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Founder Insights: The Importance of Pivoting

Joining Microsoft’s San Francisco Founders’ Day gave me a chance to engage with other Microsoft alumni, and an opportunity to reflect on the challenges and opportunities I face on a daily basis as a startup CEO and founder.

One of the realities of life as a CEO is that things are busy, and we don’t always get the time for valuable peer-to-peer networking. Highlights of the day included workshops on how to manage a board and discussions on startup growth.

As the Founder and CEO of Percolata, my journey started off with Microsoft, and Microsoft continues to play a major part in everything we do. Microsoft Accelerator really helped get us where we are today, and ongoing sessions and workshops (like Founders’ Day) are invaluable. But one of the most significant things for me is Microsoft Azure. It’s an open, flexible, enterprise-grade cloud-computing platform and is basically at the core of everything we do at Percolata.

So what is it that we do?  Percolata helps retailers optimize their retail sales teams giving retailers up to a 30% sales uplift using the same labor budget.  We do this by using sensor data that measures customer occupancy in a retail store and then scheduling the right number and composition of salespeople to handle the forecasted shopper profiles using proprietary deep learning technology.

I founded Percolata several years ago and I am proud to say that today we are backed by Silicon Valley’s top VC firms (Andreessen Horowitz, Menlo Ventures, Google Ventures, Foundation Capital, and more).  Percolata is the third startup that I’m part of but the very first one where I’m founder and CEO.

Before founding Percolata I had diverse experience in engineering, product management, intellectual property, sales and sales management roles. I also alternated my time between startups and larger corporations. While I was analyzing mobile industry trends I came to the realization that the way data was being collected for people really wasn’t done well, and that there was a much more economical way of doing it.

I decided to build Percolata and that journey began with a trial and error process of one iteration after another. It was all about finding the right product-market fit. At first we tried to sell sensor data, then after a few iterations, we arrived at sales team optimization.  It was almost like a light switch turned on. We went from struggling to sell to struggling to keep up.

Today, one of our biggest challenges is moving from our pre-market to post-market fit; it’s a completely different mindset and way of thinking. When we started we were focused on being adaptable and creating what the market wanted. After a few years of crystalizing our product-market fit we are now in the “buckle down and execute” stage.

If I had to distill my startup journey into 3 main tips they would be:

1. Keep on pivoting till you get there: Product-market fit rarely happens out of the gate but it is achievable so keep on pivoting till you get there; agility is your strength as a startup. I started Percolata with no team, no product and no brand. It was like being a speedboat in a foggy harbor, and although I didn’t have the resources of bigger boats, I had the ability to maneuver faster. This is especially important in early markets when the visibility is poor for everyone.

2. Adapt or die: The advice about pivoting isn’t just about product-market fit; it’s about everything! Marc Andreesen (GP @a16z, one of our investors) wrote: “Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don’t want to, telling customers yes when you don’t want to, raising that fourth round of highly dilutive venture capital — whatever is required.” Getting there is a form of evolution, it’s an adaptive challenge and you either change and adapt, or die.

3. Be persistent: It’s not always easy and there are tons of challenges along the way so persistence is one of the most important tools you can have.

Get to know Greg Tanaka, CEO and Founder of Percolata