I don’t think people realize how extremely hard it is to get a company launched. Some folks say that if you make into college ball, you have a 1:40 chance of turning pro. The odds are longer for startups.
My friend, Tom Summit of Genotrope does quarterly updates called “When will they launch?” that lists a few startups we’re all waiting to see. Only one out of twelve have actually launched. The rest are in “beta” or “stealth” or they’ve morphed into something else. Tom only listed companies he knew about. I could add six or seven to his list! That tells me that out of about twenty companies, one launched.
I’m think being generous here but I think once you’ve launched, you have about a 1:50 chance of getting angel or VC funding.
1:20 X 1:50 = 1:1000.
The odds are longer for web companies that are organically self-funded. Perhaps even as high as 1:2000. I know three or four and they’re very patient. They also have an anchor business that helps them fund the new one.
That should tell you one or two things: You need commitment and you need to be realistic.
As a startup consultant, I come across budding entrepreneurs who say “We’ve got this great idea but I don’t have any money! Can you help me find an angel?” only to find out they’re part timers who have an ok idea, no code, and no real commitment. Sound harsh? Go code and then we’d love to talk to you.
Others that I talk to have code but they’re part timers. Depending on the circumstances (my time commitments and a deal), I’ll work with them – depending on how long it might take them to launch. Are they prepared to quit their job? It depends. If it’s a straight IP play, they might not have to. If it’s an operating business, how much are they willing to give up?
Still others are full time entrepreneurs who continually morph their business model until they find something that works and they like. That’s ok. It depends on their ability to stay in the market. Each change in focus represents sunk resources and time.
Knowing the odds, are you committed?
