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Boulder Bits

How To Think About Timing: The Most Important Factor In Startup Success

At Bits, we’re always thinking about timing.

As a startup studio, our job is to internally form projects, match these projects with teams, and help them scale into successful startups. We ideate and collaborate from the very beginning, rather than wait for entrepreneurs to bring us concepts that can then be validated.

We consider validation way earlier in the process than accelerators. And one of the ways we do that is by considering the timing of an idea. Timing is integral to what we do and shapes every company that we create. If we can’t answer “Why now?” we don’t proceed.

Timing is most highly correlated with success.

Timing is one of the five factors of startup success — and according to Bill Gross of Idealab, it’s actually the single biggest reason why startups succeed or fail. The other four (the idea, the team, the business model, and funding) don’t even come close.

And yet, despite Gross’ well-known TED talk on this topic back in 2015, little attention is paid to the timing of a startup.

Maybe people don’t like to talk about timing because in many ways, it’s out of their control. The idea, the team, the model, and even funding — these are things that we have a direct hand in building, and if it doesn’t work out, we only have ourselves to blame. Conversely, if it does work out, we get all the credit.

Failure is often pinned on some other factor

Of course, there are plenty of reasons why a startup can fail. Coming to an idea too early or too late might be one of them.

If you take the top 20 reasons that startups fail, according to CB Insights, you’ll find that not one of them has to do with the timing of the startup. Burnout and disharmony among founders — that’s a team issue. A poor market fit or user experience — that’s a problem with the idea itself. Running out of cash too soon is a funding issue, and a failure to pivot or legal challenges have to do with the business model.

These are all commonly discussed reasons for failure. Questions of timing, on the other hand, are rarely considered.

How to think about timing

So we know that timing is crucial to success. But what is timing in this context? How has it affected the success of today’s well-known companies, and how might it affect our own success?

Timing means that the market has changed, or the technology has changed, such that now is the right time to acquire the most customers at the lowest cost.

Successful companies are well-timed

There are some classic examples of how this has played out for super successful businesses. When YouTube hit the market, cell phone bandwidth and capability boomed, making internet video a much broader opportunity than previously thought. Uber took off because GPS and data communications were sufficient to make real-time tracking of cars and people viable.

It’s often said that we succeed because of the people, ideas, or companies that came before us. This is another way to think about timing: If your business comes along before another company paves the way for your success, you may not find the going so easy.

The most famous example of this might be Airbnb. One of the keys to Airbnb’s success was how it used the path carved by Craigslist to grow — poaching users that were already looking for non-traditional means of finding housing.

Just the awareness of Craigslist as a site — and the scams people were running on it — helped early adopters see Airbnb as a viable alternative. Compared to the barebones look of Craigslist, where people went to get their money stolen, Airbnb had a beautiful website using well-established, web 2.0 technologies. While Craigslist is still around and successful in its own right, Airbnb capitalized on both the timing of the market (the economic downturn of 2008) and the changing in technology to vault to success.

And well-timed companies will be more successful

We weren’t inside the offices of these companies when they were first starting up, so we can’t speak to whether they discussed timing. But if they had, this is what they might have discussed:

  • What changed about the market or consumer spending that made now the time to address this problem?
  • What changed about technology that makes now the time to reduce costs?
  • What changed with advertising or distribution that reduces costs, or accelerates customer engagement?

These are the sorts of questions we ask at Bits about every idea that we come up with.

How to look for ways to improve your timing

To a certain extent, timing is out of our control. We can’t predict massive changes in the market or technology and would be foolish to try matching our nascent ventures to those trends.

We can, however, try to look over the horizon and glimpse at the changes that are nearly at hand. One way to do that is by doing a “PESTEL” analysis.

PESTEL stands for Political, Economic, Social, Technological, Environmental, and Legal factors. These are external marketing environment factors that shape the world we live in. Professional Academy has a good rundown of how these factors can affect your business. While you can’t control these factors, you can control how you react to them, and how to position your business to take advantage of them.

Another thing you can do is simply take the approach that we at Bits have taken, and ask yourself the question: “Why, what, and how?”

Why is now the time to start this company? What has changed in the market or consumer spending habits that is asking for this solution? What companies have gone before us that worked on similar ideas and what can we learn from them to build a better solution? And, perhaps most importantly, how much money and time will this idea take to get to market? Is that timed well or will I be too late?

Because here’s a secret about timing: It’s okay to be a little early. If you need to wait a year for the market to catch up to you, and you use that time cementing yourself as a player in the space with excellent branding and successful fundraising, you’ll be okay.

But there’s little room for a company that’s late to the game. At that point, you need to be on to the next idea.

Timing is about more than being lucky. Timing is recognizing which ideas are ready to be explored, which ideas aren’t, and which ideas are past their prime. Startup studios have rigorous systems of testing and validating their ideas to be sure that they are staying agile and lean. At Bits, we only invest in ideas that meet all criteria, and timing is always a factor. Once you start thinking about things this way, you’ll see just how much of this concept is actually well within your grasp.

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