The Road to Success
This morning's Wall Street Journal has a story on the front page about YouTube trying to find the road to success. I don't know enough about the company to comment on their prospects (though certainly they are in the middle of a key trend). But it reminds me of a conversation I was having yesterday with a good friend about what it takes for a start up to succeed.
We have launched over 80 companies in our history. Some very successful; many, trying to carve out a new, untapped opportunity were more challenged. Based on a "back of the envelope" analysis of our observations, success seems to depend on a number of critical things:
1. Execution. I know that's obvious, but a lot of good ideas don't make it because start-ups think their better mousetrap will pull them through.
2. A good strategy. A clear idea of, at the core, what the fundamental disruption is in the market that the company represents. And that strategy should translate into every molecule of the business -- from marketing to product design to sales and operations. These can't be separate.
3. Fleet footedness. No matter how good the strategy, if the company isn't prepared to learn daily from the market how to translate that vision into success, success will be elusive.
4. Great engineering. Amazingly, when we did our analysis, the single greatest challenge companies seem to face is actually building commercially viable products that represent their vision. All of the rest of these criteria are worthless if the product isn't good.
(By the way, in our world, market leadership is also key to success. But even we have to admit there are a number of successful companies that are not particularly leaders.)
This set of four criteria is interesting in light of YouTube and the many companies like it which are based on User-generated content. Does this "new" strategy change any of the above criteria? Probably not.
We have launched over 80 companies in our history. Some very successful; many, trying to carve out a new, untapped opportunity were more challenged. Based on a "back of the envelope" analysis of our observations, success seems to depend on a number of critical things:
1. Execution. I know that's obvious, but a lot of good ideas don't make it because start-ups think their better mousetrap will pull them through.
2. A good strategy. A clear idea of, at the core, what the fundamental disruption is in the market that the company represents. And that strategy should translate into every molecule of the business -- from marketing to product design to sales and operations. These can't be separate.
3. Fleet footedness. No matter how good the strategy, if the company isn't prepared to learn daily from the market how to translate that vision into success, success will be elusive.
4. Great engineering. Amazingly, when we did our analysis, the single greatest challenge companies seem to face is actually building commercially viable products that represent their vision. All of the rest of these criteria are worthless if the product isn't good.
(By the way, in our world, market leadership is also key to success. But even we have to admit there are a number of successful companies that are not particularly leaders.)
This set of four criteria is interesting in light of YouTube and the many companies like it which are based on User-generated content. Does this "new" strategy change any of the above criteria? Probably not.
posted by Abigail Johnson at 9:43 AM
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