Ever since the term “pivot” was unofficially coined back in 2009, it has become a fixture in the way we think about strategy for Silicon Valley’s leading companies and more broadly, about “failure” within the technology sector. The term has even appeared on an episode of HBO’s “Silicon Valley.” Coming up with the right business model, the right product or even the right industry from Day 1 may not be as important as popularly assumed – just witness the number of famous tech companies that have had less then auspicious beginnings before they made a pivot.
1. YouTube was a video dating site
Now the most popular video sharing site on the Internet, YouTube at first seemed anything but destined for future success. It launched on Valentine’s Day 2005 as a video dating site with the unofficial slogan “Tune In, Hook Up.” However, the company’s founders admit that the original idea never took off as planned – even a marketing ploy to pay women in Las Vegas and Los Angeles $20 each to upload dating videos to the site fizzled. Other plans to get users sharing and watching videos on the site included uploading videos of airplanes taking off and landing.
The breakthrough moment came for YouTube’s co-founders when they realized that users had a lot better idea of what to do with their site than they did. The first-ever video on the site (“Me at the Zoo”), which was created by YouTube co-founder Jawed Karim and contained a now-famous reference to elephants with “really, really, really long trunks,” provided the necessary inspiration that users uploading silly videos of themselves to the Internet could actually become a profitable business.
2. Twitter was a podcasting network named Odeo
If Twitter manages to pivot into another business from real-time tweets, it won’t be a complete surprise. Back in 2005, Twitter was birthed in Odeo, a Web site where people could find and subscribe to podcasts from around the world. With Odeo struggling, the team devoted itself to Twitter, a side project that bubbled up inside the start-up.
Twitter, originally known as twttr, was envisioned as more of a limited micro-messaging and status update service than a full-fledged social network with over 300 million users. (For a full recollection of Twitter’s bumpy rise, read Nick Bilton’s Hatching Twitter.)
3. Instagram was a confusing mobile app called Burbn that nobody used
Instagram actually started as a part-time project by Kevin Systrom to learn coding while holding down a full-time marketing job. The project, known as Burbn, was just an HTML5 app that combined a mix of check-in and gaming functions – think Foursquare meets Mafia Wars – in a single app. Given the confusing functionality, users never fully embraced the app.
The key insight was to streamline the user experience until all that was left was a lean photography app with the ability to comment and like. As Instagram co-founder Kevin Systrom has explained on Quora, the decision to streamline the app worked way beyond his wildest dreams — within hours of launching Instagram, it had more users than Burbn had acquired in more than a year of work.
4. Flickr was an online role-playing game
Today, we associate Flickr with high-quality online photography, much of it available for sharing on the Web via a Creative Commons license. Yet, when Flickr first launched in 2004, it was something very different – Game Neverending, a massively multiplayer online role-playing game from Ludicorp that enabled users to buy, sell and make items, plus navigate a map and interact in real-time with other users.
And of course, the role-playing game included a popular photo-sharing tool that eventually became the basis for Flickr. The popularity of that feature convinced Ludicorp to concentrate specifically on online photography. That Flickr was able to transform a confusing mix of features into a viable product paved the way for its acquisition by Yahoo in 2005.
5. Groupon was an online fundraising site for social good projects
The concept of a daily deal that is only activated when enough users sign up for it was actually never intended to be the core offering when Groupon was launched in 2008. In fact, Groupon was just a side project for The Point, which started using the notion similar to Malcolm Gladwell’s “tipping point” to create a unique system for funding social good projects back in 2007. Once a social cause acquired enough backers on The Point, it would receive funding.
This “tipping point” concept was then applied to discounts on local activities and services, all of which would only be unlocked if enough users signed up. Groupon eventually became the main business when The Point realized that there was a bigger market for daily deals than for neighborhood social good projects.
6. Nokia was once a paper mill company that sold rubber galoshes
The classic example of the technology pivot, of course, is Finnish mobile phone giant Nokia, which has repeatedly reinvented itself throughout its long history from a non-tech company to a high-tech company. The origins of the company date back to 1856, when the company operated a single wood pulp paper mill in a Finnish industrial town (Tampere, the “Manchester of Finland”). In 1898, Nokia made a technological leap by diversifying into rubber boots.
And from 1898 to 1967, the company continued to diversify into new product lines – among them, electricity generation and cables – before officially becoming a huge industrial conglomerate, Nokia Corp. But even then, it took awhile for Nokia to pivot into mobile phones. Starting in 1962, the company continued to innovate in electronic devices and telecom equipment before launching its first mobile phone in 1987 (the Mobira Cityman), nicknamed “the Gorba” for former Soviet leader Mikhail Gorbachev, who was photographed using the phone when visiting Helsinki.
7. Nintendo was a manufacturer of playing cards
Today, Nintendo is one of the most famous video game companies on the planet. But before the 1970s, when Nintendo created its first video games, it was engaged in a variety of other businesses — including taxis and “love hotels.” Starting in 1889, when it launched in Kyoto as a maker of handmade Japanese Hanafuda (“Flower cards”), the company actually made a profitable business out of manufacturing playing cards for the Japanese market.
A marketing deal with Walt Disney in 1959 provided early inspiration that animated characters could become the basis for attracting a large segment of the consumer population. So, in 1963, when the bottom started to fall out of the playing cards business, the company began to pivot into the toy and gaming market. In 1977, Nintendo launched its first two home-use video games, “TV Game 6” and “TV Game 15” and, in 1979, created a separate division for coin-operated video arcade games. From there, the rest is history.
So, look around you. That old-fashioned company hawking paper products or rubber boots might end up becoming the next great drones or virtual reality company — provided they make the right pivot.