Changing the Idea Is Not the Problem: YC’s Focus on Teams and Odeo’s Pivot to Twitter

Robin: ‘This is my personal impression: YC, the world’s largest and best-known startup accelerator, usually selects teams not because the idea is good but because the people are interesting and promising. Airbnb’s idea was doubted, yet its cereal sales impressed Paul Graham and helped it gain entry. According to a YC survey, more than a third of teams change ideas during the six-month program, and some merge. Changing ideas early is not a problem; the more important question is whether you can pivot promptly.’ ---- Pivot promptly when obstacles cannot be overcome When you exhaust every way to make sense of your original plan, change direction immediately. In 2004, a new word emerged for a new medium that interested many iPod owners: podcast. It transformed audio, allowing anyone to record and release content without broadcasting rules or gatekeepers. People could listen on computers as well as iPods. Early adopters and enthusiasts were fascinated. Evan Williams was eager too, with a plan of his own. Williams became an overnight Silicon Valley success with Blogger, a pioneering service making personal blogs easy to create. Though it caught the wave, the business struggled. In its last year as an independent company, Williams worked alone, without employees or salary. He ultimately sold it to Google and prepared to try another form of communication. He had always wanted to connect people—or more precisely, connect their ideas through technology. Growing up on a Nebraska farm, he felt an outsider: a school-focused child in a football-centered town. Programming and then online forums connected him beyond it. But a Wired article truly fired his imagination. ‘It discussed connecting every brain on Earth,’ he recalled. That vision drew him to Silicon Valley, inspired Blogger, and later sparked his curiosity about podcasts. If people enjoyed expressing themselves in writing, he thought, perhaps they would like sharing spoken ideas online. He raised US$5 million and built a platform making podcast publishing and discovery easy. His new company, Odeo, aimed to become the leading podcast platform. Just as he prepared for takeoff, a competitor entered—not an ordinary one, but Apple. In 2005, Apple announced podcast integration into the already popular iTunes, making access easy for iPod users, who represented most of Odeo’s potential audience. The blow was devastating. ‘It shocked us,’ Williams said. Unsure of the next move, he asked the board whether to close and return investors’ money. Unexpectedly, directors asked what other ideas he could try. ‘Of course I had ideas; I always had many,’ he thought. He returned to the Odeo team: ‘I do not know whether we still have an opportunity in podcasting. Does anyone have another good idea?’ They used a proven way to stimulate ideas: a hackathon. Gather everyone, generate an idea, and implement it in a marathon session. Such events usually solve narrow problems; this one addressed a larger question: what should the team do next? It worked. Cofounder Biz Stone and web designer Jack Dorsey’s group-texting product stood out. They had been building the small program for fun. Williams quickly liked it, remembering something from Blogger. ‘I started a status blog to share with my blogging team,’ he said. ‘Then I traveled with my family and updated it along the way. Sharing things you normally would not share was enjoyable.’ Those status updates became tweets. The team soon recognized Twitter’s potential, raising a difficult question: abandon Odeo entirely for Twitter? Williams presented updates on both at a board meeting. Odeo was not ready to die: it was not growing, but retained stable users. This is often a leader’s most painful choice. Abandoning a failed product is easy; ending a company with little development potential is harder and more strategically significant. ‘Sometimes failure is good because it lets you move on,’ he recalled. ‘But Odeo had not completely failed, so we kept iterating and hoping for a turn.’ Meanwhile, colleagues, friends, and family kept using Twitter. ‘We felt connected in a new way,’ he said. In April 2007, Twitter spun out of Odeo and took its place in internet history, while Odeo declined. The art of the pivot: literally changing direction, in business it means departing from the original plan to try something related but different, usually responding to a changing environment or market. A new opportunity, unexpected obstacle, or deeper insight into product potential may trigger it. It can range from gradual strategy adjustments to a complete company restart. Most entrepreneurs pivot repeatedly before finding their footing, and often remain alert to danger afterward. Seize opportunities before they become obvious. Equally difficult is relinquishing hopes, concepts, and ideas that absorbed time and money. People do not readily abandon old beliefs. Cofounders, employees, investors, and users may influence the pivot; this can be a supreme test of leadership. Abandoning a popular idea or formerly successful strategy is hard but strategically necessary. Recognize when to pivot and unite people around a new direction, even if that requires cutting back or ending other businesses. Look closely at successful startups and they differ radically from their beginnings, becoming successful, scalable companies through successive pivots. Yet even fundamental changes usually remain close to the original mission. Williams is a serial pivoting entrepreneur: his four startups seem unrelated but share one mission—connecting people to one another and the world. #GaoChengzhangSiwei