In the case of Atrium, it also sounded like their "pivot to tools" was trying to take many of their existing (ex) employees on the legal side, and convert them into clients of the tools.
While the legal and tools companies were together, I'm sure the lawyers enjoyed the shiny tools. But after the "pivot", with the lawyers seemingly going it alone with some of the former clients, it seems likely to me that Atrium (the tool) just wasn't offering enough of a value proposition to make the tool company profitable.
Venture money needs massive growth. Selling a tool to lawyers will get an amount of money per month proportionate to the number of fee-earners. And from the sounds of things, their tools weren't exactly going to be irreplaceable. Anyone got any direct insight as to if the tools themselves were compelling but the pivot failed, or if the tools didn't deliver?
The question is over a pivot from "I'm going to provide product/service X at a profit due to my tool T" to "Well, I couldn't sell X so I'll sell T to other people who want X". If you couldn't make a go of it, is it really likely others will, or if they can that they will want your tool T to do so?
This is different from either providing a service and successfuly using your own software to do so or providing a service and developing as well tools specifically for your customers.
Slack was suggested by another poster as a company that pulled this off, though I'm not sure the communication tool was considered crucial to the game business.
Fair. I guess it depends on what you determine as a success. 37signals was probably somewhat successful as a dev shop, but obviously not nearly as successful as a project management software one.
