[HN Gopher] If it isn't going to work, just shut it down
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If it isn't going to work, just shut it down
Author : imartin2k
Score : 54 points
Date : 2022-06-14 05:04 UTC (17 hours ago)
(HTM) web link (99d.substack.com)
(TXT) w3m dump (99d.substack.com)
| TameAntelope wrote:
| What's the difference between a pivot and founding a new company?
|
| Sometimes your company has some baggage (messy cap table, bad
| hires, a down round, etc), and pivoting brings that baggage
| along. On the other hand, forming an entirely new company takes
| time and effort that may not be necessary.
|
| What do fundraising entities think when they see a company
| fold/exit somehow in a way that keeps the founder free, and the
| founder immediately found a "similar" company solving an "only"
| marginally different problem?
| nlh wrote:
| A great quote sticks in my mind, shared with me by a founder who
| was going through hard times with his startup. The company was
| going through a bad spot, and one of his investors suggested just
| giving up and returning the existing capital to the investors. An
| advisor then said:
|
| "It's not their money anymore. Don't you dare give up."
|
| He didn't, he persevered, and the company had a fine outcome
| years later. I would not blindly follow OP's advice.
| pram wrote:
| And that founders name? J. Robert Oppenheimer!
| Ensorceled wrote:
| > They shouldn't go through down-rounds, cap table
| restructurings, multiple major pivots, or team transitions.
| After all that, is it even the same company? No. They should
| just shut down and start over.
|
| The article is talking about pivots not a lack perseverance ...
| lostgame wrote:
| Simply watching 'Dragon's Den' will reveal how ludicrously
| passionate people are about some of the _worst_ ideas.
|
| I don't really agree with the article, though. If it's not
| achieving the results you want, it doesn't inherently mean it's a
| bad idea.
| fourseventy wrote:
| pretty dumb article in my opinion. Part of being a good
| entrepreneur is struggling through hard times and figuring out a
| way to survive and make shit work when things aren't going well.
| If you follow this articles advice and quit at the first sign of
| trouble you won't get very far.
| memish wrote:
| On the other hand, that advice would have killed off Tesla and
| SpaceX at least 15 years ago.
| ncmncm wrote:
| We can dream.
| dvt wrote:
| What's up with the weird Elon hate recently? I don't care for
| the guy one way or another, but it's just bizarre. Plus, I
| have friends that worked for both Tesla and SpaceX and from
| what I hear, apart from being big and corporate-y, it's a
| pretty awesome place to be at.
| christkv wrote:
| He's of the wrong tribe now it seems
| anonu wrote:
| You can also lose face by doing what article suggests, which is
| "quitting". investors want a return on their money. They believe
| in your idea and management can make it happen. If management is
| no longer on board, what's to prevent investors from finding new
| management? Of course, easier said than done and depends on
| company stage. The downside (some risk capital) is small for an
| investor compared to the upside they're looking for, or that
| you're promising.
| analog31 wrote:
| Do investors have any evidence based reason to think a company
| has a better chance the second or third try, or a worse chance
| for that matter?
|
| Does past performance matter?
| habitue wrote:
| What about the classic story of the AirBnB founders pivoting from
| selling cereal?
|
| It seems like the metric for whether you decide to pivot or shut
| down depends on how many rounds you've done and how many
| employees you have.
|
| Early on, couple of founders & handful of employees: maybe do
| whatever pivots you can to survive.
|
| If you're a big boat and pivoting will require firing 80% your
| staff and starting an entirely different product, maybe consider
| just shutting down.
|
| (If you've got solid revenue but are just unprofitable, none of
| this probably applies, you should try whatever you can to save
| the revenue stream)
| fragmede wrote:
| But selling repackaged cereal in cutesy boxes was never
| Airbnb's long term plan. Can it be called a pivot at that
| point?
| newbieuser wrote:
| airbnb is a business model that has proven to be a great idea
| at one point. but I wonder if this is valid for every business
| idea? In other words, can every business model that has been
| followed for years be successful?
| ncmncm wrote:
| Yes: e.g., Energy Vault (NRGV, $2B+) absolutely cannot work, and
| should be shut down immediately. Maybe give back whatever of the
| pigeons^Winvestors' money is left? Somebody should sue the
| founders for fraud.
|
| The crane thing was actively stupid, and very obviously could not
| ever have worked. An investor who bothered to consult literally
| any mechanical engineer would have run a mile. Lots did, of
| course. But somebody bade the thing up.
|
| The current "condominium for concrete blocks" scheme could
| probably be made to sort of work, for a while, until it breaks,
| but only at 100x the price of the storage that utilities will
| actually buy, instead, because they are not all complete idiots,
| and anyway have engineers on staff.
|
| I expect NRGV to pivot to orbital beamed solar power, next, or
| orbital mirrors to light up your solar farm at night. Anything
| that would take a long time to prove can't work would meet their
| needs.
| brazzy wrote:
| Can you give a quick rundown why "the crane thing" could not
| ever have worked, and what exactly it was, separate from the
| "condominium for concrete blocks", which seems to be what is
| described in the Wikipedia article, but also uses cranes?
|
| As a non-mechanical engineer, it's not obvious to me.
| tschellenbach wrote:
| My first startup went through 2 majors pivots and eventually did
| quite well. The most valuable bit though was the experience.
| Second startup is in great shape thanks to that experience.
|
| I think many founders give up too early. You wont learn if you
| don't go through some difficult experiences.
| bsder wrote:
| It seems the prime directive to startups is "stay alive no
| matter how". If you can do that, eventually luck will find you.
|
| It's when VCs enter the picture that this becomes complicated.
| VCs want their pound of flesh back generally sooner than you
| will get lucky.
| diob wrote:
| Keep in mind survivorship bias though. There are probably loads
| who pivot multiple times yet still end in failure.
| harpiaharpyja wrote:
| It's tricky though, you often can't tell if you are in the
| survivor set or not until after all those attempts at
| perseverance. Its easy to assume that after N failures the
| company is not in the survivor set, but you can never
| actually know. So without perseverance, no one would be a
| survivor.
| yrechtman wrote:
| OP here. I think i mixed the message too much by putting
| pivots in the same category as founder transitions and
| down-rounds.
|
| Pivots are fine. But when you're basically just starting
| over on a completely new business with less money and a
| demoralized team, your likelihood of success is
| significantly impaired. Successful pivots need to carry
| ~something~ over of value
| ncmncm wrote:
| Yes. Letting them start over on something completely
| different is indulging sunk-cost fallacy. People were
| hired on the strength of being able to build X. If they
| are not who you would have picked to build Y, then
| getting them building Y anyway means you start out with a
| broken leg.
| skybrian wrote:
| On the other hand, if the team works well together, maybe
| they would actually be good at building something
| different?
|
| It seems like this will vary significantly depending on
| the team and the new plan. How valuable is it, really, to
| keep this team together?
| bombcar wrote:
| The pivot can be key - especially if you've built a team that
| can execute, identifying early that your plan won't work and
| pivoting to something else can help. And in the worst case,
| you've learned more.
| rossdavidh wrote:
| For those who (like me) didn't get the reference, the "Ship of
| Theseus" is a thought problem about whether, if every part of the
| ship has individually been replaced, it remains the Ship of
| Theseus.
|
| https://en.wikipedia.org/wiki/Ship_of_Theseus
| jackweirdy wrote:
| Is the ship of Theseus a single thought problem, or is it a
| different thought problem than when it was first thunk since
| all the present thinkers are different?
| idoh wrote:
| That's a funny joke. It does make me think about concepts and
| organizations and how they can drift. I don't think the Ship
| of Theseus has drifted much, but I think it totally applies
| to organizations and who is a member, e.g. people who
| supported the French Revolution / a school board / people who
| identify as liberal or conservative, etc.
| otikik wrote:
| One of my favorite ones. It comes to "identity". What does it
| mean to "be" (or not to be)?
| yakshaving_jgt wrote:
| Alternatively, Trigger's Broom.
|
| https://www.youtube.com/watch?v=LAh8HryVaeY
| [deleted]
| RcouF1uZ4gsC wrote:
| On the other hand, Microsoft was just a BASIC vendor, Amazon was
| a bookseller, Netflix was mail oder DVD company.
|
| Sometimes if you have a really good team/organization it makes
| sense to pivot based on the market.
| idoh wrote:
| Amazon always had ambitions to go beyond books, that's not a
| pivot.
| Hasu wrote:
| Microsoft's BASIC evolved into Visual Basic and still exists as
| the .NET platform. Amazon still sells books. Netflix still
| operates their mail order DVD company. All three do a bunch of
| other things now, but those products allowed the companies to
| grow and expand.
|
| I don't think expanding to other verticals is the same thing as
| a pivot, a pivot (imo) is when you entirely change your
| business strategy and product because the thing you were doing
| wasn't working. If you expand the definition of a pivot to
| _any_ change in business strategy, then every company pivots
| all the time, and the term loses its meaning.
| [deleted]
| icu wrote:
| Aren't investors really investing in the team talent to find pmf?
| In this case, is it practical to advise them to quit? If there's
| blood in the streets, it's just time to be a vampire.
| e-_pusher wrote:
| As always, all advice is wrong. While pivots are difficult to
| execute, many successful products came out of pivots like
| PowerPoint :
|
| https://en.wikipedia.org/wiki/Forethought,_Inc.
| cryptica wrote:
| It is going to work. I can feel it in my gut. I just need to keep
| myself and a few of generations of my offspring working on it for
| 150 years or so. Easy peasy.
| krallja wrote:
| This is the model of Noubar Afeyan's Flagship Pioneering: place
| tons of little bets, give them enough money to falsify the
| hypothesis. Don't even name the company yet. It's just an
| experiment. If it won't work, kill it and move to the next one.
| If it does work, call it Moderna and sell a billion mRNA COVID
| vaccines.
| lakomen wrote:
| That is very bad advice. If I did shut evrything down once I hit
| some hard opposition, I'd never finish anything. The better
| advice is, try, fail, try again util you succeed. Success is
| overcoming obstacles.
| alx__ wrote:
| I think the key part of that idea is learning from the
| failures. Analysis and objective opinions on what caused the
| failure
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