NEW YORK CITY — “Pivot” tends to be a dirty world in the tech world. When companies pivot, it’s usually because they messed up somewhere, and they tend not to hold press events flaunting their shift in focus.

Fab, however, isn’t like most companies. What began as Fabulis, a social network for gay men, has rapidly turned into one of the biggest e-commerce sites around. And, somehow, Fab isn’t content with that success: The company announced today that’s pivoting away from the world of flash sales to become something very different but far more interesting: it’s very own design store.

“We want to build something really massive — like at an Ikea scale. We think we can create the Ikea or Amazon of design,” Fab CEO Jason Goldberg said at Fab’s New York City headquarters yesterday.

To push this new strategy, Fab has revamped the design and structure of its online store and apps, all of which are now focused on distinct product verticals like “Art”, “Vintage”, “Jewelry” and “Men.” (As Goldberg would say, it’s Amazon with a soul.)

The new Fab is also particularly friendly to e-window shoppers, who can browse the site’s new designer pages and exclusive product listings. Fab has also improved the power of its search engine, which is built so that users are at most two or three clicks from finding what they’re looking for.

Welcome to the store-ification of Fab.

The new Fab will heavily push the site exclusive products.

It goes deeper. Alongside the redesign, Fab also announced its purchase of Massivkonzept, a German bespoke furniture company whose acquisition ties in with another one of Fab’s new grand ambitions: to carve its own chunk out of the online customizable furniture business. “Online furniture retail is ripe for disruption. We think it’s possible to bring fun, modern, quirky products to people on a large scale,” Goldberg said.

With the acquisition of Massivkonzept, Fab also announced that it’s building its first retail store in Hamburg, Germany. Unsurprisingly, the company’s brick-and-mortar goals are no less ambitious than its online ones. ”We’re going to reinvent, we’re going to disrupt, we’re going to re-imagine what retail can be,” said Goldberg, who revealed that Fab also plans to open more retail locations this year.

This is all really tough to take in. But as sudden as it all seems from the outside, Fab’s pivot has actually been over a year in the making. “In January 2012, we said that if we wanted to get to where we wanted to, we had to change the course of our business. Our pivot has been slow — but is indeed a pivot,” Goldberg told me.

But while Fab seems to be pulling this pivot off pretty well so far, Goldberg was quick to agree that running a store is very different from running a flash sales site. Suddenly, you find yourself worrying about things like building warehouses, managing inventory, and offering exclusive products that people actually care about. And none of that’s particularly easy.

One thing that Fab did not talk about, however, was its rumored round of funding, which was valued as high as $ 1 billion. “We’re overwhelmed by investor interest in Fab. What we’re looking for in terms of investors are people who can to help us spread this brand and take it all around the world, ” said Goldberg, asking reporters to “stay tuned” for future announcements on the subject.

“We’re in this for the long term,” he added.

About eight months ago, we shut down our offices in Boulder, Colo. I had moved out to California about a year prior, and as the lease came up in Boulder, it was an easy decision to close the office.

But not for the reasons you think.

Our company, Graphicly, has grown up over the past couple of years. We started as a company focused on building a marketplace for digital comics that allowed for sharing and discussion, and over the beginning of our life, as many startups do, we learned several hard lessons.

Yet in the midst of that learning, one truth continued to float to the top: We wanted to change the world, and changing the world meant making decisions that hurt in the immediate but would lead to a clear path.

In building a marketplace of content there are inherent issues. Early on I explored if focusing on business model would bring us the lever to move the world. Sometimes in moving the world slightly the level is simple. I started to talk to innovate folks in other industries.

“Own your future.”

I was sitting in David Pakman’s office in New York. David, as CEO of eMusic built a streaming, subscription service that leveraged licensed music and indie bands into a $70 million-per-year business.

Those three words — “Own your future.” — rang in my brain. Living in the world of licensed content created a world where the license holder had all the power. We could not build a big business without their consent. Our lever just got longer.

Over the next few months I chatted with more and more folks. The comments were the same. Get out. You are fighting a pending ceiling.

In October of 2011, I was standing in my kitchen in Boulder. On the other side of the phone was Micah Laaker (head of product) and Dan Theurer (head of technology). They had just pitched me on the idea of dumping everything we had built over the last year or so, and extract just the tools that publishers cared about.

“You want to change the world,” they said. “Let’s help publishers understand and transverse the ebook world. It’s a horribly messy and dark place. There are eleven file formats for Kindle, iBooks and Nook. Let’s help them.”

“You want to throw away everything?” I asked. “All that we built? All that we spent all that money on? Move beyond comics? You believe this is our lever?”

They both said “yes” in unison.

I remember sitting there for a couple of minutes. Fear and worry building in my chest. What if we were wrong?

Then I remembered that the two people on the other end of the phone were not only brilliant, passionate people, but my friends. I chose them to help me lead the company into the future. If I couldn’t trust them at this exact moment, when could I?

I took a deep breath.

“Let’s do it. I am not sure if I 100 percent believe in it, but I believe in the two of you. I have your back.”

Over the next several months we started building a SaaS tool for publishers that makes converting, distributing and promoting digital content faster, better and cheaper than any service on the planet.

Fast forward a few months into March of 2012. Why March? Because in that month, we did more revenue than in all of 2011. By end of 2012 we had more than 6,000 customers. We ended 2011 with 300.

By September 2012, we had dove completely into our new lever, and started to see different ways to use it. And as the new business accelerated, we decided to make another huge shift.

We went completely virtual. By forcing us to use our tools remotely we could see what our customers saw and work faster to innovate.

So we closed our Boulder office, and we leaned into our lever.

Micah Baldwin is CEO of Graphicly, an entertainment and digital content publishing platform designed to deliver what authors and publishers need to share their work with audiences. Previously, he was VP, business development and chief evangelist for Lijit Networks (acquired in 2011). Baldwin sold his previous startup, Current Wisdom, in early 2007. This post originally appeared on his blog, Learn To Duck.

Top image via Luna Vandoorne/Shutterstock

This is a guest post by entrepreneur Bernard Moon

An important factor for new entrepreneurs is the ability and willingness to change your business model or product mid-stream. Most successful startups have pivoted, but it’s not as easy as it sounds.

It’s a humbling experience to admit your original vision and product was off or something went wrong. An entrepreneur might reflect on how they spent their investors’ money or their life’s savings into a black hole and revisit the highs and lows of their journey. Some entrepreneurs don’t reach this point because they are blinded by the same fierce determination that brought them there or have a hope that things will turn around.

Related: Check out Steve Blank’s suggestions for when to pivot, and when to hold the line

As a reference, here are some successful startups that pivoted:

• Burbn, a location-based HTML5 app –> Instagram.
• Game Neverending, an online video game (MMORPG) –> Flickr.
• Tune In Hook Up, a video dating site –> YouTube.
• PDA payments (Palm) –> Paypal’s web payments.
• Odeo, a podcasting platform –> Twitter.
• Animation tools–> Pixar’s animation studio.
• Memory chips –> Intel’s microprocessors.

It is difficult to decide whether your company should pivot or not. How do you know when’s the right time? I’m assuming a company is beyond the testing and tweaking stages and fully committed down a specific product strategy and design for over six months — or even longer.  There isn’t an algorithm or some magic formula for you to use, but it is important to keep an open mind and watch for these four signs:

1. You are constantly educating the market

During my last startup, GoingOn Networks, we were constantly educating potential clients on the benefits of social networking and open communications with customers. It was a B2B, white-label social networking and publishing platform that was a few years too early. I became burned out after three years of evangelizing (2004-2007) about the coming days of social media and two-way communications. GoingOn eventually focused on the education market and gained traction within this space.

There is a fuzzy line between being a first mover and capturing a new market and being chum for sharks in the ocean depths. If you’re constantly educating your target users and trying to create a market, then you’re probably too early. This is a long and arduous process that should lead you to pivot.

2. Your beta users don’t like your product

Listening to your potential users is good thing.  Ninety-nine point nine percent of us are not Steve Jobs, so you can’t say, “Focus Groups? Feedback? Who needs user feedback when I know what people want?!”

Being passionate about your product is one thing, but being hard of hearing and fiercely stubborn can lead you to the startup deadpool. If a vast majority of your users don’t like your product or don’t find value in it or just don’t get it, then pivot.

3. Investors you meet aren’t buying it

After dozens and dozens of investor meetings and dozens of rejections, if the feedback is negative on the product or target market, you should consider a pivot. The story might be different if they say you need to get traction first, that you’re missing a key team member, or that they don’t invest in that space, but if it is repeated feedback that your product isn’t compelling enough or the market is too small, then consider pivoting.

There are outlier stories of incredible perseverance, such as Pandora’s Tim Westergren, who was rejected by over 300 venture capitalists and suffered through two-and-a-half years of being broke, but for most people, the outcome will not be pretty. As my father once said, “”Bernard, business is like poker. You have to know when to fold.”

4. You’re being everything to everyone

This not so much a sign for your company, but more of a forewarning. Most startups that try to be everything to everyone fail because they are burning their engineering resources on developing products that are bigger than they should be. Focus is a good thing. Pick one target market and user base.

Going after everyone or almost everyone might confuse your users. Do they want me? Do they like me? Is this product for me? I learned this the hard way during my second startup, HeyAnita Korea. We created a voice portal service that tried to be a voice-guided information service for everyone (weather, news, stock information, sports, and so on). After some soul-searching, the company pivoted on entertainment news targeted towards teens, and this new focus led HeyAnita to profitability.

Passion, excellent execution, and a strong vision should be balanced with the ability to listen well, the flexibility to recognize better opportunities, and the willingness to pivot your company onto a more successful path.

Bernard Moon is the co-founder and CEO of web conferencing and sales platform Vidquik and co-founder of SparkLabs, a recently launched startup accelerator in Seoul, Korea.

[Top image credit: olly/Shutterstock]

Today we know Pandora as the Internet’s radio station that broadcasts over billion hours of music a month. But the company originally started life as a music kiosk service for record stores. And in between, it experienced a savage decade of near-death experiences.

“Pandora actually started as a company called Savage Beast Technologies,” Pandora CEO Joe Kennedy says in a new Total Disruption video. “The vision was to provide software to help people buy more music in music stores. Unfortunately, that was a dying business.”

Source: A Total Disruption

Joe Kennedy, Pandora CEO

Savage Beast struggled for three to four years, Kennedy says, without success, as the music industry transitioned in great pain and with great resistance to digital. Pandora also refocused on digital music, but the pivotal moment was the launch of the iPhone app store.

“We literally dropped everything we were doing,” Kennedy says. “And to this day, Pandora is the second most popular app in the iOS app store.”

The struggle wasn’t over — after four years in the music store business, it took a year to refocus on personalized music, delivered directly to music lovers via the web. The company’s first profitable quarter wasn’t for another five to six years after that — and Pandora had to advocate for laws relaxing music royalties to make it happen, as growing revenue doesn’t really matter if expenses grow faster.

As of today, Pandora has 150 million registered users in the U.S., with a third of them tuning into the service every single day, listening to over a billion hours of music every month.

But Pandora still faces a long road ahead, with possible encroachment into its business model from Apple, still challenging revenue numbers in spite of a growing subscriber count, and possible competition from Spotify.

Here’s the story:

photo credit: Thomas Hawk via photopin cc

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

When is the right time for a cloud computing or “big data” startup to bring on a full enterprise sales team?

Tablet productivity app CloudOn has been quietly growing its base to several million users over a period of three years. The company is set to reach the 10 million user-milestone by Q2 2013. The popular product is available to consumers for free, and lets people read and edit Microsoft Office files on tablet devices.

In recent months, CloudOn has recently begun receiving calls from large enterprises, but does not plan to execute on a formal sales push until its honed the product and reached 10 million users.

At CloudBeat 2012, cofounder and CEO Milind Gadekar offered advice to startups at a similar stage of growth. According to Gadekar, it’s not as making a few key hires. He revealed the host of new requirements that will need to be considered, including improved security, manageability and reporting.

Check out the video for more:

Video via livex.tv

Zappos faced that existential crisis soon after its founding in 1999.

Originally, the online shoe retailer (that now has arguably the best customer service available anywhere online) was a dropship company: sell a product, tell a factory to ship it, and pocket the cash.

“On paper, that was a great idea,” founder Tony Hsieh says in a new video from A Total Disruption. “But we couldn’t control the customer experience.”

So the fledging company made a tough decision: no more dropshipping. Immediately, revenues dropped 25 percent. Zappos wasn’t profitable at the time, couldn’t get funding, and the U.S. had just been attacked — Sept. 11, 2001 — was in recession, and was about to start a war.

But Hsieh, whose parents had wanted him to become a lawyer or doctor, persisted. And over time, Zappos found more and more customers — by word of mouth, and by repeat business.

Here’s the story of the pivot:

“We take most of the money we would have spent on paid advertising and invest it into customer service,” Hsieh says.

The result?

Hsieh sold the company to Amazon for $1.2 billion in stock, and it now sells in excess of $2 billion worth of product annually. But that’s not quite enough to satisfy his parents, says Hsieh.

“My parents say it’s not too late for me to become a doctor!”

photo credit: mandiberg via photopin cc

We’ve heard the Twitter creation myth before, but this time two-time Sundance-winning director Ondi Timoner has produced a short insider video on exactly how Twitter pivoted so successfully.

The star witness is Dom Sagolla — @dom on Twitter — whose first tweet was the 38th use of the platform that now has well over half a billion registered users.

Here’s the video:

Sagolla, who was the ninth employee at Odeo, was not a core Twitter founder for long. In fact, he spent only eight months at Odeo before moving on to Adobe and then several startups, including his latest, Chaotic Moon Studios.

But he was there right at the beginning, in charge of quality.

And he was there for perhaps the most important single moment in Twitter’s history: the hackathon at which Jack Dorsey announced a new idea for an incredibly simple product.

Image credit: The Pivot

Cable companies such as Comcast and Cox need to take a good look at their technology as streaming services Netflix and Hulu take away their profits. In order to avoid becoming obsolete, it makes sense for cable companies to recycle their infrastructure into home automation.

Conceptually, most people are intrigued by the possibilities of home automation. The ability to program a home environment to automatically adjust to optimal comfort levels while performing a variety of other useful functions is no longer a far-fetched vision reserved for future generations. Rather, this technology is available now. While we expect home automation to rapidly spread in the next few years, it is currently only being used by a small percentage of homeowners. Cable companies, however, just may play an integral role in bringing smart home technology to the masses, especially now that major players such as Comcast and Cox are so deeply invested in its growth with products like Xfinity Home.

Despite the popularity of streaming content, cable providers have managed to maintain respectable positions within the industry, but recent leaps into the smart home market may just be a sign of things to come for future cable television companies and home automation, in general.

Home Security and Automation

According to Parks Associates, which provides analyses on the home security industry, a quarter of all American households are currently equipped with home security systems. The industry’s largest growth occurred in the years just prior to the nation’s housing crisis, according to a report on the Parks Associates website. Since then, however, the home security industry has experienced a marked decline.

But as long as crime exists people will surely want to protect themselves against it, right? Which is why quality home security devices are still a good bet in the marketplace.

Where most are familiar with the home security market, the automation industry, on the other hand, is just getting started. According to a recent article on Reuters, only three percent of homes in the U.S. are currently equipped with smart home technology, but this number is expected to reach double digits in just the next few years. Globally, this cottage industry could explode. It’s only found in approximately 16 billion homes now, but the market forecasts it will control more than 36 billion home environments worldwide by 2016.

Adapting To a Changing Landscape

Neither Comcast nor Cox are likely the first — or even the second or third brands that cross one’s mind when contemplating home security. Once upon a time, however, neither was American District Telegraph, which is now known simply as ADT. Before becoming one of the most recognizable brands in the home security industry, ADT actually helped expedite telegraph deliveries. Failing revenues at the beginning of the 20th century prompted the company to focus its efforts in a new direction, namely money remittance as it became a subsidiary of Western Union. It wasn’t until the company’s communication and remittance services were sold to AT&T that ADT finally entered the home security sector in the early 1900s.

With this in mind, it doesn’t sound all too unusual that leading cable companies are beginning to edge their way into home automation and security markets.

As one industry begins to decline, new ones emerge. Historically, the only companies that survive fading markets are those that are able to identify inevitable shifts in consumer trends while at the same time demonstrating a willingness to adapt to new ones. This is particularly true of the tech industry which, at times, tends to move at exponential speeds while often causing new businesses and products to rapidly surpass those with more traditional growth models. Then there are those unexpected events where systems that are deemed to be the hottest and the best today literally change overnight into newer and sexier technologies.

Cable Companies Help Consumers Embrace Home Automation

When we reached out to Comcast to ask why the company chose to offer a home security product with its new Xfinity service instead of one geared strictly toward entertainment, Comcast’s Senior Manager of Corporate Communications, Jamila Patton said, “We continue to look at ways to bring innovation and value to our customers. We feel that home security is a natural extension of our sophisticated network because it allows us to leverage our existing infrastructure to develop new integrated products for our customers.”

Not everyone is tech savvy and many are plain unaware that tools allowing them to remotely control a home’s environment are even available in the marketplace. A lot of people simply do not know that they can turn lights on and off, regulate a home’s temperature, or view every room inside of a home while at work or even while on vacation hundreds of miles away. Of those who do know that such technology exists, many expect it to be expensive or much too technical to install in an existing home.

When cable companies offer affordable home automation and security products to their existing customer bases, much of the fog that separates consumers from the smart home market begins to dissipate.

Currently, both Comcast and Cox offer wireless remote home automation services which include 24/7 alarm and video monitoring, door and window sensors, environmental controls such as lighting and heating adjustments, as well as the ability to receive notifications whenever a door or a window is opened in a home after the security system has been armed. It helps that all of this is controlled by a tablet-like remote and that it can also be accessed on smartphones and tablets via free apps offered by each company. This sort of control is likely to be attractive to consumers who cannot let a new gadget pass them by.

Operating Outside Of the (Cable) Box

Comcast and Cox are real-time examples of major corporations using “the pivot” to their advantage, not wanting to go the way of companies like Kodak or Block buster. At least they are attempting to.

Comcast is no stranger to operating outside of the cable box. In addition to subscription television service, the company already offers voice and data services, controls a broadcast television division, which includes major networks Telemundo and NBC, and operates a large film division, which includes Focus Features and Universal Pictures. It owns Universal Studios in California, a major athletic arena in Philadelphia, as well as other restaurants and retail businesses. After giving the cold shoulder to Netflix earlier this year, it also launched its own streaming service, Xfinity Streampix. All this in addition to its home automation services.

This also isn’t Cox’s first go-around either. Its parent company Cox Enterprises started in newspaper publishing and still owns several television and radio stations. Cox also offers voice and data packages, invested in the automobile auction industry through its Manheim and Auto Trader brands, and once entered the 3G wireless phone market. It dismantled that service in March of 2012, however.

Being that cable television is already an integral part of so many households, companies like Comcast and Cox are undoubtedly hoping to transfer a great deal of brand recognition to their new home automation and security services. Whether they succeed or fail, though, ultimately they will bring awareness to home automation, and hopefully ignite a fire under the still-growing trend of home security technology.

Madison Parker is a security industry expert who’s been following the progression of the home automation industry on her site HomeSecuritySystems.net.

Home automation image via Shutterstock

Thinking about adjusting your original big idea? Lots of companies have made BIG pivots — if they hadn’t, Twitter would still be called Odeo and unsuccessfully publishing updates longer than 140 characters.

We asked 15 young entrepreneurs about the big pivots their companies made early on in their careers.

Increasing travel – Sean Ogle, @seanogle, Location 180, LLC

I was always under the impression that to be an entrepreneur and own a business, you need to get funding, open up a brick-and-mortar space, and devote all of your waking hours to it. I wanted to travel. Early on, I realized just how much is possible via the Internet. So I ditched the idea of staying in one place and built a business that allows me to travel whenever and wherever I want.

Quality over quantity – Pete Kennedy, @petekennedy, Main Street ROI

In the first days of my marketing agency, we were only doing performance-based deals with clients. We took all the risk and spent our own money on ads, and we’d only get paid if we could deliver results. This approach made it really easy to attract clients, but we got lots of clients we couldn’t help. Our first pivot was to define our ideal client, and today we focus on quality over quantity.

Switching Target Clients – Jun Loayza, @junloayza, RewardMe

We initially targeted local mom-and-pop businesses with RewardMe. We quickly realized that although small businesses can benefit from a rewards program, they are not sophisticated enough to care about the unique product data that we capture. We pivoted our target market to nationwide franchises because they have the money and resources to take advantage of the unique data we collect.

Narrowing Your Focus – Thursday Bram, @thursdayb, Hyper Modern Consulting

When I started out, I was a run-of-the-mill freelance writer who would take any project she was offered. It was only after I really narrowed my focus, both in the types of projects I would do and the types of clients that I would work with that things started to boom.

Expanding Your Audience – Ashley Bodi, @businessbeware, Business Beware

We targeted contractors from the start but quickly noticed we had an overwhelming number of other people asking if they could use our website as well. Turns out, fewer contractors use the site — it’s businesses all across the board. Never discount a group or audience that you might appeal to, because you might just miss out on some great potential members and/or customers.

Giving up Short-Term Revenue – Christopher Kelly, @ThoughtsOnBiz, Sentry Centers

About a year into our business, we discovered that our celebrated up-sells were our clients’ pet peeves. We pivoted our focus from driving revenue to understanding and better serving our clients’ needs. Despite slightly decreased revenue per sale, total revenue has skyrocketed along with customer satisfaction and loyalty. Giving up some short-term revenue was ultimately a profitable decision.

Jumping on a Movement – Dave Kerpen, @davekerpen, Likeable Media

We started our business as theKbuzz, an offline word-of-mouth marketing company, and in 2007, the first year of our business, as social media exploded, we pivoted. We realized that social media was a much more efficient way to generate buzz than mall events and other guerrilla marketing. We pivoted our business model and changed our name to Likeable. We haven’t looked back!

Carving out a Niche – Jordan Guernsey, @moldingbox, Molding Box

My service menu was too large when I first started. I had to pare it down to ensure that what we provided was quality, 100 percent of the time. I found I couldn’t do everything and be successful. Finding our unique niche and staying the course led to less stress and much better profit.

Offering Paid Memberships – Nicolas Gremion, Foboko.com

I stepped out of my comfort zone and took the advice of a new team member, which was to offer paid memberships on our free eBook website. This, to me, didn’t seem right, but it quickly became our biggest source of revenue, allowing us to not be dependent on advertising alone.

Diversifying Revenue Streams – Raoul Davis, @Ceo_Branding, Ascendant Strategy

A big pivot we made was understanding the need to diversify revenue streams. If your business is purely retainer and/or driven by a one-time commission, a macroeconomic shift can be devastating. We’ve focused on creating more residual and royalty-based revenue models to maximize our long-term financial sustainability.

Planning for Scalability – Michael Margolis, @getstoried, Get Storied

For years I was a consultant and message architect to big brands. I made a good living but it wasn’t a scalable platform. In 2009, the business imploded amidst a divorce and I lost everything. Forced to start over, I reinvented my business with a range of online infoproducts devoted to the business of storytelling. This allowed me to expand and reach a market of thousands instead.

Gender-Neutral Marketing – Elizabeth Saunders, @RealLifeE, Real Life E®

When I started my time-coaching and training business, I thought that my clients would primarily be females. Accordingly, I choose pink as my site’s color and marketed to women in business. Despite my total lack of effort to reach out to a male audience, I found that men started finding my business and asking if they could participate. Now my business is gender-neutral.

Moving to a New Payment Model – John Hall, @JohnHallCOMO, Digital Talent Agents

We moved to a pay-for-performance model. This pivot defined our business and rapidly increased our client base. Trust is built when clients know you’re only charging them for the results they can see.

Structure Switch – Heather Huhman, @heatherhuhman, Come Recommended

Come Recommended started off as an exclusive online community for interns and entry-level candidates, but it’s now a digital PR and content marketing firm focused on helping companies with products for job seekers or employers. We’re still able to help job seekers and employers connect, just in a different way from where we originally started.

Foregoing the Double-Pivot – Nick Friedman, @NickFriedman1, College Hunks Hauling Junk

When I started the business, we tried unrolling too many peripheral services all at once. It ended up being too much too fast and didn’t work out. We were forced to scale back operations and focus on our core service offerings. I learned that sometimes, it’s the pivot you don’t make that matters the most.

[Top image credit: 140proof/Flickr]

The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization comprised of the world’s most promising young entrepreneurs. The YEC recently published #FixYoungAmerica: How to Rebuild Our Economy and Put Young Americans Back to Work (for Good), a book of 30+ proven solutions to help end youth unemployment.

“I’m just doing my best… and you can blame it all on me. It’s all my fault.”

These somber words are spoken with a genuine humility one seldom hears in the hustling, grandstanding world of technology startups. Seesmic founder Loic Le Meur is speaking them to me over a crackling phone connection today as he explains why he had to let go of more than half his team from the cross-posting service — 18 staffers this week, which leaves him with just 15 team members left.

“We have tried a number of things, but they didn’t work the way we hoped they would work,” said the entrepreneur, referring to his company’s dizzying number of pivots and products. “After trying for a long time to get traction and preserve a team that was building them… we had to reduce the size of the team, which is the worst thing a CEO can do.”

I asked Le Meur a question he doubtless had to ask himself many times over the past few months: With a team that small and that loyal, how do you decide who has to go? Le Meur struggles to answer, and it’s evident that as difficult as the question is, the decision was much more so. “It’s a group process,” he begins. “There’s a connection to the traction of what people are working on. There is how the team feels about someone. It’s definitely not a ‘Loic’ decision.”

But Le Meur continues to stress that he, not his team members and not their work, are responsible for the pink slips. “We were doing our best,” he says. “The best I could do wasn’t very good; I give myself a D minus… And that’s life; that’s entrepreneurship. But when it reaches people’s jobs, that’s bad.”

Le Meur didn’t leave his laid-off staffers completely in the lurch, though. When he knew the layoffs would be coming, he immediately began contacting his friends at competing tech-startups to see if they had job openings.

“The minute we announced it, we had a friend of mine in the office offering them jobs,” Le Meur tells me. “It’s a software company that is hiring. We tried to find any solution we could for months to not to [lay anyone off], and I think it’s very sad, but at the same time, I believe that all of them will find a job very easily.”

As Le Meur and the core team of 15 remaining Seesmic employees batten down the hatches against near-term storms, the founder tells me he is pinning his hopes on Ping.fm. Seesmic acquired Ping.fm in early 2010, and Le Meur says it gets hundreds of thousands of unique users every day. “We decided to focus on that,” he tells me. “We released mobile apps called Seesmic Ping two weeks ago, and we’re focusing on this… It’s basically cross-posting, but done in a very good way.”

Seesmic was founded almost five years ago and has seen many product iterations since that time. It started as a video commenting system, then a Twitter client, then an everything client, then a CRM system, and now a cross-posting tool.

I finally ask Le Meur the ultimate question: Why keep pivoting? Why has he not given up yet? “I am a sailor. I just keep sailing,” he says.

“I don’t give up, that’s how I am. I always have faith in my team, and I keep going. Success is going from failure to failure until you reach success. There are many examples; one of them is Mark Pincus, who couldn’t raise money for Zynga… I think he’s probably laughing right now when he thinks about that.”

At the center of a culture that fetishizes occasional failure, Le Meur is dealing with the stark reality of what he sees as his own, very personal failure. He is unquestionably down as our call ends, but he is not out — not yet.

“As an entrepreneur, you have to accept failure as an option and look at it in an honest way, but you have to keep trying.”

The pivot — it’s quickly become one of the most hated, worn-out words in the entrepreneur’s vocabulary.

Business model flopped? Pivot! Can’t get users? Pivot! Lukewarm reaction from press and investors? Rebrand and pivot!

Fab.com CEO Jason Goldberg pivoted in a big way over the past year. He turned his social network for gay men, Fabulis, into Fab.com, a site for design-oriented flash sales.

And he evidently did something right. Revenue has been pouring in ever since, items have been selling out, members have been flocking to the site, and everything is, generally speaking, coming up roses.

So we decided to get the one guy we knew who executed a drastic and wildly successful pivot to come into our office, explain how he decided to make the switch, how the changes were brought about, and what he’d recommend for entrepreneurs considering a pivot.

And if we never have to print the word “pivot” again, it’ll be too soon.

Stay tuned tomorrow morning for big news from Fab.com, including how the company plans to maintain its momentum and expand to new audiences.

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Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

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One of the key distinctions between an entrepreneur and an operating executive is an entrepreneur’s almost seamless agility in the face of changing circumstances versus an operating executive’s intense execution focus on a plan. World-class entrepreneurs learn how to combine both.

Driving home over the mountains from a Coastal Commission hearing, I had time to ponder an email I received from a city official as the road wound through the Redwood trees. The Coastal Commission had found that a zoning change his city requested didn’t conform to the Coastal Act, and we denied it.

I felt sorry for him because he had put together a project that depended upon the property owner, developer, unions, hotel operator, local neighbors, city council, weather, wind speed, phase of the moon and astrological sign all aligning just to get the project in front of us. It was like herding cats and pushing water uphill.

Reading his email I was sympathetic realizing that if you substituted customers, channel, product development, hiring, board of directors, and fund raising, he was describing a typical day at a startup. I felt real kinship until I got to his last sentence:

“Now we’re screwed because we had no Plan B.”

Say what?

I had to read his email a few times to let this sink in. I kept thinking, “What do you mean there’s no plan B?” When I shared it with the other commissioners who were public officials, all of them could see that there could have been tons of alternate plans to get a project approved, and there were still several options going forward.  But the mayor just had been so intently focussed on executing a complex Plan A he never considered that he might need a Plan B.

By the time the mountain road unwound into rolling pastures and then flattened into the farmland just south of Silicon Valley, I realized that this was a real-world example of the difference between an entrepreneur and an operating executive.

My formal definition of a startup is a temporary organization in search of a scalable and repeatable business model. Yet if you’ve founded a company you know that regardless of any formal definition, startups are inherently pure chaos. As a founder, keeping your company alive requires you to think creatively and independently because more often than not, conditions on the ground will change so rapidly that any original well-thought-out plan quickly becomes irrelevant. (It’s equally true for startups, war, love and life.)

The reality is that to survive requires a mindset which can quickly separate the crucial from the irrelevant, synthesize the output, and use this intelligence to create islands of order in the all-out chaos of a startup.  

To do this you are instinctually creating and testing multiple hypotheses which are creating an infinite number of possible future plans. And when the inevitable happens and some (or all) of your assumptions are wrong, you pivot your model into the next plan and continue forward.  You do this until you find a scalable and repeatable business model or you die by running out of money.

Great entrepreneurs don’t just have a Plan B, they have Plans B through Z.

Before Idealab, Gross started Knowledge Adventure, an educational software company. Employees once served as “weekend warriors” demonstrating products in retail outlets, where they learned the hard way that they weren’t targeting properly. With the pivot came success.

http://ecorner.stanford.edu/swf/player-ec.swf

(Can’t see the video? Click here.)

The company wants to become a hybrid of Skype and YouTube; a service that will give users a more debate-like experience, as opposed to  a strictly two-way conversation, TechCrunch reports.

In 2010, Nyoombl launched a small device that connected to your TV, and enabled you to video chat with other users, as well as Gmail users on PCs and Macs who had Google voice and video chat installed.

Unfortunately, the market became very crowded, with Cisco, IBM, and Polycom entering. As Cisco CEO John Chambers said after his purchase of Linksys, a maker of home-networking routers, “We think the time has come for Cisco to make a huge play in the home.”

Founder Oladayo Olagunju is being advised by Sun Microsystems co-founder Scott McNealy, entrepreneur Adam Rifkin, and venture capitalist Lara Druyan. The company, which is based out of Palo Alto, has received funding from one ex-Facebook executive.

Nyoombl will be inviting users to try out the service here shortly.

Calacanis got the idea a few years ago to beat Google at the search game by coming up with human editors to edit search engine results — called human-powered search. He got funding from Sequoia Capital and started work on Mahalo. The engine launched in May, 2007, and by January 2008, it was getting 2 million visitors a month. Mahalo pages were curated, with results that had videos, pictures, and a page with attractive layout. But Google and Microsoft’s Bing started improving their search at the same time.

And then Mahalo’s growth flattened out.

“You have great success for a year or two and then it stops,” he said. “You want to kill yourself. Maybe the world doesn’t need what I’m doing. This is very hard to take. I was devastated. Why can’t I make this work?”

So, about a year ago, the company started listening to user suggestions and collected data. Calacanis said the company pivoted from the “human-powered search” mission to a site where you could “learn anything.” It took 55 experienced video editors and had them create tutorials on how to do things like play certain songs on a guitar. Mahalo uses 75 domain experts and the video editors shoot them. They uploaded a lot of video on the site, and the video viewership shot through the roof.

“It changed everything in the company,” Calacanis said. “Everybody loved coming to work again. The growth came back.”

Calacanis said some of the best tech companies have gone through similar pivots. His examples: Groupon pivoted from a group action platform to daily deals; Flickr shifted from a massively multiplayer online game to web photo sharing; Nintendo shifted from playing cards to video games; and Nokia shifted from making rubber boots to making mobile phones. Calacanis joked that Nokia might now go back to rubber boots. Calacanis says his pivot has paid off, moving Mahalo from what was once a top 400 site in the U.S. to a top 160 site and it is one of the top five partners with YouTube.

In a case of embarrassing bad timing, Calacanis also announced the launch of Mahalo 4.0 while on stage, but the site doesn’t appear to be working.

There’s always talk about a startup’s end game – whether it’s in the form of an acquisition, funding announcement, or eventual flame out. But we rarely hear about the harsh realities that entrepreneurs face. This isn’t meant to be a downbeat and negative article, but actually quite the opposite. By knowing the harsh realities that lie ahead, you can be prepared when they come about. Here are some of the oft unspoken realities I’ve noticed entrepreneurs face regularly.

Your first iteration of an idea will be wrong – Very few people get it right out of the gate – but as it turns out, this is actually a good sign. No idea survives its first interactions with its customers. This sort of failure requires you to synthesize feedback to adapt to the customer. You could be prideful, not listen to what your customers are telling you, and keep things the way they were, but that leaves you with no customers and a product you may not even use yourself. It’s okay if things change up a bit when it comes to your idea and its implementation.

Your friends and family won’t understand what you do – “You’re an entrepreneur, so that means you’re un-employed?” or “Oh that’s nice.” are some of the many reactions you will get from close friends, family members, and others over the course of starting your company. Even if you achieve milestones that are worthy of praise and denote success in the entrepreneurial world (customers, fundraising, new traffic levels, press, etc.), people still won’t get what you do.

Unless you build one of the few consumer success stories that come around every few years, things probably won’t change here. The b2b space is even more difficult to explain as most people aren’t your customer, especially if it’s a niche workflow. But just because they don’t understand it, doesn’t mean you’re doing something wrong or unacceptable. I doubt most of Larry Ellison’s family understood Oracle (that database company that stores information), but things turned out pretty well for him at the end of the day.

You will make less than normal wages for a while – If you got into entrepreneurship first and foremost for the money, then you’re in the wrong business. Sure you may sell your company, but that day is probably far far away. Even if you raise a good chunk of cash, the money is better spent on hiring the best talent than paying yourself a higher wage.

There’s nothing wrong wanting to make money, but in the beginning it’s going to be rough. You will make less than most of your friends, especially the ones doing the “normal” paths of things like finance.

It’s a litmus test in its finest form, though. If you truly love what you’re doing, the capacity to have a large bank account takes a back burner to completing your mission. Sure you need some basic creature comforts, but luxury items almost seem silly as you will not have the time to truly enjoy them.

Everything takes twice as long … if it even happens – Multiply everything by two, including the things inside of your control. When things take longer, you sometimes think that you’re doing it wrong or no one really cares. In reality, everyone else has multiple deals and responsibilities on the table. By factoring this into the expectations of your startup, it makes a lot easier to prepare for launching products, closing deals, and more.

Also, be persistent and get the other party what they need as soon as possible. And realize that most deals never work out – from acquisitions down to simple business development agreements. There are always many moving parts and excitement that can fade.

That’s okay though. If you’re building your company upon a single deal, then you need to re-evaluate things. Don’t be depressed when a deal falls through. That’s just the nature of the beast.

Titles mean nothing. You will be a janitor – When you’re the CEO, chairman or co-founder of a <10 person company with a product that doesn’t have customers, titles really don’t mean much. Everyone will be doing a little bit of everything, including cleaning the toilets. Don’t try to mask the grind of being an entrepreneur with some superficial title. Instead, embrace the nitty gritty of those first days.

Business cards are nice to hand out, but they really shouldn’t say more than co-founder or something else. Maybe someone inside the company plays more of the CEO role (speaking and being the face of the company), but that doesn’t really matter in the early days. You have to be humble and you have to be willing to do whatever it takes. You don’t have a staff of 50 to throw the task on to either. If you don’t do it, it won’t get done. Sure you could also try to optimize for efficiency, but that’s almost counter productive as the early days of a startup requiring doing so much, that it’s hard to just cut something out.

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Big Data and Predictive/Real-time Analytics startups: Are you looking to jumpstart development & accelerate market traction? Sign up for the SAP Startup Focus program to receive technology, support, resources and community to help you develop new applications on SAP HANA, a cutting edge database platform. Get started here, and enter promo code “VB2013″ on the form.

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Are start-ups entering a new golden age?

Ask a venture capitalist or banker that question and you’ll probably get “no” for an answer – and given the lack of recent IPOs, as well as the changes we’re seeing in the venture industry, that shouldn’t come as a surprise. Ask an entrepreneur, though, and a very different picture emerges. That’s because today’s start-up owners are generating ideas, building products, and scaling their businesses better and faster than they ever have before.

There seem to be five key drivers for this:

The velocity of good ideas – There has been a lot of talk recently about “lean start ups” and “pivoting”, but if you don’t have a good idea to start with, all the pivoting and lean thinking in the world won’t amount to anything.

In the early days of a business, the power of a good idea, no matter how rudimentary, is what gets you started down the right path. Today, those good ideas happen faster than ever.

The Internet – and more specifically the communities of entrepreneurs that connect on the Internet – have brought the gestation period for good ideas from years to months. These communities are breaking down, combining and remixing new ideas at a pace never seen before and, in the process, morphing Steven Johnson’s idea of the “slow hunch” into the “fast hunch”.

From resource scarcity to abundance – Five years ago, start ups spent a lot of time, money and effort on hard stuff that didn’t matter. Functions like figuring out how to process payroll or build out a datacenter took up a lot of entrepreneurial attention. In the last few years, we’ve been able to tap into an abundance of computing and business resources that were previously scarce.

We’ve rightfully paid a lot of attention to advances like cloud computing that obviate the need for complex, expensive data centers. But it’s not just computing resources that are abundant. Inexpensive, valuable services have proliferated for just about every start up function, from self-service advertising to crowdsourced testing to sourcing raw materials from halfway around the world.

That means entrepreneurs can focus on the hard stuff that matters – building good products, helping customers and creating value.

The early stage virtuous cycle -Product development and customer feedback have become high priority items early in a company’s life. These two things form what might be called the start up virtuous cycle – the more you engage your customers, the better your product will be. And the better your product is, the more your customers will engage with you.

Part of pulling this off is just understanding and believing in the aforementioned “lean start up” and pivot religion that Eric Ries and Steve Blank have recently been proselytizing. Being smart at this stage helps a lot, but being fast and nimble is arguably more important.

The most important thing to do here is to figure out how to build a small team that is simultaneously capable of rapid product development and customer engagement. That’s no small task, given that hiring good people fast is the ultimate in start up oxymorons.

The unit of one – One of the more powerful dynamics shaping the start up community today is the pace at which certain start-ups are scaling. While Groupon and Zynga are two of the better-known examples, there are dozens of start-ups that have crossed the $1M per month revenue threshold in less than 2 years.

These companies have all identified their “unit of one”, a tactic they can repeat at will and at scale that yields predictable growth in a critical business metric such as revenue per customer. For many of these start ups, the unit of one often involves successfully arbitraging the cost to acquire a customer against the lifetime value of that customer.

Units of one can take other forms though, including something as old school as figuring out where to hire good salespeople from and how those salespeople will ramp over time. Whatever its form, a powerful unit of one will be measurable, repeatable at scale, and fast.

Financial rationalization – Many of these changes have forever altered how start ups raise and return money to investors. The market for early stage financings is clearly changing with angels writing $500,000 checks in place of the $5,000,000 checks that traditional early stage venture firms used to write. That smaller check makes sense when you think about the speed and velocity that start ups can now generate.

On the exit side, the monster IPO of the 90s has evolved into an acquisition. The number of IPOs, the breadwinner of choice in the 80s and 90s, is down 70 percent this decade.