When it comes to startups timing really is everything


Arista's Andy Bechtolsheim at GigaOM RoadMap 2011A few months ago, I was chatting with Andy Bechtolsheim, who is perhaps one of the smartest people in Silicon Valley (as his Sun Microsystems co-founders such as Vinod Khosla would attest). The conversation, which started out very technical in nature, turned into a philosophical discussion, mostly about how much of a role intangibles and timing play in startups. Of course, Andy should know. As an angel investor in startups like Google and co-founder of companies like Sun and Arista Networks, Bechtolsheim has seen that timing is often the key difference between startup success and ignominy.

When it comes to startups, a lot is made of a startup and its founders, the market opportunities, its advisers and the team. Of course, there is chest thumping around investors and the dollars raised. Yes, those are important issues, but let’s not forget about the role of timing. I was reminded of Andy’s comments when I read Benoit Felten’s post about the demise of Onlive. While there are  a multitude of reasons, including architectural problems, it seems that the lack of ultra-broadband is one of the main reasons why a service like Onlive (a cloud gaming service) found no traction.

Benoit pointed out that in 2003, there were a lot interesting online video startups, but they couldn’t get traction because broadband lacked oomph. Of course, a few years later when network speeds were up, YouTube was born and took the world by storm. History might be repeating itself, Benoit argues. I couldn’t help but agree, and said as much in a conversation with Bloomberg TV’s Emily Chang. I believe that Onlive came five years too soon. Why?

Future is not the past 

For starters, our definition of desktop software and desktop applications is going to change. It is not hard to imagine that what desktop games are today might not exist in five years, or that they could be an entirely new class of products? After all, the technologies that are the building blocks of our technology experiences are going through a sea change.

In the near future, if one reads the chip industry’s tea leaves, a personal compute client like the iPad will have twice or perhaps even four times the power of a contemporary laptop. With all the growth coming from those portable clients, it makes perfect sense for companies like Qualcomm to plow all their resources into developing mobile processing units with immense power and graphics ability.

The emergence of cloud is changing the software and what we expect from it. Furthermore, the presence of sensors in our compute devices could start to influence our online experiences, including games themselves. Why shouldn’t the Need for Speed change locations or graphics based on geo-location?

The Gigabit future

But more importantly in five years we can hope to have much faster pipes — both wired and wireless. The 1 Gbps experiments currently being conducted by Google in Kansas City and the 1 Gbps municipal network in Chattanooga, Tennessee are well positioned for these high-bandwidth applications. Benoit puts it well when he writes:

The sad thing is that when the tipping point for good quality broadband is reached, it will seem obvious looking back that this was a meaningful service concept, one users would be willing to pay for if they have good enough broadband (and are at least casual gamers, obviously). Just like there were many YouTube lookalikes before YouTube who all died for lack of decent broadband. [Fiber Evolution]

It is not just YouTube. Skype, which celebrated its 9th birthday recently, won mostly because it came at the right time. People were buying broadband and needed applications. Skype fit the job description and benefitted from it. Not many people remember Kozmo, a much-loved Internet delivery service that was a spectacular bust. A decade later we have companies like Postmates working on a similar concept.

Thanks to the growth of social media and mobile devices, a company like Postmates is able to find customers faster. The company, which launched its Get it Now app in May 2012, has seen a steady monthly increase (of about 43 percent) in its usage, The New York Times reports, and is processing about $100,000 worth of deliveries every month. Bastian Lehmann, the Postmates chief executive officer and a co-founder, told the Times that “With the penetration of smartphones, the world has changed, as has the ability to purchase through a mobile device.”

In five years, Onlive sadly will be forgotten — an idea caught in a timetrap, reinforcing the notion that when it comes to startups, timing is everything.

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