Several essential elements go into developing a startup, but only one assures its success.
Every business starts with an idea. Then you begin to visualize it and continue on the path of materializing that idea. You might start by creating a concept and developing a business plan and business model. Funding your concept is next, and hiring the right team may follow. What if you’ve done everything according to plan, but the timing was just not right?
When Airbnb started, investors rejected the pitch, yet they still managed to grow, not because of the technology or the idea alone. They addressed a pain point of customers at precisely the right time. After the global financial crisis, they provided an alternative way for people to make extra money by providing a platform for people to rent out their rooms, which later evolved to renting out entire houses. Today more people are employed, and many still opt for choices like Airbnb because they’re looking for something different from what a hotel has to offer. Naturally, the company evolved and began to focus on the customer value chain and other perks people look for when staying at someone else’s place. With time, and under different economic conditions, the opportunities changed, and so did Airbnb. Despite being passed on by funders at the beginning, they’ve proven that funding doesn’t ultimately impact your accomplishments.
Before YouTube, Z.com was ahead of its time with the simple idea of watching videos online. They folded one year later because broadband penetration was low, and video display didn’t exist on computers yet. Shortly after they shut down, Adobe popularized Flash for viewing videos, and networks had become faster; video streaming became easier, and the internet speed improved. These factors created a better environment for the survival of ideas like Z.com, but by that time, YouTube was born without a clear or viable business model, yet a much higher chance of success. Initially starting as a dating website, they quickly scrapped that idea and became the giant in entertainment that it is today.
Like Z.com or Joost, there is an endless number of startups that didn’t make it, but not because their ideas weren’t ground-breaking. Research done by Idealab revealed that timing accounted for 42% of a company’s success. The team accounted for 32%, idea 28%, business model 24%, and funding 14%, making timing the critical category in a startup’s bright future.
All five factors are essential for sure, and while we value each one to contribute to the overall entrepreneurial journey and achievement of a startup, timing – or better yet – the market situation has proven many times that it trumps the rest.
Timing may not be everything, but it is almost everything. Companies like Airbnb, during the economic recession, and Youtube, with the release of Adobe Flash, were perfectly timed. So were Instagram, Uber, and Snapchat. Think about what startups you know which have come and gone. Could they make it in today’s business climate?
The best way to assess timing is by being honest about whether consumers are ready for your great idea, and then you can (almost) predict the outcome of your startup’s future.