Bill Gross. The biggest reason for startup success

I want to share with you some amazing results of answering questions:

• What makes a company successful?
• What factors are most important for a successful startup?

I consider startup startup to be one of the best ways to improve the world. By gathering a group of people with the right fair motives and organizing them into a startup, you can realize a previously unattainable human potential. At the same time, achieve incredible results. But if startups are so great, where did so many unsuccessful initiatives come from? The answer to this question really bothered me. I wanted to know what is most important for a startup success. Having systematized information about startups, I wanted to try to avoid the intuitive and inaccurate conjectures that had been formed in me over the years.
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I would like to know the secrets of successful companies, because I started doing business from the age of 12, when I was selling candy at a bus stop in high school, in high school I made solar-powered instruments, and in college - speakers. After graduating from college, I founded software companies, and 20 years ago, I founded IdeaLab , and during this time, we opened more than a hundred companies, some of which are successful, and some are not. Failures have taught us a lot.

IdeaLab is the world's first business incubator, founded in 1996 in the United States by brothers Bill and Larry Grosami.

I tried to analyze the importance of factors for the success or failure of a company. For this, I chose the top five.

First, the idea . I used to think that an idea is everything. I called my company IdeaLab just because I like the insight phenomenon. But over time, I came to the conclusion that perhaps the team , management and adaptability are much more important for the company than the idea.

I never thought I would quote Mike Tyson on the TED scene, but he once said: “Everyone has a plan before he gets in the face.” I think this thesis is completely fair for business. Management's ability to adapt and keep hitting is especially important. From here I conclude that for a startup, the most important success factor can be a team .

Then my attention was attracted by business models. Does the company have clear revenue streams? Then, in my constructs, business models began to overshadow the importance of the team.

Following, I drew attention to the financing. Sometimes companies received significant financial injections. Maybe it is more important for success?

Then I analyzed timing (timeliness). If the idea is too innovative and the world is not ready for it? If it’s really early, how do you bring the idea to the world? Is it that simple? And if it is too late and there are already too many competitors on the market?

Timing - the choice of the most advantageous moment.

I tried to very carefully assess the impact of the five factors voiced by a fairly large sample of companies. To do this, I chose hundreds of companies from the IdeaLab portfolio and hundreds of others to try to systematize the data.

So, the top five with billions in capital from IdeaLab portfolio: Citysearch, CarsDirect, GoTo, NetZero, Tickets.com . Five outsiders on which high hopes were pinned: Z.com, Insider Pages, MyLife, Desktop Factory, Peoplelink .

I tried to rank by the specified attributes, participating in the sample of the company. After that, he took on companies that have no relationship to IdeaLab and achieved tremendous success, such as Airbnb, Instagram, Uber, Youtube and LinkedIn .

As well as outsiders: Webvan, Kozmo, Pets.com, Flooz and Friendster . They were heavily funded, in some cases they had sufficiently developed business models, but success passed by. After analyzing the influence of five factors on the success of all these companies, I got amazing results.

The first place was taken by timing, stretched 42%. The team and the management took about the same line. And, actually, the factor of the idea took only the third place.

This result is not yet final, it is still impossible to say that the idea occupies such a low place, but the fact that the idea loses to other indicators surprised me. Sometimes its value increased with appropriate timing.

The last two indicators, business model and financing are also significant for me. I think that starting a business can happen without a business model that can be developed later. Financing also matters in the later stages of business development, especially in today's realities, getting it easy is enough.

Let me give you some concrete examples. Consider the wild success of Airbnb. The company was ignored by many famous investors due to the nature of its business model. Today, of course, the choice of people proved the opposite, but one of the reasons for luck, along with the business model, the idea, its excellent performance and management, is timing, that is timing.

The company fired in the midst of a recession, when people really needed additional funds, which, in turn, helped people overcome the barrier of renting their homes to strangers.

Same with Uber. Incredible company, incredible business model, and excellent performance. Timing ideally lay on the prepared ground, which is very, very important.

Some of Idealab's first successes: Citysearch came about when people needed web pages. GoTo.com, announced at TED in 1998, appeared when companies were looking for effective ways to get traffic. It seemed to us that the ideas were incredible, but in fact, timing was more important.

Some of the failures: having founded the media company Z.com, it seemed to us that sufficient capital, an adequate business model and the participation of celebrities would ensure incredible success. Unfortunately, the spread of broadband access at that time (1999–2000) was somewhat ephemeral, making it impossible to use video with sufficient comfort. In the end, the company flew into the pipe in 2003.

Just two years later, when the problem of video encoding using Adobe Flash was solved and broadband access exceeded 50%, YouTube shot. Z.com is a great idea, but late timing. From the very beginning, YouTube didn’t even have a business model, some may recall that the problem of resource monetization was solved only when Google bought the service, and even Google didn’t immediately solve this problem. That's right, but the appearance of Youtube turned out to be timely, which predetermined success.

Thus, we can conclude that, in general, management and the idea are of great importance. But timing is much more meaningful. The best way to assess timeliness can be an analysis of the consumer sector and its readiness for innovation. Despite this, the rejection of the implementation of ideas, with an unfavorable assessment is not at all mandatory, but an honest assessment of timeliness can give an acceptable prediction of success.

As I said earlier, I think that startups can change the world and make it better. I hope that the results of my research can help to get a slightly higher success rate, which in turn, will bring changes to the world, which otherwise could not have happened.