When we take a look at the startup-scene it's always fairly easy to identify some of the common elements in this group of companies. There are four clear factors that most people will guess to be of critical importance in a startup's road to success. However, there is one particular detail that seems to be overlooked by many, if not all.
Here's a list of the five factors we found to be pivotal in startup success:
Clearly, without having an excellent idea your business isn't going anywhere. A ton of people tend to overvalue the importance of a business idea, however. Then again, great ideas have translated into utterly terrible companies, while seemingly odd ideas have turned into highly profitable enterprises.
“Your only as strong as your weakest link” as the saying goes. You're only going to be as good as the people working for you will take you. It's that simple. Regardless of how difficult the search might be, keep looking for the right (motivated and loyal) fit for your team. At the same time though, the execution of your idea depends on a handful of other factors as well, which we'll get to in just a moment. It is your team that is going to have to be able to adapt and face reality as the market punches it in the face at times. Pick. The. Right. Team. It is no guarantee that your startup will flourish and make it to entrepreneurial Valhalla, but at least you're limiting the chance you don't make it.
Unless you're one of those young entrepreneurs that has a proven track-record of yielding amazing returns on previous investments, you're going to need a solid business model. It doesn't need to be 200 pages long, but the main goal of the business model is to attract venture capitalists, who'll definitely want to see your plan. Does your company have a clear path to generating revenue from customers? If not, find one!
Finding the necessary to launch your idea, hand-pick a motivated, adaptable team, and gain traction in your industry is obviously a major factor. It is not, however, an absolute lock that you will succeed simply because you were able to obtain seed funding from investors. Very promising companies with excellent ideas, such as Friendster, Pets.com, and Kozmo were all heavily funded and turned out as pretty big flops. Or at best they paved the way for exponentially more successful competitors that built on the foundations they had left behind.
This leaves me with one of the most underrated, undervalued, and underreported factors in the realm of startup or entrepreneurship as a whole: TIMING. There were plenty of video-streaming websites around in the late 90's but due to broadband not yet being widely available yet (and web-browsers requiring codecs to run videos), it wasn't until the early 2000's that we saw YouTube explode onto the scene and revolutionize the world. Ideas like Uber and Airbnb both were able to flourish due to economic factors. People were looking to save up some money so they either offered a room in their house to strangers to make an extra buck, while those travellers were able to see the world a bit cheaper. Timing is of the essence, ladies and gentlemen!
So yes, having a great idea matters. Execution (the team) matters. The funding and your business model absolutely matter as well. However, you have to keep an eye/ear on the market and figure out if your product is what people want right now. Because, remember, “In a great market - with lots of real potential customers - the market pulls the product out of the startup”. Not the other way around, regardless of how awesome you think your idea is.