January 28, 2016
Well, that’s a mouthful. Let me break it down.
Ideas Matter Less Than Execution
Execution Matters Less Than Timing
Timing Matters Less Than Luck
There’s a persistent myth about entrepreneurs as heroes – the people with the brilliant ideas and Eureka moments that bring companies to life and create success. I’ve never believed in that myth, or at least not in its universality, as I’ve always valued both ideation and execution in terms of business building. But as I was thinking about that construct more the other day, it occurred to me that there’s actually a hierarchy of the two, and not just of the two, but of timing and luck as well. The best businesses — the runaway successes — probably have all four of these things going, or at least three. And in many cases, THE IDEA is the least important of the bunch. Consider these examples:
Plaxo was launched a year or two before LinkedIn.
Friendster was launched a couple years before MySpace, which was launched before Facebook. (You can go back even further and look at things like PlanetAll and Classmates.com).
Geocities predated blogging and Tumblr by more than a decade.
The Diamond Rio was launched three years before the first iPod.
Lycos, Excite, Infoseek, Altavista, Yahoo, and lots of other search engines and web crawlers were started well before Google. Goto.com (Overture) did paid search before Google.
The ideas were all pretty similar. In most cases, if not all, execution won out. In the case of the iPod vs the Rio, it’s not that the world wasn’t ready for portable music – my Sony Walkman from the early 1980s is testament to that. It’s that the combination of iTunes and the iPod, combined with Apple’s phenomenal design and packaging — all elements of execution — won the day.
The role that timing plays is also key. Sometimes the world isn’t ready for a great technology yet, or it may be ready, but not for sustained growth and usage. Friendster and MySpace vs. Facebook is the best example of this. Facebook isn’t necessarily a better service, better marketed. Friendster and MySpace were similarly viral in adoption at the beginning. But the world was still in the Visionary or Early Adopter stage (in the language of Geoffrey Moore’s Crossing the Chasm). By the time Facebook came around, the world was ready to mass adopt a social network. Geocities, for example, was a big financial success at the time (Yahoo acquired the business for $5B – they “only” acquired Tumblr for $1B, give or take), but then it disappeared from the scene, where Tumblr seems much more durable.
The role of luck is harder to explain, or at least harder to separate from that of timing, and there’s a good argument that luck can be at the bottom of this particular chain, not the top (as in, luck is hard to separate from ideas). Sometimes luck means avoiding bad luck, as in the story about Southwest Airlines — a great idea with promising early execution and good timing — narrowly avoiding a major crash during its first week of operations in 1967. Sometimes luck means being in the right place at the right time, or making an accidental discovery, as in the case of the Princeton University professor, Edward Taylor, who discovered a powerful cancer treatment a bit accidentally while studying the pigments that produce the colors on the wings of butterflies for a completely unrelated purpose.
Don’t get me wrong. Ideas are still important. They are the spark that starts the fire. And ideas can be partly created by the luck of being in the right place at the right time, so maybe this whole construct is more of a virtual circle than a hierarchy. But entrepreneurs need to remember that a spark only gets you so far. As the old saying goes, I’d rather be lucky than good!