Keys To Successful Business Pivots
Eric Reis coined the term pivot in his book The Lean Startup to describe the steep course corrections that many companies undergo to survive and grow. Today, nearly every startup and small company will go through more than one pivot on their way to maturity.
In our last episode, Rob Hegarty and I talked about the need to be constantly aware of market shifts in the fin-tech space so you can pivot your company in time, and take advantage of new opportunities.
I wanted to explore this theme in more depth more, so I reached out to Carson Conant, the founder and CEO of Mediafly. He’s got quite a bit of experience leading market and customer-driven business pivots.
Carson started Mediafly in 2006 as a podcasting app. He has successfully executed three dramatic pivots in the company’s 11-year history. He moved from audio to video, shifted from a consumer focus to a enterprise focus, and shifted from strictly video and content distribution to an extensible sales enablement platform.
In our conversation, Carson shares 4 keys to successful business pivots and gives detailed examples of how he used these keys to build his company. It’s working. Mediafly has been on the Inc 5000 list of fastest growing private companies 4 years in a row! They’ve also landed some of the biggest enterprises in the world as clients, and they’ve grown those accounts over time.
In the podcast, Carson shares stories of Mediafly’s pivots and the keys to successfully pivoting. Those include:
- Hiring the right people
- Validating ideas and opportunities with customers
- Making failure safe
- Dropping the good to get to the better, even when it means walking away from paying customers.
Michael Porter said, “The essence of strategy is choosing what not to do.” Mediafly’s story definitely offers proof of this.
So listen in or read the transcript below. I hope you enjoy this episode and would value your feedback.
Do you have ideas for future guests? Please send your suggestions to us by .
Edited Transcript for Business Pivots: Making The Tough Choices
Candyce Edelen: Carson, thank you so much for joining me today. I have been so excited to talk you. I’m really glad to have you on the show.
Carson Conant: Yeah. Thanks for having me.
Candyce: As you’ve built Mediafly over the course of time, you’ve gone through some pretty serious pivots. I’d like to talk to you about that process today — how you pivoted the company and how you’ve turned it into what it is today. Let’s start with how it got started.
Carson: I came from an entrepreneurial family. I always knew I would start a company. I just didn’t know what it was. I had the idea for Mediafly after reading Jack Welch’s Straight from the Gut, and Jim Collins’ Built to Last, and Good to Great on a boat trip.
Candyce: All at once?
Carson: All pretty much at once, back-to-back, and came back from that thinking, “I’ve got to start a company, and the core of my company is to be the people that I hire,” versus my previous thinking, which was, “I need to be the smartest guy in the room and come up with some idea.” My original idea was to create a podcast distribution platform when podcasting was becoming big. That’s what we started off doing. I set out to do that and hired somebody great to help me start that company.
Candyce: Were you a big fan of podcasts at the time? Is that what made you think of that?
Carson: The funny thing is I wasn’t. But I was a big fan of the idea of having some sort of device that would cue-up content for you based on what you were interested in. An uncle of mine recommended podcasts. When I discovered this free library of thousands of different things — everything you could possibly imagine — I realized that’s what would be the source of my content. So that my job as a technologist would be: How do I organize and package that content in a way that would make sense and be usable to a regular person?
What I found with podcasting was that it felt techie. It still feels that way to me. You download it, you delete them, you add them. It’s a very manual process. What I wanted to create was more of a radio experience. I can tune into a series of news content or politics or sports or whatever I’m into. Then I get cued-up content based on what was out there. This technology would be pulling from all of the different podcasts that were available. What I liked or what I didn’t like would then determine what I got next. That was the original vision for the company.
Candyce: All right. You start out from the podcasting. How long did it go before you started your first pivot?
Carson: When we started out originally, we built this core technology. The first job was aggregating an index of all the podcasts out there. We were very successful as a podcast aggregation portal. We had a million users at one point. We were integrated into a lot of consumer electronics devices. If you bought an Onkyo home stereo that was internet-connected at the time, it would have a Mediafly button.
Candyce: What year was this?
Carson: This was 2007 until 2009. If you bought, I think it was Logitech. Logitech had a bunch of different devices that you could use to tune into podcasts. There would be a Mediafly option there. Technologically it worked and people loved it. What was interesting was, it wasn’t a big money generator yet. Our plan was to grow, then start to interstitially include advertising. Later we would track what was being listened to and by whom, because they were actually using our application to consume the content, and sell that data back to the podcasters.
Candyce: I would love to have the stats from my podcast.
Carson: I know. It was still a brilliant vision, I think.
Candyce: It was, yeah.
Carson: It was just ahead of its time. But luckily for us, we had these relationships with hardware companies like Roku. Once video started happening, enterprises went to the hardware companies asking, “How can we use this [platform] to distribute video content for different purposes in a private, controlled way, particularly on a television or on some sort of mobile device?”
That first company was RE/MAX Television Studios. Roku said, “Well, we provide hardware and Mediafly is one of our early partners,” and so they sent them to us. We got that partnership because we were a rich source of podcast content. Their interest was figuring out how to publish, host and distribute content like a podcast but for private distribution.
Candyce: Oh wow.
Carson: Fortunately, it was a big enough pain, and once we found out how much these companies were willing to invest in it, we shifted the focus of the company pretty quickly.
Candyce: Suddenly there’s a revenue model. Right?
Carson: Yes. With the mortgage invested in this and credit cards maxed out. I had two new kids at this point. Relatively new marriage.
Candyce: Stressful time.
Carson: It was a stressful time. It was great that the core team that I had put together, and the technology that we had put together was perfect for this new use case. It fit a big, growing need. It was a pretty nice pivot. Now, it took us a while to figure out whether the enterprise side was paying the bills until the consumer side catches up? Or is the consumer side what made us relevant and we should chop that off like a dead limb? We ran that in parallel for a couple of years. It became so obvious that the enterprise relationships and the challenges we solved there were so much more interesting and valuable, and so we phased-out that consumer stuff.
Candyce: In 1999, I was working for a company called Qubit Technology. Basically what we were trying to build was an iPad (or mobile tablet). But we didn’t have the mobile data that you have today.
We took apart a Sony Vaio computer, put it in frame that we’d had custom designed so it handled like a handheld tablet. Then we stuck a touchscreen on top of the Vaio. It ran Windows in the background, but it was buried so all you saw was Explorer. We would show it to people as our prototype.
The CEO really wanted to build a consumer-oriented company. He wanted a device for his mom to be able to get on the web and not have to struggle with technology. This was back when AOL was trying to be the “walled garden.” His idea was that we would make money on every purchase someone made on the device. But they were going to cost us $800 each to manufacture. He wanted to sell them for $299.
I was in business development and was getting all of these orders from corporations. These people wanted to buy them for insurance adjusters to go out and fill-out the forms online. Right? They didn’t want our walled garden. They just wanted a device. They kept saying, “We’ll pay full price for this. We don’t care if it’s beautiful. We don’t want your walled garden, but we’ll pay $800, $900 for these devices.” I could not get the CEO to make that shift.
Carson: Wow. He would have been ahead of his time.
Candyce: It would have been really cool. Disappointing, but I did get to be on CNN showing it off so that was cool.
Candyce: But anyway, going back to your story. You guys actually figured this out and made this shift.
Carson: I’m not sure how much wisdom there was. I think it was desperation and opportunity.
Candyce: You needed that income.
Carson: I think it was just the delusional optimism of this great company I was putting together and really the people that I had hired. I can’t take credit for the pivots we’ve made. Along the way, at each one of these pivots, my immediate reaction is to ask: How does this give me an opportunity to hire some great people that can help me take advantage of this? With this next pivot, I actually had to let go of my first person. I let go of my original CTO who was a really brilliant technologist. I was looking for essentially a new leadership team that was really focused on selling to the biggest companies in the world.
And delivering technology for the biggest companies in the world and running a company that would do this — that was very different than the vision I had originally set out. I hired the three co-founders for the second generation of Mediafly. That team, we together, figured out how to make this enterprise pivot and made it successful.
Candyce: What year was that?
Carson: That pivot took place around 2009 to 2011. But it was obvious pretty quickly that the enterprise was where we were going.
Honestly, it was much more fun. Because when you’re doing a consumer-facing thing, you add a little bit of value to a lot of people’s worlds. The customers are very far away. You don’t get this close connection with them.
Candyce: You don’t get the feedback.
Carson: You don’t get the feedback. Or, if you do, it’s lots of little feedback. Right?
What I found that was so exciting about the enterprise space was you’re solving a really big problem. They’re paying us a significant amount of money, and we’re adding a lot of value to somebody’s daily life. They literally can’t do their daily life without it.
You become critical to the company and critical to the individuals using it. That was much more fun.
Still to this day, my favorite thing is hearing what we’re doing for the biggest companies in the world and the problems we’re solving for these companies.
Candyce: That’s really cool.
Carson: Yeah. I love it.
Candyce: That’s very cool. Then there was a video pivot. What that at the same time?
Carson: That was kind of the same time. When podcasting moved from audio to video and the video iPod came out, we realized, “Uh-oh, this is not an audio play.” We originally were named Audiofly. I switched the name to Mediafly, and we started to get good at video.
That’s actually one of things that made us so powerful. Video is not as easy as audio. It’s much harder than documents. The fact that we had built a transcoding capability so we could take in lots of different video codecs and make them play across all these different devices made us really unique. That is really why these enterprises came to us.
There was a pivot a year into Mediafly, when we pivoted from audio to video. That’s really what enabled this enterprise move for us.
Then the next big pivot was we didn’t know if our role was to be content distribution of any form. We had audio, we had video. We also had added documents at this point, and companies could use this to distribute collateral securely amongst their people on set-tops, on mobile devices, on laptops, and on the web. For a little while, we were just content distribution. We were a platform.
Candyce: Were you sales enablement at that point? Is that what they were doing?
Carson: No. We were indifferent to what users were doing. We had the TV and movie studios using us for distributing dailies and rough cuts to screeners. That’s a use case that they still use us for.
They were using us for training materials. Some companies were using us to distribute content for their end consumers. Some people were using it for sales collateral. We didn’t really care. We were indifferent.
What was obvious as we moved along was that there’s a need to put high-quality, relevant, up-to-date sales collateral in the hands of salespeople. Particularly at really big companies, this was a big problem they were facing. They still face that today at companies that don’t use a platform like Mediafly.
This became an obvious thing for us to focus on. It was fun. We got to bridge the gap between marketers and sellers. Marketing people could manage sales collateral in a solution like Mediafly knowing that it’s going to be in the hands of their salespeople within seconds.
Candyce: Immediately. Right? It’s accessible and findable.
Candyce: I think that’s the biggest problem for content today is it’s not findable by the sales team.
Carson: Exactly. It’s not findable and if they can find it, usually that’s done the night before. Then they’re modifying it in PowerPoint and then they’ve orphaned that from the core material forever.
Candyce: Right. Now I’ve got to go find those edits that I made for the next meeting because something went over really well, and it’s “Oh, shoot. Where did I put that?”
Carson: Right. Anybody in sales knows, the moment you go into a meeting, it never goes the way you planned.
You either have to build a really big presentation that has all the different permutations of where this conversation could go. You get a question, and then have to either say, “I’ll get to that on Slide 35, so let me either jump to that or wait until the end of the meeting.” We came from this podcast world where the idea was about letting people jump around. I might want to listen to the next segment, or I might want to switch from politics to sports. We had always had this mentality of quick shifting. And it has to be a consumer-simple experience that my mother could use.
We brought that to the enterprise, and still to this day, I think it’s one of the unique things we bring. We design consumer-feeling applications for enterprise people.
Candyce: So salespeople can stop taking their 120-slide deck and putting their audience to sleep with all of these irrelevant slides before they get to the one slide the audience want to see.
Carson: Exactly. And Marketing can stop creating 120-page decks. They can create lots of different one to three-page presentations. Then in that scenario where I didn’t think I was going talk about x, y, and z, now I can just jump over to that piece. It’s all available offline. It’s all built into the application.
Candyce: You don’t have to have a pre-built deck.
Carson: Yeah. Exactly. I should be able to swim around like a swimming pool and move wherever I want to. It shouldn’t be this rigid flow. Right?
Candyce: Right. As if I was on a whiteboard. Oh, you want to talk about this? Okay. Well, then let me erase what I just put up there and-
Carson: Exactly. A lot of companies will spend a lot of money training whiteboard presentations. The reason why they do that is they want something that feels more organic than going from one page to the next page, to the next page, to the next page. We allow the movement through content to feel organic. It goes the way that the conversation’s going.
I think Forrester said, only 8% of B2B buyers think that the sellers add value. That’s crazy. Right? 92% don’t add value. The reason is that they come in with a prepared notion of what they want to talk about, and they’re relatively rigid on what else they can talk about.
Candyce: Relatively? I don’t think so. I think they are rigid.
Carson: Right. It’s obviously not what’s important to the customer that they’re here to talk about. We shift that on its head. You come in with a hypothesis of what you think you want to talk about, and you’re prepared for your meeting. You should be doing some discovery, but if based on what you find out, or in the event that the buyer wants to go off in a different direction, ask about different products, you should be able to pivot and talk about that.
Candyce: When I’m selling, I use a Q&A process. Tell me more about this. Tell me more about this. But I don’t tend to bring decks to a sales call for that exact reason. I don’t want to get into a rigid presentation mode. I’d rather be on the whiteboard. I’d rather engage the client. I always know if the client grabs the pen, I’ve got them.
Carson: Yep. Good point. Yep.
Candyce: But sometimes you do need those prepared slides. It’s always so clunky in PowerPoint to go find the right slide.
Carson: Exactly. I think the next wave of where we’re going — I’m not sure if you’d call it a full pivot, but it’s definitely an evolution — is helping companies move to a much more interactive sale. For example, if I’m showing you what’s relevant, more of those pages should be dynamic. If I’ve got a graph, I can enter some real data about you. Or I can grab sliders and move them up and down, so that the actual content feels much more like a whiteboard. But it’s something you can never do on a whiteboard.
Candyce: Right. Tell me more about how that evolved? Because now you’re talking about another technological pivot. Right?
How did you make that shift to start creating this? It was a technological pivot to start adding all that other functionality. Right? What was the driver behind that?
Carson: I think it was a combination of luck and opportunity. We started to realize that companies wanted very different experiences for their different use cases. In the podcast world, the way that two people navigate content is probably going be very similar. But we found that PepsiCo wanted a very different way of navigating their content than what Disney wanted. If we create a product to be super-configurable, it could become very fragile. Our CTO, Jason Shaw, decided to build a layer of extensibility on top of Mediafly, so that they can get exactly what they want instead of having to be constrained to what we had come up.
What then happened was, four companies, PepsiCo, MillerCoors, Disney, and NBC Universal started doing really interesting things and building interesting sales stories on top of Mediafly. They showed us this interactive selling.
We looked at that and at the results they were getting. They had a great idea. Without a platform like Mediafly with this extensibility, they couldn’t be executing this idea. So what if we doubled down on that extensibility and brought that to all the companies that didn’t have this vision yet?”
That’s really what we focus on now. We take an incredible product out of the box that solves that main content problem. But then, we create this layer like an app exchange model, like Salesforce.com. So companies can build exactly what they’re looking for. Those companies really taught us about what we now call “evolved selling.” We looked at the commonalities amongst these companies and what they’re doing that’s special. Then we found ways to package that up and take it to the rest of the market.
Candyce: It sounds like every single pivot has been customer-driven. You find an opportunity. You figure out how big the opportunity is, and you decide, “Okay, we’re going there.”
Carson: Yep. A lot of companies make big mistakes by investing in what they think the market needs versus paying attention to what the market actually needs and quickly moving there.
Candyce: How do you go about that? What was the process you used to figure out what the customer needs? All of your pivots were customer-driven and clearly you were listening. How did you go about listening? I see a lot of companies struggling to listen broadly enough. They’ll listen to one customer, and go down a path before listening to enough customers to be sure there’s actually a business opportunity.
Carson: I’m not sure if I know exactly. I can look back on our history and tell you what happened. We’re a Chicago-based, Midwest, humble company with a bunch of great technologists.
We don’t assume that we know everything. We assume we’ve got great technology and ideas. We put them out there in little MVP (minimum viable product) fragment forms. But we’re not delusional enough to think that we’ve got all the answers. We wait to see what people pull on. If they pull on them, then we invest quickly and heavily in those things.
I think what that does is it means that customer ideas are not competing with nine other things that we’re trying to build because we think this is what the market is going to want. Instead, we just have this iterative, minimum viable product methodology.
We used to try and build things and sometimes get frustrated when we built something that didn’t get used. Then we’d see that the customers want these other things. So we decided that until a customer really pulls on something, we’re not going to build it.” But we are going to put these ideas out there in a way that customers can respond to.
Candyce: You let them play around with it?
Carson: Play around with it, whether it’s in slides or whatever. Then if they grab onto an idea, if anybody buys it, then we have enough resources and speed that we can deliver it before they really need it. We designed our whole company around a sort of, empathetic pragmatism.
Candyce: Empathetic pragmatism. I like that.
Carson: Then you need the ability to invest quickly in what they pull on.
Candyce: That’s like Disney Imagineering just storing things up. Don’t throw anything away.
Carson: Yeah. Exactly.
There’s some classic examples where I was absolutely convinced that something I wanted to do was the next big thing. Our internal team is strong enough, and I’ve delegated enough of the authority so that they could tell me, “Nope, we’re not doing that, Carson. You got to find somebody who wants to buy it first.”
Then I would go around and suggest things to customers. Some people might say, “I love that.” But if they wouldn’t buy it, we didn’t build it. It turns out it was the right move not to do those things.
Candyce: Right. It could be fun to do, but does the customer actually want it?
Carson: Exactly. I think there’s a lot of times where you’ll get validation. We partner with some companies in this cycle of investing whenever companies say, “If you just had this, we’d buy from you.”
Candyce: Oh my gosh. Sales people are renown for going there, too..
Carson: It’s tough as a technologist because you’re like, “I can do that. I can totally do that.” Right? Some of these projects sound really fun. Figuring out what not to do I think, as technology company, is almost more important than figuring out what to do.
Candyce: I think that’s fundamental to strategy.
Carson: I agree.
Candyce: Fundamental to any strategy is deciding what you’re not going do.
Carson: That was another big thing. The team that I put together has been very good at stopping doing things that used to be working but no longer are. We’ve been willing to say “no” to new customers that we felt were a distraction. We’ve been willing to let certain segments of customers go away instead of trying to keep that revenue, because it was a distraction. This allowed us to really focus on where we’re going versus having all these threads that were untamed.
Candyce: I get the impression you also have to make failure safe. Because letting those clients go feels like failure, but at the same time it needs to be safe. Right?
Carson: That’s a good point. Again, I don’t know if this is Chicago or our Midwest roots, but failure is very safe here. We have had a couple of failures, particularly I the early days, where I got called on the mat and had to fly across the country, go to a customer and make apologies.
There was never a time where we blamed the people who were responsible or blamed the technology. When you’re hiring stunningly brilliant people, you know if something goes wrong, it’s not for lack or effort or intention or anything. This is a team. We’ve built a team where everybody goes into battle with such confidence in everybody else that if something happens, we feel it could happen to anybody.
Candyce: And let’s talk about it. Let’s openly admit that something didn’t work. Let’s do a postmortem and really open it up. We gain so much wisdom in our business from failures, that we’re really open about them. We know we need to say, “Let’s examine this. Why did this not work?”
Carson: Right. Yeah.
Candyce: You can make lots of lemonade out of that.
Carson: Yes. Actually with some of our best customers, we have little failures all along the way. If you have a phenomenal team focused on customer success, you can turn little failures into big successes. I think along the way when clients saw how we responded to challenges, they weren’t freaked out when the next one happened.
Candyce: Right. They’re willing to take risks then?
Carson: Yes. They became confident that Mediafly will solve this. If there’s any challenges, they can call the CEO directly and I’ll help this, but they probably don’t need that. Ultimately, the company and the relationship is stronger for it. I think that’s why we’ve been able to grow our accounts, in a lot of cases, to ten times what they originally started at.
Candyce: That’s really cool. If you sum it up in terms of what makes for successful business pivots, I know that you’ve talked about people. We’ve talked about failure and listening to the customer. Can you just …
Carson: Yeah. I think you hit it on the head probably better than I could have summarized it. But I think it’s having the right people so that when an opportunity comes along, they’re open to new things. I think if people are rigid to thinking they know where the market needs to go, then they’re not open to new ideas.
Then, being willing to stop doing things you were doing before. Because a pivot doesn’t work if you’re still dragging along the old thing. You really have to break free from what had been there before. I think we’ve done that a couple of times, and I think in each place that was critical.
Candyce: On occasion, you’ve had to leave some people behind and bring on new people.
Carson: Yeah. I think particularly in those early days. When we made a big pivot such as going from a consumer to enterprise focus, I realized I needed to hire some different people. Or at least I needed to surround myself from a leadership standpoint with people that had expertise that I didn’t have.
Honestly, my favorite thing in the world is hiring. You know the cliché “hire people smarter than you”? I absolutely love hiring people smarter than me. I think I’m uniquely talented at being the conductor of really talented and in some cases high-maintenance people. But it’s amazing what they do when you can get them all working together and going in the same direction.
Candyce: Right. That’s really cool. Then listening to the customers. Do you guys have a process now to make sure you’re listening to the customers other than what you said about putting out those MVPs?
Carson: I think the first thing we do is cultural. We hire empathetic people. That’s a term we use a lot here. When that’s part of your culture, when you bleed for your customers, it just means you’re listening a lot.
I think that’s important and also internal communication. When somebody hears something on the customer success side, they need to be able to float that to product or to engineering. Having that inform the future, I think is critical to success.
Candyce: Right. I think we’re out of time, Carson. This has been such a fun interview. Thank you so much for joining me on this.
Carson: Yeah. I appreciate it. Thanks for having me.
Candyce: You’re our first in-person interview by the way, so thank you.
Carson: All right. Great. Thank you.
Takeaways From This Episode
The four themes I took away from this are the importance of:
- Hiring the right talent – people smarter than you, people with empathy – and empowering them to work as a team.
- Validating ideas and opportunities with customers who are willing to pay for the enhancements.
- Making failure safe and openly discussing and learning from mistakes.
- Dropping the good to get to the better, even when it means walking away from paying customers.
Michael Porter said, “The essence of strategy is choosing what not to do.” Mediafly’s story demonstrates the importance of leaving the old behind to embrace the new and carefully deciding what not to do – especially not chasing ideas that aren’t validated by customers.
I hope you’ve enjoyed this episode. If you have ideas for future guests and topics, please send your suggestions to us by .
You can get more information about Carson and Mediafly visit the links below:
For additional help with planning customer-centric business pivots, check out this related content:
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Latest posts by Candyce Edelen (see all)
- Business Pivots – Making The Tough Choices with Carson Conant, Episode 013 - October 9, 2017
- FinTech Trends-Prepare to Pivot with Rob Hegarty, Episode 012 - September 26, 2017
- Winning Enterprise Sales – The Importance of Empathy with Julia Streets, Episode 011 - September 11, 2017