Every week we at Jersey Business see people who have an idea for starting up a new business. They are enthusiastic and energetic and generally they have the core skills to deliver their business, but there is more to starting a successful business than just having a great idea. To succeed you also need to have a strong and skilled team, a clear and viable business model and of course the right funding. But is that all you need to achieve success?
Recent research by Bill Gross, a serial entrepreneur, looked at 100 successful and 100 failed start-up businesses to identify the key factors which most accounted for their success or not. The results indicated that in fact the most important single factor was not, as most would assume, the actual ‘idea’ but instead it was ‘timing’.
At Jersey Business, we spend a lot of our time with clients challenging them on how well they understand their customers and asking if there is a clear market of potential customers now who understand and value the service/ innovation that the ‘idea’ brings. We question if this then been tested with some level of market research, not just positive feedback from family and friends, who will of course always love the idea. In simple terms, is the timing right?
YouTube is a great example of getting the timing right. With the increase in broadband penetration and advancement of adobe flash, the conditions for streaming video in 2005 were ideal. Just a few years previously similar businesses had failed due to poor customer experience of streaming and downloading video, even though the businesses were well funded and had quality content.
Other examples such as Airbnb and Uber both launched in the middle of a recession when many homes were looking for extra income and so the thought of renting out that spare room or taking on some extra work hours by driving made sense. Add to that a great business model, the right level of funding, the right team and you see rapid growth and success. It’s questionable if this ‘idea’ would have succeeded in earlier years when the global economy was more buoyant.
Why does this matter? Well, it matters because whilst 91% of new businesses celebrate their first anniversary, only 25% make it through to their fifth year. So, whilst the enthusiasm for setting up in business seems to be as strong as ever, the likelihood of success is not at all easy.
The reality is there are many key aspects that help to make a viable new business, a great idea, the team, the business model, the funding and of course that other vital ingredient good timing. We at Jersey Business are here to help you build that winning formula.