To pivot or not to pivot? #78

What's Below in Issue #78:

📰 - Pivoting

📊 - Funding milestones

🎙️ - Podcast #46 w/ Rob Hunter, From Bankruptcy to Multi-million Dollar Exit

💵 - Premium startup resources

🆓 - Free startup resources

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Live Pitch Deck Feedback Session

Knowing if your pitch deck is a winner or loser is not always clear. The venture community likes to project false positivity and tries not to give direct feedback for fear of founders getting defensive or feeling crushed.

​​Personally, I feel it's a disservice to founders pouring their heart, blood, sweat, and tears into their businesses not to get direct and constructive feedback.

​​That's why I'm hosting a monthly live and recorded deck roast for founders in the Thunder community.

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How Long It Takes To Get From Seed To Series D

This week's data shows the timeline you can expect on your fundraising journey from the first raise to the late-stage rounds. The chart above shows how long it takes to go from stage to stage starting from launch to Series D. It breaks down as follows;

𝗦𝗲𝗲𝗱 (𝗶𝗻𝗰𝗹𝘂𝗱𝗲𝘀 𝗽𝗿𝗶𝗰𝗲𝗱 𝘀𝗲𝗲𝗱 𝗿𝗼𝘂𝗻𝗱𝘀 & 𝗦𝗔𝗙𝗘𝘀 𝗼𝘃𝗲𝗿 $𝟮𝗠)
• Median of 1.8 years from incorporation recently

𝗦𝗲𝗿𝗶𝗲𝘀 𝗔
• Median: 3.1 years from incorp

𝗦𝗲𝗿𝗶𝗲𝘀 𝗕
• Median: 4.7 years from incorp

𝗦𝗲𝗿𝗶𝗲𝘀 𝗖
• Median: 6 years from incorp

𝗦𝗲𝗿𝗶𝗲𝘀 𝗗
• 8.1 years from incorporation

As you can see, you can expect your journey (if you follow the traditional path) to take quite a while, so hang in there.

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Let’s Talk Pivoting!

Picture this, your early-stage startup is struggling to achieve product-market fit. You had big dreams for your new venture but it is struggling to take off. Is it time for you to consider pivoting and shifting gears?

The biggest pivot of my career was when Samsung pulled their acquisition offer of our company, LiquidSky, the day of closing. We quickly had to pivot from burning $400K/mo as a B2C business to cutting the burn to $100K/mo and becoming an Enterprise Cloud SaaS business in three months. It was nuts. So, let's talk about when might be the time to consider a pivot.

Signs That It Might Be Time to Pivot Your Startup

• Stagnant or Declining Growth: your revenue is no longer increasing and your metrics have plateaued? Perhaps you should rethink your product/service.
• Customer Feedback and Market Demand Mismatch: your product isn't sticky and your customers seem dissatisfied. Time to think about going in a different direction.
• Competitive Landscape Shifts: 2020 was the year of the pivot as many ventures had to adapt to the new normal. Sure, a pandemic is a major reason, but things can change fast and you may have to as well.
• Technological Advances: 

  A great instance of this is Slack. Originally a gaming company called Tiny Speck, was developing a game called Glitch. Despite their efforts, the game failed to gain significant traction.

  However, during the development of Glitch, the team created an internal communication tool to help them collaborate more effectively. Now Slack is valued at over $26 billion.

• Regulatory Changes: $23 billion company PayPal was focused on providing a service for exchanging money via handheld devices. However, as internet regulations and the online marketplace evolved, PayPal pivoted to become a digital wallet and online payment system that facilitated payments for eBay transactions and other e-commerce activities. 

For those of us older than the internet, we remember Netflix as a DVD order service and we got our movies in the mail. The pivot to online streaming has seen the company become a staple in every home and a decacorn trading on NASDAQ.

So, when do you decide to pivot your startup? Things aren't looking so peachy and it's time to ask yourself a few questions. It's time to do some market research and assess new opportunities. Are you changing your business model? Do you need to explore new markets or expand your product features?

It is super important to recognize when things are changing and you have to keep your eyes open for opportunities and be ready to act. It's a time to experiment; test your assumptions and validate the new direction you want to go in.

Communicating your new direction

If you are like me, you know there may be some resistance to change. How can you get your customers on board with the shift in your company? Internally and externally, you've got to be clear about how you let people know about the pivot. 

How can you reassure your customers that they can still trust you after the pivot? You have to show them that even though the brand is taking a new direction. As a venture-backed startup, this also means managing investors' expectations and being clear about the new direction you're going in.

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------------------------------------------------------------------------------------------------------------------------------------------------------------From Bankruptcy to Multi-Million Dollar Exit with Rob Hunter Now in Episode 46

In this episode, Rob Hunter, partner at Speaker Ventures and exited founder, shares his entrepreneurial roller coaster journey. From going bankrupt with his ice cream franchise in his 20s to getting into Y Combinator, raising venture capital, and eventually exiting his tech startup HigherMe. Rob provides insights on navigating the highs and lows of entrepreneurship, making tough decisions like when to step away from the CEO role, and evaluating acquisition offers.

Check It Out

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Let's stay in touch:

• Written by Jason Kirby - https://www.linkedin.com/in/jasonrkirby
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