125: The Double Loop Pivot

125: The Double Loop Pivot


Why The Double Loop Pivot Is the Best Way To Explore Changing Your Business + Strategies for Managing ADHD

Cultivating Resilience is a newsletter that helps innovators navigate change and bring new product and ideas into world. It's published by Jason Shen, a resilience coach, product manager, 1st gen immigrant, ex-gymnast, and 3x startup founder.

🧠 The Double Loop Pivot

An excerpt from Align: Why The Double Loop Pivot Is the Best Way To Explore Changing Your Business

Pivoting is a very difficult thing because it involves admitting that your prior conviction was mistaken for some reason or another. While that’s totally normal and expected in a startup, it still needs to be handled with care.

If you just sort of wing it, some of the people who believed in you — your cofounders, investors, team members, customers — may feel they can’t count on you any more and stop trusting you, which could quickly erode whatever assets you still have (brand, team, funding, etc).

What you need is a structured way to move from losing conviction in one idea to gaining conviction in another.

What you need is the Double Loop Pivot.

The Double Loop Pivot is a format for executing a pivot that aligns all those stakeholders and will massively increase the chance your company succeeds compared to winging it.

I developed the Double Loop Pivot after attempting two pivots of my own, the first one being a total failure, and the second one being a moderate success which led to a talent acquisition of my startup to Facebook/Meta.

What to do when you’ve lost conviction

As we discussed in the previous segment of this series, doubt is the most dangerous threat to a startup. The way to deal with doubt is to address it head on.

Are you no longer convinced the current A) Problem you’re solving B) Approach to solving it or C) Personal passion and skill set for this startup is enough to drive success?

If so, you can either pivot or choose from four other options.

  1. Pivoting — Our focus for today. This is where you change a major part of your business (the problem you are solving, who you are solving it for, the product/service you’re building, or the way you’re delivering that product/service) but retain the original corporate entity and investors
  2. Getting acquired — This is where you try to sell your company to a competitor in the space that could use some part of your core assets: product, brand, customer base, team, or proprietary IP. In some cases it can be combined with a pivot if your new business is significantly different.
  3. Leaving — Sometimes you can lose conviction but your cofounders still believe firmly that the original premise is correct. Often that might be because your personal interest in the company has waned even though the core business is still doing well. In that case, it might be better to leave or have your cofounders buy out your equity (to another founder/team member).
  4. Spinning out — If your company is a bit bigger and you realize that both a legacy business and a new business can emerge out of this company, you could try to do a spin-out. This is when you form a new corporate entity and provide it with employees, relevant IP, and funding. The old firm continues to operate and retains some equity in the new firm. This is complicated and pretty rare.
  5. Shutting down — If you don’t have a lot of money left and you don’t really have the energy to try to incubate a brand new business, you might just want to shut down and walk away. Take up a corporate job that pays better and has less day-to-day stress, or do some consulting work. Some investors also prefer this approach to pivoting if the idea is very different (like Fred Wilson).

Bringing people along

Let’s say you decide you have the runway and energy/motivation to explore and possibly pursue a pivot. What’s next?

Assuming all the founders and company leaders are aligned, you could immediately tell everyone to stop what they’re doing and start working on the new thing. And that might work provided you have an extremely scrappy and resourceful team and a very clear idea of what you want to do next, but it could also backfire.

Work is an important part of people’s lives and working at a startup is inherently more risky than a corporate job. So walking in one day and being told that everything is changing can really be jarring.

Investors are more used to seeing companies pivot, and you’re only one of the companies in their portfolio, so it doesn’t affect them as much as their employees. Still, they are a key stakeholder who might give you more funding or intro you to new investors for your pivot, so you don’t want them to feel blindsided about the pivot.

This is especially possible if you’ve been silent for a long time or if the last time you talked you were very gung ho about the current business. They talk about your business (as your investor) to other people and hate to feel foolish in not knowing things have totally changed.

So what do you do?

A old joke about breaking bad news

This is a very old joke and I don’t know if there’s an official source but I found this version from (very aptly) an IT leadership blog:

A man left his cat with his brother while he went on vacation for a week.

When he came back, he called his brother to see when he could pick the cat up. The brother hesitated, then said, “I’m so sorry, but while you were away, the cat died.”

The man was very upset and yelled, “You know, you could have broken the news to me better than that. When I called today, you could have said he was on the roof and wouldn’t come down.

Then when I called the next day, you could have said that he had fallen off and the vet was working on patching him up.

Then when I called the third day, you could have said he had passed away.”

The brother thought about it and apologized.

“So how’s Mom?” asked the man.

“Well, she’s on the roof and won’t come down.”

The lesson: If you can, break bad news sequentially, so your audience can better anticipate and process it. And of course, do so in a way that is contextually relevant. That’s what we do with a Double Loop Pivot.

Read the entire piece on Medium (skip the paywall with this link)

🖼  The DLP In a Nutshell

Recapping the idea in a nutshell: you need two loops so everyone gets to feel aligned and bought into the change before it happens.

👉 Strategies for Managing ADHD

A lot of folks reached out to me after last week's issue about my experience getting back on meds for ADHD so this must be a topic that interests this audience! Today I'll share 3 of my favorite strategies from a thread by one of my fav accounts: @adhdjesse

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💡Cultivating Resilience is a newsletter that helps innovators navigate change and bring new product and ideas into world. It’s published by Jason Shen, a resilience coach, product manager, 1st gen immigrant, ex-gymnast, and 3x startup founder. Welcome new readers from Hacker News! Thanks for joini…

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