Don’t start a new company – instead, pivot

Finding a successful business isn’t easy. I should know: I’ve got my seventh company going.

But is founding a new company always necessary? What if the company shifts its focus, and at the same time, its whole identity?

This is known as “pivoting”: rummaging your business inside out and forgetting about the old.

Many of the biggest technology companies started out doing something completely different to what they’re doing today. Twitter used to be Odeo, which was used for searching and subscribing to podcasts. Nokia was a sawmill, then it manufactured rubber boots, then it became a mobile phone giant and now it’s a general technology firm. Instagram, which Facebook bought for a billion US dollars, started off as Burbn, a messy app combining check-ins and game elements. Then it found its focus.

A pivot takes courage. It’s easier to stick to the old ways than throw away all the hard work and enthusiasm and start anew.

My most recent pivot happened at the end of November. Our service, Underhood, which automatically measures the Internet reputation of brands and companies, took a full turn after I saw my friend ask on Facebook: “Who’ll win X Factor UK?”

Although I deemed the question a little stupid and useless, I dug out the reputation scores of the Finnish contestant Saara Aalto and the other singers, posted them on my Facebook timeline and BANG. We caught the media’s attention immediately. When our prediction proved correct, the hullabaloo was ready: dozens of articles were published about it. Having a Finn in the British X Factor final helped, too.

Forecasting the results of a TV competition felt cheap at first. After all, we were a serious service, the rising star of social media analytics. However, then we decided to do our level best with it. We were adapting our service at top speed and bombarded the Internet with our predictions, watching our visitor count grow a hundredfold.

How about our investors? A couple of weeks before the X Factor madness, when we agreed on a new round, none of them threw money at a company that guesses TV show winners and election results. Now we’re excited to see if we can convince company analytics investors with our new approach.

A startup has to take the direction dictated by the interests of the public. Your plans mean nothing, when the world grabs your hand and shows you a new route.

We’re all pumped up now – until we, again, find a new business model and, eventually, the treasure chest full of gold.