The Most Important Skill in Startups Isn’t What You Think

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The Most Important Skill in Startups Isn’t What You Think

The biggest factor in entrepreneurial success is something few people ever talk about.

The Most Important Skill in Startups Isn’t What You Think
Photo by Dollar Gill on Unsplash

Since we all love a good cliche, let me share one I’ve been thinking about a lot recently. Since it’s a cliche, you’ve probably heard it (or something like it). It’s a quote that comes from Walter Gretzky and was made famous by his hockey-playing son, Wayne. The quote goes like this:

“Skate to where the puck is going, not where it has been.”

The lesson (and its applicability to entrepreneurship) should be obvious. If you build a business focused on whatever the current “hot thing” is, you’re going to find yourself surrounded by lots of competitors. Why put yourself in that position? Instead, try to figure out where the market is going, and get there before everyone else.

The reason I keep thinking about this Gretzky quote is because I’ve spent the past 18-ish months talking with some of the world’s most successful entrepreneurs (for my podcast), and, during my conversations, I’ve seen a clear pattern. After interviewing the founders of companies worth a combined hundreds of billions of dollars — companies like Etsy, Vimeo, Flickr, Foursquare, WIRED, and Hotmail, just to name a few — I’m convinced a huge part of the success of all these companies comes from one thing: timing.

In entrepreneurship, timing appears to be more important than any other factor in determining the eventual success (or failure) of a company. But how can entrepreneurs control timing? Isn’t that like controlling luck?

In a word: NO!

Despite how it might seem, the best entrepreneurs are great at controlling timing. In this article, I’m going to show you how

Before I explain how to control timing, let’s look at a couple examples of the impact timing can have on the trajectory of a company. I’ll begin with a company called NetGravity.

You’ve probably never heard of NetGravity, and that’s OK. You wouldn’t have reason to know about it unless you’ve been buying advertising on the Internet since the advent of the World Wide Web. Luckily, you don’t need to know about NetGravity to appreciate the role timing played in its ultimate success.

NetGravity was the first company to sell web advertising software. Its first customer was Yahoo!, and its founding CEO, John Danner, convinced Yahoo! to buy his product before NetGravity had even built it. In other words, when NetGravity launched, so few competitors were in the space, and the market was moving so fast, that simply telling a potential customer what his company was going to build was enough to help John make his first big sale. In fact, when we spoke, John even admitted that his success was more a product of timing than anything else, going so far as to call himself a “horrible CEO.” But being a horrible CEO didn’t matter because he eventually sold his company for a billion dollars thanks to having great timing.

Another example of great timing comes from the story of an entrepreneur I interviewed named Raj Kapoor. Raj recognized the emergence of digital photography before just about every other entrepreneur. It led him to launch a company called Snapfish, which allowed people to store their digital photos in online albums. While that idea doesn’t seem revolutionary now, it would have seemed like a crazy idea in the late 90s when digital cameras cost thousands of dollars and almost nobody owned one. Despite those limitations, Raj decided to pursue his crazy idea, and it eventually sold to Hewlett Packard for $300 million.

Are you starting to see a pattern here? I could easily list dozens more examples from my conversations where timing was critical. It played a key role in the stories of MapQuest, DoubleClick, Match.com, Slashdot, Shutterstock, Rotten Tomatoes, GeoCities, and any number of other companies I’ve featured that went on to million and billion dollar exits. But you probably get the point.

What you’re hopefully wondering is how you can do the same thing, so let me tell you.

As I suggested earlier, on its surface, great timing seems like luck. After all, how can anyone predict where the future will take us? And, yes, to some extent, that’s true, but you don’t have to be psychic to build a great company. Skilled entrepreneurs are good at recognizing the broader trend lines of technology and then imagining how those trend lines are going to create new opportunities for innovation.

They don’t need to know exactly what’s going to happen in the future to build successful companies, and neither do you. Instead, you need to be able to recognize which emerging technologies are likely to have a significant impact on the world and then imagine how the world is going to change as a result.

To explain what I mean, let’s start by returning to the story of John Danner and NetGravity. When I spoke with John, he explained how his idea for ad software came from seeing the increasing popularity of the World Wide Web. Recognizing this trend, he simply asked himself how it would impact businesses. He reasoned that, since more and more people were starting to use the Web, companies would inevitably want to advertise on it, and doing so would require web advertising software. Once he’d recognized the inevitability of advertising on the Web, a successful path forward was obvious: build web advertising software before anyone else. Easy, right?

The idea behind predicting the future is an easy enough concept. And it certainly works well with hindsight. By that I mean we can surely look at any number of successful companies and tell the story in a way that shows the founder correctly predicting the future. But can we use this same strategy to predict the future right now and generate some viable business ideas?

Let’s find out!

Let’s start by identifying an emerging technology that’s likely to have a major impact on the world. For our purposes here, the technology I’m going to choose is self-driving cars. While self-driving cars aren’t common yet, if I told you the majority of cars on the road would be self-driving within 20 years, I doubt you’d be shocked, right?

Since we know self-driving cars are coming, identifying possible business opportunities is as simple as asking ourselves questions about how self-driving cars are going to impact the current transportation process. For example, we might ask ourselves the following question: What parts of driving currently rely on having a human driver present, and how will those things be handled without human drivers?

Off the top of my head, I can think of three examples of ways not having human drivers will require new innovations and lead to new businesses:

Business Idea #1: Running errands

When cars can drive themselves, it means we’ll be able to send them to do things for us such as shepherd our children to soccer practice or pick up our dry cleaning.

When your self-driving Prius pulls up to the drive thru window of your local cleaner, how is the person manning the store going to know which items are yours? How are you going to pay? How is your dry cleaning going to get in the car?

These are all problems that will need to be solved, and some of them are going to be solved with lucrative new businesses.

Business Idea #2: Getting gas (or charging) cars

When a vehicle is nearly out of gas (or, in the case of electric cars, the battery is nearly dead), the driver is the person responsible for filling it up or plugging it in. However, when cars drive themselves, they’re inevitably going run out of gas/electricity while traveling without a driver (see Business Idea #1 above). In those scenarios, who’s going to pump the gas or plug in the charger?

Clearly, the world is going to need new types of gas pumps and/or charging stations that automatically connect themselves to self-driving vehicles. Someone is going to have to create those technologies. The person who does is almost certainly going to have a thriving business.

Business Idea #3: Emergency services

Because millions of us will eventually be riding around in self-driving cars, and a significant portion of us will be riding alone, the law of large numbers reminds us to expect a decent amount of medical emergencies with nobody around to help. What will our self-driving cars do?

Presumably, someone is going to build a technology (and a company to sell it) that identifies health emergencies in self-driving automobiles and diverts vehicles to hospitals. Could that person be you?

Bonus Idea: Mortuary services

Building on Business Idea #3 above, some portion of the people who experience medical emergencies in self-driving cars aren’t going to survive. As a result, we should expect that self-driving cars are occasionally going to arrive at their intended destinations with dead people inside of them. How is this problem going to be dealt with?

Honestly, I have no idea. I also know I don’t want to be the entrepreneur who deals with it. But I do know someone is going to have to solve the problem, and doing so will likely lead to a successful business. We know this because we took time to consider how technologies are evolving and asked ourselves important questions about how those new technologies are going to change the world.

You can leverage the same strategy right now. If you’re struggling to identify a great idea for a new business, start thinking about emerging technologies and how those technologies are going to change the world. Doing so should point you toward dozens of emerging business opportunities with growing markets and few or no competitors.

Conversely, if you’re currently struggling to grow a startup you’ve already launched, ask yourself if it’s a company that’s too focused on current trends rather than the future. You’re probably too busy skating around where the puck currently is instead of traveling to where the puck is going to be.

Go to Publisher:

Entrepreneur's Handbook – Medium


Author: Aaron Dinin, PhD