1) Timing
2) Team and execution
3) Idea
4) Business model
5) Funding
The number one thing is timing. Timing accounted for 42% of the difference between success and failure.
Team and execution came in second, and the idea, the differentiability of the idea, and the uniqueness of the idea, actually came in third. Now, this isn’t absolutely definitive, it’s not to say that the idea isn’t important, but it is very much surprising that the idea wasn’t the most important thing. Sometimes it mattered more when it was actually timed.
The last two, are business model and funding.
The business model makes sense to be that low because you can start out without a business model and add one later if your customers are demanding what you’re creating. And funding, if you’re underfunded at first but you’re gaining traction, especially in today’s age, it’s very, very easy to get intense funding.
So now let’s look at some specific examples about each of these.
So take a wild success like Airbnb that everybody knows about. Well, that company 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 succeeded, aside from a good business model, a good idea, and 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 came out, as an incredible company, with an incredible business model, and great execution, too. But the timing was so perfect for their need to get drivers into the system. Drivers were looking for extra money; it was very, very important. Some of our early successes, Citysearch, came out when people needed web pages.
In summary, 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, but you have to be very, very honest about that factor on timing.
Startups can change the world and make the world a better place. We hope some of these insights can maybe help you have a slightly higher success ratio, and thus make something great come to the world that wouldn’t have happened otherwise.
Thanks for reading!
