The Story Behind How Pocket Hit 20M Users with 20 People: A Brief Guide To Startup Pivots

The Story Behind How Pocket Hit 20M Users with 20 People: A Brief Guide To Startup Pivots

In the world of startups, it's often assumed that the size of a team directly correlates with the scale of impact they can achieve. However, Pocket, a popular app for saving articles and videos to read later, proves that this is not always the case. With just 20 people, Pocket managed to reach an impressive milestone of 20 million users. So, how did they do it?

One of the key factors behind Pocket's success is their razor focus. Founder Nate Weiner couldn't fathom having a team as large as Evernote, who employed around 60 people when he first started talking to them. He believed that with more people, it becomes easier to work on tasks that are not critically important. With a smaller team, however, it's much harder to deviate from what truly matters. This laser-like focus allowed Pocket to stay on track and ensure that every effort was dedicated to the most essential tasks.

Furthermore, Pocket's small team allowed them to cultivate a concentrated culture during their formative years. The saying in tech that 80% of a company's eventual culture is determined by its founder rings true for Pocket. Weiner's personality traits of trust, scrappiness, and ownership permeated the company's culture, creating a strong sense of identity and purpose. This focused culture was able to form more quickly without complex hierarchies getting in the way.

Another advantage of being a small team is the ability to make people outside of the company feel like part of it. Pocket's team constantly asks themselves, "How can we make it simpler for all involved?" By simplifying their product and not requiring people to reinvent the wheel, they were able to create a user-friendly experience that resonated with their audience. This inclusivity and ease of use helped Pocket grow its user base organically.

Now, let's explore the concept of startup pivots and how they can contribute to a company's success. At some point, founders may find themselves at a crossroads where they need to make a strategic decision about the future of their company. There are four types of pivots that startups commonly consider:

• 1. Pivot inside your existing market: Sometimes, founders are hesitant to give up on their original product or venture into new areas. However, it's important to remember that bad product/market fit is one of the main reasons why startups fail. If you find that your current market is not receptive to your product, consider pivoting within the same industry. This allows you to leverage the industry knowledge you've built while addressing a different segment or need within that market.

• 2. Reposition or edit down your product: If you discover that your product is seeing enthusiastic adoption in a specific user base or use case, it might be wise to focus all your attention on that area. By amplifying or narrowing down your product's focus, you can better cater to the needs and preferences of a specific audience. However, it's important to be mindful of the time, attention, and potential confusion that maintaining the original product may cause.

2b. Market pivot or product repositioning: In some cases, a complete shift in market or product positioning may be necessary. This type of pivot often involves launching a tool or service that you used while building your own company. By addressing a need that you personally experienced, you can identify a real product or market need. However, be prepared for the challenges of rebuilding your team and potentially laying off employees who may not align with the new direction.

• 3. Restart the company: Sometimes, a pivot may require significant changes to the founding team or a shift in investor support. In these cases, it may be more beneficial to restart the company rather than trying to navigate complex equity allocations or disagreements. By returning remaining cash, forming a new founding team, offering a new portion to investors, and going after a new mission, you can create a fresh start with a core set of true believers.

During a pivot, it's crucial to manage the various stakeholders involved – co-founders, employees, investors, and customers. Some employees may rally and do whatever they can to support the company through the transition, while others may become fearful or lose belief. In such cases, it's important to consider options like restarting the company, buying out investors who no longer wish to be involved, or even selling the company if necessary. The key is to let go of the past, focus on creating a bright new future, and maintain transparency and fairness throughout the process.

In conclusion, the story behind Pocket's success with just 20 people teaches us valuable lessons about the impact of team size and focused culture. Additionally, understanding the different types of startup pivots can help founders make strategic decisions about the future of their companies. Here are three actionable pieces of advice to keep in mind:

• 1. Embrace razor focus: Whether you have a small or large team, maintaining focus on what truly matters is crucial. Avoid getting distracted by tasks that are not critically important and ensure that every effort is dedicated to the most essential objectives.

• 2. Cultivate a strong culture: Founders play a significant role in shaping a company's culture. Start with a few choice ingredients and let them simmer together, creating bonds and a common world view without complex hierarchies in the way. A concentrated culture can help align your team and drive success.

• 3. Be open to pivoting: If you find that your current path is not yielding the desired results, consider the different types of pivots available to you. Whether it's focusing on a specific market segment, repositioning your product, or even restarting the company, pivoting can help you adapt and find success in a changing landscape.

By combining the lessons from Pocket's story and the insights on startup pivots, founders can navigate the challenges of building a successful company with a clear sense of direction and purpose. Remember, it's not always about the size of your team, but rather the impact you can make with the resources at your disposal.