This question has popped up a few times during presentations I have made to classes, especially entrepreneurs and expected entrepreneurs. My short answer is that timing is very important and I will explain why with the use of some simple case studies.
Why is timing important?
Funding and Revenue
Our own experience with RealVibes.net, the original website we launched in February 2002 which had the largest collection of Caribbean music videos on the web and was called “the closest thing to a Caribbean MTV” is an example of being a little too early. Note that YouTube launched 2005 and before that, video on the web was not that popular.
This mean that we faced two problems:
1. Potential investors did not understand how we would make money from a video website and had limited past examples of successful video websites that either became profitable or were acquired so they were hesitant to give us money
2. Advertisers were used to banner advertising but banner ads could not cover the cost of bandwidth being used by video – at one point Realvibes.net racked up over US$10,000 in bandwidth charges in 2 months
Launching when we did obviously gave us advantages such as being the first website of its kind but first-mover can go from being an advantage to being a disadvantage; just look at Overture and Google.
Overture was the first website to use the pay-per-click model and Google’s founders originally hated the idea of an advertising-supported search engine.
Google is top dog today after learning from Overture and building a better system while Overture was acquired and hardly anyone remembers the name.
Market Adoption
The PDA, personal digital assistant, became a major hit in the late 1990′s and companies like Palm rode that wave until it died. Apple however had launched the Newton in 1993 and it was a colossal failure; it was too early.
The same might be said of tablet computers launched after the dot-com crash vs. the success of the iPad. There are some differences though that contribute differentiate the previous tablet computers from the new ones, namely stylus input vs. touchscreens. The products are not as similar as the Newton and a Palm PDA so I would not use the tablet example.
Complementary Technology
eBay could not have launched in 1980 and Skype could not have launched in 1990. The list of companies that fit this mold of requiring other things to fall into place to make them have a chance at succeeding is simply massive and you can think of many yourself.
At the end of the day, any business that launches too early or too late faces an even greater uphill battle in becoming profitable.
If your really want to screw with your brain then I recommend that you try to answer the following question: How do you know that the timing is right?
Personally, while I believe that timing matters and you should survey the landscape (both a PEST analysis, Political, Economical, Social, Technological and SWOT analysis, Strengths, Weaknesses, Opportunities, Threats, are highly recommended), it makes as much sense to try and get the perfect timing as it does to try and time the stock market; NONE.
