10 Founders Who Pivoted After Failure and Built Bigger Companies

Founders who pivoted after failure include Stewart Butterfield (Glitch to Slack), Kevin Systrom (Burbn to Instagram), Evan Williams (Odeo to Twitter) and Tobi Lütke (Snowdevil to Shopify). Each dropped the original idea, kept the one thing users actually wanted, and built a company far bigger than the first attempt.

Pivoting feels like losing. Mostly, it isn’t. In a 2026 survey of 200 founders by the startup studio Wilbur Labs, 81% said their company had changed direction from its original idea, and 42% said the pivot kept the company from failing.

Below are 10 real stories: what failed, what the founders changed, and what you can copy.

Founders Who Pivoted After Failure: Quick Summary

What Is a Startup Pivot?

A startup pivot is a deliberate change to a company’s product, customer or business model, based on what the market has shown. The company keeps its team, technology and lessons, but changes direction. A pivot is not quitting: founders keep the part of the idea that works and drop the rest.

Most pivots on this list were one of two types. In a product pivot, the founders keep the audience but sell something different (Instagram, Pinterest). In a platform pivot, they turn an internal tool into the product (Slack, Shopify).

10 Founders Who Pivoted After Failure

1. Stewart Butterfield: From the Game Glitch to Slack

Butterfield’s studio, Tiny Speck, spent years building Glitch, a browser-based multiplayer game. It shut down in late 2012. Players liked it, but not enough of them paid.

What survived was the chat tool the team had built to talk to each other across offices. Butterfield saw that the tool was better than the game. Slack, short for Searchable Log of All Conversation and Knowledge, opened to the public in 2014.

Here’s the part people forget: he’d done this before. Flickr, the photo site Yahoo bought in 2005, grew out of another failed game, Game Neverending. Same move, twice. The game was a cover story for the real product.

What you can copy: look at the tools your own team can’t live without. Those might be your next product.

2. Kevin Systrom: From Burbn to Instagram

Burbn was a location check-in app with plans, points and photo sharing. It was crowded with features and nobody could say what it was for. Systrom and co-founder Mike Krieger looked at usage and found people mostly used one thing: photos.

So they deleted everything else. What was left was a photo app with filters and fast sharing. Instagram launched in October 2010 and picked up its first 25,000 users in a day. Facebook bought it in April 2012 for about $1 billion, when the team was still about a dozen people.

The lesson is subtraction. Most founders add features when a product stalls. Systrom cut them until only the part people used was left.

3. Evan Williams and Jack Dorsey: From Odeo to Twitter

Odeo was a podcasting platform. Then Apple added podcast support to iTunes in 2005, and Odeo’s reason to exist mostly disappeared overnight.

With the company stuck, Odeo’s staff held brainstorming sessions. Dorsey pitched a service where people could share a short status with friends by text message. The team built a prototype, and Twitter went live in 2006. Williams later bought out Odeo’s investors so the team could focus on it.

Twitter went public in 2013. The pivot itself took a few weeks of side-project energy, which is a useful reminder: you don’t need a big plan to find a better idea.

4. Tobi Lütke: From Snowdevil to Shopify

In 2004, Lütke wanted to sell snowboards online. He tried the e-commerce software available at the time and hated all of it. Being a programmer, he built his own on Ruby on Rails.

The store never became a big business. The software did. Other merchants wanted it, so Lütke and his partners launched Shopify in 2006 and stopped selling snowboards. The company went public in 2015.

This is the platform pivot in its cleanest form. The snowboards were the test case, and the tool built to sell them became the company.

5. Andrew Mason: From The Point to Groupon

Mason launched The Point in 2007, a site where people pledged to act on a cause only if enough others joined. It had a good idea behind it and not much money coming in.

He noticed that the most successful campaigns were about buying power: groups of people getting a discount together. In 2008 he turned that into Groupon, a daily deal for local businesses. It grew fast. Groupon went public in November 2011, raising about $700 million at a valuation of roughly $12.7 billion.

Then it got messy, and it’s worth saying so. The stock fell sharply within two years and Mason was removed as CEO in 2013. A good pivot finds a business. It doesn’t guarantee that the business holds up, and Groupon is the case on this list that shows the gap.

6. Ben Silbermann: From Tote to Pinterest

Tote was a mobile app for browsing and buying products from catalogs. People used it to save items they liked. They didn’t buy much.

Silbermann paid attention to that gap. The saving was the product, not the shopping. He built a site for collecting and organizing images, and Pinterest opened as an invite-only beta in 2010. Early growth was slow and handmade, with Silbermann personally recruiting users one at a time.

Pinterest went public in 2019. Notice what he did: he didn’t ask users what they wanted. He watched what they did instead of what they said.

7. Max Levchin and Peter Thiel: From Palm Pilot Security to PayPal

Confinity started in 1998 as a company selling security software for handheld devices. That market was small. The team then built a way to beam money between Palm Pilots, and then, more usefully, to send money by email.

The email feature took off, partly because of eBay sellers who needed a way to get paid. After merging with Elon Musk’s X.com in 2000, the company became PayPal. eBay bought it in 2002 for $1.5 billion.

The founders pivoted twice and stayed in the same territory both times: moving value securely between people. That’s a good pattern. Pivots that stay close to what the team already knows are less risky.

8. Steve Huffman and Alexis Ohanian: From My Mobile Menu to Reddit

Huffman and Ohanian applied to Y Combinator in 2005 with My Mobile Menu, an app for ordering food from your phone. Paul Graham turned down the idea but liked the founders, and he pushed them toward something closer to a front page for the internet.

They launched Reddit that summer. Condé Nast bought it in 2006, and Reddit became a public company in March 2024.

It’s a rare case where a pivot came from an investor’s rejection rather than market data. The takeaway: when smart people reject your idea but back you, listen to the second part more than the first.

9. Justin Kan and Emmett Shear: From Justin.tv to Twitch

Justin.tv began in 2007 with Kan wearing a camera and streaming his life around the clock. It got attention, but a stunt only holds an audience for so long.

The founders opened the site so anyone could stream. One category grew faster than the rest: video games. In 2011 they spun that out as Twitch and later shut Justin.tv down. Amazon bought Twitch in 2014 for about $970 million.

They followed the demand. They didn’t defend the original idea of one man’s life on camera.

10. Chad Hurley, Steve Chen and Jawed Karim: From a Dating Site to YouTube

By the founders’ own account, YouTube began in 2005 as a video dating site where people would upload clips introducing themselves. Hardly anyone did.

So they opened it to videos of any kind. People uploaded everything: pets, concerts, homemade tutorials. Google bought YouTube in October 2006 for $1.65 billion in stock, about 18 months after the domain was registered.

The narrow version of the idea had a ceiling. The wide version didn’t.

What Founders Who Pivoted After Failure Have in Common

These ten stories aren’t identical, but four patterns keep showing up.

They kept what users already used: Instagram kept photos. Pinterest kept saving. Slack kept chat. Nobody started from zero.

They built from their own needs: Slack and Shopify began as tools the founders made for themselves. If you need it badly enough to build it, others might too.

They followed behavior over opinions: Silbermann watched what people did with Tote. Systrom looked at what people did in Burbn. Surveys and feature requests come second.

They stayed near what they knew: PayPal’s team stayed in payments and security. Butterfield stayed in communication and games. Most successful pivots are a step sideways, not a leap.

There’s also a warning in the list. Groupon’s story shows that a pivot can make a company big without making it durable. Finding demand is the first job. Keeping it is a different one.

How Do You Pivot a Startup?

To pivot a startup, find what users actually use, decide what to cut, test the new direction cheaply, and commit once the evidence is clear. Here are the steps:

1. Review your usage data to see which single feature or customer group gets real, repeat use.
2. Talk to 10 to 20 users about what they do, not what they want.
3. Write down what you will stop doing and what you will keep.
4. Build a small test of the new direction in weeks, not months.
5. Set a clear metric and a deadline for the test.
6. Tell your team and investors early, and commit fully if the test works.

A pivot goes wrong most often at step 3. Founders keep too much of the old product, and the new idea never gets a fair test.

Signs It’s Time to Pivot

You don’t need a crisis to consider a pivot. These signals usually show up first:

• Growth has stalled for several months despite real effort.
• Users love one feature and ignore the rest of your product.
• Customers keep using your product for something you didn’t intend.
• Your best-performing channel or customer type isn’t the one you planned for.

If two or more of these sound familiar, that’s reason to run the test above. It isn’t reason to panic.

FAQs About Founders Who Pivoted After Failure

What is a pivot in business?

A pivot is a planned change in a company’s product, target customer or business model after learning that the original approach isn’t working. The company keeps its team and what it has learned, but changes direction. Slack, Instagram and Shopify are well-known examples.

Why do startups pivot?

Startups pivot because the original idea doesn’t find enough paying users, the market is too small, or customers use the product differently than planned. Pivoting lets a company redirect existing work toward demand it has already seen, instead of shutting down and starting over.

Is a pivot the same as failing?

No. A pivot means the first plan failed but the company continues in a new direction. Failing means the company stops. In the 2026 Wilbur Labs survey, 42% of founders said a pivot was what kept their company from failing.

Which famous companies started as something else?

Slack began as the game Glitch, Instagram as the check-in app Burbn, Twitter as the podcasting platform Odeo, and Shopify as the snowboard store Snowdevil. YouTube started as a video dating site, and Twitch as the lifecasting channel Justin.tv.

How many startups pivot?

The 2026 Wilbur Labs survey of 200 founders found that 81% had pivoted from their original idea. That’s a small sample, so read it as a signal and not a fixed rate. Pivoting is common among startups, not unusual.

The Takeaway

Every company on this list started with a failed or weak first idea. What set the founders apart was the next move: they looked at what people really did, cut what wasn’t working, and put everything behind the part that was.

If your current idea is stalling, look at your own usage data first. The bigger company might already be hiding inside the smaller one.

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