At the beginning of 2023, Keith Peiris's startup Tome, which specializes in AI-enhanced presentations, was experiencing rapid growth. It became the fastest productivity tool to achieve 1 million users—a milestone that eventually soared to 25 million, as reported by Forbes. With support from esteemed Silicon Valley investors, including Lightspeed Venture Partners, Coatue, Greylock, and billionaire Reid Hoffman, Peiris secured $80 million in funding.
However, by late 2024, Peiris recognized that he was heading in the wrong direction with his company.
The primary issue was that many users, primarily made up of students and small business owners, were either on free plans or subscribed to the low-cost $10 monthly option. This subsistence was insufficient for sustaining the business. Attempts to penetrate professional markets, such as marketers and salespeople, fell short as the tool lacked integration with their data and the context necessary for effective presentations. Although user numbers grew, the company’s annual revenue stagnated at merely $3 million.
Peiris candidly reflects on Tome, stating, “Our technology thesis and our cultural thesis was very immature.”
With nearly half of Tome’s investment still available and significant GPU resources at his disposal, Peiris opted for a pivot. “We were optimistic that we hadn’t missed our chance so early in our journey. We have a talented team and ample capital—why should we not give it another shot?” he shares.
Peiris sought guidance from billionaire Stewart Butterfield, whose previous failures in gaming had led him to create renowned platforms like Slack and Flickr. Butterfield's advice was to downsize the team to one that could be fed by two large pizzas, focusing on building something new with strong customer traction that would keep investors and staff engaged. Thus, in March 2025, Peiris shut down Tome, laying off most of his 70 employees and retaining just six.
After eight months, he introduced Lightfield, an AI tool designed to assist sales professionals with administrative tasks such as call summarization, follow-up email writing, and client interaction management.
Initially, Peiris' investors were skeptical. Developing customer relationship management software was inherently more challenging, and there were doubts about Peiris and his co-founder's expertise in this arena. Nonetheless, it represented a superior business opportunity. “There were animated discussions, but ultimately, everyone came around,” he notes.
Currently, Lightfield's revenue is witnessing an impressive growth rate of 80% monthly, supported by 1,000 paying customers, including Substack, Goodfire, and IntentHQ, according to Peiris. Remarkably, Lightfield has been built entirely from the funds initially raised for Tome, and discussions for another funding round are underway—with previous investors showing renewed interest.
Pivoting is a fundamental aspect of entrepreneurship. When an initial concept falters, entrepreneurs often seek new directions. This phenomenon typically happens before a startup gains significant traction or investor backing. However, Lightfield is a part of the emerging wave of AI startups that secured substantial funding before moving away from their original goals. Some have undertaken sharp pivots, entirely discarding their initial products, while others have adapted to pursue new, profitable avenues. The rapid evolution in the AI sector presents additional challenges, as the pace of model improvements continuously reshapes the market landscape.
"As dominant models increasingly capture market attention, we’ll likely see many startups either pivot significantly or find value in elements of their existing infrastructure to carve out a new direction,” observes Aditya Agarwal, a general partner at South Park Commons, a venture capital firm collaborating with tech entrepreneurs.
For example, Pika raised $135 million to create an AI video generator but shifted focus to AI agents and avatars. Poolside raised $620 million for training AI coding models but, as of late 2025, planned to develop a large data center in West Texas named Project Horizon in partnership with CoreWeave—a venture that faltered after Poolside struggled to meet chip supply deadlines. Subsequently, Poolside restructured into two entities: one dedicated to infrastructure (PIC) and another focused on model building.
Character AI, another early AI success story, has undergone significant transformations since its inception. Founded by former Google DeepMind researchers Noam Shazeer and Daniel De Freitas in 2021, the startup raised around $200 million from prominent investors, aiming to craft AI characters inspired by real and fictional personalities. However, after substantial developments, including the acquisition of their founders by Google and a barrage of lawsuits tied to the app's safety, the company has since refined its business strategy. In early 2025, under new leadership, it shifted toward using open-source software and exploring novel monetization strategies, including advertising and in-app purchases.
We’ve refocused our efforts away from traditional fundraising and hypergrowth toward sustainable business development," explains Karandeep Anand, the new CEO.
Recognizing the need to diversify, the startup is now delving into various interactive entertainment formats, like AI-generated audio stories and microdramas, allowing users to engage with characters in more dynamic ways. Anand emphasized that rather than “pivoting,” it’s been more about evolving the existing concept to align with user needs.
Similarly, Patronus AI, an evaluation startup, adjusted its strategy to adapt to changing industry demands. Initially focused on developing models for error detection and copyright infringements, the company pivoted to create "digital world models"—replicas of internal systems that help AI agents complete tasks across various platforms. This shift now constitutes a significant portion of their revenue.
“Reinvention and reassessment of our purpose are critical for our growth,” asserts CEO Anand Kannappan.
For some startups, adapting was essential for survival. Wispr AI’s founders, Tanay Kothari and Sahaj Garg, experienced a significant setback after investing three years and $14 million in a neural-signal-driven headset that ultimately failed. Redirecting their efforts toward AI-driven voice dictation software, they transformed the company structure and strategy. Today, their Wispr Flow app boasts hundreds of thousands of daily users and a growth rate of 40% per month, marking a departure from previous, ambitious but infeasible projects. As reflected in their blog, “We ceased chasing the idealistic dream and instead focused on delivering what truly resonates with people.”
