The Number One Reason Startups Fail

What inspired me to write this article is the sheer experience of the person from whom I’m extracting this knowledge. This article is a comprehensive summary of Bill Gross’s TedTalk back in 2015 regarding the factors for startup success.

The Number One Reason Startups Fail

Before you dismiss me by saying that you know more about your business (even if its potential) than what I’m about to tell you, then you might reconsider. Bill Gross is the creator of Idealab, which has founded over 100 different companies in the last 20 years. Let that sink in like the titanic, baby! A HUNDRED DIFFERENT COMPANIES! With the help of examples of his own companies, five of them which were a huge success and five that were a complete disaster, he outlined these five factors that are integral for startup success.


Number 1- Timing:

According to Bill Gross, the most important factor for any startup’s success is the timing. Is your idea too early that the technology and the mindset of the people is not ready for it? Or is it early enough that you’ll first need to prep the minds of your audience for it. Maybe it’s too late that you already have too many competitors in the market. The chances of your company succeeding are the greatest if the timing is just right. An example of such a success is Uber which is now a worldwide sensation. And Air Bnb which was started right around the recession, when people needed the extra money. Think about it, would you rent out your home to a stranger? Chances are you will if you need that extra cash.

The Number One Reason Startups Fail

Number 2- Your team:

Let us use the enlightening words of Myke Tyson for this one;

“Everybody has a plan until they get punched in the face.”

Is your team adaptable towards adverse circumstances? Are they good enough to find the solutions towards unexpected dilemmas and ultimately serve their level best by tending to your customers? If that is the case, then your chances of success are far greater. You need a team that is vigilant, one that is flexible.

The Number One Reason Startups Fail

Number 3- The idea:

This is an extremely mind-boggling finding by Bill. He claims that the actual idea or the concept of your business isn’t the first or second most important factor for success, it is actually the third. Well, there’s a sigh of relief for my thick head.

The Number One Reason Startups Fail

Number 4- Business Model:

The business model, Bill believes, is not important to have at all (at least in the start.) Youtube never had a business model to begin with but now it is undoubtedly one of the most surfed websites on the planet. Don’t waste your time thinking about one. Now you know where you need to focus.

The Number One Reason Startups Fail

Number 5- Funding:

Having a good amount of funding for your startup can be a great boost for immediate success, but it is not integral. Great businesses have been found without a penny of personal investment to begin with. Bill believes that there are a ton of ways to get your business sponsored just if the idea and its timing is right.

The Number One Reason Startups Fail


Like with everything we rarely have the complete picture. Listening to Bill got me thinking. If you look at it, it’s not the timing that’s important but economics 101. We are back to the basics of supply and demand. There is no reason for creating a supply if there is no demand. If you invest in something that has a huge demand you will be gold But if you invest in a great idea that has little demand then things won’t go accordingly. So timing matters little once you realise that timing is basically a simple way of saying, supply and demand. And sometimes you can manipulate those things. Look at the successes of Instagram, Snapchat and Whatsapp.


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