Startups: They’re All About The… Timing

Here’s my summary of the perfect TED talk: Why Startups Succeed.

I’d like to share with you some findings about what makes companies succeed the most; what factors actually matter the most for startup success.

I want to try to be systematic about it. So I looked at these three factors.

First, the idea. I used to think that the idea was everything for a startup. If it’s a brilliant idea, the startup will just work. Maybe.

Second, team. Mike Tyson once said, “Everybody has a plan, until they get punched in the face.” And I think that’s so true about startups too. A team’s greatness in execution is its ability to adapt to getting punched in the face by the customer. The customer is the true reality.

Third, timing. Is is way too early and the world’s not ready for it? Do you have to educate the customer too much? Is it just right? Or is it too late, and there are already too many competitors?

I looked at successes, like Airbnb, Instagram, Uber, LinkedIn, and Youtube, and some failures: Webvan, Kozmo, Pets.com and Friendster.

The number one thing was timing.

Timing was the biggest difference between success and failure.

Team and execution came in second, and the idea, that actually came in third.

Airbnb was famously passed on by many smart investors because people thought, “No one’s going to rent out a space in their home to a stranger.” Of course, people proved that wrong. But one of the reasons it worked, aside from a good business model, a good idea, great execution, is the timing.

That company came out right during the height of the recession when people really needed extra money, and that maybe helped people overcome their objection to renting out their own home to a stranger.

Same thing with Uber. Uber’s timing was so perfect for their critical need: to get drivers into the system. Drivers were looking for extra money; it was very, very important. Of course it has a great team, great idea, but timing was critical.

Video on the internet was tried many times before, but it was too hard to watch online, you had to put codecs in your browser, and broadband wasn’t commonplace.

When the codec problem was solved by Flash and when broadband was everywhere, YouTube was perfectly timed. Great idea, but unbelievable timing. YouTube didn’t have a business model when it first started. But that was beautifully, beautifully timed.

So what I would say, in summary, is execution definitely matters a lot. The idea matters a lot. But timing might matter even more. And the best way to really assess timing is to really look at whether consumers are really ready for what you have to offer them. And to be really, really honest about it, not be in denial about any results that you see, because if you have something you love, you want to push it forward, so you can be a little blind.

But you have to be very, very honest about that factor on timing. Is the general population ready to adopt this? If not, move onto a different idea, or tweak it until the customer stops punching you in the face.