I couple days ago I provided five filters that every founder should apply to a potential business idea as an indicator of potential success.
Today, I would like to add an additional criteria for assessing your next business: Timing or relevancy.
Your startup has to be relevant and timely in order to gain traction.
Felix Dennis, the founder of Maxim magazine, gives an excellent example of this in his book, How to Get Rich. (silly title, excellent reviews.)
“My own suspicion is that many failures are merely a matter of timing. What used to fail now succeeds. What once was a sure thing no longer works.
Take the invention of the fax. Fax technology existed for decades before fax machines were universally adopted. One day my office manager in the US walked me out in the hall to show me how to use our shiny new fax machine.
‘Why do we need one?’
‘Because everyone is getting one.’
‘OK, but why is everyone getting one?’
‘I don’t know. They just are.’
As far as I could see, the technology had not improved much from the prototype I’d inspected a few years back. But now ‘everyone’ was getting one.
Failure had transmogrified into success. The fax had reached critical mass.
Take another example. In 1977 (after years of arm wrestling with the powers that be), Sir Freddie Laker launched his transatlantic Skytrain service, an airline offering a no-frills service at about one third of the prices of his competitors – notably British Airways. It was a huge success for a while, then failed, collapsing into bankruptcy in 1982 with debts of over £250 million. Conventional wisdom in the City and on Wall Street labelled cheap airlines a flop.
All of a sudden, here in the first decade of the 21st century, bingo! Cheap airlines are all the rage again and turning over billions of dollars of business around the globe. A failure one minute, a success the next. It was just a question of timing.”
Felix Dennis knew the importance of timing. In May 1994, Loaded Magazine was launched in Britian by a competing publisher and as Dennis described it, it was the first of the lads magazines. He also described the founding editor’s timing as impeccable.
In 1995 Felix Dennis launched Maxim Magazine, which we all know was a huge home run. Dennis gives some brilliant advice to aspiring founders.
If you want to be rich then watch your rivals closely and never be ashamed to emulate a wining strategy.
Maxim Magazine is a great example of the power in recognizing brilliant timing. Better to emulate a winning strategy than to poorly time something and fail to gain traction because of it.
Caveat: When timing a startup it’s also important to be aware of temporary trends and fads. Courting a trend or a fad in the market can be profitable but the window of opportunity is invariably going to be much shorter.
Edit: I just came across a great blog post about choosing a startup idea using a market approach.
Here is an excerpt from the article.
Market-driven approach to finding startup ideas that make money
The market-driven approach is quite simple. It essentially means:
Find a startup idea that: a) is already making money for someone else in a growing industry; b) interests you; c) aligns with your skill sets. Once you find such an idea, simply carve out a niche within the industry by a) addressing pains of an under-served segment within that industry; b) or, making it much easier to use than existing solutions; c) or, disrupting the market by making your product accessible to masses at a much affordable price. And once you dominate a particular niche, expand from your niche with your eyes set on the largest player in the market.
The rest of the article can be read here. Great advice.