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Timing your startup

cdixon.org

107 pointsbjonathan26 comments

This reminds me a Steve Jobs quote:

"Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something - your gut, destiny, life, karma, whatever."

from http://www.quora.com/Steve-Jobs/What-are-the-best-Steve-Jobs...

This is also known as hindsight bias.

http://en.wikipedia.org/wiki/Hindsight_bias

I don't think Jobs is concerned about retrospectively predicting the successes he had. Rather, I think he wants to emphasize their inherent unpredictability, together with the assertion that such unpredictability doesn't matter. So it's not quite hindsight bias.

Actually, Jobs is paraphrasing Kierkegaard, who wrote "Livet skal forstås baglaens, men leves forlaens" (Life can only be understood backwards, but it must be lived forwards), and then advocated "Springet" (the Leap, usually translated as "the Leap of Faith".)

Being there at the right place at the right time definitely makes a difference. But - somehow I feel that there is always an element of luck involved in deciding that. You don't want to end up waiting and waiting and realize, oops you were too late!

Exactly, there were examples of startups who had a product at just the right time. But I've never heard of startups who waited until the time was right and then succeeded.

Given the nature of startups and short runways, it's a gamble for a startup to depend on having the "timing right". There are much safer and proven methods for building companies, but its fun to think about.

"But I've never heard of startups who waited until the time was right and then succeeded."

The reason we don't see that sort of thing happen may be that it just looks like they're slow to gain traction from the outside. Except they're slow because of timing, not execution or other internal reasons. Of course, they themselves probably don't know they're "waiting".

Uhm. You should read Founder at Work. What everyone is saying is that persistence is key, not luck.

Here's another quote, not from the book:

"Timing, perseverance, and ten years of trying will eventually make you look like an overnight success." - Biz Stone, Co-founder, Twitter

Yes, the harder I work, the luckier I get. I think of a startup as a game with a 1-in-10 chance - but you can play as often as you like. The odds of failing n times in a row is .9^n - so the odds improve fast. And of course hopefully you'll learn something general along the way to improve your odds, and leverage specific money/tech/contacts/market presence too. If you're persistent, failing begins to look extremely unlikely.

What can stop you (apart from giving up) is if you can't (or won't) learn some key thing, or can't (or won't) do some key thing. Which is why having mentors/colleagues is very helpful (for learning); and having co-founders and being able to employ/outsource/team-work is very helpful (for doing).

Agree that there's luck involved but "waiting" can involve building a product and keeping your burn rate low while waiting for market conditions to be right. "If you are betting on emerging trends it is better to keep your burn low and runway long."

That way when the market's ready, you're in a great position since you've already spent time creating and refining your product, as opposed to someone who waited to start only when they saw the correct market conditions.

I think he covers this in his last paragraph: If you are betting on emerging trends it is better to keep your burn low and runway long.

The Innovator's Dilemma is full of inspirational stories of markets discovered retrospectively. An example off the top of my head is honda motorcycles being used as off-road recreational vehicles - this market was discovered by a sales rep observing customers doing it. This could only be apparent some time after the product was created, and sold.

Another is Xerography being rejected by IBM after careful (and accurate) market assessments. The market significance only appeared after Xerography was actually in use. (from The Billions that Nobody Wanted.)

So when pundits (not cdixon) tell you it's impossible to discover a market retrospectively, they are simply wrong. But they're right that it's risky; and that it's much safer to launch with buyers waiting (of course!). I think the key take-home is that: a business needs customers. (Sounds obvious? Yet it's a perennial downfall of engineer-lead startups.) Finding customers (aka marketing) is at least as much work as creating the product in the first place. To put it in perspective: if creating the product takes a few prototypes over a few months or years, it's probably reasonable to put comparable effort into marketing: a few markets and 4 P's over a few months or years. The danger is when you exhaust yourself engineering it, and collapse at the finish line - just when the second marathon starts, of marketing it. (of course it's even better to run both marathons simultaneously... to torture the metaphor).

I remember watching a Youtube video of a talk by Jawed Karim on Youtube. He talked about proliferation of digital videos as video cams prices were coming down, broadband was cheaper and flash was something present in most browsers. Guess most video sharing site before that used windows media player and real player.

Guess this is the link http://www.youtube.com/watch?v=nssfmTo7SZg

I probably first saw the "fat guy tearing up his cubicle computer" video in RealMedia, but the simple history is that before flash was prevalent there wasn't really a such thing as a "video sharing site." Modems were still the primary means of internet access 7-8 years ago and codecs weren't yet optimized for online access.

I would prefer looking at it this way: "Being at the right place, at the right time".

Neither you can sit and wait for the right time nor you can try to build something for which the timing is right today.

Its more about being prepared for the future. Understand the future and build something you feel excited/passionate about. Now just be fully prepared to strike with full impact as soon as the iron is hot.

Timing your startup? Do it ASAP. If it fails, do it again.

I doubt very many startups at all have timed their run intentionally. More likely, they've been inspired, run to market before their motivation fizzled, and things have fallen into place (right timing, met the right people, etc).

Timing your startup? Do it ASAP. If it fails, do it again.

I think this is a bit too glib. If it is evident to you that the timing is not right for your startup, the prudent thing is not to launch blindly, praying for a miracle or a chance to try again after failure-- rather, to adjust your idea/product/service to fit the market conditions.

Sure, but don't sit there like you're about to jump rope waiting for the perfect timing that may never come. For those facing enough challenges already, the last thing you need is another fear or excuse.

You want to be early, but not too early. Ideally, you want to be the guys who've spent enough time thinking about the space to appreciate the opportunity when it strikes.

I think you just have to have a great team that knows when the iron is hot and where to strike it.

Seems to me that you can't possibly know if your timing is correct except in hindsight.

What if you could really understand why others have failed, and honestly evaluate your ability to overcome those difficulties.

He notes the higher-quality flash player, proliferation of broad-band and digital video cameras, and growth in blogs that wanted to embed video. If you were the Youtube founders, and were able to correctly asses the situation, then you COULD have foresight.

Perhaps you're right. But most people were still on dial-up in 2005 and most DV cameras were bad and expensive. Who really could have known that would have been enough? I'm sure people earlier thought that the proliferation of webcams meant they would succeed.

Maybe the early startups should just be more patient?

The problem is that when the money run out, patience won't save you.

That and, as Chris Dixon said, it's hard to know when these things will be successful at scale.

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