The essay
The window of time.
More than once, an investor asked us: why the hurry? He read our urgency as desperation to raise funds. It was the opposite: it was physics. This essay explains the variable that decides more than the idea, the team and the capital put together, and how it is managed without rushing.
3 min read
The factor nobody weighs.
Bill Gross, founder of Idealab, analysed two hundred startups (his own and other people's, successes and failures) looking for which factor best explained the outcome. The idea did not win, nor the team, nor the business model, nor the funding: timing won, with more than forty per cent of the explanatory weight. The same idea, with the same team, succeeds or dies depending on the moment it touches the market.
The window opens when four things line up: the technology is ready, its cost has fallen far enough, the demand exists (even if it cannot name itself yet) and the regulation allows it. Before that, being right is of no use: it is the Cassandra effect. Afterwards, being right is worth nothing: it is a commodity, and the window belongs to someone else.
Hurry, properly understood.
That is why the question we were asked («why the hurry?») started from a misunderstanding. Desperation for funds has another face: it accepts any terms, today. Window urgency is different: it knows how to wait years in the early phases, and it knows that once the window opens, every month counts. We are not rushing to get paid sooner: we are rushing because the market does not wait for capital to deliberate. Confusing the two urgencies is, also, a form of the Cassandra effect: disbelieving the messenger because his clock does not match the committee's.
Time as building material.
The window cannot be predicted precisely: it is managed. Phases F1 and F2 of the path are also a store of early insights: problems captured and analysed that wait, validated and protected, for their window to open. Phased financing removes the wait for capital when the moment arrives: the bridge over the valley of death is already built before it needs to be crossed. And the seven decisions prevent the opposite: building too early out of impatience. Reaching the window neither early nor late: that is the whole craft.
References: B. Gross, The single biggest reason why start-ups succeed (TED, 2015), analysis of two hundred Idealab and external companies.
John F. Kennedy, 1962