According to Bill Gross’s survey of 200 successful companies (see TED talk “The single biggest reason why startups succeed”), 42% of the companies attributed timing to the most important success factor. Timing is more important than the quality of the team (32%), idea (28%), business model (24%) and funding (14%). In discussion with some colleagues recently we identified how hard it is to know whether “now” is the right time for any proposition – it is very easy in hindsight.
On reflection I disagree: when I started looking at problems the internet could solve back in 1996 I researched creating a real estate website. I soon discovered that 1996 was not the right time and a decade later the right time was only just appearing. So how can we systematically work out and articulate whether Now is the right time?
The quality of time is something that is external to the company so you need to look out into the real world through the eyes of your product or service. A standard tool for doing this is PEST analysis. PEST encourages you to articulate external influences to your proposition along four metrics – Political, Economic, Social and Technological. PEST has been expanded to include other metrics such as Legal and Environmental (PESTEL) as well – you can read more about it on Wikipedia. Let’s consider aspects of PEST:
- Political: Consider all the things that government has an impact on – 8over the last decades the list has got longer and includes transport, health, tax, law, regulation, defence, tariffs, labour regulation, freedom of movement, grants, etc. In 2016 there were two major impacts that could affect your organisation in multiple ways: the election of Donald Trump and the Brexit result. These are major changes there may be numerous smaller ones such as changes in the Therapeutic Goods Act.
- Economic: Look at the current monetary environment – interest rates, rate of inflation, exchange rates, etc. These all affect the ability to raise capital from all sources for your research and development. Occasionally the whole financial system has wobbles as well – the General Financial Crisis (GFC) in 2008 is a recent example.
- Society: Consider all aspects of the impact of people and society on your company – culture, religion, changing age profile, general appetite for risk and to work, health consciousness, etc. For example it is known that immigrants generally contribute more to a country’s economy than the incumbents (on average they are more educated, younger and have no state support) so an increased in movement of people will change the social fabric of a country.
- Technological: While the impact of the internet is an obvious technology to consider don’t leave out considering the rate of technology change, R&D activity both locally and elsewhere in the world, automation, etc. The driver behind the internet is miniaturisation which affects many other areas as well such as the reduction in the size of all measurement devices meaning products can become sensitive to the environment in ways never dreamt of.
Some events will impact more than one metrics at a time. This is to be expected for large events such as Brexit which is affecting political (changes to the law & government structure), economic (large currency & interest rate fluctuations) and social (immigration & culture) dimensions.
Having considered each of these aspects of the “Now” question you should be in a much better position to articulate three reasons why you can succeed now – not possible last year, not possible next year. Only now…
Our next slide to consider is the Market Size…