For startup genius Bill Gross, sharing the secret to success wouldn’t be possible without experiencing failure.
Few know success quite as well as Idealab founder and CEO Bill Gross. With more than 100 startups birthed from Idealab, including NetZero, Pet Smart and tickets.com, Gross has lead plenty of new stores to sky-high profits and unparalleled success. Like many others, however, he also started stores with unfortunate outcomes.
But, Gross’s entrepreneurial spirit didn’t allow him to fall when faced with failure. Instead, he explains on TED Talk, failing inspired him to find the key to success. “When a group of people with the right equity incentives takes part in a startup,” Goss says, “They can achieve unbelievable things.” So, why do so many startups fail?
Needing answers, Gross set out to uncover what factors undeniably attribute to creating a successful business. Guided by a systematic approach, common misperceptions and his own business failures, Gross evaluated 100 Idealab companies and 100 non-Idealab companies to determine five underlying traits that ultimately lead to startup success:
The idea is your aha! moment, Gross describes. It’s the time when you first come up with the concept for you business. Initially, he believed “the idea was everything” (hence, Idealab).
Gross says a team’s execution comes from the ability to adapt after getting (figuratively) “punched in the face by the customer.” Your team doesn’t just believe in your brand – they convey your brand and its values directly to the customer.
3. Business Model
The business model outlines how your new store will generate revenue. Is the path to customer revenues clear? What is your plan for achieving profits?
How is your startup funded? Do you have enough initial capital, or will you need more funds? Do you have the right type of investors?
Are consumers ready to for your brand at just this moment? Are you introducing your concept too early? Or, are you too late? Has the market become saturated?
Though Gross identified which five factors impact the outcome of startups, he wondered if any elements had greater influence than the others. After evaluating the wild success of brands such as LinkedIn, YouTube and Instagram and the downfall of not-so-successful brands like Friendster, floorz and pets.com, Gross revealed top contributor to startup success was timing.
Gross found hugely successful startups, like Uber and Airbnb, soared to unbelievable heights because they launched at a crucial time: a time when the industry was ripe and consumers were ready for their concepts. For Uber and Airbnb, the idea was appealing to customers because these concepts were unveiled during a recession. Consumers’ desperation to both earn and save extra money outweighed the terrifying thought of allowing strangers into their homes or personal vehicles.
Your idea is important. But, the idea won’t lead to success unless the timing is right, too. For successful startups, the idea isn’t everything, as Gross once believed. Before launching your startup, be honest about the timing. Ask yourself: “Are consumers really ready for what I have to offer?”