Creating a start-ups is a great way to unlock human potential. You get a group of individuals together with the right equity incentive and you can achieve a great deal. But, what is the biggest reason why startups succeed? In other words, what matters most in a start-up?
Bill Gross has founded a lot of startups, and incubated many others — and he got curious about why some succeeded and others failed. So he gathered data from hundreds of companies, his own and other people's, and ranked each company on five key factors. He found one factor that stands out from the others — and surprised even him.
After starting and been a part of over a hundred businesses since the age of 12, Bill Gross sought out the sole reason why startups succeed.
"Everybody has a plan, until they get punched in the face." So much about a team's execution is its ability to adapt to getting punched in the face by the customer. The customer is the true reality.
What five factors did he take into account?
1) Idea - The "ah-ha" moment.
2) Team - Team execution and their ability to adapt to the customer's demands.
3) Business Model - Does the company have a path?
4) Funding - Do they have enough money?
5) Timing - Do you need to educate the world, is it too late, or just the right time to release your product? Are there too many competitors?
Number one thing that contributed to a success or failure of a start up was timing. Team and execution came in second. The idea itself was third. Business models and funding were fourth and fifth as these were things you could add later on in the business.
Airbnb came out during the height of the recession and people needed money, so people were not hesitant to rent out their places. Uber was perfect in getting drivers extra money. Z.com an online entertainment company, signed Hollywood talent, but broadband penetration was not good in the late 90s. In other words, the timing wasn't good. Years later a similar company, YouTube started and by that time the market was ready. It was timed perfectly.
Are customers ready for your product or service?
Labels: Career, Starting Your Own Business