What's More Important in Business: A Good Idea, or Just Good Timing?

VANCOUVER — Say you're creating a company. You probably want to make sure it has competent managers, a good idea, maybe even a snappy name.

All important factors, sure. But, like so many parts of life, what if success in business is all really just a matter of timing?

Investor Bill Gross floated that theory during an afternoon session of the TED conference Wednesday, suggesting that when a company launches may be the most critical factor in determining whether it flourishes or flops.

Gross has founded more than 100 companies since creating incubator Idealab in 1996, helping launch brands like business directory CitySearch, retailer PetSmart and image organizer Picasa. But, like all startup investors, he's seen failures, too.

So he sat down and decided to rank each of Idealab's 100 companies, plus 100 others, on five factors: strength of idea, executive team, business model, funding and timing.

His gut feeling told him that the idea would be No. 1. (Look at the name of his company, after all.) But maybe the team's execution, and ability to adapt to changes, mattered more? He crunched the numbers, and his results surprised him.

Timing accounted for 42 percent of the difference between success and failure, while team and execution came in second, followed by the idea itself. The company's business model and availability of funding had the least significance. (That part makes sense. "If you're underfunded at first, but you're gaining traction, especially in today's age, it's very, very easy to get intense funding," Gross said.)

He applied these results to some breakout successes, like Airbnb. The home-sharing site launched in 2008, but couldn't get high-profile investors to take it seriously. Y Combinator's Paul Graham once called the idea "crazy." Who would want to put up with strangers in their homes?

But the timing, and economic desperation of Americans, made a difference.

"That company came out during the height of the recession when people really needed extra money," Gross said. "And that maybe helped people overcome their objection to renting out their own home."

The same goes for Uber, founded in 2009: "The timing was so important for their need to get drivers into the system. Drivers were looking for extra money."

Some of Gross's own failures can be explained by timing, too. A video site, called Z.com, launched in 1999 with a bevy of Hollywood A-listers and plenty of potential. But only 10 percent of U.S. homes had broadband Internet at the time, and video players were too clunky. It went out of business in 2003. YouTube, launched just two years later with no real business model, benefited from the introduction of Adobe's Flash video software that made watching online videos easier.

Caveat alert: There's, of course, no one single factor that can predict whether a startup will get off the ground, and Gross acknowledges that.

But he called on entrepreneurs to pay a bit more attention to timing -- even if they're convinced they've got a golden idea able to succeed at any time.

Readers: What do you consider to be most important in determining whether a business will make it?

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