I recently saw this short (under 7 minutes!) TED talk from Bill Gross on why startups succeed. It is a must watch for any startup–or, perhaps more importantly, anyone thinking about starting a company.
Bill presents a thorough analysis of startup success and finds one dominant factor. It’s not the idea. It’s not the team. It’s not the model. It’s not the funding.
I can definitely relate. Several years ago, I joined a startup in the Raleigh area. We had a great idea–communication enabled business applications delivered as a service. This was before the iPhone. We leveraged Open Source. We solved significant problems for small and mid-sized businesses who sold or supported via the phone. We successfully recruited big channel partners whose core business was at risk because of VoIP.
And we failed.
Speaking about it with a colleague here at Gartner after the fact, he (Eric Goodness) told me “You guys had a great idea and a great team. But you were AT LEAST five years to early.”
Was timing the only factor in our demise. Certainly not. We did not have enough funding and did not use it as wisely as we should have. We had no room to pivot. We were trying to do too much. We lost sight of the essence of our story and value. But timing was the key.
I have always thought that luck is a factor in success, but luck can often be attributed to timing, at least to some extent.
But how can you gauge timing?
Here are a few ideas:
1. Talk to industry experts. Industry experts can come in a variety of forms, but for many technology markets, I’d definitely include Gartner in this mix, particularly our market analysts. They are the folks that do all the forecasts that you hear from Gartner. Those forecasts are based on scientific assumptions about what is driving market behavior (from both a buyer, seller, and macroeconomic perspective). The right analyst can help you understand if the market is ready for your product–and also what segments of the market are “more ready” than others.
2. Look at pain. Both Uber and AirBnB are cited in Gross’s presentation as being timed right because it was when people were looking for new ways to make–and save money. The question you need to ask is are they feeling the pain you address now—or is this more of a wellness issue currently. At my startup, we knew that telecom service companies were going to feel pain from VoIP, but the reality was it was at the annoyance level for most of them v. a top priority business concern (we were selling wellness). They were intrigued by what we did and willing to experiment, but they did not need to fully commit. The pain was coming, but it wasn’t there.
3. Look at infrastructure needed for success. Gross also talks about this. If your innovation needs foundational elements to succeed, then make sure those are in place. For example, let’s say you have a great analytics product for visualizing and providing insight on sensors embedded in clothing. You should probably ask our IoT guys about this, but I’d suspect that the overall adoption of wearables, and the infrastructure to support receiving and transmitting data, is not at a level where you could succeed with a broad play. Instead, you might have to go niche and focus on smaller market segments (e.g. exercise enthusiasts) to gain traction. Or, you hold back on some of your features, make money where you can, and go hard once the infrastructure you need is in place.
4. Look at replacement cycles. If you have a new way of doing something that is established, then you are going to need to replace existing systems. If those systems are early in their life cycle, it is a hard, hard decision for a customer to make to abandon it, even if you are a little better (if you are a lot better, it gets easier, but it is still hard). Understanding where the technology you are impacting is in its market cycle is a key timing factor (Note: this is an area that Gartner explores in forecasts and in market clocks). If existing technologies are in the replacement stage, it is a great time to start.
Timing can rarely be perfectly predicted, but doing some homework can help. And timing is everything.
View Free, Relevant Gartner Research
Gartner's research helps you cut through the complexity and deliver the knowledge you need to make the right decisions quickly, and with confidence.Read Free Gartner Research
Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.