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I feel like this misses an obvious source of the appeal of the pivot for the founders, namely that actual money in your hands today beats potential money in you
by smacktoward 8y ago
I feel like this misses an obvious source of the appeal of the pivot for the founders, namely that actual money in your hands today beats potential money in your hands tomorrow.
If you shut down and start over around the new idea, maybe you’ll be able to raise money around that idea, but then again, maybe you won’t. Nothing’s guaranteed; and if you find you can’t raise the money again, you end up with nothing at all.
Meanwhile, in the existing business, there’s a big pot of money already raised just sitting there for you to use. Using it could mean problems down the road, of course. But not using it means problems right now, so it’s not hard to see the appeal of just grabbing it and figuring you’ll cross those bridges if and when you ever actually come to them.
- sturadnidge 8y ago> If you shut down and start over around the new idea, maybe you’ll be able to raise money around that idea, but then again, maybe you won’t. Is someone who chooses failure over pivoting likely to get some kind of negative association in the investor community at large? A perception that they don't do enough to protect investment or something like that? No judgement on whether that is right or wrong, just curious.
- scarejunba 8y agoNo, it’s just that they have to prove the new thing. This way they go with the existing pot.
- ymolodtsov 8y agoThat’s actually mentioned in the text.
- daveed 8y agoI understand the argument that starting a new company by pivoting with cash in the bank and a team that is already built is attractive and giving those back and starting over from scratch is harder. But the harder path is often the best path. And the easy path is often the harder one.