Startups begin with bold ideas and grand ambitions, but the journey to success is rarely straightforward. Many of today’s most valued tech companies started with an entirely different vision, only finding their stride after a major pivot. This adaptability—the ability to change business models and pursue new directions—can give a struggling startup a “second life,” or even a third. Below, we explore ten well-known companies that embraced pivots and, by doing so, unlocked exponential growth and success.
A pivot is a focused adjustment to the business model, triggered when hypotheses prove incorrect. This shift realigns the strategy without losing sight of the overarching vision.
Initial Vision: Instagram began as “Burbn,” a check-in app where users could share locations, earn points for activities, and post photos. The app combined multiple social networking features, but its cluttered interface made it challenging for users to focus on any single function.
Pivot: The founders noticed that users primarily engaged with the photo-sharing feature, so they stripped away everything else, transforming the app into a streamlined, visually driven platform focused on photos alone.
Outcome: This pivot led to Instagram’s rapid growth, quickly attracting millions of users. In 2012, just two years after its launch, Instagram was acquired by Facebook (now Meta) for $1 billion, securing its position as a dominant social media platform.
Initial Vision: Twitter started as Odeo, a podcasting platform co-founded by Evan Williams and Noah Glass. The platform aimed to help users create, share, and discover podcasts. However, Apple’s announcement that it would integrate podcasts into iTunes threatened Odeo’s viability.
Pivot: During a brainstorming session, team member Jack Dorsey suggested a platform for sharing short, real-time updates. Inspired by SMS, he envisioned a service where users could post 140-character status updates. This side project, initially called “Twttr,” gained momentum, prompting the team to pivot entirely from podcasting to microblogging.
Outcome: Twitter quickly became a cultural phenomenon and an essential tool for real-time communication. Its role in shaping digital conversations eventually led to significant investment and, in 2022, its acquisition by Elon Musk, marking yet another new phase for the platform.
Slack
Initial Vision: Slack began as an internal tool within a gaming startup called Tiny Speck, which was developing an online game called Glitch. Despite a unique concept, Glitch struggled to attract a sustainable player base, leading the team to shut it down.
Pivot: The team noticed that the communication tool they had built to collaborate on Glitch was highly effective. Recognizing its potential as a stand-alone product, they pivoted to refine the tool for workplace communication, aiming to make it a central hub for team interactions.
Outcome: Slack’s pivot made it one of the most popular workplace messaging tools globally. Known for its user-friendly interface and integrations, Slack quickly gained a loyal following, leading to its acquisition by Salesforce for $27.7 billion. The pivot transformed a failed gaming project into a corporate communications powerhouse.
YouTube
Initial Vision: YouTube started as a video-based dating site with the tagline “Tune In, Hook Up.” The platform was intended to help singles introduce themselves through video, but early users uploaded a range of content unrelated to dating.
Pivot: Realizing the broader potential for a video-sharing platform, the founders abandoned the dating angle, opening the platform to all types of videos and rebranding it as a universal video-sharing site.
Outcome: YouTube’s pivot resulted in exponential growth as a video platform, eventually attracting Google’s attention. Google acquired YouTube in 2006 for $1.65 billion, cementing it as the go-to platform for video content and helping to launch the creator economy.
Shopify
Initial Vision: Shopify’s founders initially wanted to build an e-commerce site to sell snowboards. Frustrated by the lack of user-friendly e-commerce tools, they developed their own software to support the online store, initially focusing on selling snowboards.
Pivot: After realizing that other entrepreneurs also needed a straightforward way to create online stores, the founders pivoted to offer their e-commerce solution as a platform for other businesses, shifting from a single online store to an e-commerce service provider.
Outcome: Shopify quickly became a popular solution for small businesses and entrepreneurs, eventually growing into one of the world’s leading e-commerce platforms. Today, Shopify powers millions of online stores and continues to shape the digital retail landscape.
Netflix
Initial Vision: Netflix started as a DVD rental-by-mail service, aiming to simplify and improve the rental experience. However, they faced stiff competition from physical rental stores like Blockbuster and saw limited scalability with the mail-order model.
Pivot: Recognizing the potential of digital media, Netflix shifted to a streaming-based model, betting on the rise of internet bandwidth and changing viewing habits. Later, they invested in original content, setting themselves apart as a streaming service with exclusive shows.
Outcome: Netflix became a global streaming giant, leading the industry and transforming how people consume media. The pivot to streaming, followed by content creation, helped Netflix evolve from a niche mail service to a powerhouse in entertainment.
Initial Vision: Pinterest started as a mobile shopping app called Tote, which allowed users to shop from their favorite stores by saving and sharing product images. However, users were more interested in collecting and organizing images than completing purchases.
Pivot: Founders noticed that users enjoyed using the platform to curate ideas, images, and inspirations. Recognizing this trend, they shifted focus from shopping to visual discovery and inspiration, making Pinterest a platform for users to collect and organize ideas.
Outcome: The pivot transformed Pinterest into a unique visual search engine, attracting millions of users who wanted a place to gather ideas and inspiration. Today, Pinterest is widely used for discovering everything from recipes to home decor and remains a significant player in visual search.
Flickr
Initial Vision: Flickr started as a feature within an online multiplayer game called Game Neverending by Ludicorp, where players could share images and chat with one another. The game struggled to gain traction, and it became clear that the image-sharing feature was more popular than the game itself.
Pivot: The founders decided to focus solely on the photo-sharing functionality and transformed Flickr into a stand-alone platform for uploading, organizing, and sharing photos.
Outcome: Flickr quickly became one of the most popular photo-sharing sites on the internet, eventually attracting Yahoo’s attention. In 2005, Yahoo acquired Flickr, and the platform became instrumental in shaping online photo-sharing trends.
Groupon
Initial Vision: Groupon started as a social action platform called The Point, designed to help groups raise funds for causes. It allowed users to gather support for projects or causes and act only when a critical mass of supporters was reached.
Pivot: The founders saw that the model could apply well to group discounts and pivoted to offer daily deals for local businesses, provided enough people committed to buying.
Outcome: This shift to a local deals platform led to rapid growth and made Groupon a pioneer in the daily deals space. Although its popularity has waned, Groupon’s pivot exemplifies how a sharp focus on local deals can attract massive user interest and investment.
PayPal
Initial Vision: PayPal began as Fieldlink and later Confinity, first a security software for hand-held devices and later a mobile encryption service for digital payments founded by Max Levchin, Peter Thiel and Luke Nosek. The original focus was on providing secure payment solutions for handheld devices.
Pivot: Recognizing the broader potential of secure online payments, the company shifted from mobile encryption to digital money transfers, expanding its target market to include internet transactions.
Outcome: PayPal became one of the most widely used online payment platforms, ultimately acquired by eBay in 2002. Today, it remains a leader in digital payments, serving millions of users and shaping the future of online transactions.
Conclusion - Pivots
A pivot is a targeted adjustment to a business model that becomes necessary when hypotheses are not validated. Especially in startups that are still developing their business model, initial assumptions often turn out to be wrong. In such moments, founders face the critical question: keep the current approach or pivot to a new hypothesis? This flexibility allows them to realign the strategy without losing sight of the long-term vision. A successful pivot can guide a company back on track and secure long-term success.
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