What’s the single most important determinant of a successful startup?
“New ideas are necessary, but insufficient. What’s more difficult and even more important is execution.” “Teams win.” — John Doerr, partner of the powerhouse venture capital firm, Kleiner Perkins Caufield & Byers in the introduction to Successful Business Plan: Secrets & Strategies
Recently we’ve been having in-depth discussions here at PlanningShop about the most important components of success in entrepreneurship.
We’re here in the heart of Silicon Valley, so many funders and entrepreneurs appear to concentrate on the idea/concept. They’re looking for innovation. But research and our own experience show that other factors are as important—or MORE important—than the idea itself.
Of course, the most crucial success factor may vary by industry or geographic location. Some may believe an innovative idea is the most important component in health care or technology while execution is more important in manufacturing and timing more important in retail or consumer products.
You may have conducted some of your own research or have observed the successes and failures of your students or accelerator and incubator participants.
So we want to know: As an experienced entrepreneurship educator, if you had to choose only one, what do you consider to be the single most important contributor to entrepreneurial success.
Resources and Research
Timing
Bill Gross, founder of IdeaLab, which launched more than 100 companies, systematically evaluated what were the factors that most determined ultimate success. His surprising result: timing. Here’s his Ted2015 Talk transcript.
The Idea or Concept
Researchers at Harvard, MIT and the University of Singapore, examined 652 ventures from MIT and concluded that a startup’s core idea mattered more in R&D-intensive industries with more barriers to entry. Read more here.
Formal management structure
Startups that adopt structured systems grow three times faster than competitors according to this award-winning research paper by researchers from Stanford, Barcelona and Beijing.
Execution
Successful young entrepreneurs at a panel at “Forbes Under 30 Summit” all agreed: “It’s 100% execution” that leads to success. Read more here.
Team
“A founder’s individual characteristics are important but what’s more important is that person’s ability to bring a bigger and more experienced team with them,” according to faculty researchers from Rotman School of Management, and Universities of Maryland, Wisconsin, and Ohio State University. Read more here.
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