In terms of the Lean startup, market timing is sort of like the stock market. If you get lucky, you can buy stocks low and sell them high to make a profit. It takes some effort to time markets well. It takes more than effort to make the process repeatable and scalable (and not losing all your capital)
In a startup, the example is similar in that if you wait too long to start with your customer development, you can run too long without gaining important insights. Unlike the stock market where company information is public, in a startup it’s difficult to find out what non-public competitors are doing in your targeted space. Getting to customers can allow you some insights into what pilot projects they are undertaking and what their status is. This takes a lot of skilled effort to get people to open up and tell you this information.
The real problem is that any original research findings and SWOT analysis doesn’t magically “recalc” itself with valid new inputs. The markets move without you. One visceral challenge is to get real with feedback quickly and without just that “leap of faith” commitment.Craig Stark
Another challenge I see over and over again is the project team that is comprised of several part time partners who are really in various stages of commitment. The time burn in this scenario is deadly despite some “vanity metrics” of success along the long path to customer development. In this case, several competitors had come and gone in an 18 month window and the team had not ever heard of them. Some ongoing customer intel and simple monitoring of University accelerators would have redeemed hard facts a lot sooner than 18 months.
In one startup I managed business development for, my instincts drove me to asking each of four partners (co-founders) to participate in an interview with me. The interview was designed to determine timing, priorities and best customer fit to support current cash burn. Not surprisingly, I came back with 4 different patterns in the resultant matrix. I felt that the only safe bet was to assign value to the current marketable assets and go after a partner for acquisition.(which I completed)
I have seen the same scenario with business model testing where a mismatch in channel pricing and margins kept consumers from buying. Rather than test and adjust they stuck to their value hypothesis and spent 3 years flailing before pivoting. Some discussions with distributors would have fixed this mismatch and opened up a new world of possibilities. (The client’s spouses had a friend who was a lawyer who suggested that they not sign our agency agreement. The agreement was designed to pay us a success fee to bring them to the aforementioned distribution company to create massive growth. To this day, they have no distribution channel partner and no massive growth)
The market doesn’t care what you are doing as it is happening with or without you. Testing and using validation learning to prove or disprove the status quo can help move the process along quickly, so you can have a better chance of successful market timing. Potential investors in your startup also need to have this clarity so that they can feel they are buying low and have a decent chance of selling high!