Should Your Startup Pivot

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Ep. #740 - Should Your Startup Pivot

In this episode of Startup Hustle, Matt DeCoursey and Matt Watson discuss what a “startup pivot” is in this Part 43 of the “How to Start a Tech Company” podcast series.

Covered In This Episode

Should your startup pivot? Is it really okay to completely change the direction or focus of your tech business? Matt DeCoursey and Matt Watson talk everything about pivoting to help you help your business grow.

The Matts emphasize that founders and entrepreneurs should not be afraid of pivoting. In fact, they remind founders to keep several options for how their business can shift when they launch it. Matt and Matt see a startup pivot as one of the ways to grab an opportunity. Plus, they provide some examples of successful businesses which resulted from a startup pivot.

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Growth and Innovation in Startup Venture


  • Introduction to Part 43 of the series (0:08)
  • What is a startup pivot? (1:03)
  • Pivots can open different opportunities (3:03)
  • Companies that succeeded after pivoting (6:23)
  • Running out of money is a common cause of failure (11:34)
  • How do you pivot up and down the company ladder (13:35)
  • Pivoting after an acquisition (16:12)
  • Giant social media platforms were born from pivots (23:52)
  • Why pivots occur (28:27)
  • Wanting to serve everyone can doom your business (39:03)
  • Give it time to grow and succeed (42:55)
  • Key Takeaways (45:15)
  • Wrapping up (51:43)

Key Quotes

It is important to remember, if you’re starting a new business, to think about possible pivots, changes, different use cases, and scenarios for which you could open up more opportunities for anything.

Matt DeCoursey

When you’re doing software, there’s usually some services component that can be attached to it or other offshoots of the software, other uses of the software. And it usually can go a lot of different directions. But as founders, we typically are pretty hard-headed about one of those things, and we, you know, want to want to die on that sword on that hill. Instead of pivoting, it happens a lot.

Matt Watson

The number one thing about a startup is you don’t know what you don’t know going into it, right? You think that you can build and sell this thing. You think that people want it. But then, you get this feedback, or you all of a sudden see this other opportunity. But now you’re an expert in the industry. Now you see the problem better. And you better see how to position yourself and pivot into that niche. And that’s where you become successful.

Matt Watson

Pivoting can be a good thing. It’s not the end of the world, and just do it with confidence. Like, if you’re ready to pivot, you got to sell it. You can say hey, look, this is for the greater good of all of us.

Matt DeCoursey

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Rough Transcript

Following is an auto-generated text transcript of this episode. Apologies for any errors!

Matt DeCoursey 0:00
And we’re back. Back for another episode of Startup Hustle, Matt DeCoursey, here, with Matt Watson. Hi, Matt.

Matt Watson 0:06
How’s it going, man?

Matt DeCoursey 0:08
I’m just balling, bro. Pivoted, passing, shooting the rock. That’s how it goes, right? It’s part of the game.

Matt Watson 0:17
That’s part of this part of the hustle for sure.

Matt DeCoursey 0:21
Oh, other episodes that that basketball I was watching Kansas University play this weekend. You know, I’m a big Jayhawks fan and you know, the pivot, and lets me slide back and forth and do a lot of different moves. And didn’t you want to say to me your favorite move is the pivot.

Matt Watson 0:37
You know, I would love to watch you hustle some guys a basketball. That’d be great.

Matt DeCoursey 0:41
Dude, they’d have to be okay. The only the only hustling I was I’m capable of doing a basketball would have been my daughter’s first grade team.

Matt Watson 0:52
Probably your kid?

Matt DeCoursey 0:54
Yeah. Yeah, we had our first basketball practice on Saturday, there wasn’t a lot of pivoting going on. There was a lot of grabbing the ball and running.

Matt Watson 1:02
They probably just run right.

Matt DeCoursey 1:03
No, no, now my daughter, she’s pretty tall. She’s taller than the other kids. But yeah, there wasn’t much pivoting going on. There is a lot of traveling. Double dribbling, a little bit of crying and a lot of confusion for for practice. Right? That’s a, that’s a little different than when a start up pivots. And that’s what we’re going to talk about today. Before we get too far into that today’s episode of Startup Hustle is brought to you by, helping you build a software team quickly and affordably. So hopefully you don’t have to pivot as soon or maybe not at all, whenever fine, we’ll never know. So, Matt, a startup pivot occurs when a company shifts its business strategy to accommodate changes in its industry, customer preference, or any other factor that impacts its bottom line. The drastic pivots are the ones you tend to hear about. But not every pivot is a fundamental change to an entire company. So when you think about a pivot, what do you think about?

Matt Watson 2:02
Survival? Learning, reacting to what you learn listening to customers?

Matt DeCoursey 2:10
Yeah, I think one of the key things and you know, the definition that I just read is, I think pivots occur all the time. I mean, absolutely. They make little, little pivots. I mean, these are just like sometimes like simple lane change moments or adjustments. I think those are technically pivots. If you look at the the kind of visualization of a pivot, like we were joking around with basketball, that’s one foot on the ground, and you can spin in any direction. So you could pass shoot, do something different. And that’s really what they’re all about. And I think that you’re right, though, I think that most the time it is more survival based or wanting or, or wanting to prevent survival, like the wall around, let’s say, for survival, wanting to prevent, like the need for a true like, survival escape plan.

Matt Watson 3:03
Well, and Full Scale in general was one giant pivot. If you remember, right, like, you know, you were no, yes, we were no, yeah, you’re done business for a friend, right writing software for his shoe boutique, or whatever, we won’t call it and decide, hey, you know what, we can create software for other people, and they pay us for it. Maybe we could do more of that.

Matt DeCoursey 3:26
Yeah, I think that that wasn’t as much of a pivot and what we’re talking about, as you know, Matt, and I became business partners at Giga buck. But we had, the plan was to later down the road provide some client services, through the offices that we had set up in the Philippines. So I don’t know if that was necessarily a pivot, or if that was just an acceleration of the timeline. You know, so, but a little bit, or that now, sometimes that’s actually a good let’s start on that started on a positive pivot note, because we actually, you know, we had, you know, set up our what is now the Full Scale office in the Philippines, and it was to take care of, of our own needs primarily. And then, as we realized there was a huge demand for the potential services, we moved to plan up that was supposed to occur roughly like a year later. And it went really well. So sometimes a pivot can, you know, be that acceleration in in the timeline or pointing the ship in a different direction, because the waters are a little less choppy?

Matt Watson 4:33
Well, and that that acceleration or pivot became the main thing. Right, like, yeah, that’s what happened. Yeah. You know,

Matt DeCoursey 4:41
well, that’s that’s a good pivot, then. Yeah, it’s now one of the things that I think that is important to remember if you’re starting a new business, is to think about possible pivots changes different use cases, scenarios for which you could open up more opportunities for really anything?

Matt Watson 5:08
Well, especially when you’re doing software, there’s usually some sort of services component that can be attached to it or other offshoots of the software, other uses of the software. And it usually can go a lot of different directions. But as founders, we usually are pretty hard headed about one of those things, and we, you know, want to want to die on that sword on that hill. Instead of pivoting, it happens a lot.

Matt DeCoursey 5:34
And many do die on many hills. You know, that I think you brought bring up a good point, too, is that so many people are really stubborn, when absolutely pivoting? Do you think that’s just like ego and just like stubbornness, or

Matt Watson 5:54
it could be what they’re passionate about, or what they, you know, they go around telling all their investors and friends and family that this is what we do and whatever. And then, for them to decide, like a couple weeks later, they don’t do that anymore is a hard pill to swallow too, right? So they feel like they’re letting go of the dream if they make too big of a change, but you got to do it. And you know, my last two companies that ended up being pretty successful. Both had some pivots along the way, as well. So it happens.

Matt DeCoursey 6:23
I’m looking at our show notes here, and they’re given a they’re given an example, our production team said that Instagram was originally a service called bourbon bu RBN, which was a location based check in app.

Matt Watson 6:37
That sounds like a terrible idea.

Matt DeCoursey 6:40
That was apparently a pretty good idea, though. I’m pretty good member

Matt Watson 6:43
of Foursquare. Now, nobody does that anymore, either.

Matt DeCoursey 6:49
Barely, barely.

Matt Watson 6:51
Was this a place? Do you go to an app? You go to drink bourbon? Like, that’s a stupid ass name?

Matt DeCoursey 6:56
I don’t know. I don’t know.

Matt Watson 6:59
Well, I made the right decision. When they pivoted away from a bourbon drinking app, I guess that you check into I don’t know what the hell it was

Matt DeCoursey 7:07
Instagram per acquired for $1 billion, which many startup experts refer to as the best and worst acquisition ever, depending on on whose side of the table you were on?

Matt Watson 7:21
How can it be worst and

Matt DeCoursey 7:24
a heart? I know, I know. But it’s, you know, it’s just wildly more valuable, right? It

Matt Watson 7:29
was like, yeah, 12 people total in that company. And they sold it like 18 months later, for a billion dollars. I don’t know who got the worst end of that deal.

Matt DeCoursey 7:38
It was terrible. How are those people managing to get by Matt? How? How do they survive? I just I don’t understand that. They need to pivot their personal lifestyles into something clearly more affordable. Because if you can’t live off of a billion dollars, and you have some issues. Alright, so one of the things I think that when I hear people say, Well, we’ve made a plan, and now we have to stick to it. Do you know?

Matt Watson 8:07
No. You know?

Matt DeCoursey 8:10
I mean, I’ve we’ve talked a lot for people that have owned a lot of different businesses and, and done a lot of different things. We are often devout have a truly detailed, written plan. And that’s because the details change a lot. And well, it’s not a bad thing.

Matt Watson 8:33
And you just learn as you go, right? Like one of the next examples in the list here we had was slack, which was Stewart Butterfield, you it was originally used internal communication platform for another company that decided to build an internal tool. And then there his original company failed, but slack kind of spun out of it. Right? And do you hear that same story a lot, too, right? Like we these companies build some internal thing or solve some industry problem. And then that thing becomes really valuable and spun out. Like I was part of that a long time ago in the ticket industry, I worked for a ticket broker. And I helped them create some ticketing software, that we sold a whole bunch of ticket brokers and it was acquired by StubHub and eBay. Right? Like, you know, sometimes you get this a lot where companies internally build something and then that’s something else becomes really valuable.

Matt DeCoursey 9:27
I think that happens a lot. I mean, I think that’s one of the you know, we’ve talked about the different in the past the different reasons that people start a business or start a company and you know that and that same didn’t that same that same guy you worked for started had a different version of that. Yeah, so yeah, Rush. Rush was even better. Even better one Yeah, yeah.

Matt Watson 9:54
Yeah. So you know, as a ticket broker, one of the main things I do is ship a lot of tickets right via up S and FedEx, and he constantly had to deal with them being delivered late or not being delivered at all, which, of course, is a huge problem if you’re selling tickets, but you know, when you send, spend like millions of dollars a year on shipping, you know, if UPS doesn’t deliver it on time, you’re supposed to get a credit back. So we actually worked on this, and I worked on this myself 20 years ago, when I worked there have software to audit, FedEx and UPS bills around if the, if the packages were delivered on time. And that ended up being a company he spun out called Vera ship that was here in Kansas City that was wildly successful. That has since sold. And yeah, that was another thing that spun out of that business. So yeah, great entrepreneurs tend to do that. Right. They have one business, but they, at the same time, they’re kind of creating other things that sometimes get spun out that are bigger than the original thing. It was way bigger than the ticket business ever was.

Matt DeCoursey 10:55
Yeah, Vera ship is now called sifted. So yeah, that was, uh, yeah, and maybe we should have Ross back on because that’s a that’s a pivot master that was that even a pivot though? Was that a pivot? Or was that like,

Matt Watson 11:13
it was just something that was born, it was born out of the greater, you know, goal, right? It’s like, oh, we need to build this thing. But that thing ended up being bigger and wasn’t so much a pivot, it was just letting that thing, you know, grow and mature and then letting it become its own company. But in some sense, it’s a pivot, right? Like it’s a change of focus over time.

Matt DeCoursey 11:34
That business gave birth to two businesses that were that ended up being far bigger than the original business. Yeah, yep. Absolutely. That’s so that’s when that’s when things are going right. That’s when things are going right. Now, in the past, we’ve done episodes, you know, this is the 43rd, part of a 52 part series, which much like most startups, we’re going to deliver our products late on our 52 part series. I think that that’s pretty much something we can count on. But knowing that things take longer and cost more than originally, originally, the original assumption, or guess or estimate, causes companies to run out of money. Now, this is kind of a redundant fact, because it says on my list here that 37% of companies that fail say that running out of money was the reason why pretty sure that’s the reason that all of them run out that all of them go out of business. But that often puts a lot of pressure on companies and the sometimes the pivot, much like, you know, obviously the we were making basketball references. It’s kind of like the full court press and you got all these guys. You know, in the back court, trying to prevent you from passing the ball up the field while you’re on budgets and timelines cause you to kind of win the ball down the court and hope that a member of your team grabs it. And in the business sense, it’s more along the lines of hoping that you can generate some revenue, you can do something different. I mean, overall, that that lack of direction can also lead to no investor interest, because you’re stuck explaining what it what to do. Okay, so what do you do?

Matt Watson 13:23
We help with everything.

Matt DeCoursey 13:26
I’ve heard Matt Watson ask someone that after them giving us a pitch for 10 minutes,

Matt Watson 13:31
it’s still not understanding what it is that you do. Absolutely, yeah.

Matt DeCoursey 13:35
Yeah, I want you all to picture Matt Watson. And then someone giving a patch and after 10 minutes, and and you said what I was thinking. So I appreciate that. But it leads to, you know, this can’t that pivot can lead to a lack of understanding of what you’re supposed to be focused on, not only for your investors, but also for your company. So when it comes to a pivot, how do you? I mean, how do you sell it all the way up and down the line?

Matt Watson 14:08
It’s really hard. And, actually, let’s talk about stack lifer, an example of this, you know, we built a free tool called prefix. And, you know, we originally built it as a lead generator. So it was a free tool that people would download. And, you know, our goal was that people would download it and then they would buy or other paid product. And there was a long time that we all thought like the entire management team thought like, you know, what, should we just shut down our main product and focus on this free tool and sell this free tool? We never did. And to this day, I still wonder it’s like, should we have made that pivot? Because that free tool had really no competition. People loved it, they would have definitely paid for it. Where our primary product was very competitive and we were in a tough a tough, you know, industry vertical that that we We’re competing in, should we have pivoted to that tool and we didn’t. And to this day, we’ll just never know what could have happened. But it’s so hard to then think about, well, if we would have made that pivot, how would have changed the entire company, right? Like, oh, we have all these salespeople, we have this and that whatever. It’s like, No, I don’t need them anymore if we go this direction, right, like, and that’s a hard pill to swallow. And that’s one of the reasons that people don’t do it. And that was one of the reasons that we were hesitant to do it, is because it’s like we’d spent years building this other product to just all of a sudden say, and we don’t care about that anymore, is really difficult to do

Matt DeCoursey 15:36
with some of that bandwidth thing.

Matt Watson 15:40
Well, it would have been a focus thing, right? Just imagine if instead of like our free tool was kind of the the rotten stepchild that didn’t get a lot of attention, right? Just think if we could put all of our muscle and focus behind that free tool and turn it into a paid product. Could it have been a big thing, right? But it’s so hard to turn your back on the other part of the business? I mean, it’s really hard. But you know, what we might have been, we might have been a billion dollar unicorn, if we would have done it. You just never know

Matt DeCoursey 16:12
you another business that you were involved with event solutions. After your acquisition, that company kind of got forced into a pivot. When I say a forced pivot? What didn’t you say there were four or five different things that the company did. But then the new party just said, the new owner said, we’re doing one of them? Well, yeah.

Matt Watson 16:33
And so that’s the problem. We’re into an acquisition, right. So you had, who acquired VinSolutions, but they also acquired a whole bunch of other things, right. And one of the great things about VinSolutions is it it was a platform that did several different things for car dealers, so it manage their inventory and their website, and it was a CRM system and different different things. Well, when autotrader goes out and acquires other companies that do websites and other companies that do inventory and other pieces of this, all of a sudden, now they’re looking at their portfolio, and they’re going back to VinSolutions. And they’re like, ah, we only want you to do CRM now, and tear apart all this other great stuff that you did. The reason that people bought your product, now they have to buy that from some other company we acquired. Yeah, it’s like 3% better, and it’s not integrated, very good. And we’re gonna charge a lot more for it. It’s like, I mean, that’s frustrating to see too, right? Like they, they what was great about a company, because of the acquisitions, they tear the baby apart and piece it out. And my dad still works there. And he has to deal with this, like, Oh, we got to spend the next two years migrating people from one platform to another, and it’s like, they get the same shit. But we’re gonna migrate them from one to another, so they can justify why they acquired this other company. Like, welcome to the corporate world.

Matt DeCoursey 17:48
Yeah, but those two examples are on the complete opposite of the spectrum from each other ones is like a company you owned and was actively in motion and growing. And the others, not yours anymore. I mean, that’s like getting upset. On some levels. That’s like getting upset that you sold a car. And you found out later that they painted it a different color that you didn’t like, yeah, like, you know, it’s like you may have that that car may have been your baby you met, like, Man, I have all these great memories. I made my first child and that car, there you go. And you’re like, I can’t believe they painted it green. But, but that’s part of it, though. Now, that’s a different story. Now, you look at some of these things. And it’s easy to I think it’s easy to to look at things on paper, or hypothetically. And then you say, Oh, well, we’ll pivot over to this lane. And we’ll do this and this is what we’ll focus on. But once you get off of that sheet of paper, or part of what like when you were talking about the sacrifice situation, and the free tool, and this is where, you know, things that you okay, these things can be disheartening. And because it’s hard to tell someone it’s like, Hey, dude, so I know you’ve spent two years of your life working on this. Pretty much like it’s all you do, but we’re gonna we’re gonna throw it in the trash now. And I need you to get really excited about this other. You were working on that everyone else that we’ve been telling everyone was just our free giveaway. Yeah, it’s I feel like that’s, I feel like that’s the conversation that you have with the employee that has to hold the arrow on the busy street that says, like, turn here to sell gold. You’re like, hey, look, I need you to spin it and throw it up and dance with it with some real authority. I really need you to sell this to everyone driving by that you really want to be here and do this. Like it’s probably I don’t know. I mean, it’s that. That’s tough. I mean, if you run into the same thing, it’s with it. in the creative world, so, you know, if you’re in a creative if you’re if you do not like, hearing about why anything you’ve made is good or bad, do not get into creative services. Because typically, like in that case, you’re going to tell your designer make me six. That means you’re throwing five of them away. I mean, someone is heading into that day’s task, knowing that 83% of their output is going to just like, I don’t know, it’s going to come and go and no one’s going to think about it.

Matt Watson 20:33
Yeah, working in any kind of graphic design, marketing, creative kind of stuff. Gotta be, gotta be difficult. You gotta be able to accept feedback, right and do a lot of pivoting for sure. Yep, make my logo bigger. Number one feedback.

Matt DeCoursey 20:49
Turn my left headphone, please, more cowbell. All of them are kept like, Oh, but I mean, that’s, that’s the world that you live in. And you know, that’s gonna go from anything from startups to like homebuilding. I was talking to Eric Perkins, who’s on Startup, Hustle TV with us. And about that in a previous episode, which, by the way over the last year has been our most popular episode. So thank you, Eric, for talking about homebuilder entrepreneurship. But, you know, part of I think part of as of getting he’s our age, or in between our age, Matt, and, you know, in his early 40s, and he said, Hey, look, I work for the customer. And that’s, that’s an evolved outlook actually is like knowing and that’s when, when you what you need to think about when you ask, should you should your startup pivot. And you know, we’re going to talk more about that after a quick reminder that today’s episode of Startup Hustle is brought to you by, helping you build a software team quickly and affordably. And you know, I want to say thanks to so many of the listeners and supporters out there. We’re this week is Startup Hustle is fourth birthday now. We’re turning four.

Matt Watson 21:57
Wow, that’s crazy. Four years.

Matt DeCoursey 22:01
Yeah. So this episode comes out on December 10. And the birthday is December 7, four years ago, man, almost 750 episodes 2.5 million downloads later 190 countries when we quit counting, we may have picked up a few of the other ones. I’m assuming we have but but thank you, people. And thank you for Full Scale and all the staff that helps us make this show happen. And thank you for all of the myriad people that have gone to and filled out the form at the Get Started page. You know, I was just talking to I talked to two of our listeners last week that were interested in what Full Scale does and it’s always so humbling and to hear. You know, I talked to one lady who was just really excited. She said wow, I can’t believe I’m talking to you and said yeah, I’m just a guy looking for something. Yeah, no, definitely not. No, but.

Matt Watson 22:58
Are we like F list celebrities, like E list, D list like?

Matt DeCoursey 23:04
My wife asked. My wife asked me that are 2 million downloads just joking around and I said yeah, we are G list local niche celebrities.

Matt Watson 23:14
When do we get invited to the Grammys and the Oscars?

Matt DeCoursey 23:18
We don’t. They don’t give them out for podcasting than they do. They have like the potties. That’s it that says even sound good either party. Thank you. Yeah. Yeah, it was, it was it was roughly four years ago today. That’s crazy. I showed up with that with $100 microphone, and an old laptop and said, We’re doing a fucking podcast. Here. We’re gonna what? We’re gonna figure it out. And if you’re listening to this episode, and it’s your first one, don’t go back and start it episode one. Listen to him backwards, if anything. So, yeah.

Matt Watson 23:52
Alright, so getting getting back to the pivot stories here. You know, looking at our show notes, what blows me away? Instagram, Slack, Twitter, and YouTube. We’ll talk about Twitter, give the Twitter all we’re all born notice. All four of those billion dollar companies were pivots. That’s insane. So yeah, Twitter, as it was originally a platform discovering and subscribing to podcast. And then they quickly figured out that competing with iTunes for that would probably be very difficult. And then I guess, settled on doing you know, the messaging service that is today and and you know, what’s crazy about social media is there are different types of social media for different types of like, industries or topics that are way bigger than others. Like, like if you want to learn about cryptocurrency stuff, Twitter is the place to be. But if you want to look at pretty pictures, then you want to go to Instagram or whatever. Like it’s just crazy how there’s they all live for different reasons, by the way, but I can’t believe all these major social platforms were pivots.

Matt DeCoursey 25:01
YouTube was originally a dating site.

Matt Watson 25:05
That makes sense. What I was thinking, either that or porn. I mean, that’s usually the origin of a lot of technology, dating or porn. Just like Facebook, it was dating originally.

Matt DeCoursey 25:22
I just look at that now, you know, there’s something that that really you look okay, so you look at all these things. Alright, so we’ll go back and we’ll just talk about the pivot. So Instagram. I mean, they became something completely different. Right? I mean, completely different. Slack. That’s, that’s, that’s a, that’s just a solid pivot. There was an internal communications platform. And it was created for a failed game. Like, you know, gaming, like gaming, right? And

Matt Watson 25:57
building a communication platform is what I want to know. They just spent their time making the game may be the game forward, maybe

Matt DeCoursey 26:03
if they’re making the game it wouldn’t. Do that happens a lot. Yeah, happens a lot. There’s like this, like, weird Albatross and side, so many around the neck of so many businesses, and they’re trying to build one component. And you know, I remember, this was actually right before we started the podcast, like a few months, and it was funny you and I had had just started talking, you remember when I went out to San Francisco, for TechCrunch. And I went out there with my family. And I remember and I was talking to people about Gigaba, because part of what I was wanting to do was see who I could partner up with, it would need a booking engine. And I talked to so many businesses that had so many different businesses have calendaring Booking and Scheduling components on them. And I kept talking to people, and they were like, Yeah, we’re gonna do that. But we’re saving it for last. I’m like, and I’m and I would I remember literally talking to one guy said, your platform doesn’t work without this. He said, Yeah, we got to get the other stuff right first. And I and I remember thinking, I don’t think you’d know how, how complex. Some of this stuff is because you talk about creating schedules and doing Booking and Scheduling, it seems like it’s really easy. You’re like you take a day, you take a name, a time, a date, and a little other info and you put it on a calendar. Now that’s not that hard. But what is hard is all the the 12 different things that can occur with that, after all the things that it might need to link to. And this is an example of some of these, these Albatross, and that’s an old phrase and saying for something that waits you down and will just sink you to the ground or the bottom of the ocean floor. And I think a lot of companies get get stuck into pivoting because they build two out of three parts of whatever it is that they’re wanting to do. And for some reason, they don’t get one part of it right, or they run out of resources, or they realize that I don’t know, like, maybe that wasn’t even a big thing. You know, you look at like you talk about Twitter. That’s crazy. I did not realize Twitter had originally started as a platform to subscribe to podcasts now in 2005 Dude, who would listen to a podcast in 2005?

Matt Watson 28:14
Well, and to put it in perspective, the iPhone came out in 2003. Right? So this was super early days, and like, and that concept of podcast must have been very much in its infancy.

Matt DeCoursey 28:27
So So I was recording the show last week. And, and one of the things we talked about is there, you know, sometimes you’re wrong, as a startup founder, like you’re just wrong, you know, you just think something’s gonna happen. And it doesn’t. And then sometimes you’re early, which is the same thing as wrong. It’s not, it’s the same result often as wrong. So, you know, I think a lot of pivots occur too, because I’m not going to get into all the different examples. But, you know, I’m kind of a documentary film that and I watched recently watched some stuff about Silicon Valley, it was watching about, boom, and this is in 2000. You know, right before it. I mean, there was a lot of really great ideas that were just Well, well, well before their time, and you look at this 2005 like subscribing to podcasts, dude. I remember six years ago, people didn’t even know what a podcast I talked to people all the time. Okay. This is how I know you’re either 86 or you’re not into the digital age and oh, yeah, I’ll I’ll watch your podcast. Okay. I’ll make sure to watch that soon. I’m like, wow. But people ask still ask me all the time. They say well, what’s I don’t even what is a podcast? I don’t even know what it is. And I just describe it. I’m just like, it’s, it’s modern. It’s it’s modern Talk Radio. Well, we’ve pivoted the show. Like we had video for for joining us, Lee. Yeah, well How about Lauren and Andrew? Yeah, we pivoted into having more hosts and creating more content and multiplying what we’re doing. So we found a formula that was working both from a show perspective and some of the other things we change to as if you have been listening for a while, we used to do shows with more than one person on him. And now we kind of pivoted back to only two people and like, just like me, and Matt or me and a guest or whoever. And some of that was also it was easier. It’s easier you record a better show with two people on it, because it’s easier to get a rhythm and have a conversation, where with the third person, we found, there were times when we’d come out of like a show with three people. And we’re like, I don’t know what to say, or when or where, or how or was that what you normally say, or whatever. Look at. Yeah, you start to look at making simple little changes. And yeah, I want to go back one second, I want to talk I want to ask you a little bit about the sacrifice thing with the free tool wouldn’t have been as popular, if it wasn’t free.

Matt Watson 31:11
That’s the That’s the hard part. Right? You don’t know. And maybe there’s still a free version. But you stripped down what’s free, and you make a more compelling paid version and stuff like that, too, right? It could be like, there’s still a free version. But we added so many things to it that people are willing to pay for it. Or maybe it’s free for individual use, or consumer use or free. If you don’t work at a corporation, or if you work at a corporation with more than ex employees, it has to be paid or whatever, right? Like there’s different schemes they’re figuring out, but yeah, it until you explore all of it and put the energy into it, you just don’t know.

Matt DeCoursey 31:45
So with the man product that you had built, and I remember when and this was right around. So for a little, we’re getting a little nostalgic today. But I think that this is important, because you know, we started the podcast about a month after I moved in to the office at sacrifi. With you and here I was just some dude. I’m like just a guy that had written some books, I had done some other stuff. And we were trying to figure out exactly what we were doing. But remember that the main product that you had built one of the paid product, one of the problems was it needed to support like a gazillion different coding languages. Yeah. So you had built like these couple pillars that held things up? And then you needed to multiply those? And was the daunting nature of that task. Part of why you’re like, well, we just won’t mess with the free product right now we’ll let it do what it does or

Matt Watson 32:33
not, yeah, that’s part of it, too. And that’s something else we could have pivoted on, right is saying, Look, rolling a sport, one programming language, you know, like, Oh, we’re gonna focus on Microsoft Azure only, and, you know, dotnet developers or something, versus trying to support everybody, right? But we thought all along that if we didn’t support everybody, that we’d never be able to sell the company. And so many of our customers used multiple languages. So it’s like, well, we have we have to do this, but it was a huge undertaking to do. So again,

Matt DeCoursey 33:06
it’s easy to be an entrepreneur and look in the rearview mirror and have all the right answers. You know, I mean, I, I think about the same thing with Giga book and you know, I look at so Giga book is broad, and it just like the total addressable market or user bases, it’s too wide. And that’s a problem. Now, one of the things I want to point out in all of these cases, okay, everything from Instagram. So you might think Instagram is a generalist kind of thing. It’s not, it’s like you post pictures, or then maybe videos, but there, it’s actually very narrow, like you get a picture, or you get less than 60 seconds worth of video. Like, that’s what it is. And now you can focus

Matt Watson 33:46
on the more generalized version, right? You can do pictures or text or video or whatever, and everybody hates it.

Matt DeCoursey 33:52
Right now, Slack was slack was originally kind of like an instant message kind of thing. And then it became in many ways an integration hub. When it comes to communication and it broadened. You look at at Twitter, so Twitter was originally in 2005. It says here it was odio. And then when it became Twitter, it was it was actually kind of marketed as a micro blogging platform. And that was like the term that they used and part of and now I think that Jack Dorsey and the folks over at Twitter got it right because it Twitter has, if you talk about onboarding, it has, it is like always one of the examples when it comes to onboarding as like how to because they made it really, really fast and easy to get in and get moving. Like absolutely start your microblogging page now and the whole thing and people were looking at it when it came out. They’re like 160 characters. What am I going to do with that? You know, it’s like, but he made it fast to get in there and fast to do stuff. You talk about YouTube. So YouTube, according to notes here was originally a dating site that allowed singles to upload videos as themselves talking about what they wanted in a partner. That wasn’t a new concept. You know, back in the for the history of like pre internet, they used to there was like dating sites and services where you, you know, they would you get a VCR like a VHS tape. Hi, I’m Matt. I like long walks on the beach, pivoting my startup and you know, doing this and like, then you’d send in a letter and be like, I’d really like to meet this man, you know, and so that wasn’t a new thing. But, but all of these things they were originally made for a very hyper specific purpose, and then just made to do a different hyper specific purpose. And so last, I was recording an episode recently with one of Miami’s top startups. And they have, they have, okay, you talk about an old concept with a newer feel this company, and they’re called Audience dot CEO, Matt, you remember when I used to get to work every day, and I’d write, I’d write 10 handwritten notes. And I put them in a box with one of my books and send them to a startup founder with a note that was like, you know, all that, and I do you know, 510 15 of those a day. Yeah. That well, they, they, I don’t need to because I’m gonna subscribe to It does have its handwriting robot. And it writes all your notes with it. Now, that’s not a new thing. It’s not new technology. And the handwritten note goes back as far as paper and pen, but they put a new twist on it that made it easier to do and made it more customizable into the actual whole, like flow of sales and marketing. And, you know, here’s the point. It’s all these other things like the video of someone talking about what they wanted in a partner wasn’t a new thing. You know, like the same thing with Twitter. It was microblogging that was kind of new at the time. Communication from one Okay, so as slack was coming out, I mean, dude, what was it AOL Instant Messenger wasn’t that like the the first aim? Was that like one of the first one things where you’re like pinging someone, and then you had Skype, and you know, now there’s

Matt Watson 37:18
a bunch of different messaging things. And actually, Slack was kind of a redo and improvement of ICQ. That was really the best probably analogy, and a lot of people have never used ICQ. I never really used either, so, but it was more similar to ICQ.

Matt DeCoursey 37:35
So So I’ll give you an example. So this this guy that Jesse Stein, who is the founder of, he hits clearly and found a niche with realtors, because, you know, that was like his thing. It’s all over the site. And you can tell that he took off and ran with it, because some of the things too, that they do, and they added in were the ability to help them find leads and do it. Like bring in the data, send notes and make them look handwrite do they’re pretty clever. Like, you ever get a note, handwritten note. Like it makes mistakes, like little goofy ones to just kind of like keep keep it feeling authentic, so it doesn’t feel printed. But you can take a lot of old specific things. And now, he’s not pivoting his business by focusing on real estate people he just found traction. That’s what you Matt, will often Matt Watson will often refer to as a traction channel. So this is that when you say should you pivot? I don’t know if that’s a pivot, or if that’s just an acceleration into traction. I mean, do you consider that a pivot like one of the things i i regret with gega book was not making it an industry specific platform. And we talked about that four or five years ago, it’s like, you know, and we wanted, we could have picked one industry or we thought about picking like a handful of them, like just making 10 things that no one was ever going to do and just being fucking amazing at all of them, because we’d never have any competition.

Matt Watson 39:03
Well, that’s the thing, right is, in hindsight, you’re like, man, we should have just gone all in on escape rooms. But at the time, you’re sitting there thinking like, well, well, why would we do that? We should do massage parlors or spas or beauty parlor or like whatever. Like there are such bigger industries, why would we do this escape room thing. And but then There ended up being a lot of competition in those other ones and escape rooms was new. So it’s hard when you have a product that can be tailored to a lot of different industries. Like pick a book where you’re like, oh, I want to serve everybody I want I want the whole world versus like, do I double down and really bet the house on one specific thing. And it could be you do two or three, right? You make a version of giga book that is specific to to one of those and you kind of rename it and make an industry specific product or whatever, which is probably the best thing to do is you make two or three smaller bets and figure out which one wins and then you chase the winner and cut loose the losers. But it’s hard to do that as an entrepreneur because you’re like, I want to serve everyone. I want everyone as a customer, which ends up being the doom of a lot of them.

Matt DeCoursey 40:09
Well, and then sometimes you have things and like you mentioned, kind of the the stepchild attention. So you know, Full Scale had started with, with Giga buck and wanting to do developers and flex on some relationships and things I built in the Philippines over the past year. And you said to me, at one point, you said, you know, we were talking about the plan and moving forward. And us literally said to me, this was, I mean, in a similar timeline, as the as the podcast that occurred, you said, I think, once you see these contracts, piling up at 3500 to $5,500 a month, that that’s going to consume all your focus, and it did, and it has, and that’s been part of it, and then you know, then we get a pandemic, and we have a rapidly growing business. And on some levels to if your business has multiple components, I think that’s okay. You know, I think it’s okay to you got to focus on the things that are going to have the biggest impact now and later for your company. And that was one of the things and you and I have both talked about that because Full Scale in today’s episode of Startup Hustle is brought to you by Full Scale, go to We help you build software and build teams of people that hopefully stick with you for a really long time. Now, when it you know, when it comes to, to, you know, like, the stuff you’re doing if the business like it. I personally like and all the different entrepreneurial things I’ve done, they’ve always had many tentacles, they’ve had different things like when I owned my ticket business, you know, we had Giga book, we had a we had a basically had a marketing business where we owned a bunch, we bought and sold tickets, we built websites that people did that, you know that people use this marketplace for tickets, and there’s all these different components that I had in my business as an entrepreneur now at your startup, that not might not be a reality. So that helped me saved me and honestly satisfied my my entrepreneurial ADD at the time. But it also hurt me because when I went out and tried to get investors or partners at Giga book, and sometimes they’d asked me, they said, Well, are you going to work full time for this business? And I said, Well, that’s really tough for me to do right now, because I got this other thing that’s printing money over on the other side of the business. And, you know, sometimes, sometimes the pivot, the focus the attention, it can get watered down. So, I mean, I really at this point, you know, as I’ve, as I always get so reflective around the Startup Hustle birthday, in the end of the year, I’m out. But I think really, in the end, the moral of the story with all these is, you know, like, I think that, you know, they say riches in the niches, but you got to pick one thing, you got to be good at it, you got to be like running

Matt Watson 42:55
gotta give it time getting good at it, you got to give it time, like I was talking to a friend the other day that worked at some company. And the the biggest problem they had is, you know, the whole management team gets together, and they all agree on what they’re going to do. And then like two weeks later, the CEO has a totally different idea and wants to do something totally different. And it’s really difficult for the company to be successful at anything, if you have constant change in direction. And you don’t give any of those ideas enough time to materialize. Now, the problem in an early early stage startup is you. You’re just trying to find anything that works. And sometimes you’re just like a dog chasing the bone, which is all understandable. But once you get something that works, you’ve got to give it time to grow. And in time to succeed too. And that’s the really hard part as a startup, when you’re like in a lot of urgency. Like we don’t have a lot of money, we got to make this work, we got to sell some stuff. It’s really hard to be patient too. But that that focus and sticking to a plan is something that plagues companies of all shapes and sizes. I mean, even to the largest companies in the world, right? Like all of a sudden Facebook thinks they’re going to be a Metaverse company now, I guess.

Matt DeCoursey 44:04
Now I’m out there. I know it’s no longer Facebook.

Matt Watson 44:08
It’s just but companies have that problem too. Or they just they lose focus. And that’s really difficult on the business in the team do.

Matt DeCoursey 44:17
I don’t think there’s a prescribed amount of time, though. I mean, it’s, you mentioned that two to two weeks, I mean, that’s like you can’t that and change management is different for everyone. And I’ll tell you one thing is the most people hate change. So, you know, that’s kind of like the if you most people’s biggest fear is public speaking, not death. You know, it’s like the change is up there on the list. That’s why also on the list of like most dreaded life events, moving changing, jobs, getting married, these are all change, it’s all change. So you got to think about if people like recently changing, yeah, it’s tough. It’s tough. Alright, so here we are. We’re at the end of episode 43 of 52 Thanks for joining me again, Matt and happy birthday.

Matt Watson 45:02

Matt DeCoursey 45:03
For start for Startup Hustle. Only 17 more years before we can take the show drinking.

Matt Watson 45:10

Matt DeCoursey 45:12
It’s gonna be a hell of a night.

Matt Watson 45:13
I might be able to drink then.

Matt DeCoursey 45:15
Me too, and 17 years I’ll be, I’ll be 63 man. And if my wife has her way, I’ll probably be at a high school graduation and I won’t be able to go. So, yeah, if you figure that out, that’s the asking for a third kid. So what Matt, what sticks out about the show? I mean, I think you and I, we’ve both, you know, we didn’t even talk about the pivots where you just pivot something into the trashcan?

Matt Watson 45:42
Well, and I think that’s

Matt DeCoursey 45:44
important being something but yeah,

Matt Watson 45:45
Yeah. And that gets back to opportunity costs, right? You’re like, oh, we’re spending all our time trying to make this thing work. At some point in time, we’re losing out on a massive opportunity of this other thing, right? And there’s a component of of an opportunity cost there. It’s like a failing fast sort of thing, right? It’s all related to that.

Matt DeCoursey 46:09
Yeah, so a couple other things. And, you know, we use the end of the show to talk about what we, what we liked, what we didn’t like, and there’s a couple notes that so 55% of businesses claimed to have pivoted at some point to avoid failure. But 75% of those businesses said the pivot was successful.

Matt Watson 46:28
It makes a total sense.

Matt DeCoursey 46:31
I think that I think that says a lot. And I think that, you know, it’s, this is like the least scientific answer. But you know, like, I think one of the things is I’ve gotten older that that whole trust your gut?

Matt Watson 46:43
Well, the number one thing about the number one thing about a startup is you don’t know what you don’t know going into it, right? Like you you have, you think that you can build this thing, you think you can sell this thing, you think that people want it, right? But then when you get into it, you realize that you get this feedback, or you all of a sudden see this other opportunity. It’s like, oh, now you’re an expert in an industry that you knew a little bit about, and decided to jump into like a crazy person. But now you’re an expert in the industry, now you better see the problem. And you better see how to position yourself, right, or whatever it is, and you make that pivot into that niche. And that’s where you become successful.

Matt DeCoursey 47:24
Yeah, and I think that when I think, you know, what I’m thinking right now, and I’m thinking about our own stories, I’m thinking kind of like a submarine, you know, like, you’re, you’re under the surface of the water, you’re cruising, you’re just going full speed ahead, you don’t really have a huge line of sight, because your heads down, you’re focused on your Ford momentum. But sometimes you got to slow that thing down and come up to the surface and kind of look around and see what’s going on. And that and I think that if you, you know, a lot of people associate a pivot with failure or need to change something. But I think you can also need and require pivots for businesses that grow really quickly like that’s something that’s been going on over the last six months with us at Full Scale because then that business grew fast. And some of the things that happen is you kind of leave some things in the dust, there are some things that there’s a lot of unintended details, and a lot of sometimes lack of attention for things and like on our case, some of that was things like attribution, like where where has all of our leads our business and our clients come from. And sometimes those things like those are really sunny day things. And sometimes as long as they’re coming in, you don’t necessarily count them. And then I think you sit down and start to tally some of this stuff up. And you’re like, Oh, wow. Okay. So like with Full Scale, we get to just get a shitload of business from referrals. So what’s making people refer us or what, and then also, the podcast is one of those things. And then sometimes as well, I think with a pivot, you can also look so you know, another example, as Full Scale has a blog, we get like 50,000 visits a month, and we get a bunch of leads to it. But when we go when we went back through and look, we’re like, wow, so we got to get like, a whole lot of leads to get down to like three, four or five really high quality ones, where maybe the ones that come from, okay, where when we get leads from a referral, they’re pretty much good every time. So some of that stuff is like how do you accentuate and build up one part of the business, not necessarily killing the goose on the other side, but having some like there’s a lot more to pivoting the go-to-market strategy.

Matt Watson 49:35
Right, it’s definitely getting the product, it’s pivoting the go-to-market strategy.

Matt DeCoursey 49:40
Well, and in that particular case, you’re like, you could say, well, sometimes that’s just what you go through to get a lead, but you got to take some consideration to the scalability because if all of a sudden, you now need now if it takes 50 leads to find three that are good and as opposed to like referrals were nine out of 10 are good, you know You’re thinking, okay, that’s only 10, that’s 10 things or items or instances that I need to handle where the other side is 50. And then if you want to scale that up, and you want that to get 10 times bigger, and you’re like shit, and I gotta go through 500 people. Now maybe that’s just what you got to do. Like, I mean, I love watching these shows where they mined gold, and they move a mountain of dirt to find little pebbles and little tiny grains of sand of gold, that by the time they have at the end, and like dump these huge jars onto the scale, they have like a half a million dollars worth of gold right in front of them, but you can’t see the gold, when you look at the dirt, you got to wash it all through and try to find little pieces of it. Now that’s a lot of work for that gold. Obviously, if you walk up to the hill, and there’s a big fat nugget of it sitting there, you’re like, you know, and that’s a better thing. But it’s not always easy. So like some of the things in this particular case, like, I don’t know, I don’t necessarily other than incentivizing or paying people to refer, which we’ve done in the past. I don’t know how to scale that up in a predictable way. So there’s a lot I mean, there’s a lot of a lot of things that I think the one moral of the story is, is no matter what, as an entrepreneur, on some levels, every day is a journey into the unknown, you know, we look

Matt Watson 51:12
Things are gonna change.

Matt DeCoursey 51:14
Yeah, I mean, technically, at this point, this podcast has existed, half of it has occurred during the pandemic. Yep. And so have all of your businesses or if you’re getting ready to start one, you’re on the tail end of one. And like, I mean, mad at any point of planning, doing anything for Full Scale, any of that? Did we ever say before? 2020 Oh, but if a global pandemic comes along, we could lose 30% of our business in a month.

Matt Watson 51:40
Nope, nope.

Matt DeCoursey 51:43
Right. There was no forecasts that we had that issue global pandemic. And, you know, here’s the thing, we had other things on there, we even talked about like you could have, so most of our employees are in the Philippines, like you could have political unrest, you could have, I don’t know, there’s like, a whole lot of stuff. And we have one employee and volunteer. I was reading the article, an article the other day that Russia wants to in might invade Ukraine, that’s next door. You know, it’s just like you there’s a zillion things that could come in there. And then the one thing you didn’t plan for you didn’t think about comes up. Now that can also happen with opportunity. And that’s where I want to end the show is like, keep your eyes up, keep your head up. I said, don’t be that submarine that’s under the surface all the time. Put the periscope up and look around look left, look right. I don’t spend a lot of time looking behind the mat, like what’s kind of, like I try to preserve the memory of the scars and the chaos and the shitty moments because they form your decisions in the future. But if you’re not up, have your eyes up and looking around. That was the hard thing. Like when we’re out the first grade basketball game will end the show, like we started, the girls are looking straight down at the ground because they’re just trying to keep the ball bouncing. But as you get better at bouncing the ball, you got to bring your head up, you got to look for the open pass, you got to look for where someone could score or where you’re about to run out of bounce or maybe into another player another wall. So, you know, pivoting is can be a good thing. It’s not the end of the world and just do it with confidence. Like if you’re ready to pivot, like you got to sell it you can say hey, look, this is for the greater good of all of us. And for the greater good of all this. Matt, I’m gonna end the show. So I’ll see you next time.

Matt Watson 53:22
Alright, man.