There’s nothing like founding a startup. You get to work like a dog with a scrappy crew of fellow entrepreneurs and sink every ounce of your heart and soul into a new company only to discover a few years in that your business model doesn’t actually work.
While some founders might let failure get them down, others are able to make a change that takes their company beyond the plateau and onto success. As difficult as it can be to pivot, evolving is sometimes the only way to survive.
Last updated: June 15, 2021
The idea for Yelp was born when its CEO and co-founder Jeremy Stoppelman became frustrated with the lack of information he encountered while trying to find a doctor. His early efforts at building a better business-search site focused on getting users recommendations from people they already knew. This did not work, but when the founders realized that there were a lot of people leaving reviews, they hit on the business model that would ultimately carry the site to success.
In the ensuing years, Yelp has had to pivot again and again as controversy seems to follow the company wherever it goes. There was a major scandal that saw Yelp accused of extorting businesses to buy ads under the threat of manipulating their ratings. Then there was the long beef with Google. Most recently, Yelp received blowback for its controversial racism alerts. Yet all these years later, Yelp endures.
You know YouTube as the OG of streaming video and the No. 2 most popular website in America behind only Google, which, conveniently, owns YouTube—but did you know that it started out as a dating service?
The site was built to allow people to upload videos of themselves in an effort to snag a potential mate. And while that didn’t work out, the founders had a moment of brilliance in realizing that the video uploading part of their business plan was all they needed to change the world.
Since the computer became a fixture of the modern office, bosses have been trying to get people to spend less time playing video games and more time working. So, it’s not without irony that one of today’s most popular tools for work productivity actually started as a video game.
Before Slack, the workplace collaboration software’s creators designed a massively-multiplayer online game called Glitch. The game was focused on communicating and collaborating with other players. While that didn’t exactly win over the online gaming crowd, the format proved priceless for businesses—particularly in the age of COVID.
Legions of newly remote office workers have turned to platforms like Slack to connect with teammates in other time zones. Slack just turned in a quarterly earnings report that dazzled investors and proved that its business model was built for a future that’s moving toward telecommuting.
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Shopify started out selling snowboarding equipment as a site called Snowdevil. Its founders, however, quickly tired of their options for equipping their site to sell their stuff to visitors. They decided to build their very own e-commerce platform, instead.
As you might have guessed, the snowboarding equipment part eventually faded away and the quality of the platform became what really mattered. Realizing that they could replicate the process and help medium and small businesses of all shapes and sizes do the same thing for their own site was the Eureka moment. In 2020, more than 44 million people made purchases from Shopify merchants.
Before PayPal was PayPal, it was Confinity — a payment transfer site built around the ability to send people money from your PDA (the founders had all worked at device security companies).
In the 1990s, however, the world just wasn’t ready yet for device-to-device payments—most people didn’t even have a handheld device. In 1999, however, the company pivoted to offering a way to transfer payments via email, giving rise to the PayPal you know and love today.
Today, PayPal is on the cutting edge of the next incarnation of money as it makes major investments in cryptocurrency.
Groupon founder Andrew Mason originally created Tipping Point, a site that let people pledge donations to nonprofits without risk. Their donations remained in stasis until the totals reached a certain threshold, and only then would they be executed.
Tipping Point found only limited success, but when Mason applied the same concept to discounts offered by merchants, it was clear he was onto something big. Despite a decline from its 2014 peak, Groupon still has more than 34 million users today.
Picture this: The original version of Instagram wasn’t about applying sepia-toned filters to pictures of your food. In fact, Burbn — the original iteration — was as much about checking in at locations as it was sharing photos. In fact, as founder Kevin Systrom revealed on Quora in 2011, they were really just trying to create something that combined Foursquare with Mafia Wars.
However, while Burbn wasn’t quite destined for picture-perfect success, one tiny part of it would go on to become one of the most successful social media platforms ever. The final version of Burbn proved so cluttered that the founders stripped out all of it except for the ability to share photos and comment, leaving behind only a minimalist digital oasis that would become Instagram. Today, it boasts 1 billion active monthly users.
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Pinterest is one of the rare startups that realized its potential for profitability by pivoting away from e-commerce. The company evolved from an app called Tote, which connected people with their favorite retailers and allowed them to receive news or sales updates while also saving items of interest.
If you’re a fan of Pinterest, you might have already guessed where this is going. The founders of Pinterest noticed that — while Tote’s effectiveness as a shopping app never really came together — people seemed to love the feature that let them create wish lists for things they eventually wanted to buy. They pivoted and focused solely on allowing users to build image-based wish lists and Pinterest was the result. In the last year alone, Pinterest added 120 million users and now boasts about a half-billion active accounts.
If you’ll go all the way back to the early 1970s when it first opened, Starbucks was all about selling espresso…machines. That’s right, the company’s founders had mostly gotten the business model right: Americans were ready to drink high-quality coffee and Starbucks was there to help them indulge that.
It wasn’t until Howard Schultz joined the company that they figured out the final piece of the puzzle—namely, that the whole “give a man a fish” adage works in both directions. In this case, the real profit was not in empowering people to make their own espresso drinks, but in charging them $5 a pop to buy one every morning.
The story of how Airbnb pivoted its way into the disruptive market force it is today is also a primer on how the name came about. In its earliest incarnation, Airbnb was specifically about helping people find places to stay when they were attending conferences. Two of the company’s founders got the idea to let attendees pay to stay on air mattresses in their living room during a design conference as a way to make some extra money. They offered breakfast as part of the deal, hence “airbnb.”
While focusing specifically on conferences failed to produce enough business to sustain the platform, it took off once it was opened up to travelers of all stripes looking to avoid pricey hotel stays or for hosts looking to make a little extra money. Today, Airbnb is making sure it’s ready to pounce when travel finally opens back up. It recently launched Flexible Search, a game-changing new function for people who know they’ll want to travel at some point in the future, but who can’t nail down exact dates.
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Joel Anderson contributed to the reporting for this article.