Flexibility & Nimbleness

What the greatest technology investors say about Flexibility & Nimbleness

FLEXIBILITY & NIMBLENESS POSTS (15 posts)

The following is a list of the post titles by author under this topic.  Scroll further down this page to find the actual blog post by your selected author.   Author’s posts appear in reverse alphabetical order.  For example, following this list, Fred Wilson’s post appears towards the beginning of the blog page, and Jason Calacanis’ post appears towards the end of the blog page.   

JASON CALACANIS  (1 post)

Jason Calacanis: Probably 95% of Successful Businesses Pivot

KENT GOLDMAN  (1 post)

Kent Goldman:  Pivoting is One of the Most Critical Challenges

BILL GROSS   (1 post) 

Bill Gross: Don't Overbuild-The World can Change Very Fast

ROB HAYES  (2 posts)

Rob Hayes:  What Hundreds of Founders Have in Common

Rob Hayes:  Red Flags: Signals Not to Invest

REID HOFFMAN & BEN CASNOCHA ( 3 posts)

Reid Hoffman & Ben Casnocha:  Smart Adapting & Pivoting

Reid Hoffman & Ben Casnocha:   Pivot to Real Market Need

Reid Hoffman & Ben Casnocha:  Better To Be in Front of a Big Change than Behind It

JOSH KOPELMAN  (1 post)

Josh Kopelman:  Invest in Teams that Adapt to Change

HOWARD MORGAN (1 post)

Howard Morgan:  How to Get a Second Meeting with Howard Morgan

MARK SUSTER   (2 posts)

Mark Suster:  Successful Entrepreneurs have these Qualities

Mark Suster:  Great Entrepreneurs Pivot

DAVID TISCH  (1 post)

David Tisch:  Startups are Constantly Failing

ANDY WEISSMAN   (1 post)

Andy Weissman:  Overnight Successes Never Are

FRED WILSON  (1 post)

Fred Wilson:  Sustainability by Fred Wilson

Sustainability by Fred Wilson

Fred Wilson venture capitalist and Co-Founder Union Square Ventures

Wilson believes the concept of sustainability needs greater consideration today in business as “[] the focus on performance and efficiency often comes at the cost of sustainability.   

[] sustainability is all about figuring out how to be in business forever.  It is about [:] [win/win] business models that [] lead to happy long term customer and supplier relationships [;] [] avoiding the temptation to overreach [] [and] maximize near term profits at the expense of long term health [;] [] adapting [] to changing market dynamics [;] [] building a team and a culture that can survive the loss of the leader and keep going[;] [and] [] many more things like this.”  Fred Wilson, Sustainability, Nov. 21, 2011  http://www.avc.com/a_vc/2011/11/sustainability.html

Overnight Successes Never Are

Andy Weissman venture capitalist and Partner  Union Square Ventures 

“These things often times look like overnight successes but they never are. About a year ago I was at a conference and Dennis Crowley the founder of Foursquare was at the conference and Foursquare at the time was maybe two years old.  And someone [] [asked] Dennis [] how does it feel to be [] an overnight success [] [with] millions of users [].  And Dennis said actually [he’s] been working on it for 15 years, and 13 of those were failures before [he] got to the last 2 years, so it hasn’t been an overnight success.”  Andy Weissman , #startupstories: Failure @ .10 min into video, Published on Sep 10, 2012 ; NewYorkTech Meetup #Startup stories , http://nytm.org/resources/startupstories;  

Failure: http://www.youtube.com/watch?v=lS3o2Pv355U

Startups are Constantly Failing

David Tisch angel investor, Managing Partner The Box Group and Co-Founder TechStars NYC

 “You are constantly failing as a startup.   It’s how quickly you rebound from that failure that might lead to success.” David Tisch, #startupstories: Failure @ 1.3  min into video, Published on Sep 10, 2012 ; NewYorkTech Meetup #Startup stories , http://nytm.org/resources/startupstories;  

Failure: http://www.youtube.com/watch?v=lS3o2Pv355U  

Great Entrepreneurs Pivot

Mark Suster Partner Upfront Ventures and former entrepreneur

 “Great entrepreneurs pivot.  Evan Williams [] and David Sacks are great entrepreneurs.”  Williams was a co-founder of Odeo a predecessor to Twitter.  Sacks originally founded Geni.com which beget Yammer, a business social network. Yammer was purchased by Microsoft in 2012 for $1.2 billion. Mark Suster What Makes an Entrepreneur (3/11) – Ability to Pivot, December 17, 2009; http://www.bothsidesofthetable.com/2009/12/17/what-makes-an-entrepreneur-310-ability-to-pivot/

Successful Entrepreneurs have these Qualities

Mark Suster Partner Upfront Ventures and former entrepreneur

 Suster believes successful entrepreneurs have these qualities:  “1. tenacity, the most important [].  2. street smarts []” including “[] know[ing] [] how customers buy and how to excite them [], [an ability to] spot opportunities that aren’t being met and [] design products to meet these needs. []”. “3. ability to pivot []” which “[] might just be a totally different business model.[]”  “4. resiliency  []. 5. inspiration [].  6. perspiration [].  7. willingness to accept risk []. 8. attention to detail [].  9.  competitiveness []. 10. decisiveness []. 11. domain experience []. 12. integrity  []”.    Mark Suster, Entrepreneur DNA, December 15, 2009;http://www.bothsidesofthetable.com/entrepreneur-dna/ What Makes an Entrepreneur (2/11) – Street Smarts December 16, 2009

http://www.bothsidesofthetable.com/2009/12/16/what-makes-an-entrepreneur-210-street-smarts/

What Makes an Entrepreneur (3/11) – Ability to Pivot December 17, 2009

http://www.bothsidesofthetable.com/2009/12/17/what-makes-an-entrepreneur-310-ability-to-pivot/

How to Get a Second Meeting with Howard Morgan

Howard Morgan Partner First Round Capital

 When asked “How [an entrepreneur gets] from first meeting to second meeting [with him]”, Morgan said, “Personal qualities are the first filter:  integrity, intelligence, and not too dogmatic.  Then [he considers] if it is a big enough market. [] [Morgan said the most common mistake in the] first pitch is to say something that is not credible [like] wildly overstating a market size.   Chemistry with the entrepreneur is also important considering you will be working together for the next few years.”   Howard Morgan, Want to Know How First Round Capital was Started? by Mark Suster, April 20, 2011; http://www.bothsidesofthetable.com/2011/04/20/want-to-know-how-first-round-capital-was-started/

Invest in Teams that Adapt to Change

Josh Kopelman Partner First Round Capital and former entrepreneur

“As soon as you hit print on the business plan, things change.  Competitors emerge.  Technologies shift.  Regulatory changes [affect] your marketplace.  Key employees quit.  Macro-economic factors impact customer spending.  Shit happens.  I'd much rather invest in a founding team that shows an ability to adapt to change than one that claims to accurately predict the future. I believe that teams that are nimble, market-focused, and are willing to rapidly test/iterate/shift their plans are more apt to perceive the signals that the music may be stopping.” Josh Kopelman When the music stops... March 10, 2006; http://redeye.firstround.com/2006/03/as_a_little_kid.html

Better To Be in Front of a Big Change than Behind It

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

 “Plan A is what you’re doing right now. [] Within a Plan A you make minor adjustments as you learn; you iterate regularly.”

“[] [Should] you decide you need to make a bigger change, that’s when you pivot to Plan B. [] It’s changing direction or changing your path to get somewhere based on what you’ve learned along the way.”

“How do you know when to pivot from Plan A [] to a Plan B? [] You’ll rarely know for sure when to pivot or when to persist in what you’re doing.  In general, a lesson from the technology industry is that it’s better to be in front of a big change than to be behind it.  But the question of when to shift exactly is a question of both art and science, intuitive judgment combined with the best feedback or data you can collect []. [Expect] both good luck and bad luck along the way that will open and close unexpected windows of opportunity.

The common presumption is that you shift to Plan B when something isn’t working.  That’s frequently the case but not always. What you’re doing now doesn’t have to be failing for it to make sense to shift. [] If you find that the grass really is greener somewhere else, go there!”   Reid Hoffman & Ben Casnocha, book The Start-up of You, pg 58, 68, 70-71

Pivot to Real Market Need

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

PayPal a leading online payments company was acquired by eBay for $1.5 billion in 2002.  Yet PayPal initially was very different than today.

In 1998 Max Levchin and Peter Thiel “[create[d] a “digital wallet”- an encryption platform [] that [] evolved to software [] [for securely moving digital cash via a Palm Pilot] [one] of several iterations []”. The company grappled with finding a mass-market use case as the public wasn’t used to wirelessly and electronically sending cash.  Meanwhile eBay was growing significantly despite its inability to efficiently handle payments, even though “growing numbers of eBay users [tried] us[ing] PayPal to handle payments”[].  As a result “[] PayPal ditched the Palm Pilot app [] and focused on eBay]. [] It stayed true to [its] initial encryption roots while shifting to capitalize on what appeared to be the real market need.”  PayPal became a huge success, overcoming many challenges, including new management and losses from fraud.   Reid Hoffman & Ben Casnocha, The Start-up of You (book), pg 64-66, 68-70

Smart Adapting & Pivoting

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

Flickr is a popular photo-sharing website. Yet its founders Caterina Fake and Stewart Butterfield didn’t plan to start a photo-sharing site.

Begun in 2002 their original product was an online game played simultaneously by hundreds of players.  “[] the plan was to build [] less [of] a game and more [of] a “social space designed to facilitate and enable play”” with features to attract users, including photo-sharing.  When photo-sharing surpassed the game itself in popularity they had to decide whether to continue game development while expanding photo-sharing, or dedicate most of their resources to photo-sharing.  They pivoted from the original plan to focus solely on photo-sharing.  Its tremendous popularity resulted in Yahoo! acquiring it in 2005.  

“[] [its] evolution [] “is a case study in smart adapting: its founders [] tried many things to see what would work, and nimbly shifted their plans based on what they learned.”   Reid Hoffman & Ben Casnocha, The Start-up of You (book), pg 52-53  

Red Flags: Signals Not to Invest

Rob Hayes Partner First Round Capital

Hayes discusses red flags, things that would make him not want to invest in a founder or entrepreneur. 

Red flag:  If he doesn’t have the best possible people as part of the initial team pre-funding.  “When someone comes to [him] who has already surrounded [himself] with people [] who have quit good jobs [to come and work with him] because they’re so passionate about [] working with this person but also what they’re working on, [] that’s a good indicator.”

Red flag: “[] [The founder] is so enamored with [the] product [to the exclusion of addressing other important business elements.] There have been very few products that have been so good that the world just beat a path to their door [like Google or Facebook]. [] If someone is so enamored with their product that they can’t think through how things might change or they’re focused on one particular slice of the market and they only know that piece of the market and not a much bigger market [], I would be concerned about [that].”

Red flag: “[The founder says] now [he] need[s] to hire a designer[]. [] [Hayes likes] a product with design built in from the very beginning. [] When [Hayes talks] about design [he’s] talking about UX [user experience], feel, everything []”.  Rob Hayes, Rob Hayes of First Round Capital - TWiST #249, (ThisWeekIn Start Ups with Jason Calacanis), Published Apr. 18, 2012 @ 25 min.; http://www.youtube.com/watch?v=GEPqy0ad0BU

What Hundreds of Founders Have in Common

Rob Hayes Partner First Round Capital

“[One] thing that the hundreds of founders [he meets] each year have in common [] is that their plan is wrong. Sometimes it’s the big things, sometimes it’s the little things, but the plan is always wrong.  Founders who can pivot to a new idea given what they learn will survive their plan being wrong while those who believe that all signs pointing to trouble are wrong are not going to survive. []

[Here are lessons] that every founder should follow- start with a solid plan, but always listen to your customers, employees, advisors, and your gut.  When signals suggest that the path you are on is not going to take you where want to go it is time to pivot. 

So how do you pivot?  Always be ready.  Listen to your customers-they will tell you what they want.  And when the time comes, pivot clearly and decisively.  Understand what can be reused, what needs to be thrown away and what else has to be built.  Ensure that your team understands the pivot and is on board.  Manage your cash and make sure your business partners, including your board, understand [the pivot] and are supportive.  [Assess] whether you have the right skill sets for the new direction.

[] [Always] be assessing your situation and expect to pivot [to reach the destination].”  Rob Hayes, Do More Faster by David Cohen & Brad Feld, copyrt 2011, Pg 201-202 

Don't Overbuild-The World can Change Very Fast

Bill Gross Founder and CEO business incubator Idealab

“Don't overbuild. The world can change very fast. We had no idea the dot-com crash could come on as fast as it did. It's better to grow slowly, and sacrifice some upside in the short-term, than to go out-of-business because of over-capacity. For us, it was a very painful lesson, and a very valuable one.”  Bill Gross   BILL GROSS: Here Are The 12 Lessons I've Learned In My 30 Years Of Being An Entrepreneur, Dec. 15, 2011;

http://www.businessinsider.com/bill-gross-lessons-2011-12#lesson-6-dont-overbuild-26#ixzz1j69K42a8;

http://www.businessinsider.com/bill-gross-lessons-2011-12#ixzz1j5th1O5b

Pivoting is One of the Most Critical Challenges

Kent Goldman Partner First Round Capital

“Pivoting is one of the most critical challenges a business can face. [] [Pivoting is] what you do when you’ve built everything according to plan and yet, the business and users aren’t materializing according to plan.[]

Pivoting is a good thing. It is the outcome of learning about your business and adjusting. The best run start-ups do this every day but they do it a little bit at a time. [] [They see smaller pivots] so often, they rarely realize that they are pivoting. Instead, they are simply operating.  It’s the more dramatic pivots which are more challenging, require greater commitment and longer runway.

[] Knowing when to pivot starts with knowing the milestones []. [We] believe the purpose of a seed stage investment is to prove / disprove / refine a thesis so we always work with [] founders to outline the milestones they want to achieve with their financing. This is a living document [not to be considered as] absolutes and deadlines, but [] provides markers against the original assumptions. As the progress against the milestones occurs, we look to understand both what is / what is not working and why[, revisit original] assumptions and ask what [was] learned. Together with the founders we ask, “Knowing what we know now, what would we do differently?” and “What can we do with the cash we have left?”

[] It’s critical to make a pivot when you still have runway [].  [] Plan your pivot with enough time to show genuine progress against [] new milestones.” Kent Goldman  This Just Ain’t Gonna Work Out, March 1, 2010http://thecornice.com/2010/03/01/this-just-aint-gonna-work-out/

Probably 95% of Successful Businesses Pivot

Jason Calacanis entrepreneur and angel investor

“[] It’s probably 95% of successful businesses pivot.  Nobody gets it right the first time.  By definition because if your first idea is your best idea, then you’re probably not a very dynamic entrepreneur, right?  If you say [] when I was 25 years old [I] came up with my best idea, and I didn’t have another great idea for the next 20 years of my career, something is wrong.”  Jason Calacanis, TWiST Meetup, London vs. Berlin - TWiST #270 @ 45 min., Published on Jun 29, 2012; http://www.youtube.com/watch?v=W_6h8XWfUO8