Lessons in Pivoting from A Recovering Entrepreneur

“Have you heard of Shapelog?” asked Neil outside the Egym demo trailer. Neil worked for Egym and we just met at the Canfit conference. Egym had this motorized weight machine that provided resistance on both the push and pull action along with this little pathfinding minigame that forced users to maintain smoothness of motion. Their equipment cost about $10k-$20k per weight machine, required some nominal calibration, and blew my mind more than anything else at the conference. Neil and the whole Egym team also talked to the three of us — Aman, Alberto and I — a lot.

I took notes on everything Neil said: Shapelog, market penetration, Netpulse apps. Every word, Neil spoke meant a new action item for us. What was our target market really? How were we going to integrate with existing systems? What were the KPIs we were going to provide back to the gyms? Where were our hooks? Who did we know? The walk through the Metro Convention Centre was our first time out of the building and out into the world with our thing. We had business cards, a website, a semi-functional prototype, and three MBA degrees. By the end of the conference it also became quite clear, we also had no idea what we were doing.

Like I said before we had some credibility challenges we were trying to address. At the conference we talked, we schmoozed and we collected swag. A few days later on one of our many evening calls, we decided we needed to talk about direction in person. A week after the conference, we discomfited in a meeting room at Rotman that we guerilla occupied. Alumni are welcome to use the alumni lounge, but at a certain point our ability to reserve the white meeting rooms in the hot pink building got revoked.

“Our idea needs work.” I said. Our idea is shit, I thought. Our sensors didn’t sense. I couldn’t get a group of them working together and I couldn’t keep them from producing noise. They weren’t tracking peaks, just random wobbles over a period of time. And no matter how many hours I spent tweaking the chip’s bios with my newly-minted chip programmer and my freshly discovered C programming talents, they didn’t work as expected or as promised.

We had an outstanding balance of $5000 owing to our hardware developers, bringing our total spend on the dozen sensors, AWS infrastructure, and Raspberry Pi controller to about $25,000. Six months of work on hardware and we had what amounted to the worst accelerometer experience on a Nintendo Wii without workable software or a user experience. Six months and $25,000 and we had nothing. Not nothing more than x or a next step or a good start. Nahhh-thing!

We had a bill to pay and a deficit in the account and a very expensive RetroPi.

“We need to pivot” Alberto said.

“Agreed” Aman said.

I failed. My beautiful little sensors, my hours with the chip programmer, my database, my data, my stupid video recordings like I’m Tony Stark working out with Jarvis.

“Agreed” I slumped back in my chair.

The Pivot

Imagine running a foot race. Imagine training, preparing, and doing everything you thought you needed to do. On race day, you fail to start; you pack up and go home, and then afterward email everyone who matters that you think biking is the thing to do now. That’s pivoting. From experience three things help:

1. Be Resilient and get back up. You’re embarrassed and you should be, but do not let it define you. Get up. Staying down after falling once is not a good look. It’s a worse look.
2. Plan B: have one, make one, or get one. We got one pretty quickly by shifting from hardware to software and because we listened to a lot of the advice regarding the mistakes we were making with hardware, we started moving toward solving the software challenges while finishing the course with hardware. The hard lessons had to be learned, but as the issues piled up, it made sense to look for opportunities, options and alternatives. .
3. Don’t take it personally and don’t make it personal. Ignore the business platitudes, spend a few days wallowing, moaning, or whatever you need to do to get over it, but do get over it on the inside. On the outside, own it as a team or as an individual. Do not assign blame, but do take responsibility. That means learn from the experience, not retrospect on what could have, should have, or would have worked. The future feels opaque and the past may look like an open book, but neither is true. We don’t see backwards or forwards in time very well, we just happen to tell a better story with what already happened because we have a detail or two more. What story you tell defines the past, not what actually happened. That’s why pivots on successful businesses sound like obvious choices not epic failures.

What We Did Wrong

Our mistake was pursuing a solution without fully understanding the market we were entering. We didn’t leave the building soon enough and let our idea and our imagination lead us down a path that did not necessarily align with the industry we were trying to enter. It’s all well and good to sell a killer app, it’s another thing entirely to convince customers that an app they’ve never heard of is worth the risk. To that end, we had to pivot from hardware and minimize our software solution’s focus. No one was looking to trade one set of known requirements for a set of unproven features. This could have all been done for $25,0000 less by simply going out into the world and talking to customers and the industry. We listened to the people that said they wanted to see something working, and then they would be interested in talking more with us, but what they really meant was that they wanted to see revenue and then they would be interested in taking some. This might sound callous and cynical, but as they say on Shark Tank, ‘sales solve all problems.’

What We Did Right

We abandoned what did not work rather quickly. Six months of work lost yes, but not six years. We saved what we could and we aligned our strategy to the target of making a sale not getting investors. Organizing and strategizing to convince someone else to invest does not make a successful business; organizing and strategizing to make a sale does. Investors will come when they smell money, not before.

A Good Pivot

The pivot is all about information. It should be a revelation of crossing out known unknowns and addressing high risk items. Build on the acquired knowledge that led to the moment. Pivoting means your strategy has changed, hypotheses were tested, and new information became available. Adapt to the information or die. Dying is okay, especially early on. Throw away your darlings. Just as in writing, in business, there is a lot of digging. If it’s wrong or not good enough, let it go. Try to fail cheaply and when failing cheaply, try to fail often to test your hypotheses and validate plans. A good pivot optimizes on an opportunity or solution.

The Bad Pivot

A bad pivot is not learning from the evidence available by not modifying the business trajectory enough. Keeping the core idea with a few tweaks is not a pivot; it’s lipstick on a pig. If that was all it was going to take then the original idea was fine, the team needs to work on execution.

A bad pivot is also changing the core idea so much it might as well be a new idea and starting from scratch. Starting from scratch = Same team + new idea. There should be some carry forward, else what was the point? Either the original idea was not the right idea for the original team or that the new idea is not right for the original team. In both cases the team needs an introspective as to why they thought the original idea would work and why the new idea would work when the original idea didn’t. Again this to preserve information.

Somewhere between too little and too much there exists a path for every business to move forward. The successful ones will pivot and pivot and adjust and tweak and eventually the road ahead will change from a jungle footpath to a dirt road to the autobahn.

What Next?

Our pow-wow in September ended with a new action register. We renegotiated with our hardware vendor and took the learnings from the past six months to put together our next big thing. We wrote a white paper detailing what we thought the gym of the future would be, and then placed our business within it. Changing course re-invigorated our thing. No longer were we hitting blocker after blocker. We now had a fresh direction and a clearer road ahead. Clear at least insofar as we could see.