What Houston startups can learn from the power of the pivot

houston voices

YouTube, Yelp, and Groupon all pivoted to great success. Here's what lessons Houston startups can take from these pivots. Miguel Tovar/University of Houston

Tons of companies start off as something completely different until they are faced with a challenge that only a change in direction can overcome.

Why should your startup pivot?

Imagine your startup is getting ready to present its product to the world at a tech exhibit. Right before you present, another company shows off their own product. And it's just like yours in every way. Is all lost for your company? No. Because now is the time where you must learn one of the most important principles in business. The startup pivot.

A pivot is a change in strategy. A new approach to your business model. A change in direction.

Companies that pivoted

Did you know that YouTube wasn't always a video sharing platform? That's right. YouTube actually started off as a dating service. You'd send in videos of yourself, essentially selling yourself to potential dates in your area. They even had a catchline: "Tune in, hook up."

Upon realizing the massive potential they had for hosting videos, the company pivoted and is now worth $40 billion. Talk about no regrets.

Yelp started off as an automated system that suggested recommendations from friends. The execution of this idea wasn't well-received. However, the founders recognized that users were writing tons of reviews for businesses just because they enjoyed it. And just like that, Yelp became the billion-dollar third-party directory we all know and love today. It was all because the founders knew enough to pivot.

Groupon actually started off as a social platform whereby people could unite to support charities and socially conscious causes. It was called The Point. This idea soon withered but a branch of The Point proved to be popular: a subdomain called Groupon. This idea turned out to be more popular, as people showed deep interest in pooling together funds to broker a group discount.

What these companies teach about pivoting

These companies' success from pivoting teaches us to focus on what we already have built. If there is an aspect of your business that isn't quite working out, there might actually be a part of your business that is. Look for that part and focus on it. Expand on it. Search for positives within your company and concentrate on developing them into something new and different.

We can also learn to cut our losses. Even if your idea is a genius one, if it's not yielding money, you have to move on. Getting stuck in the "just give it more time it'll work out" quicksand can sink your business fast. If you're hemorrhaging money because of your awesome-on-paper idea, the more chances you give it to succeed, the more money you'll lose. You have to know when to say when.

Another thing these three companies did was to follow the trail of money. They recognized areas of strength, and rode those areas to the bank. They concentrated on the aspects of their startups that yielded the most revenue. And you should too.

Don't be afraid of change. Your company doesn't have to be a success over night. It's okay to give it some time. But there is an art to knowing when give up and try something else. You have to master that art, just like the aforementioned companies did. Open yourself up to bigger possibilities. Sometimes, when working on the idea you thought was so brilliant, you stumble on to a different idea that proves to be more financially auspicious. Then it's time for a startup pivot. It's up to you to spot those instances and run with them, just like YouTube, Yelp, and Groupon did.

------

This article originally appeared on the University of Houston's The Big Idea.

Rene Cantu is the writer and editor at UH Division of Research.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

Houston fintech company closes $7M funding round

fintech funding

Houston-based fintech company Receipts Depositary Corporation has closed a $7 million oversubscribed funding round and plans to scale.

The round was led by Austin-based LiveOak Ventures, with participation from Hivemind Capital, Onigiri Capital, OTC Markets Group, GTS, and Redbeard Ventures, according to a release from RDC.

RDC's platform issues depositary receipts (DRs) to qualified investors on digital and alternative assets, making it easier for investors to buy and trade hard-to-access and less traditional assets. Currently, the company offers DRs for cryptocurrencies including Bitcoin, Ethereum, Solana and XRP.

RDC says the new funding will allow it to launch new DR products across a wider range of asset categories, potentially including commodities. Additionally, it plans to grow its relationships with "banks, broker-dealers, market makers, custodians and exchange partners" and add to its product, operations, technology, and commercial functions teams. The company is actively hiring, according to a press release.

“Depositary Receipts are trusted, regulated capital markets products which RDC is bringing to an entirely new universe of assets, from commodities to digital assets, that have historically been out of reach of traditional securities markets," Krishna Srinivasan, founding partner at LiveOak Ventures, said the release. “The team's depth of experience in the DR business on a global scale, combined with the broad institutional validation from co-investors, anchor customers, and strategic partners across asset classes, makes RDC uniquely positioned to define this category. We're proud to lead this round and support the company as it scales.”

RDC was founded in 2022 by three Citibank alumni: CEO Ankit Mehta, CEO Bryant Kim and COO Ishaan Narain. It began offering its first DRs for Bitcoin in 2024.

“This funding round is a strong validation of what we’re building at RDC and the growing demand for modernized Depositary Receipt infrastructure,” Mehta added in the release. “With the support of LiveOak Ventures and our investor partners, we are accelerating development across our DR platform expanding our market reach, and building the team needed to support the next generation of DR product

Houston space co. adds local colleges to university alliance

space schools

Houston’s Axiom Space has added 26 new members to its University Alliance—including two from Houston—to support the next generation of space exploration.

Engineers, researchers and students from the partnering universities will be dedicated to advancing microgravity research, technology development and commercial innovation in low-Earth orbit.

Rice University and the University of Houston are among the new colleges to join the alliance, which launched with 15 members last year. The University of Texas at Austin and the University of Texas at El Paso have also joined, in addition to international institutions in Europe, Asia and Australia, and others from around the U.S. See full list here.

“Through the University Alliance, Axiom Space is uniting the international research community driven to enable human progress,” Lucie Low, Axiom Space chief science officer, said in a news release. “Together, alliance members are taking the initiative to ensure microgravity research benefits everyone on Earth and our shared goals fulfill a scientific purpose to advance civilization.”

Axiom is building the world’s first commercial space station, known as Axiom Station. The University Alliance “will support and advance space science during the transition from government-led to commercially owned and operated space stations,” the company said in a release. Partnering universities will contribute to the research community by participating in international collaborative scientific initiatives, identifying future research, and bolstering strategic positions in the commercial orbit research field.

Recently, the Rice Space Institute was also selected to lead the U.S. Space Force Strategic Institute 4 in addition to other space-centric partnerships.

“We’re excited to bring our expertise to this global alliance and to benefit from the deep expertise of our partners,” David Alexander, professor of physics and astronomy and director of the Rice Space Institute, said in a news release. “Space is truly a collaborative and global endeavor. Alliances like these are key to progress.”

UH and NASA’s Johnson Space Center expanded their collaboration in 2022. In 2024, UH launched its NASA MIRO Inflatable Deployable Environments and Adaptive Space Systems Center (IDEAS2) via a five-year, $5 million grant.

“As a major public research university located in Space City, the University of Houston has a unique opportunity and responsibility to help lead the future of space innovation, and our participation in Axiom Space’s University Alliance represents a major step forward in that mission,” Karolos Grigoriadis, the Hugh Roy and Lillie Cranz Cullen Endowed Professor and chair of mechanical and aerospace engineering at UH, added in a separate release.

Meanwhile, Axiom recently tacked on an additional $175 million to a previously announced capital raise, bringing the oversubscribed round to a total of more than $525 million. It also has announced plans to launch Swiss and Japanese subsidiaries.

This Houston suburb named one of 10 newest boomtowns in U.S.

Booming 'Burb

What do you get when you combine a city's surge in population, housing growth, and economy? For the Houston suburb of Conroe, it adds up to being America's No. 9 newest boomtown, according to a new survey from SmartAsset.

The personal finance website's just-released report analyzed more than 400 U.S. cities with populations of 65,000 or more to identify places experiencing rapid growth based on five-year changes in economic output, housing units, and labor force size.

Texas is home to the second-highest concentration of new boomtowns in America with 18 out of 75 located in the Lone Star State. Only Florida ranks higher than Texas by just one.

However, Texas nearly locked out the top five most bustling boomtowns in America. Austin suburb Georgetown topped the list, and its Central Texas neighbors New Braunfels (No. 2) and Leander (No. 4) ranked close behind. Dallas-Fort Worth mid-city Lewisville claimed the No. 5 spot. Lehi, Utah ranked in third place.

Conroe has soared in popularity as one of America's most sought-after suburbs over the last several years, boosted by its renter-friendliness and its livability among the millennial generation.

Conroe has seen a 37 percent increase in housing units from 2019 to 2024, with its labor force growing by 33 percent during that time. SmartAsset also determined that Montgomery County's economic output grew at compound annual rates of 4.9 percent.

The report says population booms and "expanding business activity" can create "visible momentum" for an up-and-coming city, but these fast changes can alter a city in ways residents may not expect.

"In recent years, some American cities stand out for attracting people, investment and development at a pace that sets them apart," the report said. "Boomtown status does not mean growth benefits everyone equally, but it does reflect a city’s expanding economic capacity and the new opportunities that come with it."

America's top 10 new boomtowns are:

  • No. 1 – Georgetown
  • No. 2 – New Braunfels
  • No. 3 – Lehi, Utah
  • No. 4 – Leander
  • No. 5 – Lewisville
  • No. 6 – Palm Coast, Florida
  • No. 7 – Nampa, Idaho
  • No. 8 – McKinney
  • No. 9 – Conroe
  • No. 10 – Frisco
---

This article originally appeared on CultureMap.com.

View All Listings