TechCrunch is reporting that BuzzFeed is buying Kingfish Labs, for an as-yet undisclosed sum. It's the first acquisition for the meme-making-machine that BuzzFeed, founded in 2006, has become. But more importantly, it shows how a startup can "pivot," in the language of tech entrepreneurship, from one business model to... a completely different model.
In a conversation I conducted this morning at the Drucker Business Forum — held at KPCC's Crawford Family Forum — Allen Moore of Idealab's New Ventures Group and I briefly delved into this phenomenon. Pivoting is something that the founders of startups need to be prepared to do. As Allen put it, they need to be able to drive full speed ahead, with one foot pushing the pedal to the metal — while still keeping one foot hovering above the brake.
Kingfish Labs, for example, started out building a Facebook dating app (which is interesting, given that Facebook got its start way back in the Harvard-Winkelvoss Twins-Zuck 1.0 days as a dating site). When that didn't work out so well, the company pivoted to creating a "data service for optimizing Facebook ads," as TechCrunch reports. Dating! Ads! All the same thing, right?
Well, sort of. What the two applications have in common is that they both utilize Facebook's "platform" — the basic framework that Facebook CEO Mark Zukerberg often says is Facebook's main product, the thing upon which developers can construct their innovations. For what it's worth, this deal also shows that BuzzFeed thinks Facebook ads are worth investing in — a somewhat bold move as skepticism mounts about Facebook's ability to keep its old desktop ad business fresh as it move into mobile ads.
Anyway, pivoting. It's something that every entrepreneur needs to be prepared to do. And sometimes, it pays off.