The importance of start-ups
Start-ups are important for innovation and new business development. For those starting new businesses, they need to be laser-focused on the things that will make the business to succeed. The statistics show that 20% of new businesses will fail in the first year.
I have always had an interest in how to improve the success rate for small businesses, especially start-ups. They are the engine of business evolution. As old businesses die off, we need their natural replacements in the form of start-ups.
The speech by Bill Gross on start-ups given at TEDx is a great insight ( you can check this out on YouTube). I was surprised by the findings of his research on the reasons for the success of start-ups. Of course most high profile start-ups are in the technology sector, but there are hundreds more in other sectors as well. His finding should be of interest to everyone planning to start their own business.
The most important success factor for start-ups seems to be timing. Bill Gross gave examples of Airbnb, Uber and YouTube as examples of businesses that came to market at the right time. Apart from time, the next most important element for the successful start-ups happens to be the team and their ability to execute the plan. We have seen this in recent success stories like Facebook, eBay, Google etc, where the founders have relied on more experienced leaders to help them put the team in place and execute plans.
The actual business idea only comes third, then the business planning and lastly the funding. This insight by a very experienced start-up expert allows us to understand what is important in determining the success of start-ups. We have all seen products that came to market too early or before the consumers are ready for them or those that came too late. The perfect time for a product or service is difficult to judge.
The above must help to give some comfort to entrepreneurs who may be focusing their attention on funding, it seems better to focus research on timing in making sure that not only is the idea a good one, but that it is perfectly timed, with the right team in place to execute as best as possible.
Having a great business model and adequate funding came third and fourth in the ranking. The best quote from the presentation was a quote attributed to the boxer Mike Tyson; “everyone has a plan until they get punched in the face”. This is a wonderful quote. It doesn’t matter how well we plan until we put the product or service in front of the ultimate judge, the customers, we will never know how good the product or service is. The most important thing is how we deal with the feedback from our ‘ultimate bosses’, the customers.
You may also be interested in critical success of entrepreneurship
But don’t wait until you get the perfect product or service. Get the product to market and let the judges determine. I watched Elon Musk of Tesla had an indestructible glass on his new car shattered. He shrugged his shoulders and said “Well it is back to the drawing board”. Great attitude.
You may also be interested in small business consultancy