Why Timing Is the Difference Between Success or Failure
The most important and most overlooked factor in business success.
Every day, over 137,000 startups are created, each with a different idea, a different business strategy, a different aim. Out of them, 120,000 will fail and only 17,000 will mature into companies; they may be technology, scientific, agricultural, or even floral startups but that does not matter. Many of these 120,000 failed startups had great ideas, a great business model, even great funding but they missed one thing out.
So let’s say I want to start a 3d printing construction company today. It’s a great idea — fewer employees to pay — great for a startup and I have a really good business strategy with venture and angel capital. My team is highly dedicated and competent, although small. It seems I got everything right? No. I forgot timing; 3d printing in building constructions is too early. Perhaps in 10 years or even 20 but not now. You have to choose your timing, not your idea.
What matters is your timing. It may seem basic but so many entrepreneurs forget that.
All you have to look at are examples.
Have you ever wondered what would’ve happened if YouTube had been made 5 years earlier?
It would’ve failed miserably because the timing would’ve been wrong. Modern internet speeds were nowhere to be found, videos of sufficient length were heavy to load, and many had previously failed to do the same thing youtube wanted. The fact that it came just after the Janet Jackson incident of 2005 meant that many people realized the potential of video streaming, as well as better internet connections, made it feasible.
All startups are that way, not just in the tech world, but in everything- for example, the companies Shell Oil, Total, and BP(all energy companies) were all founded 15 years from one another in the 1910s. That’s because it was cheap enough and the cars and petrol revolution were on the rise.
All you have to do is look at the analysis
If you were to make a new Medium or Youtube or Amazon now, you would fail for sure because you are too far behind- all of that took place in the 2000s. If you have watched Bill Gross’s Ted Talk, you will know what I am talking about. He has founded over 20 startups and incubated in many more and he ranked each of his companies on five key factors- the idea, the business model, the team, the funding, and the timing. He found that your idea, although it counted was not the most important- the timing was. His company MyLife had a great idea (it had an 8/10 on his ratings) yet it had terrible timing (2/10).
He then analyzed the success in more than 200 famous companies on the Fortune 100 and this is what he found- 42% had great timing, 32% a good team, 28% an interesting idea, and only 14% had great funding. So what should we take away from these stats?
1. The greatest of the unicorns and fortune 500 had perfect timing
If you want to build a small business for a few months with minimal profit, sure timing is less important, but if you are serious about your companies aims, think again. Airbnb for example is the prime example of a unicorn that could’ve been a forgotten company. Airbnb’s idea and business model are decent but so many people had already tried it. So why did this one succeed? Airbnb used the path of Craigslist to create its own success.
Before craigslist, in web 1.0, most of the rented stuff was on craigslist.com and it was highly popular and Airbnb just added another layer to that. They made a web 2.0 page where you were less likely to get scammed. Before craigslist, they would’ve collapsed, a few months later and someone would’ve taken their spot.
If you want your company to mature, all your business decisions from hiring to launching new products should be based on timing- is there a recession going on, or has someone already done this. Or it could be too expensive as you are ahead of the curve.
2. Do PESTEL analysis
PESTEL, what the hell is PESTEL?
PESTEL stands for political, economic, social, technological, environmental, and legal factors. This is the best way to access if your timing is right.
Political- If you for example are trying to create a wind energy startup (they are very rare), it is best to be a startup where the government subsidizes you (Biden does it unlike Trump). The political timing isn’t that important though.
Economic- This is the most important especially for stuff like e-commerce. If there has just been a recession or on the other hand there has been a pandemic (hint: corona), this will influence the long and short-term customers you have. For example, deliveroo that was previously reported net losses boomed during the lockdown.
Technological- If you were making A.I fifteen years ago, you were bound to fail because the technology was not there yet and the market wasn’t at that stage either. Advances in robotics in Japan and facial recognition in China have allowed for this progression. Think about if your product is too futuristic or too vintage and outdated.
Social- If you are creating a fashion startup, this is all social timing. If your tastes are backwards in the 80s for example, you are going to find it hard to have a breakthrough. Trends are very important- people do what other people do. If you don’t adapt to the social timing, you will drown in obscurity.
Those are the most important- the other ones are only for specialised and more advanced stages of company development.
3. Wrong timing means loss of money
CB insights researched the top 20 reasons why startups fail and the results were a landslide. The first reason at 42% is there is no market for it but the second reason is more interesting- 29% said they ran out of cash. This shows that if you got the wrong timing and you’ve got no market, you are rapidly going to run out of money.
Money doesn’t grow on trees as they say and even if you’ve got the new capital from funding for your venture, it will run out fast. Half of the small businesses only have 27 days of financial buffer and from then on, its net losses. If you are in fashion and you are trying to sell real fur coats, you are quickly going to run out of money because no one wants to buy them anymore. With that, you have probably one month or two before you declare bankruptcy.
“It isn’t the consumer's job to know what they want” Steve Jobs
That quote is probably a good way to sum this up. It is your job to look at what the consumer what's in that year, at that day and in that decade. Follow the timing and the customers will follow you and so will the people. For the eternity of time good ideas, funding and clever people have always existed but many of them were exterminated by the sheer power of time. If you want your business, your startup to succeed- follow the rules, stick to timing. It’s basic but people always forget it.
