“The initial idea doesn’t matter — most companies pivot.” I’ve heard that 100 times. But is it really true? Today, I dug into my portfolio to find out.
I looked at investments at least a year old. This way, they’ve had time to pivot.
Here’s what I found…
Of 29 companies in the sample, 10 pivoted. 19 are still working on the same idea they had at the time I invested 1-4 years ago.
Are pivots more successful? Or is pivoting something only a failing company does?
To answer this question, I looked at the 3 most successful companies in my portfolio. Of those 3, one is a pivot.
If I expand that to the top 5, I still have only 1 pivot. This makes sense — if you’re crushing it with your initial idea, why change?
Since I’ve only been investing for around 4 years, my sample size is small. I searched for data on how common pivots are but couldn’t find anything useful. So for now, you’ll have to content yourself with my study, small though it may be!
The bottom line is most of my investments don’t pivot. This is especially true for the most successful companies.
As investors, it’s our job to challenge conventional wisdom. And from what I’ve seen, the commonplace that “the idea doesn’t matter” is wrong.
I pay close attention to both the team and the product. Odds are, they’ll still be slinging this thing for a long time.
More on tech:
My Biggest Losses as an Angel Investor
Don’t Give Answers. Ask Questions.
Do Non-Founders Make Better Investors?
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