Four years ago, my ad tech company was one of many digital media middlemen. With many millions in revenue, we were doing incredibly well, but as I looked towards the future, I was worried. Soon enough, I suspected, the smart money in ad tech would run from the media business and embrace software as a service (SaaS). Instead of selling inventory or audiences, we’d all be selling the technology that would let advertisers buy inventory or audiences themselves. I knew we needed to change course, but I couldn’t be certain where the new one would take us.
It’s hard to know when it’s the right time for your business to pivot, but experience plays a key role. In the case of my own company, I probably would’ve missed the window had I been too focused on our number-crunching. But for all the value of analytics—and there’s plenty—it’s important to remember that one of leaders’ best assets is instinct.
Learning to follow your gut takes time to develop, but many of the most successful leaders get that process under way early in their careers. I started off in sales and I make it a point to seek out “VITOs”–very important top officers–for networking, business advice, and perhaps most importantly, to pitch my ideas. I learned you don’t get a lot of time with these people, and you never get a second chance. So you learn to adjust your pitches in real-time, which means relying on instinct.
When it came time to pivot my ad tech company, I wish I could tell you my instinct screamed, “Andy, get out of the media business!” It didn’t. Instead, I found myself suffering through sleepless nights. I was feeling stress, more than the usual amount, and that stress was my first clue that there was a real problem. Stress can be bad for your health, but in the short run it can also be a good thing because it alerts you to danger before it strikes.
A former boss of mine once told me that I was often the lone contrarian in the group whenever an issue reached his desk. I’m especially proud of that comment now, because to be a contrarian, you have to stay true to your instinct. Relatively speaking, getting in touch with your instinct and learning to trust it is the easy part. Seeing it through is hard.
When I told my team we needed to pivot from media to software, I understandably got a lot of pushback. That resistance was productive. It forced me to re-examine the reasons why I felt that was the thing to do. I had to build a strong case for my position and nail down that case with concrete evidence, then present it compellingly to my team. But hearing just how “out there” my thinking was relative to the rest of the industry at the time also reminded me why we needed to take action.
Through that process, I was able to get a better grasp on a problem many people hadn’t identified yet, let alone articulated. Conventional wisdom can be difficult to overcome. If my thinking had been a little less contrarian–or worse, if I hadn’t been able to see the value of a contrarian mind-set–it’s likely the company would’ve just followed the herd. But following the herd isn’t leadership, and in some cases, waiting it out can be a fatal mistake.
At the time, it would have been easy to move slowly. But that would’ve meant death by a thousand cuts. When it comes to shifting market opportunities, moving slowly often isn’t moving at all.
We all face choices. If we’re lucky, those choices are binary ones. But we’re seldom so lucky. Looking back on the decision I made to get out of media and pivot to software, I think there were really three choices.
- Stay the course and continue to exploit an existing business model
- Change course and develop a new business model altogether
- Try to do both at once
At the time, I believed that number two was the right choice. But of course, that’s hindsight, and it could certainly have proved the wrong decision. Back then, plenty of smart people thought number one was the right choice. In retrospect, one choice was right and one was wrong, but the only truly terrible choice in the bunch was number three.
In fact, that final option was a false choice because it asks the impossible. You can’t head in two directions at the same time, although you can fool yourself into thinking that you’re covering all your bases when you try. On the other hand, staying the course and changing directions are both clear, valid choices.
You can be right or you can be wrong, but if you’re honest with yourself, your team, and your clients, then your organization will be able to move forward at full speed. But if you try to hedge, you’ll slow down relative to your competitors. Worse still, you won’t really be moving decisively towards the next opportunity on the horizon. You’ll get bogged down, simultaneously missing the opportunities of the present and failing to prepare for those of the future.
In other words, engineering a successful pivot requires being decisive. But the moment you decide to make a change, you have to begin to make it. If the change is merely a prospect, it won’t be concrete or meaningful to your team or your clients, and business as usual will continue apace. Soon enough, you’ll eventually run into the problem your instincts warned you about in the first place.
Andy Monfried founded Lotame in 2006 and has since been focused on building the world’s leading data management technology.