If you have done your homework, you have probably heard that most startups fail within five years of their launch. Unfortunately, that is true. Many startups collapse due to wither the incompetence of their team, lack of funding, or most probably, because of poor timing.
In 2015, Bill Gross, the founder of Idealab and the person who turned many ideas to successful startups, gave a TED Talk about the main reasons behind startups’ success. In order to find out, he gathered data from some companies and compared them based on five dimensions: The idea, team/execution, business model, funding, and timing. He came to the conclusion that the latter is the most crucial factor in determining a startup's success. He says, “Timing accounted for 42% of the difference between success and failure”.
Even with the immense importance of timing, it still gets less attention than it should. In fact, many companies are praised for their innovative and original ideas or effective business models, but never for their perfect timing, even though according to Bill it’s the most crucial variable in this equation.
Airbnb, for example, did not bring a new idea or concept to the market. There were already pioneers in the industry like HomeAway—which by the way is orders of magnitude less valuable then Airbnb today. What made Airbnb a successful business is that it was launched during the Great Recession, where people needed extra money to the point that they were ready to welcome strangers in their own homes.
However, even if the timing is right, the brand’s vision has to be communicated effectively. Otherwise, you risk the chance of coming across as opportunistic. In 2014, Airbnb rebranded completely, making its visuals more fun and switching to a strategy that revolves around their vision of "Belonging" wherever you are. The new logo for example, as part of a dynamic identity system, was made customizable by hosts to fit their locations.
The significance of timing in startup success depends on how you pair it with clear communication of Brand Vision. The multibillion dollar hospitality unicorn is proof that ideas aren’t everything and that in order to succeed, both the market and the audience have to be ready for your product/service. This is why having a strong brand strategy which is based on a profound understanding of your target audience will allow you to connect with them much better, reducing the possibility of missing this once in a lifetime opportunity of being the startup that got the perfect timing.
1. What Is The Right Timing?
It could be defined as a set of circumstances that make both your audience and the market in general ready for your product/service. If your timing isn’t right or if it's not fully taken advantage of with the right branding efforts required to connect with the audience, then neither your idea nor its execution is enough to succeed.
- Pre-existing demand: No, creating demand is not impossible, but it is certainly infinitely more difficult to achieve for an unknown or small brand. Giants like Apple have reached a point where the have fans that not only enjoy their products but actually love them. So they can sell pretty much anything they make. For a startup that is just starting out that can be hard to do.
- The Economy: Every entrepreneur knows that studying closely the economy can create new opportunities. The Great Recession allowed Airbnb to happen, the same way the inflation of cable prices allowed streaming services to happen. But the important thing to remember is that people in general don't like companies that take advantage of economical factors to profit. Good branding is the way to avoid having an ambiguous goal that could be interpreted negatively by people.
- The Audience: You are selling to people, and if people aren’t ready for your product/service, then you are battling uphill. Also, social behaviors change quickly and you should take advantage of that. Facetuneapp became popular because of the “selfie” culture. But they were only able to do that because their brand adopted a language that their audience related to. The contrasting example is your 50 year old uncle who still tries to look cool by keeping up with the trends unsuccessfully.
2. Don't Miss Your Chance
Understanding who you are targeting is often the most important step to create the right Brand Strategy for your startup. This understanding will not only help you improve your product/service but also shape the tone and voice for your message. First, you need to identify who you are addressing so that you can speak directly to them by focusing on their specific needs and pain points.
Even though it might take some time and effort, understanding your audience is key to your success. You should know who you are talking to, where they live, their motivations, and even their income. Seeing the full picture will also allow you to make cost-effective strategies. If you are targeting businessmen, then TikTok is probably not the touch point you want your brand to be most present in.
If you fully understand your audience, you’ll be crafting specific messages that attract loyal customers who care about your brand.
3. Time Doesn't Stop Moving
Communicating your vision in a successful manner is what turns a target audience into fans and then customers, and mere consumerism to rewarding, meaningful customer experience. Even though it is easy being said than done, conveying your vision adequately is what creates a consistent brand identity throughout time.
For your audience to react positively to your product/service, you need to need to catch the big way at the right time yes but what good is that if you can't ride it to the shore? Branding is your surfboard, it allows you to grow with your audience as the market shifts and changes. Maybe Airbnb did blow up because of the recession but they kept going even after it was over.
At this point it is pretty clear how important timing is when it comes to a startup's success, but without the right branding efforts your startup can shrink as quickly as it grew. Increasing your startup’s chance of success lies in truly understanding your audience and their motivations, and successfully aligning and communicating your vision at the right time using branding. A well known and loved brand is at the core of every successful company. Because significant impact is not made by what is sold, but through the deep and human connection that can be built around a shared vision of the future.