Startup organizations undoubtedly are one of the greatest forms which can change the world and can definitely make the world a better place.
If you take a group of people with the right equity incentives and organize them in a startup, you can unlock human potential in a way never before possible. Still the most important question remains…
Why do so many startups fail?
Some insights can maybe help you have a slightly higher success ratio, and thus make something great come to the world that wouldn’t have happened otherwise. You get them to achieve unbelievable things. Now the obvious question is what factors actually matter the most for startup success.
“Everybody has a plan, until they get punched in the face.” – Mike Tyson
What makes startup companies succeed most?
The customer is the true reality. And that’s why it seems that the team maybe was the most important thing. There are few startups where we all had high hopes for, but they didn’t succeed. Then business model, funding, timing, idea! Some went wild successes, and others failures, these results are really surprising.
Now, this isn’t absolutely definitive, it’s not to say that the idea isn’t important, but it is thought provoking that idea itself wasn’t the most important thing. Sometimes it mattered more when it was actually timed. The number one thing was timing. It accounted for 42 percent of the difference between success and failure. Team and execution came in second, and the idea, the differentiability of the idea, the uniqueness of the idea, which actually came in third.
Execution definitely matters a lot. The idea matters a lot. But timing might matter even more. And the best way to really assess timing is to really look at whether consumers are really ready for what you have to offer them. And to be really, really honest about it, not be in denial about any results that you see, because if you have something you love, you want to push it forward, but you have to be very, very honest about that factor on timing.
Watch the striking six minute TED talk on the topic from Bill Gross – The single biggest reason why startups succeed!