This column is authored by Final Year Law Student, Karan Dhingra
“Everybody has a plan until they get punched in the face”
Every marketer knows that customer insights should form the foundation of their product and marketing plans. Yet when I talk to marketing leaders at startups, they tend to balk at the idea of devising and executing thorough market research plans given resource constraints. Consumer Market Research is one essential startup doesn’t talk about.
It’s a common adage in Silicon Valley that 90% of startups ultimately fail. Bill Gross and his team at Idealab has been studying the startup phenomena and has some enlightening research on the topic. His team studied the top startup stories and what really made them successful in the long run.
India is quickly becoming a leading global startup hub. Rising numbers of entrepreneurs, incubators, international and local VCs, and multinational corporations are turbocharging the development of a burgeoning tech scene. In fact, the number of startups in India is expected to nearly quadruple from 3,100 in 2014 to over 11,500 by 2020.
As a startup enthusiast, I had started with a startup last year known as RaddiMandi. It was a location based startup that directs raddiwala’s or scrap buyers directly to your location to pick up scrap at a marketable price. The focus was to keep it less capital intensive and had a smart way through. Just like everyone other, instead of the hiring of scrap collectors, I had tied up with local scrap buyers of selected localities across Gurgaon. With time I started exploring the ugly truth of the industry. Due to poor and unplanned execution, the startup had to be closed down. After analyzing there’s one aspect that many entrepreneurs may miss out will executing their startup.
Nowadays the startups run on 3 phases of time – Is the idea way too early that the world is not ready for it. Is it early, you’re advance and you have to educate. Or too late and there is already too much competition.
So take a wild success like Airbnb that everybody knows about. Well, the company was famously passed on by many smart investors because investors thought that no one’s going to rent out space in their home to strangers. Of course, people proved that wrong. But one reason it succeeded aside from a good business model, a good idea and a great execution were its timing. The company came out right during the height of the recession. When people really needed extra money and that maybe helped people overcome their objection to renting out their own home to a stranger. Same as in the case of Uber. The timing was so perfect for their need to get drivers into the system. Drivers were looking for extra money. Timing has played as an important part for startups.
Timing has not always ushered to every startup. It has also become a failure for few Z.com was an online entertainment company which had raised enough money due to its solid idea. Even signed up incredibly great Hollywood talent to join the company. But the broadband penetration was too low in 1999-2000. It was too hard to watch video content online. You had to put codecs in your browser and do all other technical stuff. Eventually, the company went out of business in 2003. Just 2 years later when the codec problem was solved by Adobe Flash and the broadband penetration crossed 50 percent in America, YouTube was launched. It was a great idea but unbelievable timing. In fact, YouTube didn’t even have a business model when it first started. It wasn’t even certain that it would work out. Thus, timing does matter.
Leading to things we know we don’t know. We often fail to take such aspects into consideration. Our minds are pre-set by such stereotypes set and precedents from the past that idea, business model, funding and other aspects are the only things to look out for. The things that are told to us which we don’t even bother to look out more for. It is a very common thing but still, we fail to think it out for once. Many entrepreneurs only work out an idea, execution, plan and other stuff. Eventually not taking timing into perspective or the acceptance of the idea in the market. Timing accounted for 42% of the difference between success and failure, states Bill Gross, an investment expert.
In India, recently Reliance Jio snagged 72 million paying customers to switch over to its network service within months of going live (now at 108 million). The timing was so perfect that regularity bodies had to study the impact it had on the business eco-system in India. It tried to study the over-arching dilemma this presented to the telecom industry in general.
Standard financial matters assumed control from that point. That is the point at which one competitor brings down costs on a similar level of value, the industry impacts and combines to reinforce its center offerings. So all said and done, timing has been brought about by numerous as either the Achilles’ foot sole area or the harbinger of accomplishment and catering growth in leaps by a wide margin.