Sanzeri describes why market timing is critical for startups and how to get it right by talking to potential customers.
- Startups are typically tight on capital, so you have to be very careful on the advice you get.
- LinkedIn is a great tool to talk to potential customers. If you’re trying to reach CxOs, send a personalized request; don’t try to sell or ask for too much. You can get advice, they can become an advisor and/or a future customer. Get out there, find a group of 10-15 customer advisors to work, use all of their feedback, look for patterns, etc.; that’s about the best you can do for your startup.
- You can give equity to advisors, so it doesn’t need to cost a lot.
- 00:55 – Can you provide us an overview of QuSecure? Quantum computers are coming at us very rapidly. They’ll be super powerful and are great for logistics, pharmaceutical, chemistry, etc. but they are also very powerful hacking machines. There will be a trillion dollar upgrade of computers, so someone needs to help enterprises and governments with protecting their data, cyber security, penetration testing, and so on.
- 02:15 – What does market timing mean? At a logical sense, it means your product is timed, so the market is ready for it or you’re in a space where you can beat your competition. It’s really not without our control, since the market will dictate the timing but it’s up to us as entrepreneurs to determine if the timing is too early or too late.
- 03:15 – What factors impact market timing? It’s based on where the market is, at the time you want to show your product to the market. For example, Bill Gross of Idealab, did an analysis of a couple hundred startups and determined that market timing was the most important factor out of ideas, team, business model, funding, and timing. Getting market timing right can be very hard to do.
- 06:40 – What are some risks of being too early or too late? They can be fundamental. There are shades of grey — it’s not all about giant successes or are a complete failure — there are also many companies that have smaller exits or “zombie” companies that are chugging along without scaling much. Also, it’s not about the spectrum of startup failures/successes but how you can optimize your market timing — do base this on feedback you’re getting from potential customers. For us, our customers were literally reaching out to us; those are the signals you need to look for. You need to do a ton of outreach also.
- 08:45 – What about product-market fit? Market timing is about the market being ready; product-market fit is about your product being ready for the market. You need to talk to your potential customers, perhaps create a customer advisory group/board of potential customers, who are advising you on how to build your product. For example, we have someone who is literally guiding our product. You have to be careful to see whether potential customers would actually buy versus just interested.
- 12:09 – What successes and failures have you seen in startups? If you count outright/complete failures, then 9 out of 10 startups fail. If you only look at large/unicorn exits, then 999 out of 1,000 fail. I see companies fail for hundreds of reasons; early stage startups are fragile like egg shells. Startups fail because they don’t study the market by talking to customers; even when they do that, sometimes they don’t believe the feedback. There are times, you have to shift and move versus banging your head for 10-12 years, hoping for something to happen — sometimes, it’s best to move on. Regardless, it’s always good to have good advisors around.
- 14:20 – Takeaways (see above)