One of the Arctic15 finalists from last year was 300mg, from Estonia (now in the Valley). In early June this year they made the announcement that they would cease to develop 300mg and pivot to something new. Back then Import2 had just a landing page to catch your e-mail, but today they have a meaningful landing page with enough information to understand what they are doing. The new problem they are planning to solve is to help people switch software, be it a CRM or a blogging platform.
We talked to Mark to share his advice on the things they looked at and what it felt like to do the pivot. Decisions this large are never easy and hopefully other will be able to take something home from the discussion below.
ArcticStartup (AS): What were the decisions you guys took and looked at when the time for the pivot came? Can you run us through that?
Mark Kofman (MK): Hah. Probably the toughest moment was to honestly tell yourself that to see your company succeed you need to change. And change a lot. As an optimistic human being you find thousands of excuses why it will still work out. You have read all those great stories how founders have lived from the credit card until the miracle has happened so you still believe in the fairy tales. At this moment telling to yourself that now is the time you have to change, was the most difficult.
As soon as we have decided that change is needed, basically, there were 3 options that we could have proceeded with:
2. try to sell a “team” to somebody more successful
3. shut down the shop and either go find a job or start a new company
Honestly, we have considered each of these options very carefully. We had job offers on the table, negotiated an acquisition opportunity and in parallel thought about new startup ideas.
Decision to pivot didn’t come easily, but now, after 2 months, I feel it was one of the best decisions during our startup career. Hope my intuition is right this time.
AS: Were product decisions more important or financial reasons the underlying drivers for a pivot?
MK: I think product was influencing our decision much more. Paul Singh or Dave McClure once brought up the great term “Living zombie” to name a startup that is growing slowly, getting positive reactions from users, has passionate founders, but doesn’t bring any signs of product/market fit for some time. I think that was exactly our experience with 300.mg. And we wanted to be a flying superman instead.
I guess biggest personal decision that me and Anton made during this time, was that we still want to succeed as founders. For us it was important to be founders and not ride on someone else’s back. So, that had motivated us to continue iterating and thinking about our own startup
AS: When you pivoted, what were the learnings that you decided to take with you to the new “idea”?
MK: I guess biggest lesson is that one should always start a company with a BIG PROBLEM to solve. Trying to figure out the problem on the go is pain in the ass.
For our new product idea, the validation was very simple. We have told about our idea to several people and most of them took their wallet out and paid us to solve this pain. So we actually made $4,000 during first week without writing a piece of code. Crazy, but that was a sign of solving a problem that somebody is willing to pay for.
I would never start a company again without this strong sign of an important problem.
AS: How did you evaluate these things that you took with you and what you decided to leave behind?
MK: We didn’t think so much about what are we leaving behind. Our question was: giving our position, technology, know-how and experience what would be the best market opportunity that we should be working on.
AS: Do you have any investors and if so, how did they relate to this pivot?
MK: Yes, we had a hand-full of angel investors who trusted us their money. Most of them were very supportive of the pivot decision. Our big thanks go to Yee Lee who was helping us during this period with great advice – even if it was sometimes conflicting with his own interests.
Arctic15 will be organised this year in October, on the 17th and 18th. Register your tickets today to see speakers like Marko Ahtisaari (Nokia), Phil Libin (Evernote) and Mikkel Svane (Zendesk) just to name a few.