For Some Internet Start-Ups, a Failure Is Just the Beginning

The following is an excerpt from a January 18 New York Times article with the above title.

For Some Internet Start-Ups, a Failure Is Just the Beginning

By JENNA WORTHAM

Every entrepreneur hopes to start the next big thing. But sometimes the first try doesn’t go as planned.

Bradford Shellhammer remembers the exact moment he realized his fledgling Web start-up, Fabulis, a review site and social network geared toward gay men, was a flop. Last November, he and Jason Goldberg, one of his co-founders, flew to London, expecting to hold a festive party for their users there. Instead they found themselves among a sparse crowd at a tacky club in Soho, listening to an off-key singer doing show tunes and being served overpriced drinks by shirtless bartenders.

“No one showed up!” said Mr. Shellhammer, burying his face in his hands at the memory. “It was so awful. We were just like, ‘What are we doing?’ ”

After that disaster, Mr. Shellhammer and Mr. Goldberg laid off more than half of their employees, threw out the code they had written and changed course. Six months later, they introduced a high-end e-commerce site called Fab.com.

Theirs is just one example of a start-up that decided to cut its losses and pivot — choosing an entirely new direction in the hopes of transforming a dud of a business into one that might have a shot at success.

To pivot is, essentially, to fail gracefully. While the term has been in the start-up lexicon for decades, it is coming up more often in the current Internet boom, as entrepreneurs find that many investors are willing to keep the money flowing even if a start-up takes a hard left turn.

“Ideas are like lightning in a bottle, so if the company is small enough and didn’t seem to capture lightning on their first try, it makes sense to try again,” said Ben Horowitz, one of the founders of the venture capital firm Andreessen Horowitz. “The art of the pivot is to do it fast and early. The older and bigger the business, the harder it is to change directions.”

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