MOO In The Financial Times

A pivotal moment in the life of a start-up

By Jonathan Moules (link to full article on

When Alicia Navarro set up her company four years ago, she believed she had a great business plan.

Navarro had noted that people often have better experiences when they make group decisions about key activities, such as planning a holiday or buying a sofa. So she set up a social decision-making website.

But the business, Skimlinks, was not quite right. The technology was being built by a team of developers in Romania, while Navarro was based in Sydney, Australia – trying to nurture the start-up at the same time as holding down a full-time job.

Rather than give in and try a completely new business, however, Navarro went about altering some of the elements of her original idea. This process is described in the US as “pivoting”, derived from the way basketball players move around the court.

Mark Suster, general partner at Los Angeles-based venture capital firm GRP Partners, says that the ability to pivot is one of the key characteristics of a successful entrepreneur.

“Every entrepreneur starts with an idea that they believe makes sense,” he says. “But then your customers start using your products, your competitors come out with new offerings and your partners decide to launch a similar product rather than working with you. You’re forced to pivot on a regular basis.”

He notes that almost all software start-ups in Silicon Valley now build their businesses on this basis. Google and PayPal, two of the Valley’s biggest recent success stories, both pivoted, Suster notes.

“Minimum viable product is the mantra of the Valley. Rather than launching a bloated product that the market does not want, you look and learn.”

Often, he says, the market does not know what it wants. This makes it all the more important to get something out there, then refine it using feedback from customers and focus groups.

Navarro made multiple pivots with her business. First, she relocated from Sydney to London’s Shoreditch district to be close to the internet business cluster, which is locally nicknamed the Silicon Roundabout.

She then marketed her business as a white label service to online publishers who wanted the service on their website.

Navarro won customers, got friends to invest and secured a bank loan, allowing her to employ four people. But it was still a fairly hand-to-mouth existence.

“Every month, it was a nightmare working out how I would do payroll, but I always found a way, and kept it going,” she says.

But the global recession hit, and Navarro found herself facing the prospect of bankruptcy. It was then that she made what she has since realised was her smartest pivot to date.

“As I was pitching my company to potential clients and investors, it struck me that what everyone was interested in wasn’t my fabulous website, but this techie back-end solution.”

She made her pivot at 10pm one Friday night, when she cold-called a large electronics forum website and offered them her technology. They said yes, and Navarro promised to get something to them within a fortnight. It meant changing a model that Navarro and her team had worked on for two years, but they were all won over.

“Over the next two weeks, I went out and sold the concept to some huge UK content networks and my team converted what we had built into something other publishers could use,” Navarro explains.

A month after relaunching the business, in December 2008, Navarro had an agreement with an equity investor. A year later, the business was breaking even and serving over 500,000 websites worldwide, working with 8,000 retailers as well as winning dozens of awards for innovation.

The business is, in many ways, entirely different from the original plan, but Navarro believes pivoting made the difference between success and failure.

“That late-night decision to pivot is what saved us,” she says.

Another successful pivoter is Richard Moross, founder of The business started life in 2004 as a social networking website, with the twist that users could send their details to one another on real business cards.

“It was basically Facebook with cards,” Moross says. However, Moo was not taking off in the way Moross had originally intended. “People loved the little cards, but they didn’t want to join another social network.”

The first pivot – although Moross describes it as “more of a pirouette” – was to drop the social networking site entirely.

Instead, Moo started working with established social networks, such as Flickr, the picture website, giving users the ability to put downloaded images onto paper business cards.

Moross’s other pivot was to extend Moo’s portfolio of cards beyond its original mini-cards to more conventional shapes.

Not all these ideas worked, such as folded notecards, necessitating another pivot back to the core business proposition.

Pivoting is all very well, but a good entrepreneur focuses on what he or she is good at. In Moo’s case, Moross notes that he could have gone for the consumer market by selling lots of different greetings cards, but pulled back from this because it would have required a very different business model.

“I guess we have learnt a lot about what works and what doesn’t work,” Moross says. “When I started out, I was very stubborn. I had something I wanted to do and I wanted to do it my way. I am still stubborn on some things but I am also very flexible on what customers want.”

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