Most complicated questions to answer in a startups business is why some ideas succeed and others fail. This was explained by Bill Gross who is the founder of the first US-based startup accelerator Idealab. He launched over 150 startups companies.
He set out a few systems to rate all of his startup companies. They are:
- Ideas: How good /original/valuable was the idea which the startup was working on?
- Team: Did the company have the team and leadership to actually execute the idea?
- Funding: As the companies were predominantly technology-based, how much money did they raise to fund their growth?
- Business model: Did the company know how it would make money?
- Timing: Was the company working on the right things at the right time?
Furthermore, he rated each startup against the 5 criteria set out above, and finally tried to find the statistical trends which would indicate which of the 5 essential elements was the most likely to predict future success. Also, which of the elements was the key component changing success from failure. As a result, he found that the quality of the idea and successful funding are major parts to predict success.
So, to succeed in any innovation, it should meet all three aspects mentioned below:
At that moment in time, does the end customer see enough value in the offering to consider buying / using it? Likewise, this includes a number of aspects, such as it being easy enough to use, affordable, accessible and also delivery on time. It also needs to provide value, even when compared to the competition.
Is the currently available technology at the time able to deliver a good experience? For example, is broadband internet speed high enough to finally stream video of watchable quality. Microchip fast enough to run a program at an acceptable speed. Are new metal alloys light enough to allow an airplane to travel across an ocean?
Can a company make a business model which sustains itself from the offering, or add enough additional value in other ways to make it worth offsetting costs? For example, is there a profit margin with a large enough market in this offering to make investing in it worthwhile?
In order for any innovation to succeed, it will need to meet a minimum threshold for each of the three aspects. These three aspects are the “Triangle Innovation Success”. If any of the three aspects is not high enough, then the innovation cannot work out in the long term yet. Not only these three aspects are important but also timing plays a major role.
“Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.” –Steve Jobs, Co-Founder, Chairman, and CEO, Apple
Successful startups can improve your productivity and helps to achieve financial independence and can foster your early retirement.
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