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Most entrepreneurs have heard the commonly cited statistic that 90% of all tech startups (and let’s face it, the majority of modern startups are technology based) fail. Some people fail because their products have not become what they thought they were. Some fail because they lack money. Others simply fail because their income could not grow fast enough.
But these causes of death do not illustrate exactly what did not work for the startup in its lifetime, in the same way that registering a heart attack as a cause of death does not directly indicate a mode of unhealthy living that may have led to it. As with human life, some startup deaths come from nowhere and cannot be helped, and some are both predictable and preventable.
We all know that there is no shortcut to success, and there is no magic formula that can create the “perfect” startup, sheltered from the 90% mortality rate that is constantly hovering on the heads of entrepreneurs. However, there is one factor that surpasses all others in importance: the timing of the activity.
Related: What Makes Startups Success When 40% Fail?
In a recent TEDTalk, serial entrepreneur Bill Gross introduces a dilemma that has plagued him for years. Within and outside of his organization, he saw dozens, if not hundreds, of different companies move from a simple idea to fully-fledged businesses developing independently. He has seen a number of different successes during his tenure, and he has seen many failures, and as you can imagine, some ideas that he thought were perfect turned out to be flops and others that ‘he thought to be flops turned out to be very successful.
Driven by curiosity, Gross examined dozens of different companies, rating them on a point scale in each of the five different categories that he said were at least partially responsible for determining the success of a startup. They understood the strength of the idea behind the business, the plan on how the idea would be executed, the amount of capital injected, the people who ran the show and whether the idea had been launched at a time when the audience was both ready and interested.
If you saw the title of this piece, you will not be surprised to learn that timing has proven to be the factor responsible for the greatest number of successes among the Gross selection sample. And while the idea and the funding might make more sense – after all, how can you find success with a bad idea or without the money to help you grow? – the temporal aspect represents the biggest breaking point or rupture in the development of a startup.
Imagine a business where everything else is perfect: you have a great idea, a theoretically brilliant business model, a talented team and enough funds to make things happen. But if your idea comes too early and consumers aren’t ready, they won’t easily adopt your system. If your idea arrives too late and there are already a number of different competitors in front of your target audience, you will not be able to squeeze in.
Related: 6 Steps to a Successful Product Launch
Imagine the other end of the spectrum. Everything else is missing: you have a good idea, but not great, a business model with a few holes, a few dedicated people who do not know exactly what they are doing and barely enough funds to keep the lights on. But your outing is perfectly synchronized. People are in great need of your idea and they are ready to do it, but you came before everyone else.
You can expect to see strong initial sales, which can help you flesh out your business model and provide you with enough cash to cancel your funding problem. At this point, you will be able to hire a better team and eventually your idea will evolve and improve with the support of your users.
Timing cannot be ignored and it cannot be replaced simply by paying more attention to the other elements of your business. Granted, having a good idea, a business model, a team and available capital can increase your chances of success, but without this critical timing factor, you will inevitably end up failing – or at least struggling.
The biggest drawback is that there is no scientific process for determining the timing of your idea. You can use market research to determine the personalities of your target demographics and competitive research to see what your competition looks like, but for the most part, timing comes down to instinct and a bit of luck.
However, choose the right time and everything else in your business will fall into place in due course.
Related: 5 Signs You’re Ready To Go Even If You Don’t Think It