Great market timing — that is, releasing a product when the market is ready for mass adoption — can make up for poor execution. Great execution cannot make up for poor market timing.
In general, I believe technology companies overrate their ability to accelerate an adoption curve and underrate the natural pace of markets. Markets have their own pulse.
The very best technology companies time the market well and execute on their vision. If you compare RightNow Technologies and Salesforce.com, both were founded at around the same time, both timed the market well. But Salesforce was superior on execution (for a variety of reasons, namely a commitment to a pure SaaS play instead of hedging all over the place with one-off on-premise deployments). This is an example of where execution made the difference.
There are far more examples of companies that timed the market wrong despite excellent execution.
While there are many guidebooks to improving execution, there’s little chatter around how to figure out whether, from a market entry perspective, you’re too late, too early, or just right. When you are introducing a cutting edge / disruptive technology, the difficulty is compounded.
My theory is that early stage tech companies should: a) be humble about their ability to accelerate an adoption curve and acknowledge the pace of the market they’re playing in, b) do their best early on to assess the state of the market and their timing, and c) if they think they’re too early, decide whether it’s worth waiting around and assuming the challenging task of evangelism and market education or simply ignore their sunk costs and pull the plug.
What are your thoughts? Can companies meaningfully accelerate an adoption curve in a market? How do you hone your ability to know whether the timing for your new business is right?
Timing the market (or its likelihood of adoption) to perfection is highly intuitive. At best, you can judge it ex-post facto – by the magnitude of market reward.
That said, you can use some quality market intelligence to figure out what the market needs now and be there with a solution before anyone else. That’s as close you can get to timing it right.
But all markets readily adopt anything that –
a) simplifies some current complexity (imagine an ATM machine vis-a-vis a Bank Teller )
b) substitutes chaos with order or eliminates randomness (Think Google )
c) reduces costs significantly ( Digicam V. traditional camera, Dial-up Vs. Broadband )
d) is convenient ( Cash v.Credit Cards )
Simply put, so long as your product / solution has that overarching usefulness to the consumer, you can as well take timing / adoption element for granted.
No, it’s not counter intuitive at all.
Ben, this is a great question. I don’t have a confident answer, but tentatively I’d say that adoption can be accelerated, but only to a limited extent – all the pieces of adoption need to be in place and you can merely make it easier for people to learn about the offering, try it, use it, and communicate about it.
Thus the analysis needs to be “what are the factors that would enable/prevent adoption?” and “what is the current status and trajectory of those factors?”
In answer to Delia’s point of view, the problem with that strategy is that the entrepreneurial infrastructure and culture is strong enough today such that, by the time a market is clearly ready for adoption, and the problem you solve is obviously one that people need solved (with attendant good economics), there will already be a lot of businesses (or even an established leader) in that market.