refoundai Recovering From Failure
Turn product setbacks and stalled growth into strategic breakthroughs and pivots.
Help the user with recovering from failure using insights from 20 guests and posts across Lenny's Podcast and Newsletter.
How to Help
- Diagnose the failure - Use frameworks like the Four Ps or root cause analysis to identify exactly why the product or feature isn't gaining traction.
- Assess conviction - Determine if the team still believes in the problem and solution after facing real world challenges or if it is time to move on.
- Identify the pivot path - Look for organic pull within existing features or technical foundations to find a more viable direction.
- Execute with speed - Move decisively to abandon failing initiatives and reallocate resources toward high conviction opportunities.
Core Principles
Stay in the game to reinvent
Bret Taylor: "They gave me another shot to do a V2 of it and I got the impression it wasn't like my last shot, but I certainly was feeling a little dejected from going from a hot shot, new PM to a new thing. So, we spent a lot of time thinking about how can you make something that's just much more compelling and not just a digital version of the Yellow Pages and not just so similar to some of the other products out there."
Rebuilding a reputation after a high profile failure requires the resilience to stay active and the willingness to completely reinvent the product.
Pivot toward domain expertise
Dalton Caldwell: "Usually a successful pivot gets warmer instead of colder from what you're an expert at and somehow builds on what you learned on the prior idea. Right? And so in the case of Brex, it was they had worked on a FinTech company in Brazil when they were younger, and so I'm like, 'You need to work more on the thing all about and not the thing nothing about.'"
A successful pivot leverages lessons or internal tools developed during previous attempts and moves you closer to your existing expertise.
Adopt a wartime mindset
Eoghan McCabe: "I said, we need to become a wartime company. If we don't fight for this, we are dead. I jumped hard on AI, but I also restarted the culture. I rewrote the values designed to be a sharp knife to cut out the parts of the company that I just knew wouldn't be effective."
Transitioning during a crisis requires aggressively eliminating legacy projects and cultural bloat to ensure survival over legacy processes.
Maintain fidelity to vision
Eric Ries: "People act like having a startup fail is the worst thing that can happen to you. And man, that's not even in the top 10. It's bad, I've done it, it's awful. It's really bad, but far worse is to be in a company that won't die, a zombie, undead company that you hate, but you can't leave."
Define a pivot as a change in strategy that maintains absolute fidelity to your original vision rather than losing your way.
Test your fundamental conviction
Scott Belsky: "I basically say, 'How much conviction do you have in the solution you're building?' I know in the beginning, before you knew all you know now, you had tons of conviction. Now knowing all you know, do you have more or less conviction in the problem and the solution you're building?"
The decision to persevere depends on whether your belief in the problem and solution has grown or diminished after facing real world challenges.
Evaluate the four key levers
Todd Jackson: "You've got the persona, the problem, the promise, and the product. Lattice kept the first one but changed the others. Vanta changed all four."
Analyze which element is failing by systematically checking the persona, the problem, the promise, and the product.
Kill profitable distractions
Varun Mohan: "Obviously that's a very big moment because that was a bet the company moment in the sense that we basically said, told our investors, 'Hey, we're making money on this.' We had already raised 28 million of capital and we were just like, 'Hey, we're just going to pivot entirely from this.' And we did that overnight."
Startups must be willing to kill even profitable business lines immediately if their foundational market assumptions are proven wrong.
Change the delivery model
Uri Levine: "We started that as a B2C and then we realized that this is way harder than we think it is, and we ended up with converting that into B2B, which turns out to be very successful for us. And so occasionally there are companies that you start your journey with one perception and you change that and that will happen multiple times."
Successful pivots often involve keeping the core problem while radically changing the delivery model to overcome adoption friction.
Templates & Frameworks
- Pivot Stories from Successful Companies (What to do if your product isn’t taking off) - Detailed first-person accounts of how Instagram, Loom, and Discord identified their pivot signals, plus a list of 10+ other famous pivots
- Managing Founder Expectations — 7 Tactics for Driving a Pivot (This Week #7: Effectively communicating about a failure to execs, managing founder expectations, and hiring a Director of PM) - Tactics for convincing a founder or CEO to change direction when the core product idea isn't working
- Four Strategies for Finding a Better Idea (The art of the pivot, part 2: How, why, and when to pivot) - Four proven paths to finding a pivot idea, derived from analysis of 40+ startup pivots. Three of the four are about noticing what's already working.
- Startup Failure Warning Signs Checklist (Lessons learned from a startup that didn’t make it) - Warning signs derived from Cascade's experience that indicate a startup may be heading toward failure
- Five Patterns of Successful Pivots (The art of the pivot, part 1: The definitive list of successful pivots) - Five empirically derived patterns from analyzing 30+ startup pivots, serving as a mental model for founders evaluating their own pivot.
- Questions to Ask When Looking for a Pivot Idea (The art of the pivot, part 2: How, why, and when to pivot) - Diagnostic questions to identify pivot opportunities within your existing product or through exploration
- Two Types of Pivots Framework (The art of the pivot, part 2: How, why, and when to pivot) - A classification system for understanding which type of pivot situation you're in, which determines your timeline and approach
- Seven Options When Your Product Isn't Taking Off (What to do if your product isn’t taking off) - A sequential framework of seven actions a founder can take when their startup or product isn't gaining traction, roughly ordered from easiest to most drastic
See references/artifacts.md for the full list with details.
Questions to Help Users
- "Are you seeing genuine market pull or are you manually pushing every user into the product?"
- "If you were starting your company today with the knowledge you have now, would you still build this product?"
- "Is there a specific feature or internal tool that users are engaging with more than the primary offering?"
- "Can you clearly articulate the granular implementation details of your current strategy?"
- "Is your current retention data showing a persistent lukewarm interest where users consistently bounce?"
- "Does the current technical foundation create more instability than value for your users?"
Common Mistakes to Flag
- The Zombie Trap - Continuing to run a company that has lost its vision and no longer aligns with the founders' passion or market reality.
- Copying the Status Quo - Building a digital copy of a legacy process rather than creating a differentiated experience that gives users a reason to switch.
- The Sunk Cost Fallacy - Letting past effort or reputation prevent you from shutting down a product that is merely a novelty rather than a high pain solution.
- Slow Pivoting - Stretching a strategic shift across multiple quarters instead of executing overnight to maintain focus and manage opportunity cost.
Deep Dive
For all 22 sourced insights from 20 guests, see references/guest-insights.md
Related Skills
- Defining Product Strategy
- Product Vision
- Positioning
- Pricing Strategy