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The Biggest Reason Companies Succeed.

One of those questions that looms over you when starting something new. How can I guarantee success? What elements should I focus my efforts on to be the best I can be?


Bill Gross is the founder of the first US-based startup accelerator, IdeaLab. Since 1996 they have created over 150 companies and more than 45 IPOs and accusations. He looked back at all his success to see if there was a common trend that could explain what makes a successful startup.


He broke down the companies into five areas that could explain his success:

  1. Ideas: How good, original or valuable was the idea or problem that the start-up was working on?
  2. Team: Did the team have the leadership and skills execute the ideas?
  3. Business Model: Did the company know how it would make money?
  4. Funding: How much money did they raise?
  5. Timing: Was the company working on the right things at the right time?




Take a look at Tower Records as an example. In the 90s they were the authority on new music. They spread locations all across America and in 1998 took out $110 million in debt to fund aggressive expansion. In the same year, the first digital music player went on sale and Napster (the first popular music sharing platform those who don’t remember) took the world by storm the next year. By 2001 apple launched the revolutionary iPod/iTunes combination and sold over 1 million songs in its first week. Sales of hard copy music aggressively declined, and in 2004 Tower filed for bankruptcy and for the second time in 2006. It wasn’t all caused by the advent of the Internet but this was the biggest contributor.

But it’s not all bad news, take Netflix as an example. Back in the 90s when it was launched, it would have been impossible to stream movies on a dial-up connection. But they soon recognized that the DVD sharing model wasn’t sustainable. Netflix saw that a streaming model would likely be the successor to the core DVD business so took advantage of faster connection speeds and a growing library of original and third party content. Although the original idea is a minuscule part of Netflix now, they survived by anticipating the shift and taking advantage of.

What you can take away from this is that timing is everything. According to Bills data. What determines the success of a company is timing. Choosing what to focus on and when.

Here are Bill’s findings:

Full TED: Talk below