41–50 of 120 posts
A great quote sticks in my mind, shared with me by a founder who was going through hard times with his startup. The company was going through a bad spot, and one of his investors suggested just giving up and returning the existing capital to the investors. An advisor then said: "It's not their money anymore. Don't you dare give up." He didn't, he persevered, and the company had a fine outcome years later. I would not…
Yes: e.g., Energy Vault (NRGV, $2B+) absolutely cannot work, and should be shut down immediately. Maybe give back whatever of the pigeons^Winvestors' money is left? Somebody should sue the founders for fraud. The crane thing was actively stupid, and very obviously could not ever have worked. An investor who bothered to consult literally any mechanical engineer would have run a mile. Lots did, of course. But somebody…
As a non-mechanical engineer, it's not obvious to me.
On the other hand, Microsoft was just a BASIC vendor, Amazon was a bookseller, Netflix was mail oder DVD company. Sometimes if you have a really good team/organization it makes sense to pivot based on the market.
Microsoft's BASIC evolved into Visual Basic and still exists as the .NET platform. Amazon still sells books. Netflix still operates their mail order DVD company. All three do a bunch of other things now, but those products allowed the companies to grow and expand. I don't think expanding to other verticals is the same thing as a pivot, a pivot (imo) is when you entirely change your business strategy and product becau…
Big difference between "we think this is The Business, ope its not lets pivot" and "we think this is a good place to Start the Business and grow out of".
Earlier quoted context omitted.
OP here. I think i mixed the message too much by putting pivots in the same category as founder transitions and down-rounds. Pivots are fine. But when you're basically just starting over on a completely new business with less money and a demoralized team, your likelihood of success is significantly impaired. Successful pivots need to carry ~something~ over of value
Yes. Letting them start over on something completely different is indulging sunk-cost fallacy. People were hired on the strength of being able to build X. If they are not who you would have picked to build Y, then getting them building Y anyway means you start out with a broken leg.
I think more human, personal elements are probably at play before this conclusion. Moreover, I think this mentality the OP is suggesting is good is actually wrong and actively harmful.
> For almost all of them, it won’t be worth it. When things get really messy for seed companies, it’s almost always already a lost cause.
The "almost" in this sentence is the actual key. How do you know? By not doing everything you can to find out you run the risk of the opposite reputation: Gives up easily, not willing to put in the work, fair weather founder, etc.
A great quote sticks in my mind, shared with me by a founder who was going through hard times with his startup. The company was going through a bad spot, and one of his investors suggested just giving up and returning the existing capital to the investors. An advisor then said: "It's not their money anymore. Don't you dare give up." He didn't, he persevered, and the company had a fine outcome years later. I would not…
> They shouldn’t go through down-rounds, cap table restructurings, multiple major pivots, or team transitions. After all that, is it even the same company? No. They should just shut down and start over. The article is talking about pivots not a lack perseverance ...
What about the classic story of the AirBnB founders pivoting from selling cereal? It seems like the metric for whether you decide to pivot or shut down depends on how many rounds you've done and how many employees you have. Early on, couple of founders & handful of employees: maybe do whatever pivots you can to survive. If you're a big boat and pivoting will require firing 80% your staff and starting an entirely diff…
But selling repackaged cereal in cutesy boxes was never Airbnb’s long term plan. Can it be called a pivot at that point?
They needed some cash, had a good random idea and did it as a side project to raise some money. In the end it became a great story of chutzpah too.
Similar to how the band Vulfpeck found a loophole in Spotify’s terms and got a tour funded by publishing a silent album and getting their fan base to stream it at work.
A great quote sticks in my mind, shared with me by a founder who was going through hard times with his startup. The company was going through a bad spot, and one of his investors suggested just giving up and returning the existing capital to the investors. An advisor then said: "It's not their money anymore. Don't you dare give up." He didn't, he persevered, and the company had a fine outcome years later. I would not…
If your formula is sufficiently wrong, which is the rule not the exception, you can’t make up for it with perseverance.
There’s a selection bias in these stories you hear. Stories about people who gave it their all and failed aren’t popular.
Yes: e.g., Energy Vault (NRGV, $2B+) absolutely cannot work, and should be shut down immediately. Maybe give back whatever of the pigeons^Winvestors' money is left? Somebody should sue the founders for fraud. The crane thing was actively stupid, and very obviously could not ever have worked. An investor who bothered to consult literally any mechanical engineer would have run a mile. Lots did, of course. But somebody…
Can you give a quick rundown why "the crane thing" could not ever have worked, and what exactly it was, separate from the "condominium for concrete blocks", which seems to be what is described in the Wikipedia article, but also uses cranes? As a non-mechanical engineer, it's not obvious to me.
Water is 1kg/L. Concrete is 2.4kg/L. Therefore, the volume of concrete lifted is 40% the volume of water you would need to store the same amount of energy.
Here's the biggest water energy storage facility in the US: https://www.google.com/maps/place/Dominion+Bath+County+Pumpe...
Cost of the water for that facility? $0/L.
Equivalent cost for concrete? $0.15/L (https://www.google.com/search?q=concrete%20cost)
That facility has 14GL of water.
Replacing that water with concrete, you get $2.1 billion dollars. Which, ya know, actually compares favorably with the $4 billion (2022 $) that the pumped hydro facility costs.
But then you have to remember that the pumped storage facility has like a half-dozen or dozen pumps, and that probably made up a big fraction of the cost.
The equivalent lifting block thing would have... like thousands or tens of thousands of the motor/generator devices. I can't imagine the cost.
A great quote sticks in my mind, shared with me by a founder who was going through hard times with his startup. The company was going through a bad spot, and one of his investors suggested just giving up and returning the existing capital to the investors. An advisor then said: "It's not their money anymore. Don't you dare give up." He didn't, he persevered, and the company had a fine outcome years later. I would not…
Those who persevere and fail may tell how not quitting early enough continued the agony, but also can tell how just a bit more help could have led them to success, but odds were just all stacked against them.
Those who saw a failure coming and quit are likely not to tell much about it, there's no glory at it.
This all produces a kind of evolutionary / social pressure to persist and maybe win even when the chances are slim. The winner takes all. The losers persist at their (and, in a sense, everyone's) expense of "malinvestment", but they, and the price they pay, is handwaved away and forgotten. Evolution is about advancement of a species, not of a particular organism; progress is about advancement of an industry, not a particular company.
I'm with the "wind it down properly if it's not working" crowd though. One reason is that you have to fire people, and it's nicer to still be able to give them some severance pay.