to chase it

Why people take too long to pivot
• Loss aversion
• Have a little bit of traction
• People are polite and have a hard time telling you they don't want what you are making in a direct way
• Fear of admitting weakness/defeat
• Putting blame on: why things aren't working on customers/investors
• if you just believe hard enough things are going to change

Reminder about product market fit
• Most people never get it
• You know you have it when growth is not your biggest problem - keeping up with demand is
• If you don't have PMF and you have given an idea your best then it can be easier to get PMF by changing ideas than continuing to throw good time/money after bad
• shots on goal

How to find a better idea
• Try to find something the founders are more excited about and makes them feel more optimistic to work on it
• Corollary: being more ambitious is often counterintuitively easier
• Honest assessment of founders strengths/weaknesses and attempt to find something with better founder market-fit
• Best to find something easy to get started and validate market feedback

It's OK to not work an idea that requires venture capital
• Most companies in the world that people start don't require VC. That is good.
• Trying to raise money for a company where VC doesn't make sense is not a great use of anyones time
• If the way you evaluate the quality of an idea is from investors you are going to get pushed down the VC rabbit hole

Venture vs non-venture scale ideas
• Can I imagine this business possibly generating 100s of millions or billions in net revenue per year?
• Can I imagine the revenue growth to get to that scale taking less than ten years?
• Can I imagine this as a publicly traded company?
• Kevin's first lecture talks about this

Other usual properties of a venture-backable business:
• Technology is a key component, and the technology is built by the founders rather than outsourced
• Extremely high software margins
• A large % of stuff on Shark Tank is not a venturebackable business

When is the best time to pivot
• As soon as possible when these things happen:
• You have launched and have been trying to get users for weeks or months and it feels hopeless
• When the idea is impossible to get started on b/c it takes years of building/too much capital etc
• You know in your heart its not going to work

More pivoting thoughts
• Pivoting over and over and over again can cause whiplash
• Whiplash makes founders give up -> kills the company
• Founders that are incapable of changing ideas struggle, founders that change ideas too much struggle. Find the happy medium
• Having employees while pivoting is extra hard and not recommended - best to do it with just founders

Here are some criteria you can use to evaluate your idea
• How big of an idea it seems to be
• Founder/market fit
• How easy it is to get started on the idea
• Early market feedback from customers

In summary
• Changing your idea is part of doing a startup, and the earlier you lock into the right idea the better
• When you are considering a pivot it should not feel like some huge monumental decision
• You should follow pivoting best practices

There is basically no barrier to entry other than execution.