The Timing Factor
Can you create a breakthrough TECHNOLOGY instead of incremental improvements?
If you can create, can you DELIVER?
Is now the right TIME to launch your service or product?
These are key questions that every start-up should address if they do not want to run into lots of “bad luck” and business failure. Our world reflects an extremely competitive environment, nevertheless, you certainly do not need a “miracle” to keep your business under the “success” factor, all you need is to nail the key questions following a proper STRATEGY.
The ENGINEERING question addresses the technology introduced with your product/service. Proprietary technology is the answer to this question. Such technology means that your new product or service is almost impossible to replicate. A simple rule of thumb, your new technology should have at least 10x improvement magnitude relative to the closest substitute. If you think this is difficult to implement, then the monopolistic advantage will never be your cup of tea.
A good example would be GOOGLE, it is exceedingly difficult for a company to do to GOOGLE what GOOGLE did to other search engine companies 20 years ago. If you are asking why? The answer is that GOOGLE launched their service with a 12x improvement magnitude relative to any substitute.
The DISTIRUBUTION question addresses your ability to deliver your product/service. Thinking that you can introduce a breakthrough business idea, the real challenge is being able to launch your product as a need for your target segment. Many start-ups are obsessed with attracting investors and securing a government support; however, they seem to neglect that delivering the product to the customer is as important as the product itself. To save yourself from the DISTRIBUTION trap, make sure that your customers understand what they are buying.
The TIMING question addresses whether the world is ready for your product to penetrate the market. The TIMING factor is the LOOPHOLE to any possible obstacle in your way as a start-up, so this is the most important question to address. Let us go through this question with few examples.
In 2001, a company called Z.com entered the market offering an online entertainment service (similar concept to YOUTUBE). The technological support in the early 2000’s was not ready to absorb the idea introduced with this service. Eventually, the company closed its doors around 2003. By the end of 2004, Adobe flash player provided the support to such technological advancements, one year later, YOUTUBE entered the market, and the rest is…. history.
Airbnb launched their service around the end of 2008, few months post to the global financial crises. During this time, people around the world were looking for any sort of income, so Airbnb knocked their doors in the right time.
For better comprehension, let us address the TIMING factor with some numbers. According to a study made across 200 successful international companies, the TIMING factor recorded 42% importance weight to success. The execution plan and the hired team accounted for 32%. Surprisingly, the idea recorded a third position with 28%. The business model recorded 24% and the funding accounted for 14%.
To conclude, investors and VCs (Venture Capitalists) do not the buy the idea itself, they buy your passion about executing your idea. Therefore, to boost your passion and confidence, make sure you nail these questions, once you do that, a fortune of success will come knocking on your door.