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Navigating startup “pivots”
In these challenging times, a lot of businesses are being forced to change dramatically due to COVID-19. For example, retailers are being forced to switch to online sales in a hurry. Many health practitioners have switched to distance medicine. Restaurants are focusing on delivery, pickup, and outdoor dining.
This is happening all over the country, in many industries.
In the startup world, this type of change is often called a “pivot”. As in, the founder pivots the business in a new direction. The new direction can be closely related to the original one, but not always.
There’s always some pivoting happening in the economy, but there’s a lot more than usual today.
Sometimes, pivots are simply necessary. And yes, some will result in failure. But occasionally, pivots succeed brilliantly. Maybe the founder spots an opportunity too good to ignore, or sees a flaw in the old model, or gets hit with something unexpected like the COVID situation. Either way, they see a need for change and make it.
It can work out well for both founders and investors. For example, Slack started out as a video game called Glitch. The game failed, but in the process of building it, the team built Slack to communicate and share files internally. Today it’s a gigantic success.
Youtube was originally a dating site. Twitter was a podcasting company called Odeo. Instagram was originally a failed social app called Burbn.
A change in direction can be a good thing, even when it means starting over. Value-add investors will be supportive during such times. They’ll wish the team good luck, cheer their wins, and help where they can. We should be supportive of entrepreneurs during these disruptive times.
Needless to say, not all founders will pull off a pivot successfully. But there’s always a chance they’re onto something big.
The power of community
Over the last year or so, Republic has built a powerful network of 83 Venture Partners. These are investors and entrepreneurs who are working with Republic to help founders get access to capital and other resources they need to build their businesses. They’re an impressive group of people who are paying extra attention to founders who are underserved by the traditional startup funding system.
Republic’s VPs are already contributing to our community by referring deals and supporting founders. We’re excited to welcome the third cohort of Venture Partners. Read more about this innovative program here. If you’re interested in becoming a Republic Venture Partner, you can apply here!
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