In the high-stakes world of startups, failure is often a stepping stone to success. Research by CB Insights reveals that 70% of startups pivot from their original idea, proving adaptability is key to survival. This article explores 15 companies that turned near-collapse into billion-dollar triumphs by embracing change.
The Pivot Table: 15 Startups That Reinvented Themselves
| Startup | Original Idea | Pivot Year | Pivoted Idea | Key Outcome |
|---|---|---|---|---|
| Slack | Gaming (Glitch) | 2013 | Workplace Communication Tool | Sold for $27.7B to Salesforce (2021) |
| Check-in App (Burbn) | 2010 | Photo-Sharing Platform | Acquired by Facebook for $1B (2012) | |
| Shopify | Snowboard Equipment Store | 2006 | E-Commerce Platform | $10B+ valuation (2023) |
| Podcasting (Odeo) | 2006 | Microblogging Platform | $41B market cap (2023) | |
| Groupon | Social Activism Platform (The Point) | 2008 | Group Discount Marketplace | IPO at $12.7B (2011) |
| Mobile Shopping App (Tote) | 2009 | Visual Bookmarking Platform | $23B market cap (2023) | |
| YouTube | Video Dating Site | 2005 | Video-Sharing Platform | Acquired by Google for $1.65B (2006) |
| Nintendo | Playing Cards (1889) | 1970s | Video Games & Consoles | $55B market cap (2023) |
| Wrigley | Soap & Baking Powder | 1890s | Chewing Gum | Acquired by Mars for $23B (2016) |
| PayPal | Cryptography (Confinity) | 2000 | Digital Payments | $290B market cap (2023) |
| Avon | Book Sales | 1886 | Cosmetics Direct Sales | $3.7B revenue (2022) |
| Play-Doh | Wallpaper Cleaner | 1956 | Children’s Modeling Clay | $500M+ annual sales |
| Flickr | Online Game (Game Neverending) | 2004 | Photo-Sharing Platform | Acquired by Yahoo! for $35M (2005) |
| HP | Oscillators & Medical Equipment | 1939 | Computers & Printers | $29B revenue (2022) |
| Starbucks | Espresso Machine Sales | 1987 | Coffeehouse Chain | $35B market cap (2023) |
1. Slack: From Gaming Flop to $28B Collaboration Giant
Original Idea: In 2009, Stewart Butterfield’s Tiny Speck launched Glitch, a multiplayer game.
Failure: Despite $17M in funding, Glitch shut down in 2012 due to low engagement.
Pivot: The team repurposed their internal communication tool into Slack, which scaled to 12M daily users by 2019.
Lesson: “Your side project might be your real product.”
2. Instagram: Ditching Check-Ins for Filters
Original Idea: Burbn (2010), a location-based app with photo features.
Failure: Overly complex, with only 1,000 users.
Pivot: Co-founders Kevin Systrom and Mike Krieger stripped Burbn to its photo-sharing core. Instagram hit 1M users in 2 months.
Lesson: Simplify ruthlessly.
3. YouTube: From Dating Disaster to Video Empire
Original Idea: A video dating site in 2005.
Failure: Zero traction; users ignored dating to share random videos.
Pivot: Chad Hurley and Steve Chen allowed all video uploads. By 2006, YouTube hosted 100M daily views.
Lesson: Listen to user behavior, not your ego.
4. Nintendo: Playing Cards to Pokémon
Original Idea: Founded in 1889, Nintendo sold handmade playing cards.
Pivot: After dabbling in taxis and love hotels, Nintendo released Donkey Kong (1981), birthing a gaming empire.
Lesson: Diversify boldly.
5. Shopify: When Snowboards Led to Software
Original Idea: An online snowboard shop (2004).
Failure: Struggled to compete with larger retailers.
Pivot: Founder Tobias Lütke built an e-commerce platform for their store. Shopify now powers 4M+ businesses.
Lesson: Solve your own problem first.
6. Groupon: From Activism to Discounts
Original Idea: The Point (2007), a platform for collective social action.
Failure: Struggled to gain traction.
Pivot: Andrew Mason shifted focus to group discounts, starting with a pizza deal. Groupon’s IPO in 2011 valued it at $12.7B.
Lesson: Leverage existing demand.
7. Pinterest: From Shopping to Inspiration
Original Idea: Tote (2009), a mobile app for tracking retail products.
Failure: Users saved items but rarely bought them.
Pivot: Ben Silbermann reimagined Tote as a visual bookmarking tool. Pinterest now hosts 450M+ monthly users.
Lesson: Observe how users misuse your product.
8. Twitter: Podcasting’s Loss, Microblogging’s Gain
Original Idea: Odeo (2005), a podcasting platform.
Failure: Apple’s iTunes dominated the market.
Pivot: Jack Dorsey and team created a 140-character messaging service. Twitter’s 2023 valuation hit $41B.
Lesson: Pivot when competitors overshadow you.
9. PayPal: Cryptography to Digital Wallets
Original Idea: Confinity (1998), focused on Palm Pilot cryptography.
Failure: Limited adoption of Palm Pilot payments.
Pivot: Merged with X.com (Elon Musk’s venture) to create PayPal, which eBay acquired for $1.5B in 2002.
Lesson: Merge strengths to fill market gaps.
10. Avon: Books to Beauty
Original Idea: David H. McConnell sold books door-to-door in 1886.
Failure: Customers preferred free perfume samples over books.
Pivot: McConnell founded Avon as a cosmetics company. Today, it operates in 100+ countries.
Lesson: Let customer preferences guide you.
11. Play-Doh: Cleaner to Creativity
Original Idea: Kutol Products (1930s) sold wallpaper cleaner.
Failure: Demand plummeted with vinyl wallpaper.
Pivot: Repositioned as a non-toxic modeling clay for kids. Play-Doh now generates $500M+ annually.
Lesson: Repurpose assets for new markets.
12. Flickr: Gaming’s Loss, Photography’s Win
Original Idea: Game Neverending (2002), a multiplayer online game.
Failure: Shut down due to lack of interest.
Pivot: Stewart Butterfield reused the photo-sharing feature to launch Flickr, acquired by Yahoo! for $35M.
Lesson: Salvage what works.
13. HP: Oscillators to Tech Titan
Original Idea: Hewlett-Packard (1939) sold oscillators and medical equipment.
Pivot: Shifted to calculators, printers, and computers. HP’s 2022 revenue reached $29B.
Lesson: Adapt to technological shifts.
14. Wrigley: Soap to Gum
Original Idea: William Wrigley Jr. sold soap and baking powder in the 1890s.
Failure: Customers cared more about free gum promotions.
Pivot: Wrigley focused on chewing gum, becoming a Mars subsidiary worth $23B.
Lesson: Turn freebies into core products.
15. Starbucks: Machines to Mochas
Original Idea: Sold espresso machines in 1971.
Failure: Low consumer interest in home machines.
Pivot: Howard Schultz transformed Starbucks into a café chain in 1987. Today, it operates 35,000+ stores.
Lesson: Experience trumps products.
5 Universal Lessons from Successful Pivots
- Embrace Failure as Feedback: Twitter abandoned podcasting when Apple dominated.
- Obsess Over User Behavior: YouTube noticed users preferred cat videos over dating.
- Stay Lean to Pivot Fast: Flickr’s pivot took just 4 months.
- Solve Your Own Problem: Shopify built tools it needed as a retailer.
- Repurpose Assets: Play-Doh turned a failing cleaner into a toy.
How to Pivot Successfully: A 5-Step Framework
- Audit Your Assets: Slack reused its chat tool; Nintendo leveraged gaming R&D.
- Listen to Customers: Avon switched to cosmetics after customers demanded perfume.
- Test Small: Groupon started with a single pizza deal.
- Secure Buy-In: PayPal’s team united behind digital payments.
- Communicate Clearly: Starbucks rebranded to focus on café culture.
As Airbnb (which pivoted from “AirBed & Breakfast” to global stays) proves, resilience defines success. Whether you’re selling gum (Wrigley) or servers (HP), adaptability turns near-death into rebirth.
