venture capital
Pivot while there's still time
Pivot while there’s still time
Bobby Ghoshal, co-founder of the now-defunct social news app Flud:
A year after pivoting to the enterprise we were out of business […] because we ran out of money and investors didn’t have enough data to make a decision to jump on board.
I buy this reasoning. I read a lot about venture capital investors and how they conduct their due diligence.
Investors want to (as they should) gorge themselves on data before even discussing the possibility of backing your startup.
But if the first iteration of your idea falters and you’re too late to accept it or notice it or implement a pivot, getting to the next phase of development won’t save you because, as Ghoshal notes, the data won’t be there to convince investors to sign on the line which is dotted.
Of course, passion and user engagement is important when you’re building an app with a backend service. But all passion and users usually get you is a meeting.
It’s data that closes deals.
$85 million round by Evernote
It’s one of my favorite services, and the first I decided to pay for on a monthly basis. I think Libin, despite his transparent business style and easy-going manner, is genius of the caliber of any CEO at a company ten times Evernote’s size. He built something awesome, gives most of it away, and amplifies the magic for a small monthly fee.
You don’t get to 45 million users without being awesome.