Be wary of emotional attachment; for a Startup, it can be a double edged sword.
PayPal went from nothing to a market cap of $1.5 billion in 4 years. The growth of PayPal was remarkable, and to this day, it is the talk of legends and myths in Silicon Valley. What most people miss about the PayPal story is the number of fundamental changes, or pivots, the company had to go through before finding product-market fit.
Here’s the Five Pivot journey PayPal went through to discover its “best use scenario”:
First it was an encryption platform for mobile phones. Then it became a “Cash on Mobile Phones” application. Then it became an email payments system. Then it became an email payments AND PalmPilot payment system. Then it reverted back to an email payment service with a focus on e-commerce, mainly for use on e-bay.
This entire journey took 15 months.
Once PayPal discovered its best use scenario, it focused all of its efforts on enhancing that service for users. In 2002, four years after a young team of entrepreneurs set out to build an encryption platform for mobiles, PayPal was sold to e-bay for $1.5 billion.
Pivoting is a science and an art. To pivot successfully, a startup must have supreme agility and blistering reactivity to customer feedback. The founding team must combine quantitative analysis with qualitative interpretation to fully understand what the market demands.
So why do most startups experience “pivot failure”?
The answer is that most founders treat a startup “like it’s their baby”. What that means is that founders get emotionally attached to the original idea, and convince themselves it’s a winner while ignoring all signals from the market. They are so emotionally invested in an unproven concept that they fail to recognize a need to change (or pivot). Emotional attachment creates blindness to reality and compromises objectivity.
There is no doubt that founders have to be inherently passionate about an idea, or they are doomed to fail. But that passion must be balanced with a flexibility to change according to customer feedback in order to reach the holy grail of product-market fit.
Slice of Advice
If you’re a founder, make sure that you and your team realize that your idea will most certainly require fundamental changes. Save your emotional capital to after your product has achieved product-market fit. At that point, you are free to pour your heart into it. Startup success requires agility, both in thinking and emotion.