Founder need to be crazy true believers - there's no other way to beat the odds. But at same time, constantly taking in data to help tweak, rethink or completely change approach. "if we just do status quo longer/harder" can be as dangerous as giving up and losing faith early.

What are the key signals that founders & funders should look for in determining to stay the course vs change direction/look to rationalize the investment.

I think there is a reason why this dichotomy exists. The stories about perseverance (that Rovio's 51st game would be Angry Birds) are because running a startup is a constant crisis of confidence and we need the reinforcement to soldier through. The mythological air about the pivot is the opposite, to help us ignore the sunk cost fallacy and to feel okay about not persevering.

There is the intuition side of knowing when to pivot or persevere, and an analytical side. Let's try and talk both.

Mostly, I think this is largely intuition driven. (But that's also how I've worked generally.)

The biggest determining factor to pivot is whether the founding team is really in love with the thing they are building. You have to have deep intuitive sense that even tho the thing your working on is still nascent and warty that you're going to love it and want to dedicate your passion to making it better. If you don't have that, like Jimmy Carter, you've already committed pivot in your heart.

Not sure I agree that what we did was a partial pivot more than it was just perseverance in chasing the same vision and problem. When we started, we wanted to create a place for you to bookmark your life with your mobile phone, a journal of sorts. Hence the name Path: your "path" through life.

When the first version did not work entirely, it became imperative to unlock the things that were working and become a more true version of the original vision.

You must stay in the problem long enough.

It's true you've got to stay in the problem long enough, so how about asking the reverse. When to bail?

On the analytical side, I think there are ways to figure out whether your product is meeting that vision or not. Just after a launch when I'm trying to drive product (say, increase d1 retention, or virality) and we're getting NO improvement from our iterations then either: we don't get our customer well enough to build features for them, or the vision is not what your customers want.

@Dave - thanks for the clarification. Interesting that initial challenges forced you to head more directly towards your core as opposed to away from it. How did you articulate this to your employees?

@Goldman - given your experience, and what you're trying to create at Obvious, do you think that "loving the thing you're building" is actually a pre-requisite for success? I've seen more operationally focused entrepreneurs who love the building process, love the cerebral process of problem solving, love the competitive intense nature of startups, but I don't think truly love the product in the way you guys did at Blogger, Twitter, etc

@nabeel - did you encounter situations where you want to stay course or pivot, and didn't out of fear you couldn't keep the org together. ie right direction but not the right time - needed to let some things play out longer, or spend more time helping funders understand why.

Biz likes to say that the big lesson from Odeo was that we don't work well on products that we don't love. The team liked the challenge and opportunity of Odeo but wasn't personally compelled enough by the product. So that gave rise to the opportunity for Twitter.

So it's totally a pre-requisite for success in my view. I should add, I didn't work on Odeo because I wasn't into it. But jumped from Google for Twitter ... well after a brief vacation :)

When we pivoted to Facebook at Conduit, even though Loudcrowd was a clear dud their was strong emotional attachment (and users) that the team didn't want to declare failure. My cofounder still believed, so I ended up having him and one artist porting LC to Facebook while we worked on the new game.

While it did help the team emotionally, in hindsight I see this as a leadership failure on my part. We didn't fully kill it until Music Pets launched and started scaling so quickly.

BTW the example of OMGPOP is one of pivot and perseverance. They started as a dating site (which to your point Jason they never really loved - Charles just did it because he knew it was a soft spot for PG). Then they made a bet on light synchronous gameplay (Omgpop), something they believed deeply in. As that skidded they spent a year trying to do FB games (back to no love again).

From my understanding, Draw Something is really an interesting case of compromising your vision but staying true to your love. It did not fit their thesis that "synchronous was going to win" so in a sense they abandoned that vision. But Dan has said it was really the first game he designed the way he would be proud of it -- not trying to be too clever (ie use Words with Friend mechanics) or too hip ("Draw my Thing") -- just focus on what feels right.

"The focus on what feels right" sentiment rings true to me. At Obvious, we've created a number of rubrics for quantitatively evaluating how we think about potential projects across specific values. But a lot of the time it comes down to "I have a hunch there's something interesting over here." The evaluative framework stuff is still useful because it creates a common language on how to think about "interesting." But the decision to actually pivot has been largely hunch-based.