Timing influences many aspects in life. Sport, music, and cooking for example are very susceptible to the right timing; hitting a ball at the right moment, playing a certain key in synch with others and taking the steak out of the pan when it’s just right. Innovation in particular has a high sensitivity for timing. Understanding timing and the elements that influence successful timing are therefore very important when bringing new products and services to the market.
In the financial services sector we all see this massive wave of FinTech (Financial Technology) momentum coming our way. Possibly delivering perfect timing for the start-ups offering new financial propositions.
Alexa Krayenhoff Innovation Manager, Innovation Centre
Timing is more important than the idea!
The incredible importance of timing for companies has recently been illustrated by Bill Gross in a TED video called ‘The single biggest reasons why start-ups succeed’. He researched 200 companies and investigated which factors accounted the most for success and failure. Timing by far seemed to have the highest impact on success. With a score of 42% it was judged to be more important than the team/execution (32%), the idea (28%) or even the business model (24%). Funding came in last at 14%.
Business models with the right timing have the potential to be disruptive
Airbnb is a great example of incredible successful timing. When founded in 2008 the crisis was at its height. People could not afford their own rent nor could they afford hotels when travelling. The idea to have people rent a room in your house came at a moment when people really needed extra money and guests were desperately looking for a cheaper place to stay. The idea may not have worked before the crisis when both needs were not apparent and people may not have wanted to let strangers into their home. Currently Airbnb is available in 34,000 cities and valued at $20 billion and delivers a new channel of competition to the hotel, B&B and rental sector.
Another company delivering a new business model based on timing during a crisis is Uber. The luxury car segment was suffering due to less business as people were taking regular taxis or public transport to save on money. Uber came at a time when the recession had set in for a while and these luxury car drivers had become open to explore other options for business to survive. Clients on the other hand welcomed getting more luxury for their money. Uber was timed also really well from a smartphone adoption perspective. The majority of their target group owned a smartphone and were therefore offered more convenience and transparency when ordering a taxi with Uber than with traditional services. Had there not been a recession or had the smartphone not been as widely adopted Uber may not have had the same success.
Being the first is not as important as having the right timing
Airbnb and Uber are pioneers. But being the first does not guarantee success. New propositions and technologies often take a while before being welcomed by the public. The first company will often have to overcome certain technological and business model barriers before having a product solution fit that works for the market place. This takes a lot of time and money. A ‘fast follower’ that enters the market with a similar product when the timing is right and these barriers have been overcome will therefore have more time and resources to focus on execution than the first company will have at that point. As Geoffrey Moore noted in 1991; ‘at a time the market is sufficiently proven the initial investment risk will be significantly lower’.
Great examples of fast followers are Google and Facebook. Both did not invent their product, but both introduced it to the market at a right time. Their success must have been very frustrating to the true inventors of these ideas that did not have the same luck with regards to timing.
Launching before your time equals bad timing
Steve Sasson, engineer at Kodak, invented the first digital camera in 1975. When presenting his idea to the Kodak management team they did not take it serious as it would not help them sell more film. They missed the disruptive potential of digital photography. One may wonder whether the product would have been successful at the time with consumers if they had decided to launch a digital camera in the seventies.
My thought would be that the timing would not have been right as personal computers were not widely distributed nor was their capacity enough to manage digital photos secondly the memory capabilities of the camera at the time were there insufficient to give the digital camera an advantage over the film camera. Both would have heavily impacted the customer experience and convenience and may not have led to a similar uptake as the digital camera had when launched in the early 2000’s. In other words: the timing was not right.
Another example of a very recent timing flop is the Google Glass. It did not have the lift off that Google expected. The features were not capable of delivering a frictionless customer experience and consumers were not ready to wear the ugly glasses impacting their image. The benefits did not exceed the inconvenience and invasiveness of wearing the technology. It may well be that it was launched before its time and will have a revival in years to come when the technology is more in synch with the user experience that is required to overcome the inconveniences of wearing glasses. It could even be its physical appearance will be entirely different all together for it to succeed.
Macro-economic and technological factors; the usual suspects influencing timing
Macro-economic factors can hugely impact timing. Such as times of wealth or recession. Technological capability and adoption rate also play an important part. Think of the adoption of the (wire-less) internet, the smartphone and the microprocessor. Newsweek even wrote an article in 1995 why the internet would fail. It was deemed to be just for IT people and hackers, not for the crowd. It was a big bucket of unedited and unsearchable data that could not easily be used for a specific purpose lacking human contact and thus trustworthiness.
A similar adverse reaction has been projected over the past few years to the Blockchain. Often it is associated with criminal activities and its potential is overlooked. I believe this can be mainly derived to a lack of understanding of the technology and its true potential. Secondly technological capacity is not sufficient as yet for the Blockchain technology to reach its full potential. It can only process seven transactions a second which is by far not enough if for example the whole financial services sector would adopt the Blockchain technology for their transactions,. Therefore I believe the timing for mass adoption is not there yet. However we should not be blinded to the potential disruption of this technology by the insufficient capability the technology currently has.
Timing can also be influenced by more unexpected personal factors
Peer to peer finance has seen a huge increase over the last few years. Technology unlocks the willing wallets of the connected crowd seeking for new investment propositions out of the traditional investment scope. Traditional investors have been scarred image wise by the recent recession. Other than that it has also unlocked the wallets of social investors who see it as part of their lifestyle and image to invest in new companies and build their reputation upon this. Being unique is something the consumer of today really longs for and many propositions of late have supported this.
Time also influences timing. Families where both partners are working often have less time. A major influence in the success of a few ideas of late has been this personalisation aspect. Netflix for example allows people to watch television not only at the time they want it, but also enables them to select exactly what they want. Spotify enables you to quickly set up playlists and Booking.com allows you to easily compare and quickly book hotels.
Anything that has the power to influence timing?
Personally I doubt many things can really influence timing. Timing is hard to capture and hard to manage. However there is one thing that I believe has the capability to influence timing: regulation. The UK government has for example been very supportive of P2P propositions and thus created a more opportune timing for crowdfunding platforms in the UK. The European Parliament is pushing the use of API’s (Application Programmable Interfaces) through their PSD2 Access to Account legislation and creating a huge timing moment for companies offering new insights into data through dashboards that are being fed from various open data sources.
How to prepare for disruptive timing?
In the financial services sector we all see this massive wave of FinTech (Financial Technology) momentum coming our way. Possibly delivering perfect timing for the start-ups offering new financial propositions. Working together with these small companies and adopting new propositions is important for us.
So is adopting new skills such as selecting the right start-ups/innovative tech companies, recognising and identifying our customer’s problems more specifically and learning how to work together with these companies. There is a reason the unicorns of today are so successful. They have adopted the lean way of working that allows for quicker proposition (in)validation and thus shorter product- and service life cycles. In the field of being agile, open for change and speed of innovation we can learn a lot from them. This is important to us, for the right timing.