Someone on HN said Notion started as a research tool. Couldn't find info on that online, but it got me interested in thinking about unusual/interesting pivots. I've read about some of the big ones (Odeo --> Twitter, Tote --> Pinterest), but curious if anyone has more recent or lesser known ones.
An even more interesting and funny perspective is from another programmer beforehand:
In this post-mortem talk [0] on Diablo 1. The creator mentioned his worst business decision - the Hotmail guy offering 10% of the company in return for an office in the back they weren't even using, and he rejected it.
According to him, the pitch was: "I'm going to make email over the Internet".
His response: "Dude, that's the dumbest idea I've ever heard! What are you talking about, I already have my email over the Internet - this isn't even an invention!".
14 months later, that 10% was worth $40 million. Meanwhile they agreed to do Diablo only for $300k for Blizzard, and that was a bad deal - they even had to find more contracts to compensate it.
I had one. My point is that was the finished thing. And it’s appeal to me was that it was free not that it was web based. Freeness required a VC. Was making web based email (if that era standard) a real hard technical challenge that only one dev team could do it?
I'd been building increasingly sophisticated CGI-based web apps at the time (as a hobby) and still remember being blown away with what appeared to be a fully functional email client running inside Netscape. This was before Javascript was commonly available or standardized, and certainly no XmlHttpRequest etc.
> The name "Hotmail" was chosen out of many possibilities ending in "-mail" as it included the letters HTML, the markup language used to create web pages (to emphasize this, the original type casing was "HoTMaiL").
Nintendo was a century-old family business making some of the best playing cards in Japan; when the old CEO was about to pass the baton to his descendent, the latter took a trip to the world headquarters of Bicycle, the biggest playing-card manufacturer in the world, and was shocked to see it was like two floors of a generic office building, and decided immediately to pivot the company into a bigger pond.
You can still buy Nintendo made playing cards. Their hanafuda cards are pretty decent, can be gotten on Amazon, and feel good to play with. Occasionally if you look on ebay you can still find JAL/Nintendo trump decks.
If you've got a Japanese coworker who likes traveling from Japan to your area, or a remailer service you trust, Nintendo sells a mahjong set on their spare parts store in Japan.
Funny thing is this was the second time Stewart Butterfield tried to build a massively multiplayer game and pivoted the company. The first one was Flickr!
Reminds me of my brother, who wanted to have a little toy car consolation price at the christmas fair, but kept winning the main prices. Parents were chatting with another couple, he came asked for a buck to play, dumped the main price into my fathers arms, this went on six-times, he was almost crying by the point my father said "enough" the arm full of Dresden stollen. Sometimes your glorious victory is the defeat of others. Good times.
In fact the gaming company had already failed. They shut down the product and laid off employees, and offered to return the remaining money to their investors. The investors instead said keep it and try building something else.
It wasn't a random pivot either. Real-time multiplayer gaming and real-time group chat share a lot of the same characteristics. Discord has the exact same origin story.
This is what first came to mind for me - which is unfortunate because Glitch was fun and very chill. Too bad fun doesn't necessarily mean successful for MMOs.
Cisco is a famous example. They were founded to build a clone of the beloved PDP-10 mainframe. To bring in some cash they made copies of the stanford LAN routers the team had designed and built at Stanford. Turns out a lot of people wanted networking gear.
Years later some of the founders founded XKL to make a PDP-10 clone.
BOYSTOYS.COM, which ran a strip club in San Francisco, pivoted to manufacturing antifreeze as GlyEco.
Yes, someone did a full-scale IPO for a San Francisco strip club during the original dot-com boom. Ticker symbol GRLZ. SEC central index key 0000931799, if you want to track the history of the company.
Okay, wow.
>> BoysToys.com, Inc., a Delaware corporation (the "Company"), was
incorporated in the State of Delaware on April 21, 1997 under the name Wagg
Corp.
In January 1998 the Company changed its name to Alternative Entertainment,
Inc. (the same name of a Nevada corporation (identified below as "AEI-Nevada")
previously established for the operation of the Company's business) and in
December 1998 the Company's name was changed to BoysToys.com, Inc.
THE COMPANY'S BUSINESS
The Company, through its wholly-owned subsidiary, RMA of San Francisco,
Inc., a California corporation ("RMA") owns and operates an upscale gentlemen's
club in San Francisco, California (the "Club") under the name, "Boys Toys
Club." The Company originally intended to operate the Club through Boys Toys
Cabaret Restaurants, Inc., a California corporation ("BTC Restaurants") that is
currently a dormant corporation with no operations or assets. All assets and
operations of BTC Restaurants have been assigned to RMA.
The Company has the following subsidiaries: RMA, BTC Restaurants, and
Alternative Entertainment, Inc., a Nevada corporation ("AEI-Nevada") of which
only RMA has any assets or operations.
INTERNET-RELATED MATTERS
While the Company's name includes the ".com" moniker, this reflected the
Company's original intention to pursue business activities involving the use of
the internet. Currently, the Company has not had sufficient financial or
managerial resources to pursue or develop any significant internet related
business: (i) the Company has two internet Web Sites for the Company's public
and investor relations (namely, Boystoys.com and Boystoysir.com, respectively)
(the "Corporate Web Sites") and (ii) six sites that opened in October 1999 and
which have remained in development only.
(https://www.sec.gov/Archives/edgar/data/0000931799/000108638...)
>> In November 2007, after the Company's emergence from bankruptcy in May 2007, the Company's Board of Directors voted to forego any further involvement in the adult entertainment industry. The Company has since decided to explore opportunities in the environmental emissions trading industry and the Company is now positioned itself as a developmental company in that industry.
(https://www.sec.gov/Archives/edgar/data/0000931799/000108638...)
Discord itself says this in their welcome messages but they used to be a game development studio that tried to develop an mobile MOBA game called Fates Forever back in 2014. However they found VOIP software to be pretty problematic and pivoted to develop VOIP software for gamers. Now they're a very popular chat client.
Between Discord and Slack, I think something SaaS companies need to consider is looking at play and how to genuinely integrate play / fun into how they develop product. Both of these huge companies spawned out of video games and I think we are going to see more spawn this way.
I think play, especially at work, isn't discussed or considered enough and can form a strong core of a good product ("focus on the fun rather than the money") [0]. If a product evokes good feelings, especially if it is being used in an otherwise drab 'setting' ("I need to talk to other people"), people will gravitate towards it over others that don't.
I can't think of a person who is overjoyed to use, say, Microsoft Teams but you will almost certainly find people who love Slack or Discord to the point of pushing their leads to use them.
In other words, he pivoted from an idea analogous to Visa/PayPal/Stripe/etc -- to -- a forex exchange market and financial broker/custodian.
[To downvoters, if my information is incorrect, please add the correction. I linked Brian's 2012 text where he described what he was initially trying to create.]
EDIT ADD reply to: >because you pretty clearly need to build the exchange to make the payment thing work.
Thank you for your comment. I'm using the term "exchange market" in the sense of a full blown currency trading platform that has a "order book" to constantly match buy/bid and sell/ask orders. His initial description of "disrupting credit-card fees" did not require building that type of exchange platform. Instead, he just needs to be a "bank" that acts on behalf of users via the "custodian" ownership model. This would let users convert USD$ into BTC and they can then pay each other. The first business name for the website on his prototype screenshot was "Bitbank" which makes sense for the idea that emphasizes ecommerce payments rather than the trading of cryptocurrencies itself. E.g. Stripe enables payments and deals with 135+ currencies but does not have a "currencies trading platform with a buy/sell order book".
I listened to Armstrong on Lex Fridman lately. He was originally trying to simply build a bitcoin storage website (a ‘bitbank’). Then he added a buy button and people started using it, but even this did not initially require creating an order book / full exchange. It was a proper pivot by the sound of it.
They actually got to that part pretty early on I think. They had a feature that allowed businesses to accept crypto through them and receive plain old fiat payouts to the bank account. It's still there nowadays, too: https://commerce.coinbase.com/
Edit: it was even earlier than they actually added an exchange – these days it was just a custodial wallet.
Plaid was originally a budgeting app. After realizing how terrible banking APIs are, they pivoted to building a developer-friendly banking API. Now their valuation is 10B+.
So what goes wrong with budgeting apps? Sounds like there would be a huge market for personal (or small business) finance, targeting traditional CPA/CFP approaches.
I can't find sources but having made a budgeting app in the past have first-hand experience from being in the domain.
Small businesses are well catered for with tools like Xero, QuickBooks etc.
There's a psychological issue of people treating their budgeting app as the bearer of bad news (shooting the messenger effect), which results in churn.
There's also a high correlation between people looking for budgeting solutions being in a bad financial standing which makes the justification of paying for the software less likely.
That is not that interesting. It's something everyone realizes when they try make a budgeting app. Plaid decided to break the rules to create a product. They collected end users authentication details and pretended to be them to scrape data from financial institutions.
In the very old days Phar Lap made a compiler. They ran out of room in 64K so they wrote the DOS Extender. It was a far more popular tool than their compiler, so they sold that, for a decade, from 1986 until Win95 came out with 32-bit support.
They have indeed erased the original compiler from the company history. But the company name itself, Phar Lap, was a reference to the racehorse because their compiler was going to be fast.
This isn't quite a pivot, but Tandy was originally a leathergoods company that acquired a massive stake in Radioshack. For several decades it was known for its microcomputers during the dawn of the personal computer era. Today the leathergoods branch still exists, but the computer branch does not.
Another is IBM which originally built analog census taking machines and cash registers, but "pivoted" into the emerging world of digital computers.
Polaroid originally started off with Edwin Land's invention of polarized lenses which he sold in large number to world war 2 aviators. The instant camera was a pet project which exploded in success.
Many people might be surprised to learn that Intel did not go whole hog into CPUs after the 4004 processor. Intel made most of its money selling memory for mainframe computers. The revolutionary 4004 CPU was designed for a japanese calculator company that didn't even put up the cash for the original order. It was the automated decision-making processes that Robert Noyce set up that made sure the 4004 continued to get funding once people started buying them, and it took a while to get out of the memory making business.
The name Tandy is still associated with leathercrafting, see [1]. No idea if the name has changed hands or whatever, but it's quite fun that it's still around.
Arguably more an expansion of the original idea than a pivot, but Twitch used to be justin.tv which was just a single 24-hour livestream of Justin Kan, they later expanded it to allow other people to broadcast as well and then noticed their gaming channels was doing really well and rebranded as Twitch to solely focus on gaming.
From Justin.tv (the streaming service) to Twitch (the gaming-focused streaming service) was definitely more change in strategy (focusing on what was organically working best), but the original change really was a pivot from content creation (which happened to need the ability to stream) to providing others with that ability to stream as a service.
Sharp doesn't make mechanical pencils, so far as I know. I'd also be sort of surprised if Panasonic made lightbulb sockets.
To your broader point, though, it's true that most of the major Japanese conglomerates have amusing/modest origins and have accrued side-businesses over time until they became goliaths.
It's still interesting that a company like Panasonic began with something so mundane. Other than a few cases like IBM (which began as separate companies making time clocks and card punchers), it's not that common a story in the western market.
Warren Buffet was always a investor he didn’t himself pivot anything.
He didn’t found Berkshire he just bought a old public not very healthy textile company and used it as his investment vehicle /holding company and dumped its assets.
Yes all correct, just like the parent, but technically he did pivot the textile mill company into an investment company, even tho Warren Buffet himself didn't pivot (altho he's arguably pivoted a bit from his original investment strategy, but this a thread for large pivots).
Berkshire Hathaway the textile company died more than pivoted.
The kind of change that Berkshire Hathaway went through is fairly well used tool in finance. Every SPAC does the kind of the same for example, asset stripping and selling in parts or becoming a holding company is natural way for companies in late stage to die.[1]
Alphabet becoming a holding company is perhaps closer to a pivot for holding and operating companies than Berkshire
[1] A recent example would be Altaba that was created from the remnants of Yahoo.
Not that Nokia. Nokian Tyres plc (Nokian Renkaat Oyj) was split in the 80s and is the company making tires. Rubber boots were made by Nokian Footwear (Nokian Jalkineet), split in 1990 and nowadays a brand of Berner Oy. Paper products at Nokia (the city) are made by Nokian Paperi which is a part of Swedish company Essity.
The Nokia plc we all know mostly focuses on wired and wireless network technology.
It could depend on what is considered 'a pivot'. Some companies start out with grandiose plans only to find out that they don't have enough money or other resources to develop, market, and support 'Plan A'. So they take a piece of what they already have working and build a product around that to 'prime the pump'. Before they know it, the pump primer turns into 'Plan B' and they never get back to the original plan.
I have experienced some of that with my current project. It is designed to be a global distributed data management system, but I am currently marketing it as a simple data analytics tool because that is the part that is working the best right now. https://www.Didgets.com
Our last company went that path. We planned to build one product, but first we had to build an initial feature set to support it. That initial feature saw early traction and we never got around to building the real product. Not a bad outcome for us, but we definitely were not able to realize the vision we had.
Oops, thanks for the catch re: the spaces. Looks like I can't edit the comment anymore though.
That said, I'd say going from a SaaS model where you charge companies or universities $40k/year to access software that they provide free to students/workers is very different from a mobile app that does real-time dispatch / pickup inside a city and you charge the consumer directly. Different customer, different business model, different offering.
Nokia came to my mind as well. They made rubber products (galoshes, etc) before getting into telecom equipment in the late 70's and ultimately cell-phones in the 90's!
Devin Finzer and Alex Atallah got into YC with an idea centered around sharing wifi bandwidth using blockchain.
They saw the rise of Crypto Kitties, and how people were buying and selling them online. They pivoted mid YC batch into building an NFT marketplace called Opensea.
The Segment crew tried a couple of ideas without any success. Segment was an open source project that they wrote for one of the startup ideas and it had much more success. They weren't in agreement but the partners didn't have any better ideas, they were down to the last of their capital so they launched a commercial version of their open source.
I worked in a place before, that I won't name due to legal unpleasantness, but started life as a travel marketing company, and pivoted to some banking/finance customer management when the pandemic properly took hold.
They exited not too long ago for about 150M after firing the CTO just before their big payday. I guess the co-founders spending a lot of their early seed money on strip clubs didn't deter later investors.
Dude, if it was the same deal, there's a few major sleaze-bags who just got VP positions in the parent company, the worst sort of tech-bros you can imagine.
MtGox, the infamous Bitcoin exchange that handled over 70% of the Bitcoin trading volume of 2010 was originally "Magic: the Gathering Online Exchange", a site for trading magic cards in MtG: Online. I don't know if it's that wild of a pivot, trading one virtual object and then trading another, but magic cards sure seem more innocuous.
It's even more interesting than that. Nintendo was created shortly after Japan made it no longer illegal to manufacturer or play card games (seen as something from the West to be banned). They started creating original card and board games, as well as card designs. They focused on playing cards, not necessarily trading cards, though. The entire business was able to exist or started due to government regulations and a partial lift.
Sort of unrelated, but Japanese companies have a history of convincing Disney to do things they'd otherwise never do. Nintendo famously got a license to use Disney characters on their playing cards in the 1950s... something nobody else was able to do, and it was one of their most lucrative lines. Square Enix managed to convince Disney to license their IP for use in Kingdom Hearts, which is bizarre in numerous ways for the Disney MO, and it turned into something incredible. Studio Ghibli famously managed to prevent Disney from destroying it's films when released in the US by pulling a power play (they sent a samurai sword to Harvey Weinstein... yes that Harvey with a note that just said "No cuts.").
> Studio Ghibli famously managed to prevent Disney from destroying it's films when released in the US by pulling a power play (they sent a samurai sword to Harvey Weinstein... yes that Harvey with a note that just said "No cuts.").
What's worth noting here is this was in response to a very bad cut of "Nausicaa Valley of the Wind", which is the studios first movie and where their name comes from.
> Studio Ghibli famously managed to prevent Disney from destroying it's films when released in the US by pulling a power play (they sent a samurai sword to Harvey Weinstein... yes that Harvey with a note that just said "No cuts.").
Well the power play is more that they put a clause in their distribution contract with Disney saying they had to agree to any cuts after the botched release of their previous films and simply said no to every cuts Weinstein asked for.
Apparently, Toshiro Suzuki personally offered the replica sword to Weinstein during a Miramax meeting while yelling "Mononoke Hime, NO CUT!" because Disney didn't respect the contract while distributing Kiki Delivery Service.
Thank you for sharing this -- I didn't realize this existed. Instagram is covered in your link, and you can hear about it from the founder in this really good Lex Fridman podcast: https://www.youtube.com/watch?v=3pvpNKUPbIY
These lists always kind of remind me of popular bands that changed music over time. The most drastic "pivot" I've ever come across in a known band is Ministry, who went from a benign new-wave Depeche Mode clone in 1983 [1] to a pseudo-Cabaret Voltaire in 1986 [2], then to full-on metal by 1991 [3].
This is bonkers -- I don't really follow/listen to jazz, but was aware of "So What" and the other Miles Davis standards -- I had no idea he went this direction. Was he just stretching the genre as far as possible at this point? The "genre-stretching" thing is something I've been thinking about lately and trying to identify -- the band Swans has done this convincingly imo with rock, especially with the 2013 album "To Be Kind."
Hi :-) What genre? ..jazz?! I don't think of those second two as jazz. People play music, not genres. They and their music just have to be labelled to put in bins in record stores I guess. Some other Miles "directions":
Nope, YouTube really did start out as a dating site where you could record videos. Quite simply it didn't work very well. They pivoted and history was made.
Others had tried earlier with the same idea but the pieces weren't in place. Plus being members of the PayPal mafia they knew how to execute.
Unless...This is a mind trick that he uses to trick his mind into thinking that *this time* I'll really develop a game...and then fully expecting that something else will be created! I mean, some other creative people resort to all manner of tricks - like alcohol, weed, etc. - just to trigger the muse and serendipitous invention!
There will have to be a chapter devoted to this topic in my (fictional) book: "A Dictator's Guide: Your Next Step After Being Fired from Corporate America for Being A Sociopath". ;-)
I really dislike these stories because virtually all these companies lose the script (no second act). It seems that companies that start with a larger vision have multiple acts. Microsoft with software going from programming tools to OS to office to cloud. Apple with computing going from computers to iPods, phones, and tablets. Google with organizing the worlds information and making it accessible. Perhaps it is survival bias or perhaps I am mistaken.
I'm not sure Microsoft had such a grand vision early on; they were late to the Internet after all. And their public cloud play came along later as well. Neither did Apple. And I'd say that Google went from organizing the world's information to mostly selling ads.
Except that they largely deprioritized things besides search because they couldn't monetize to the same degree. Google Reader, Scholar, Books (and yes I know there were legal issues), Deja News/Groups, etc. They continue to sort of support things like Blogger but they're clearly not a priority. To Google, the "world's information" is mostly restricted to information they can serve search ads against.
It's also a little silly because every serial founder basically could have pivoted had they desired. It's just normally suboptimal for various reasons. Easier to shut it down and start anew.
A pivot away from tech but I found the Pixar story to be super interesting. One of Steve Job’s more interesting strategic accomplishments imo. My favorite part of the Walter Isaacson book.
This is perhaps the best talk I've ever heard on startups, ever. Chesky is such a good story teller and Reid Hoffman is such a great interviewer. I think a lot of founders would benefit from watching this.
I mean if we're going with Airbnb then might as well mention Uber's pivot from black car service to ridesharing (along with new CEO.. basically rebooting the company)
We're not a big company (yet lol), but we have an interesting pivot story.
In 2019, my friend and I bootstrapped a white-labelled SaaS for Professional Sports Teams to have their own (personalized) mobile applications through which they can interact with their fans (i.e. exclusive behind-the-scenes content, tickets, merchandise, trivia, etc.) We landed a small client then a few big clients, and then COVID happened as soon as we were about to scale. In a matter of few months, we went from being on the verge to breakeven to existing clients defaulting on their payments and potential clients going from wanting our products to not wanting in a span of 3-months. The situation was pretty bad.
At that point, I had to sit with the team and be transparent about our situation (from both a financial and a market standpoint). Luckily for us, the team was willing to undergo a pivot and throw everything we had previously built away. But we all agreed to do so under one condition: we will only pivot to a problem that we're passionate about and that is worthwhile.
The problem? We found the market we were interested in (Gamers & Content Creators), but we could not exactly pinpoint the problem we wanted to solve at the time. But we had (and still have) an amazing team so we believed it would be a matter of time until we figured the pain-point out.
At that point (August 2020), we only had 5-months worth of runway. We knew from consuming content (and creating it ourselves) how difficult it was to get discovered as a content creator, so we spent two months building a website that allowed Livestreamers to mirror their Twitch streams while also posting short-recorded content in an attempt to help them funnel in more viewers to their livestreams. We launched bith.tv in November 20202, and in our first year we had (organically) around ~250K unique viewers, then we decided to pivot once again. In that one year, we managed to pinpoint the actual pain-point after noticing how a) difficult it was for gamers to edit their content and b) how overwhelming it was to tailor their edited content to the various social media platforms that exist and cross-post it across them all.
So in November 2021, we underwent our second pivot and since then have built an easy-to-use cloud-based video editor with social media publishing tools in an effort to simplify the entire content creation journey for gamers.
Not a startup obviously but the pivot of Berkshire Hathaway after Warren Buffet bought it is pretty incredible. Company started in textile manufacturing in the late 1800's, after buffet bought it he expanded the company until it became the conglomerate we know today.
> In 1962, Warren Buffett began buying stock in Berkshire Hathaway after noticing a pattern in the price direction of its stock whenever the company closed a mill. Eventually, Buffett acknowledged that the textile business was waning and the company's financial situation was not going to improve. In 1964, Stanton made an oral tender offer to buy back Buffett's stake in the company for $11 1⁄2 per share. Buffett agreed to the deal. A few weeks later, Warren Buffett received the tender offer in writing, but the tender offer was for only $11 3⁄8. Buffett later admitted that this lower, undercutting offer made him angry. Instead of selling at the slightly lower price, Buffett decided to buy more of the stock to take control of the company and fire Stanton (which he did).
The Oracle of Omaha's first big move was driven, in part, by his desire to settle a grudge!
Started out making steel and fibreglass fishing rods in the 1950s. Pivoted to making high-performance antennas in the 1960s. This move makes a lot of sense when you think about it, but most people's initial reaction is surprise.
I saw it mentioned in a reply, but Soylent was the first time I ever heard the word pivot used for a business. Here is the hn thread for the article "The Biggest Pivot in YC History"
pretty sure the discord as a whole was a pivot away from a video game (I believe they extracted the chat feature they'd built for the game and ran with that)
Mitel allegedly first stood for "Mike and Terry's Lawnmowers". But when their first lawnmowers were lost in shipping, they pivoted to telecommunications.
Agaveapi was originally for data crunching in construction but there was just no way to get the data so it became an integration platform for all the various construction software.
TUI, a german turism company and one of the biggest in the world was founded as Preussag AG to manage mines an ironworks belonging to the state of prussia.
Agave was originally for data crunching in construction but there was just no way to get the data so it became an integration platform for all the various software.
I believe both Slack and Discord started developing video games, then realized the communication tools for large video game-scale teams aren't good enough.
Lego _was_ a carpentry making wooden toys (not bricks, that concept came from another company: Kiddicraft toy company founded by Hilary Fisher Page). They acquired a very expensive plastic injection moulding machine. They spend several years working on the "Automatic Binding Brick" before nailing it down. By the time the wooden toy warehouse caught fire in the 1960s, the LEGO system was already -by far- the biggest selling product line of the company. Wooden toys were simply discontinued, not a pivot.
If it was so natural, a single high level executive at Blockbuster should've seen it coming. Accessible and cheap servers, exponentially increasing internet speeds, and smart devices all happening at once was society-altering. It seems obvious in retrospect but it's just tough to spot.
The founders had an idea for a database hosted on the web(?), and pitched it to some VCs. They had been working on it as a side gig.
Naturally, the VCs asked: did you do it on company time? Did you communicate via the company's email system?
Nope, came the answer. We thought about that and built this email system to exchange messages while we worked on the product.
And the VCs eyes lit up: tell us more about this email system!