These 5 factors account the most for startup success, according to serial tech innovator Bill Gross
23rd Jul 2020
Whenever people discuss which factors are the most determining when it comes to startup success, opinions are widely divided.
Is it actually possible to predict if a business is going to be successful? We asked Sportup Innovation Manager Nico Delleman, who came up with some interesting research.
Having a good idea is a good start
“My first answer to any question about recommendations or tips for early stage startups, is always this: you should at least have an idea. This sounds obvious and simple, I know. Not every idea leads to real business with a viable product or service, but those that do, are the result of the entrepreneurs knowing their domain very well: they are familiar with the current practice in their sector, know where they’re going to delivertheir product or service and know how to answer the needs of potential customers in the near future. The ideal start is feeling the need for a certain solution yourself. But besides having a good idea, two more things are even more important.”
“It was Bill Gross, a US based serial entrepreneur, who disclosed in his TED Talk what factors accounted the most for company success or failure. Examining 200 businesses, he discovered and compared 5 factors: ideas, the team, the business model, funding and timing.”
“The results surprised him as well as me: they showed that having a good idea only ranked at number three on the list in order of importance.”
But what's even more important, is... timing.
“‘Funding’ came in at number five, followed by having a good ‘business model’ on number four. As the right ‘idea’ stranded at number 3, it was ‘team’ that came in second, clearly separated from the top factor… timing.”
“Looking at that in more detail, I wasn’t actually very surprised that timing is on number one. Because what that actually means, is that you should perform a very thorough market research. The proper research will tell you if the conditions of the market are in place to support your business idea, or if they're going to hold you back. Without researching the market you won’t know whether your product is needed at the right time. Your idea can be amazing, but if you’re too early, or too late... failure might be closer than success."
“However, looking at the startup initiatives that I worked with over the years, I want to add another timely factor: Tempo. Many startups seem to slow down for various reasons, eventually ending up with nothing and withering away. That’s why tempo is important: you have to keep up the speed, keep the ball moving, in order to succeed. You don’t have to sprint, but make sure you keep the pace.”
That's why you need the right team.
“And that’s where having the right team comes in. Just enough people, with the essential complementary competences and personalities on board, sharing one goal, is what helps to keep up the tempo. Nothing better than another fired up friend to pick you up when things are tough, and vice versa.”
“So idea, team and tempo. Those three are my absolute basics for success.”