The Difference Between a ‘Pivot’ and a ‘Reboot’

    by Tom Grasty
    February 22, 2012

    Two and a half years ago, I co-founded Stroome, a collaborative online video editing and publishing platform and 2010 Knight News Challenge winner. But the site you see today is very different than what was initially developed at USC Annenberg’s pioneering Program for Online Communities in the fall of 2009.

    Over the last 24 months, we’ve changed our look; we’ve changed the way users interact with the site; we’ve even changed our product offering. On the surface, it may seem that our strategic direction has been fraught with impatience and indecision. I can assure you, however, none of these changes have been arbitrary.

    There’s a word for what we — and so many other startups — must do in order to address the constantly evolving needs of our customers: We “pivoted.”


    Recently, I was asked by Jason Nazar, founder of Docstoc and a big supporter of the L.A. entrepreneurial community, if I had any tips for startups regarding if (or perhaps more accurately when) they, too, should pivot.

    A short, 3-minute video response can be found at the bottom of this post, but I thought I’d share some key takeaways with you here:


    In recent months, the term “pivot” has become ubiquitous in startup circles. It’s hard to pinpoint exactly when the word entered the entrepreneur’s vocabulary. Most tend to agree, however, that serial entrepreneur-turned-enterprising startup evangelist Eric Ries had a lot to do with it.


    Eric didn’t invent the concept of the “pivot,” but he’s generally acknowledged as the purveyor of the pivot’s prominence by making it a pillar in a larger movement that’s captured the imagination of entrepreneurs of late: the Lean Startup.

    I highly suggest you read Eric’s book. Whether you’re throwing your hat in the startup ring for the first time or are a seasoned entrepreneur, you will learn something. In the interest of expediency, however, let me condense the concept of the pivot here— and introduce you to a new concept of my own:

    **The pivot* If you’re making a course correction within your established marketplace by altering a product offering or going after a different set of customers, that’s a pivot.

    **The reboot* But when you chart an entirely new course outside of your current space, that’s something else altogether. I call it a reboot.

    Both are important, and both have potentially dramatically different implications for your business. Let’s take a look at those differences by looking at two examples.


    Most of us know Pandora as the wildly successful music recommendation service that somehow knows the music we’d like to listen to with nothing more to go by than the selection of a single song or artist. But consumers were not the original play for Pandora.

    Launched in January 2000, Pandora’s initial go-to-market strategy was to license the service to corporations like AOL and Yahoo. When the B-to-B route didn’t pan out, however, only then did founders Tim Westergren and Jon Kraft decide to cut out the middle man and go straight to the consumer. It was Pandora’s first major pivot, and it changed the course of the company.

    But it was Pandora’s second pivot — layering a social element on top of the underlying recommendation technology — that changed everything.

    For the first few years of Pandora Radio, the service relied predominantly on the complex mathematical algorithm to predict similar songs and artists. But when the service was rebuilt in HTML5, the new design allowed users to see what their friends were listening to.

    Adding “social” to the experience turned Pandora Radio from a collection of self-styled, personal music channels into a vibrant music community. Today, nearly 100 million people use Pandora Radio to discover and share their musical preferences with their friends and family.

    And so, what started as a B-to-B play, morphed into a consumer platform that, in turn, transitioned into a hugely popular Internet radio community tailored to your tastes — and the tastes of those with whom you’re listening.

    But if it hadn’t been for a few key pivots on the part of the founders, however, chances are most of us never would have even heard of — or be listening to — Pandora.


    Listening to music with others. It’s a compelling concept. But Pandora hardly has the social music market cornered.

    “Social listening” site Turntable.fm is one of the most interesting — and fastest growing — startups to emerge since its launch in May 2011. With more than 140,000 users in its first month alone, many in the entrepreneurial community attribute Turntable.fm’s phenomenal growth to a well-timed, exceptionally well-executed pivot. I would argue that Turntable.fm didn’t pivot at all: They “rebooted.” But first the story of how Turntable.fm become Turntable.fm—

    Co-founded in 2009, by Seth Goldstein and Billy Chasen, Turntable.fm evolved out of a social bar code scanning service called Stickybits. Stickybits allows (the site is still active) users to affix barcodes on objects that when scanned trigger audio, video or text messages. Admittedly, it’s a pretty cool concept. Unfortunately, Stickybits never quite stuck. Turntable.fm hasn’t had that problem.

    Here’s how it works:

    When users enter the Turntable.fm room they’re given the opportunity to play a song. (For now, the service is available only on the Facebook platform.) That song is voted up or down by the other people in the room. If your song is voted up, you become the DJ. If your song doesn’t make the cut, chill out, take the temperature of the room, and think about the track you’ll spin when your turn at the table comes around again.

    The reason I consider Turntable.fm a “reboot” and not a pivot is that while both Stickybits and Turntable.fm connect the digital and physical worlds, Goldstein and Chasen didn’t just tweak their product; they came up with a completely different product altogether.

    Despite its instant success, however, the new product that emerged is not without potential pitfalls. Turntable.fm may have been the result of a bold reboot, but I foresee as a pivot looming on the horizon.

    The entire business model for Turntable.fm is based on sharing music socially. To date, however, the company has yet to strike a significant license with a major label. And while the labels have yet to come calling (the emphasis on yet), with a growth rate as fast as the one Turntable.fm is experiencing, I suspect the labels will mixing it up at Turntable.fm before too long. And when they do, Turntable.fm will have to alter its product offering to accommodate its new partners.

    In other words, it will be time for Turntable.fm to pivot.


    Over the last year or so, it’s become commonplace — fashionable even — to talk about “pivoting” when talking about how entrepreneurs adapt to constantly changing market conditions. The problem with the sudden rise in the popularity of the “pivot,” however, is that what was initially meant as a slight tweak of the business plan or product based on iterative market feedback has become an umbrella term for the complete re-imagining of the company’s DNA.

    Of course, we all know that if there’s one truism in entrepreneurship, it’s that change is the only constant we can rely on. And sometimes we really do need to change course. So how do you know if you should pivot or reboot?

    Maybe you don’t have to do either. The reality is that If you’re listening to your customers, you will always be pivoting to some extent.

    In other words, you won’t have to choose between a course correction and changing course altogether — your customers will be making that decision for you.

    This article is the sixth of 10 video segments in which digital entrepreneur Tom Grasty talks about his experience building an Internet startup, and is part of a larger initiative sponsored by docstoc.videos, which features advice from small business owners who offer their views on how to launch a new business or grow your existing one altogether.

    Tagged: annenberg apoc billy chasen collaboration editing entrepreneurship eric ries jon kraft knight news challenge Lean Startup online video pandora participatory media pivot reboot seth goldstein stickybits stroome tim westergren turntable.fm

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