What is it that makes a startup succeed? This question has stumped me and likely many other entrepreneurs and investors over the years. Bill Gross — a legendary founder of Idealab who has started and invested in hundreds of companies — may have the answer.
After seeing countless startups rise and fall, Bill has developed a unique perspective on what makes them thrive in the long run. In a fascinating TED talk, he shared the key factors he believes make or break a new business in order of importance.
As someone who often helps entrepreneurs turn ideas into products, I was intrigued by Bill’s framework. Whenever founders come to me asking for advice on developing their brilliant idea into a product, we dig deeper together to understand how to set them up for success beyond launch day.
So, what were Bill Gross’ secrets to startup glory?
Having the Right Team
Execution is everything when it comes to bringing a startup idea to life. But turning vision into reality requires more than sheer willpower or effort. According to Bill Gross, having the right team accounts for 28% of startup success.
Building a team that can operate smoothly and efficiently takes incredible leadership. It means sustaining motivation even in difficult times and forging lasting bonds of trust. I’ve seen close-knit founding teams stay together for over a decade and weak ones fall apart in months.
For example, Airbnb’s founders Brian Chesky, Joe Gebbia, and Nathan Blecharczyk bonded early over shared values and visions. This camaraderie helped them persevere when their fledgling home-sharing startup was on the brink of bankruptcy in 2008. Today, Airbnb is valued at close to $80 billion.
On the other hand, the lack of trust corroded Justin.tv’s founding team when the workload scaled. But after a painful breakup, the remaining founders rebounded as Twitch — capitalizing on the rising popularity of game streaming to sell to Amazon for $970 million.
Team chemistry matters immensely, but it isn’t a magic bullet. Execution still comes down to consistently making the right moves at the right time.
While ideas themselves may be overhyped, you need to come up with solutions that break new ground to succeed. As Gross puts it, uniqueness accounts for 24% of the startup equation.
Your product or service should be original or improve what’s already out there. Identify fundamental gaps in a market, pay attention to emerging trends, and then leverage your special skills or insights to craft something fresh.
For instance, Groupon pioneered online couponing tied to local businesses when that was still a novel concept. Meanwhile, Apple incorporated existing MP3 technology into a uniquely slick and user-friendly device, capitalizing on consumer desire for music on the go.
But an idea in isolation is still only potential. Successful founders don’t just ideate. They execute their vision strategically according to real-world conditions. Which brings us to timing.
Timing is Everything
While teamwork and uniqueness matter tremendously, Bill Gross found timing alone determines 42% of a startup’s success.
Market timing can make or break even the most promising venture. Uber, for example, scaled rapidly because it launched when smartphones had recently gone mainstream. The timing was perfect for an app-based, on-demand taxi service.
Conversely, Webvan learned in 2001 that operational brilliance means little without demand. Their grocery delivery model failed because it exceeded most consumers’ willingness to buy groceries online.
So, how can founders determine the right moment to launch? Here are a few key factors to consider:
- Assess technology trends and infrastructure. Is the tech there to support your concept?
- Gauge market demand. Are target users enthusiastic and ready to adopt new products quickly?
- Evaluate the competitive landscape. Is the space oversaturated or ripe for disruption?
- Test and iterate before going live. Get user feedback to confirm product-market fit.
The Window to Launch
While you can’t see into the future, adept founders spot patterns, listen to their users, and relentlessly align their execution with the realities on the ground. They understand that great timing is not up to chance but the result of preparation meeting opportunity.
The window to launch a given product may be years in the making but open briefly. As an entrepreneur, your job is to spot that window, seize it, and pour your all into making the most of it while it lasts.
Timing may tip the unstable balance between startup victory and defeat. The success goes not to the first mover but the right mover — the one who executes with speed, passion, and acute market awareness.
Originally posted on Medium.com