Why timing is everything
Everyone has a plan until they get punched in the face
One of our favourite Ted talks is Bill Gross’s The Single Biggest Reason Why Startups Succeed.
Gross founded Idealab, an incubator of new inventions, ideas and businesses in 1996. Idealab has helped more than 100 companies - some were huge billion dollar successes, some companies they had high hopes for but they didnt succeed. He decided to rank the 5 factors he thought would matter the most to startup success across 100 Idealab companies and 100 other startup companies that had succeeded or failed.
The results showed that the number one factor was timing, which showed a difference of 42% between success and failure. These are the five factors that he analysed:
- Timing 42%
- Team 32%
- Idea 28%
- Business model 24%
- Funding 14%
Timing clearly is hugely important for successful startups. When Airbnb started many investors passed on the idea because they thought “no one is going to rent out their room to a stranger” - but the timing was perfect - it came out right at the height of a recession when people really needed extra money and that helped people overcome their concerns about renting out their own home to a stranger. Uber was similar - they had a great idea, team and business model - but the most important thing was to get drivers and their timing was perfect for this - there were a lot of drivers looking for extra money.
One of Idealab’s failures was Z.com which started in 1999 but failed in 2003. It was a home entertainment company which Gross had high hopes for - they had a great business model and raised enough money but in 1999 broadband penetration was low and technical constraints meant it was hard to watch video content online so the company went out of business in 2003. Just 2 years later broadband penetration in the US was 50% and Adobe Flash solved technical problems to made watching videos online practical, so YouTube was perfectly timed to succeed - it was a good idea but timing was everything.
For your startup assess timing by considering if consumers are really ready for what you have to offer them. If you have an idea you love, you will be keen to push it forward regardless, so you have to be very honest about timing to succeed.
https://www.ted.com/talks/bill_gross_the_single_biggest_reason_why_start_ups_succeed#t-384396
Video by Christian Bodhi from Pixabay
