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Why startups must pivot, and how to avoid pivoting too far

(Entrepreneur News) Pivoting is part of startup life, whether major or minor, but some companies go too far with it – how avoid going too far with your own brand.





Pivoting is part of business, but…

Many companies, particularly startups, end up pivoting at some point, and it can be a distraction and done poorly can pull founders into chasing their tail trying to do what they think is best, only to be a wasted effort.

How do you know when your new company is pivoting too far, and how do you prevent this in the future? We tapped the wisdom of Dan Hogan, CEO of Nashville-based Medalogix, a predictive modeling platform for the healthcare industry.

“I know of precisely zero entrepreneurs who have built a company without pivoting,” Hogan asserts. “It’s because a living, breathing business is never exactly as it was imagined on the back of the napkin.”

In his own words below, Hogan offers advice for startups to help each from pivoting too far:

Even Twitter pivoted

Pivoting is an essential part of every successful business’s timeline. While some company founders completely about-face their on-paper idea after activating it, others make 45 or 90-degree conceptual adjustments after launching and throughout development.

One of the most legendary pivot examples is multi-billion dollar social media giant, Twitter. The company was originally called Odeo and operated as a resource for researching and downloading podcasts. As it turned out, Odeo was a great idea—so great that a little company called iTunes (you may have heard of it) was concurrently developing their own podcast marketplace.

Not interested in competing with iTunes, and wanting their own unmapped territory, company execs pivoted Odeo to Twitter, a social micro-blogging network that’s valued at more than $30 billion today.

Starbucks’ pivot was minor but relevant

While Twitter epitomizes a 180-degree swivel, Starbucks exemplifies a minor pivot. The coffeehouse company on every corner started as an espresso machine and coffee bean retailer.

The company’s director of marketing at the time (CEO currently) visited Europe, experienced their coffeehouse culture and was convinced that Starbucks could capitalize on European-style espresso beverages. He eventually bought Starbucks and shifted the original concept into what it is today.

Pivoting is the fuel for success

Pivots are necessary and ubiquitous because it’s impossible to account for all your intended industry’s variables during conceptual development. Only once you take the leap from planning to action the market will define for you aspects of your business that hadn’t occurred to you to consider and plan for.

Further, only through flexibility and adaptation can a company survive long term. Company execs must be open and ready to shift to stay relevant in today’s ever-changing market landscape.

Founding several businesses, most recently a healthcare technology company, I’ve experienced my fair share of major and minor pivots. Here’s what I’ve learned about successfully adjusting your business:

Embrace the shift: As I mentioned, many of the most successful companies sustained major pivots. Don’t let fear or ego get in the way of making a change.

And my own story

My current company actually started as a high-risk medication identification technology. Although from my healthcare experience and vantage point it was a good idea, when I presented the concept to a potential client, she laughed at me and told me it was a terrible idea.

While it was tough to hear, I ended up taking her advice and experience into consideration and pivoted to something she said would be valuable—a technology that used analytics to identify patients at risk of hospital readmission. It worked out. Although it was tough to admit my original idea was flawed, and even tougher to conceptualize a new business, I’m glad I did.

Pivot continually

Big pivots are stressful to a company. Your company can best endure a big transition in its early stages while it’s still lean and agile. Once a company matures, continual minor pivots are essential to ensure you’re responding to evolving consumer and industry trends.

Blockbuster failed to keep a pulse on consumers’ changing habits and as result, tanked. By failing to continually make minor pivots, the movie rental empire was too out of touch and too late to regroup and sustain a major pivot—other innovators like Netflix had already successfully answered the market’s new requests.

In my case, my company’s minor pivots have come in the form of new products. Our first product, which I mentioned earlier, was a readmission reduction predictive modeling technology. This was especially relevant to the healthcare industry in 2008 when we launched, because the Affordable Care Act prioritized readmission reduction.

Fast forward to 2013, care providers in our space were looking for new ways to better identify patients who would benefit from hospice care. As an answer to patients and our clients’ new needs, we expanded and developed a hospice identification predictive technology.

And now, what you must do

To make sure your company is evolving in line with your industry, communicate with thought leaders in your field and stay in tune with your industry’s regulatory and news coverage.

Run a democracy. When Odeo leaders decided they didn’t want to compete with iTunes, they asked their team to submit pivot ideas. From the group’s feedback, Twitter was born in two weeks.

Your team members read industry news, communicate with clients and understand gaps in your current product or service. You hired your team members because they’re smart, capable and innovative. Ask for their feedback and put it into action as you work to consistently evolve and improve your company.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

Business Entrepreneur

Entrepreneurs: You’re unemployable in your own company, must define your role

(ENTREPRENEURS) Once you’ve built a successful business, it’s time to reexamine your role and determine where you fit in best.



startup optimize to key metric

In my experience, most entrepreneurs are “accidental entrepreneurs.” They happened to be good at something, or they had a unique one-time opportunity to provide a product or service to the market. Then years later, they wake up one day and realize that they’re running a big business.

As an entrepreneur, one of the unintended consequences of building a business is that you become essentially unemployable within your own organization. After living the life of freedom, flexibility and responsibility of being a business owner, it’s difficult to go back to a “nine-to-five” job. This is why many entrepreneurs don’t enjoy staying with their businesses after they’ve sold to other organizations. Within months, they are frustrated that they’re no longer in control and the new owners are (in their opinion) making poor choices.

I see many situations where entrepreneurs are bad employees in their own organization. In fact, they may be the worst team members in the organization by having inconsistent schedules or poor communication skills and/or by inserting themselves into areas that aren’t useful. They can also have too much freedom and flexibility. And while most entrepreneurs insist on clearly defined roles, expectations and goals for all of their employees, they don’t always take the time to define their own roles, expectations and goals.

So why do entrepreneurs become bad employees?

I believe that it’s because they don’t have someone holding them accountable. Think about it: Who do they report to? They’re the owners. Part of the definition of “owner” is being accountable for everything but not accountable to anyone. Having a board of directors, a peer group or a business coach can provide some accountability for them, but another solution is to clarify their roles in the company and then abide by those definitions.

If you find yourself “unemployable” in your business, it’s time to define your role. It starts with outlining your main focus. Do you concentrate more on day-to-day execution or strategic, long-term decisions? Do you consider yourself an owner-operator or an investor?

Most entrepreneurs start as an owner-operator and put in countless hours of sweat equity doing whatever needs to be done to build the business. But over time they reinvest earnings in the business and hire a management team so they can step back and take on a more strategic role. Sometimes it’s not clear when the entrepreneur makes that transition, which can lead to challenges for the entire team.

Focus: Strategic Overview

If your main role is in dealing with long-term, strategic decisions, then it’s important for you to communicate that to the team. Clearly delegate tactical roles and responsibilities to the leadership team.

I’ve seen many instances where owners do more harm than good by haphazardly injecting themselves into tactical decisions that should be handled by the leadership team. Instead of jumping in when they see something they disagree with, I encourage owners to actively “coach” their leadership team to be better leaders. The approach of micromanaging every decision of others will frustrate everyone and lead to an underperforming organization.

I have one client that decided his role was to build strategic relationships and work on a new service offering. He was confident that his leadership team could handle the day-to-day operations of the business. Over time he discovered that being in the office every day was actually a distraction for him and his team. So, he moved his office out of the building.

To maintain his ownership responsibilities to the company, he scheduled one afternoon a week to physically be in the office. Team members knew they could schedule time with him during that weekly window when he temporarily set up office space in a conference room. Not having a permanent office in the building also sent a message to the team that he was not responsible for day-to-day decisions. Sometimes not having an office in the building is better than the team seeing the owner’s office empty on a regular basis.

Focus: Day-to-Day Execution

If you decide that your role is in the day-to-day execution of the business, then clearly define your role in the same way you would define any other team member role. Are you in charge of marketing? Sales? Finance? Operations? Technology? R&D? Or, some combination of multiple roles? Take the time to outline your responsibilities and communicate them to the team.

Just as you define your role, also define what you are NOT going to do and who is responsible for those areas. After all, sectioning off some tactical work does not abdicate you from long-term decision-making. You must set aside time to make the long-term, strategic decisions of the company.

Being an entrepreneur sounds glamorous to those that haven’t done it, but ultimately, the owner is accountable for everything that happens in their organization. It can be quite sobering. And while some entrepreneurs have a delusional belief that they can do everything in a company, it’s not a path to long-term success.

All entrepreneurs have to decide what their role should be in their organization – even if it means that they’re contributing to their “unemployable” status.

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Business Entrepreneur

Startups love pondering inclusion, yet half have no women in leadership

(STARTUPS) Tech startups are a huge part of discussing diversity and inclusion, but something as simple as hiring women in management somehow remains elusive.



women in leadership lean out

According to the Silicon Valley Bank’s annual report, over half of startups have no women on their leadership team. None.

As hard as this fact is to believe, it is also hardly breaking news. Organizations who have surveyed startups and technology companies for the past several years have seen that long-standing trends that disadvantage women and other genders in the tech space are still at play.

Like many other gendered debates about the treatment of women and other minority workers, this problem is seemingly a Catch 22 or a chicken and egg situation. Critics will continue to argue that the reason ladies aren’t in leadership roles is because they don’t have innate leadership qualities or that once their non-male employees have proven themselves, then they will start getting the resources and promotions that they say that they desire.

Like many other myths about women in the workforce, these beliefs only serve to reinforce the status quo by transferring the responsibility for these frustrating conditions onto the marginalized party.

These beliefs are busted not only because they’re tired gender clichés, but because we have hard data that proves the financial and cultural benefit in long-term effects of women leadership in tech.

However, for all the discussion of diversity initiatives, the likelihood of traditional funding going to women-led startups is still small.

For now, startups with women in leadership roles were more likely to get their funding from investing teams that were also led by females. Wouldn’t it be great if other investors began to not only understand that in 2019 it’s imperative that a company’s leadership reflect the diversity of the employees that comprise it? That workers will be more motivated, feel more understood, and have greater buy-in when they identify with their management?

Empowering women is how more get involved in tech. Diversity of leadership helps organizations thrive. And if something as simple as binary gender diversity is such a tremendous challenge, all other diversity issues are still (unfortunately) a large mountain to climb.

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Business Entrepreneur

C. J. Walker: America’s first self-made millionaire was a black orphan

(ENTREPRENEUR) When you think of our nation’s first self-made millionaire, C. J. Walker is probably not the picture that may come to mind, but this generous genius made it to the top, breaking every glass ceiling possible.



These days, it seems like Oprah gets all the bragging rights. I don’t think it’s quite fair that some car-gifting mogul gets to bask in the glory of a path that was paved a century ago. **No offense, O Great Winfrey. You’re cool, too. Please don’t take my Altima back.**

It’s time to pay our respects to the first female self-made millionaire in America. My friends, I’d like to introduce you to your new idol, Sarah Breedlove, better known as Madam C. J. Walker.

This gal had just about every card in the deck working against her. Both of her parents and all of her siblings before her were born into slavery. Her mother died when she was five, and her father passed the following year. Orphaned, she lived with her older sister until she married at age 14.

As if that wasn’t enough, a mere two years after her first child was born, Sarah’s husband died. I mean, she just couldn’t catch a break. Unfortunate event after unfortunate event. She then moved to St. Louis to live with her brothers, working as a washer woman for a mere dollar a day. Classic rags-to-riches stuff.

Her brothers worked at a local barber shop, and she wound up learning a thing or two about hair care while sharing a home with them. This planted the seed that would lead to her working with Annie Turnbo Malone, selling African American hair care products. As she learned more about hair, she must have realized she had a knack for it, because she decided to roll up her sleeves and put some indie elbow grease in.

After moving to Denver to work on her own products, she married Charles Walker, who provided the advertising know-how that would help her venture succeed. She adopted the name C. J. Walker and began traveling and training women in the fields of beauty and sales.

Eleven years later, in 1917, she called her first convention of so-called “beauty culturists” in Philadelphia. Here, she rewarded her top agents as well as those who were the most philanthropic towards local charities.

What I love about C. J. is that as her business grew, so did her awareness of the social climate around her. She never forgot where she came from, never hesitated to give back, and never gave up. She lectured on topics such as women’s independence, helping educate other black women in the ways of business.

Upon her death, it was determined that she was the wealthiest African-American woman in the country. In true C. J. style, she left two-thirds of her future profits to charity.

If I ever get mega-famous, I’m doing it the C. J. Walker way: Keep a level head, educate and help others, and put your community first.

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