What People Miss About Timing

They say timing is everything in business. In fact, in a survey of 800 VCs, timing was one of the top reasons they noted behind successful or failed investments. (And though it might seem counterintuitive, being early is often more dangerous than being late.)

But how do you determine if your timing (or “why now”) is right? I set out to learn more through research and testing my findings. Along the way I developed a set of helpful frameworks and a process that I bring investors, founders, and innovation teams through as they consider where to put resources.

Here’s a partial list of some insights and recommendations I developed along the way:

• Look for what I call Timing Drivers. I track 12 types of drivers in a general sense and have teams I work with go into detail for their specific situations. The drivers I track include everything from the Technological (for example, performance curves and cost improvements), Installed Base (critical mass reached in users of supporting equipment and systems), Capital Access (sources and availability), and more. These drivers are a mental shorthand for where to look for environmental changes. These drivers are also most likely changes that are happening outside of your control. Some may have a level of predictability to them, while others may not. You notice change and then put your perspective behind what’s changing.
• Connect the Timing Drivers to your potential business model. Timing Drivers need to improve an existing business model or make a new one possible. Otherwise, you don’t have a timing advantage. You only have a new capability that is at risk of being financially unsustainable. Companies that skip this step can end up wasting the money they raise because what they’ve built may never produce enough value for customers or may never enable the business to capture enough value back from their customers.
• Timing shifts your market size. If we’re not simply evaluating an unchanging, well-understood market, then we should think differently about the role that timing has in potential market size. Too often we look at markets as being measurable and static or as undergoing dramatic growth, but don’t understand what produces that static or dynamic market. Timing plays a part here. In the year 1900 you can’t estimate the market for cars by extrapolating from the existing number of horses.

 

• There are “Timing Patterns” we can learn from. These are repeated combinations of timing drivers that offer us examples to learn from. I’ve written about some of the most common I’ve observed. These patterns help give us a starting place to look for potential timing advantages.
• Run “Why Now Sessions” and build “Timing Maps.” These are processes and tools I developed to conduct a structured evaluation of a market and industry to identify whether this is a promising time for a specific concept. The Timing Maps visually represent the factors influencing your timing decision.
• Don’t simplify too much. For example, while people often say you should “sell shovels in a gold rush,” think about what type of situation you’re actually in. There are different types of allegorical shovels you can sell, just as there are times when it is more beneficial to mine for the gold. The original discoverer of gold at Sutter’s Mill, James W. Marshall, died penniless. So did Samuel Brannan, the proprietor of the only general store near Sutter’s Mill (he sold lots of shovels). But one seller of “shovels,” Levi Strauss, the first manufacturer of tough denim jeans, did much, much better. Consider which shovel seller (or gold miner) type you might be.
• Consider how early you should enter. This depends on how long you expect it will be for the market to be ready, just as it also depends on the type of organization you are. Are you able to build quickly and benefit even if the market window may quickly shut? Or are you better off watching first entrants, learning from their mistakes, and then entering? This requires you to evaluate your own business as much as it requires an analysis of the external environment.

• Remember that first movers usually fail. If you plan to be a first mover, can you control resources to make it more difficult for later entrants? Can you lock in customers? If not, what will prevent later entrants with better products from overtaking your business? Too often, in our excitement to enter a new market, we don’t consider these long-term questions.

As you can see, there are many timing-related considerations. I spent the past few years focused on the timing question and issues like those above and distilled my findings into a concise, practical book. The book is called Why Now: How Good Timing Makes Great Products.

This book is your guide to understanding the drivers of good timing, the impact timing has on business models, and how to apply these insights to your unique situation. Whether you’re an investor, founding team, product manager, or part of an innovation group, this book offers valuable frameworks and real-world examples to evaluate and leverage timing in your ventures. I hope you enjoy it.