We sold RemoteTeam to Gusto. It was a great exit. Everyone saw the success, the headlines. What they didn’t see was the gut-wrenching year before that, where we almost ran the company into a brick wall.
We had a product that was working, kind of. We had customers, but the growth wasn't there. The churn was a little too high. The team could feel it. I could feel it. That slow, creeping dread that you’re on the wrong path. The temptation is to call a big all-hands meeting, announce a “new direction,” and rally the troops. I’ve seen founders do this. It’s almost always a mistake.
Big, flashy pivots are for the movies. In the real world, they just scare your team, confuse your investors, and alert your competitors that you’re wounded. There’s a better way.
The Public Pivot is a Sign of Weakness
Think about it. You stand up in front of everyone and say, “Everything we’ve been doing for the last year? It was wrong. So we’re going over here now.”
What does your best engineer hear? He hears that his last year of work was a waste. He starts updating his LinkedIn. What does your investor hear? She hears that you don’t have a clear vision. She’s not writing the next check. And what does your competitor hear? They hear that you’re in chaos. They’re going to pounce.
I’ve been on the other side of this. As an angel investor in over 200 companies, I’ve seen this movie play out dozens of times. The founders who announce big pivots are the ones who are usually the least confident in their new direction. They’re seeking validation through announcement. It’s a founder’s tell.
Don’t do it. Instead, you need to go quiet. You need to go dark. You need to run a stealth pivot.
How to Run a Stealth Pivot
A stealth pivot is a process for testing a new strategic direction without disrupting your current business. It’s a skunkworks project. A secret mission. It’s how you find your next big thing without betting the entire company on a hunch.
Here’s my playbook. I’ve used this at my own companies, and I’ve advised countless others to do the same.
1. The Secret Team
You can’t do this with your whole company. You need a small, trusted team. Two or three people, max. Your best product person, your best engineer. People who can build, think, and keep their mouths shut. This isn’t a committee. It’s a commando unit. At MovieLaLa, when we were exploring a new social feature, it was just me and two engineers working after hours. We didn’t even give it a project name. We just called it “the thing.”
2. The Hypothesis
Your new direction is not a vague idea. It’s a testable hypothesis. “If we build X for customer Y, they will do Z.” Be specific. Write it down. For example, at RemoteTeam, our hypothesis was: “If we build a simple, one-click payroll product for remote teams in emerging markets, they will switch from their complex, expensive local solutions.” That’s a testable idea. It’s not “let’s do payroll.” It’s a specific bet.
3. The Minimal Viable Test (MVT)
Forget MVP. MVP has become an excuse to build a bloated, feature-heavy product. You need an MVT. A minimal viable test. What is the absolute smallest thing you can build to test your hypothesis? A landing page? A concierge service? A spreadsheet? Before we wrote a single line of payroll code, we created a simple landing page with a “request access” button. We wanted to see if anyone even wanted what we were selling before we built it. The MVT is all about getting signal with the least amount of effort.
4. The Isolated Test
Don’t test your new idea on your existing customers. Don’t use your main brand. You need to isolate the test. Create a new, unlinked brand. A simple landing page. Run some cheap ads on Google or LinkedIn. The goal is to get fresh, unbiased feedback. You want to know if this idea can stand on its own, without the crutch of your existing reputation. We spent $500 on Google Ads to test our payroll idea. That’s it. We weren’t looking for thousands of signups. We were looking for a handful of desperate customers.
5. The Data, Not the Drama
When you’re running a stealth pivot, you need to be ruthless with data. Don’t fall in love with your idea. Fall in love with the truth. Is the conversion rate on your landing page high enough? Are people willing to pay? Are they using the MVT? At this stage, you’re not looking for massive scale. You’re looking for a signal. A pulse. If the data isn’t there, don’t make excuses. The idea is wrong. Move on.
6. The Decision
After a few weeks of testing, you’ll have your data. Now it’s time to make a decision. There are three options:
- Go: The data is strong. The signal is clear. It’s time to start shifting more resources to the new direction. This is when you can start thinking about a broader announcement.
- No-Go: The data is weak. The hypothesis was wrong. Shut it down. The beauty of the stealth pivot is that you can do this with minimal damage. You haven’t scared your team or your investors. You just ran a small, cheap experiment that didn’t work. That’s not failure. That’s learning.
- Modify: The data is mixed. There’s a signal, but it’s not strong. Can you tweak the hypothesis? Change the target customer? Adjust the MVT? This is where you iterate. You run another small test. And another. Until you get a clear go or no-go.
The Un-announcement
If you get a “go” signal, the transition can begin. But even then, you don’t need a big, flashy pivot announcement. You can just… start doing the new thing. You slowly shift your marketing. You update your website. You start onboarding new customers to the new product. Your old product can be sunsetted gracefully. It’s not a pivot. It’s an evolution.
I’ve seen this work again and again. It’s how you build resilient, long-lasting companies. It’s how you navigate the treacherous waters of the startup world without sinking the ship.
So the next time you feel that creeping dread, that feeling that you’re on the wrong path, don’t panic. Don’t call an all-hands meeting. Go dark. Assemble your secret team. And run the stealth pivot. It might just save your company.
Frequently Asked Questions
How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
How can I apply this thinking to my own situation?
Start by identifying the core principle behind the opinion, not the specific example. Then ask yourself: does this principle apply to my context? If yes, test it in a small, low-risk way before going all in.
What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.