Knowing when to preserve and when to pivot is ultimately the difference between failure and success in a startup. Unfortunately, 90% of startups fail, and 10% of those fail within the first year.
In my own experience as a founder, I started my media agency, Bonsai, in 2009 following the 2008 recession. It was a tricky time in business. I had job opportunities, but none were great, and I thought I could do better on my own.
While there’s no exact recipe for startup success (and it can often come down to intuition), there are factors startup founders can consider that will help them decide on what future course of action to take.
Knowing When to Persevere
“Success doesn’t really interest me anymore. It’s too easy…Like… analysis plus capital plus execution…Anyone can do that.” It’s a line from entrepreneur Lukas Matsson in the TV series Succession. While he might have a point on one hand, he’s completely missing it on the other.
Success as a startup founder comes from more than just data analytics. It’s important to have conviction even when faced with skepticism so you have the energy to persevere. In my experience as a startup founder, growing from $0-1 million, then $2-3, $3-4, and so on, the challenges you’ll face are different at every stage.
Getting into the top 10 of Google is easier than the top three. In the beginning, it’s easier to grow (you’re starting from 0). From there, it gets exponentially harder to scale, so you need business intelligence strategies in place from the start. This includes attracting and retaining talent, ensuring your operating procedures and lines of credit are set up, and creating robust legal and tax strategies.
Crystalizing my vision allowed me to persevere in the face of friends, family, and colleagues telling me to shut my business, Bonsai, down and go work for one of the big tech players. First, realize that it’s your dream, not there’s. Second, often you need to persevere where others won’t so you can have what others can’t, because success can be just around the corner. I had to have conviction in my vision and dream to make it through the tough times that undoubtedly come.
After all, if it were easy, everyone would do it. So what goes wrong for the remaining startups that fail sometime after the first year? For many, it can be from choosing to persevere when the wiser option might have been to pivot, but knowing what to do in the moment can be difficult.
Knowing When to Pivot
Grit is your secret power for persevering as a startup founder, but it’s not always the right approach. For example, around 2013-14, I worked on an app to help high schoolers get into college. We’d just signed the San Jose school district in the heart of Silicon Valley. That’s a big deal for a tech startup. However, in the Beta phase, legal troubles involving a trademark dispute led to friction with the co-founder and a downward spiral from there, with revenue dropping by 40%.
It was a learning experience. Instead of laying people off, I made the mistake of cutting my own salary and ended up moving into the office for a year to keep the company intact. It was the worst decision I’ve ever made. There was no escape from work, and I was captive both financially and physically. Cutting my salary also meant I had cut my options, but knowing that now means you can learn from me.
Firstly, don’t trap yourself. You need to create an environment that enables you to succeed. Whether enjoying a sauna or a cold plunge, reading an inspirational book, or hanging out with your family, you need to look after the things that excite you to be alive. Moving into the office meant I started suffering some serious health issues. After a year, I realized I needed to pivot and strategically separate from my business partner at the time.
Having monthly, quarterly, and yearly check-ins with yourself and your team can help evaluate whether it’s time to persevere or pivot. Use a 15-year goal to plan for long-term success and then go all the way down to the next three months. Metrics are the mile markers you need to know when to pivot, and if the market isn’t responding and you’re not reaching your goals, you need to change the plan.
Learning from and reflecting with peers is how you can help build the intuition you need to know when to preserve and when to pivot. The value of peer-to-peer networks is the ability to learn from other peoples’ mistakes. Networks like EO (Entrepreneur Organization) and Vistag are great places to have authentic conversations about challenges with people who can relate and share their own experiences for you to learn from.
There’s a balance between knowing when to preserve and when to pivot. Pivoting can be over-sensationalized when you often need to maintain and push through. But, at other times, dedication to a vision that the market is not responding to can continue down a less ideal path when you should have been open to change. Open your mind to other possibilities, evaluate those possibilities scrupulously, talk with brilliant people, and if your path needs to change, change it. If you need to suck it up and persevere, dig your heels in and fight.
Embracing The Change
Despite the difficulties, people become entrepreneurs for several reasons, including having more control over their work-life balance, solving a problem, and achieving something significant. Whatever your reason, it’s crucial to create an environment that fosters success, whether it’s through self-care or embracing change. Whether you choose to preserve or pivot, you need to remember why you’re doing this.
To really succeed, it’s important to abstract away where possible from simply the financial side of why you’re doing it, to look for where you can add value in the world and make a difference. With Social Bee, it’s my aim to create a social platform that encourages people to be more active and social in the real world. Wanting to have a positive impact with what I do is why I invested over half a million dollars into Social Bee.
Having clear goals and a sense of purpose can help sustain you through the ups and downs of entrepreneurship. Even if financial success is your biggest motivator, you also need to keep sight of the impact you want to have on the world, and a strong peer-to-peer network can help you keep your eyes on that vision. Often the difference between failure and success in navigating the unpredictable startup journey is striking a balance between perseverance and pivoting.
Jason LaBaw is the Founder and CEO of Social Bee. Jason is an experienced entrepreneur and digital marketing professional with over 13 years of experience as the owner and operator of Bonsai Media Group, serving top brands such as Samsung, Amazon, Supra Boats, and CTG. He is the Founder and CEO of Social Bee, a travel AR app that combines elements of Pokemon Go and Trip Advisor to enhance the travel experience.