Inside Pivotal Labs, the Agile Force Behind Twitter and Groupon

PivotalLabs

Pivotal Labs is a name that comes up often in regards to web startups, but it’s sort of an enigma. The company’s San Francisco office is home to the hyped-up distributed social networking effort Diaspora; its work has been credited for shaping Twitter’s development culture; and its clients include Groupon, Gowalla and Best Buy’s “Remix” API project. But what exactly does Pivotal Labs do?

[youtube=http://www.youtube.com/watch?v=BHNF00FlS0w]

All those mentions were enough to get me intrigued, so last week Chris Albrecht and I paid a visit to Pivotal’s San Francisco office to find out more. The office has all the trappings of a startup incubator: Ping-Pong games, ample snacks, big computer monitors, bike racks and clumps of scruffy young dudes. But Pivotal’s services are different from an incubator’s: It’s a consultancy that brings technical teams into its space to grow them, train them and help them build their products. Rather than Pivotal investing in companies, the startups and enterprise clients pay Pivotal for the service.

Pivotal has actually been around for 20 years, but in the last few years, it has created a sort of focused training program for technology startups and projects within larger companies. Say you have an idea for a company and raise funding for it. You then come to Pivotal, which takes on any developers already working on your project and hires new ones to round out the team. Your technical folks come into the Pivotal office every day at 9:00 a.m., sit down at a desk with a “Pivot” from the company’s team, and work in tandem as pair programmers for the full day until 6:00 p.m. At the end of period of about 2-7 months, you have a trained agile development team for building products with Ruby on Rails, as well as lot of progress on your product.

Pivotal charges by the hour for its programmers’ time, and throws in lots of perks: computers and monitors, breakfast, desks for founders and Ping-Pong. Companies pay Pivotal between $150,000 and $600,000 on average, according to VP Technology and Principal Ian McFarland.

Current Pivotal clients include Best Buy, EMI, Groupon, MavenLink, and goBalto. Recent clients include Twitter, Gowalla, Urban Dictionary, Indaba Music, CitySearch and the Associated Press. In the video, McFarland explains the arrangement with Diaspora, which currently operates out of the Pivotal San Francisco office. The Diaspora founders, who didn’t go back to NYU this fall, are using the Pivotal space for free because the company is interested in their project. McFarland also talks about former client Twitter, which has been effusive in attributing improvements in its development culture to its work with Pivotal. I ask McFarland if that’s really such a good thing given Twitter’s widely known technical problems.

A few more reasons you may have heard of Pivotal: Pivotal Tracker, which the company developed to help clients plan and execute projects, is a free agile development tool that has hundreds of thousands of users. And, the company’s New York office is going to be the home of the new TechStars edition there starting in January. Check out the video to get a better idea of who and what’s behind all this.

Photo courtesy of Flickr user Lisa Brewster.

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