Timing: The single biggest reason why startups succeed

Why do startups like AirBnB, Uber, Space X succeed while other fail? Is it the team? Funding? Timing? Idea? Business model?

You, and most people, will think it’s all about the idea, the team and execution. It’s neither. According to serial entrepreneur Bill Gross, it’s all about timing.

Timing is everything

single biggest reason why startups succeed

Mr. Gross came to this conclusion by investigating how 5 key factors affected the success of the 125 companies in his portfolio at Idealab and 125 companies outside of his portfolio.

The factors he considered were:

  1. The Idea: How new is it? Is there a unique truth in the idea? Are there competitive moats you can build around it?
  2. The Team and the Execution: How efficient is the team? How effective is it? How adaptable?
  3. The Business Model: Do you have a clear path to revenues?
  4. The Funding: Can companies that can out money-raise others succeed where the others would fail?
  5. The Timing: Are you too early? Just early? Too late. Right on time? Did that matter a lot?

Of these 250 companies, Bill picked 10 in each category: five companies that turned into billion-dollar companies, and five that everyone thought would be billion-dollar companies but failed.

Which factor mattered the most? Timing.

In the video you can learn more about his findings:

This isn’t a surprise for those of us who do innovation because adoption is the real challenge for innovators; and it only happens until people are ready to do so. Apple, who hasn’t been first to market in anything, has mastered the art of timing:

“Apple has been second at most stuff. They’re not a true innovator in the definition of the word. They weren’t the first into object-oriented computing (the mouse), they weren’t the first mp3 player, they weren’t the first mobile phone. But they look at something, they improve upon it, they weigh it, and they come in and make it more user friendly.”

Bottom line: Innovation requires a change in behavior, and that only happens when outside factors align themselves for people to be ready to adopt a new idea.

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