There are several conditions that must be met for a startup to emerge. But what is the most important success factor?
This question was asked by Bill Gross. This curious entrepreneur has had the opportunity to bring several successful companies to life. Likewise, he has also been part of several failures.
This has given him the knowledge and experience to fully understand what it takes to start a business.
In addition, Bill is the founder and CEO of Idealab, a company in charge of turning innovative ideas into companies. All of his experience allowed him to break down the factors that make a startup successful:
Most important success factor – Top 5 –
1. The idea: Is it a worthwhile idea?
2. The team: Are the members indicated to execute a plan and adapt to what the market brings?
3. Business model: Is the company clear on how to contribute to its customers in such a way that it knows how to generate revenue for them?
4. Financing: Is the money already available or do you know where it will come from?
5. Time: Is the world ready for that idea? Is it too early and people need to be educated first or is it too late and there is already a lot of competition?
What is the most important factor of success.
In order to avoid falling into subjectivity or reaching conclusions based on errors; Bill analyzed 100 companies founded by his company Idealab and another 100 companies in which he was not involved. He then gave a rating from 1 to 10 to the 5 factors mentioned above and thus came to a conclusion.
The most important success factor is time, with 42%.
Bill explains that it is understandable to him that the business model and financing are at the bottom of the table; since having a product with good demand, the model can be created.
He also argues that in these times, if the idea is good, there will never be a lack of companies or people willing to invest in them.
There are several examples that prove why time is the most important factor. Let’s see some examples:
Airbnb
It is a community where people can offer their homes for other members to stay in. How good of an idea is it? Despite the skepticism of some, the concept was a complete success and one of the fundamental factors was time. Airbnb was founded in 2008, the same year as the economic recession in North America, so through Airbnb people could get extra money without having to give much in return and due to the difficult time they were going through, that extra money that they could earn became more important than the worry of renting out their home to strangers.
uber
The case of Uber was the same. Being an Uber driver could earn extra money in difficult times.
Youtube
Idealab created an online entertainment company called Z.com, which had a great business model and even Hollywood actors, but the time was not right. Bandwidth between 1999 and 2000 was very slow and made it difficult to watch videos online. Additionally, other difficulties with search engines at the time forced the company to close in 2003.
2 years later YouTube was born, which despite not having a business model or any certainty of success, had a perfect time, since the conditions that prevented Z.com from succeeding had changed, watching content online was totally possible.
Bill’s advice to all entrepreneurs is to be very honest with yourself and think about whether consumers are really ready for what you have to offer and no matter how enthusiastic they are about your projects, carefully evaluate the timing.
And remember, if you are really interested in creating your own business, you can read our book “How to create a company while working: Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
