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Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.96,0:00:02.94,Default,,0000,0000,0000,,I'm really excited to share with you
Dialogue: 0,0:00:02.94,0:00:05.53,Default,,0000,0000,0000,,some findings that really surprise me
Dialogue: 0,0:00:05.53,0:00:08.08,Default,,0000,0000,0000,,about what makes companies \Nsucceed the most,
Dialogue: 0,0:00:08.08,0:00:11.99,Default,,0000,0000,0000,,what factors actually matter the most\Nfor startup success.
Dialogue: 0,0:00:13.06,0:00:15.21,Default,,0000,0000,0000,,I believe that the startup organization
Dialogue: 0,0:00:15.21,0:00:18.97,Default,,0000,0000,0000,,is one of the greatest forms\Nto make the world a better place.
Dialogue: 0,0:00:19.63,0:00:22.76,Default,,0000,0000,0000,,If you take a group of people \Nwith the right equity incentives
Dialogue: 0,0:00:22.76,0:00:24.64,Default,,0000,0000,0000,,and organize them in a startup,
Dialogue: 0,0:00:24.64,0:00:28.61,Default,,0000,0000,0000,,you can unlock human potential\Nin a way never before possible.
Dialogue: 0,0:00:28.61,0:00:31.14,Default,,0000,0000,0000,,You get them to achieve \Nunbelievable things.
Dialogue: 0,0:00:31.68,0:00:33.80,Default,,0000,0000,0000,,But if the startup \Norganization is so great,
Dialogue: 0,0:00:33.80,0:00:35.28,Default,,0000,0000,0000,,why do so many fail?
Dialogue: 0,0:00:35.28,0:00:36.88,Default,,0000,0000,0000,,That's what I wanted to find out.
Dialogue: 0,0:00:36.88,0:00:39.36,Default,,0000,0000,0000,,I wanted to find out what\Nactually matters most
Dialogue: 0,0:00:39.36,0:00:40.57,Default,,0000,0000,0000,,for startup success.
Dialogue: 0,0:00:40.57,0:00:42.78,Default,,0000,0000,0000,,And I wanted to try \Nto be systematic about it,
Dialogue: 0,0:00:42.78,0:00:45.94,Default,,0000,0000,0000,,avoid some of my instincts\Nand maybe misperceptions I have
Dialogue: 0,0:00:45.94,0:00:48.20,Default,,0000,0000,0000,,from so many companies\NI've seen over the years.
Dialogue: 0,0:00:48.20,0:00:49.43,Default,,0000,0000,0000,,I wanted to know this
Dialogue: 0,0:00:49.43,0:00:52.48,Default,,0000,0000,0000,,because I've been starting businesses\Nsince I was 12 years old
Dialogue: 0,0:00:52.48,0:00:55.13,Default,,0000,0000,0000,,when I sold candy at the bus stop\Nin junior high school,
Dialogue: 0,0:00:55.13,0:00:57.44,Default,,0000,0000,0000,,to high school, when I made\Nsolar energy devices,
Dialogue: 0,0:00:57.44,0:00:59.23,Default,,0000,0000,0000,,to college, when I made loudspeakers.
Dialogue: 0,0:00:59.23,0:01:02.26,Default,,0000,0000,0000,,And when I graduated from college,\NI started software companies.
Dialogue: 0,0:01:02.26,0:01:04.06,Default,,0000,0000,0000,,And 20 years ago,\NI started Idealab,
Dialogue: 0,0:01:04.06,0:01:07.30,Default,,0000,0000,0000,,and in the last 20 years,\Nwe started more than 100 companies,
Dialogue: 0,0:01:07.30,0:01:09.63,Default,,0000,0000,0000,,many successes, and many big failures.
Dialogue: 0,0:01:09.63,0:01:11.46,Default,,0000,0000,0000,,We learned a lot from those failures.
Dialogue: 0,0:01:11.99,0:01:14.74,Default,,0000,0000,0000,,So I tried to look across what factors
Dialogue: 0,0:01:14.74,0:01:17.90,Default,,0000,0000,0000,,accounted the most for company\Nsuccess and failure.
Dialogue: 0,0:01:17.90,0:01:19.46,Default,,0000,0000,0000,,So I looked at these five.
Dialogue: 0,0:01:19.46,0:01:20.42,Default,,0000,0000,0000,,First, the idea.
Dialogue: 0,0:01:20.42,0:01:22.57,Default,,0000,0000,0000,,I used to think that \Nthe idea was everything.
Dialogue: 0,0:01:22.57,0:01:24.88,Default,,0000,0000,0000,,I named my company Idealab\Nfor how much I worship
Dialogue: 0,0:01:24.88,0:01:27.47,Default,,0000,0000,0000,,the "aha!" moment when you first\Ncome up with the idea.
Dialogue: 0,0:01:27.47,0:01:28.38,Default,,0000,0000,0000,,But then over time,
Dialogue: 0,0:01:28.38,0:01:31.97,Default,,0000,0000,0000,,I came to think that maybe the team,\Nthe execution, adaptability,
Dialogue: 0,0:01:31.97,0:01:34.12,Default,,0000,0000,0000,,that mattered even more than the idea.
Dialogue: 0,0:01:34.12,0:01:38.48,Default,,0000,0000,0000,,I never thought I'd be quoting\Nboxer Mike Tyson on the TED stage,
Dialogue: 0,0:01:38.48,0:01:40.34,Default,,0000,0000,0000,,but he once said,
Dialogue: 0,0:01:40.34,0:01:44.94,Default,,0000,0000,0000,,"Everybody has a plan, until they get\Npunched in the face." (Laughter)
Dialogue: 0,0:01:44.94,0:01:47.86,Default,,0000,0000,0000,,And I think that's so true\Nabout business as well.
Dialogue: 0,0:01:47.86,0:01:50.14,Default,,0000,0000,0000,,So much about a team's execution\N
Dialogue: 0,0:01:50.14,0:01:53.90,Default,,0000,0000,0000,,is its ability to adapt to getting punched\Nin the face by the customer.
Dialogue: 0,0:01:53.90,0:01:55.59,Default,,0000,0000,0000,,The customer is the true reality.
Dialogue: 0,0:01:55.59,0:01:57.04,Default,,0000,0000,0000,,And that's why I came to think
Dialogue: 0,0:01:57.04,0:01:59.56,Default,,0000,0000,0000,,that the team maybe\Nwas the most important thing.
Dialogue: 0,0:02:00.04,0:02:02.15,Default,,0000,0000,0000,,Then I started looking\Nat the business model.
Dialogue: 0,0:02:02.15,0:02:05.40,Default,,0000,0000,0000,,Does the company have a very clear path\Ngenerating customer revenues?
Dialogue: 0,0:02:05.40,0:02:07.50,Default,,0000,0000,0000,,That started rising to the top\Nin my thinking
Dialogue: 0,0:02:07.50,0:02:09.82,Default,,0000,0000,0000,,about maybe what mattered\Nmost for success.
Dialogue: 0,0:02:09.82,0:02:11.22,Default,,0000,0000,0000,,Then I looked at the funding.
Dialogue: 0,0:02:11.22,0:02:13.92,Default,,0000,0000,0000,,Sometimes companies received\Nintense amounts of funding.
Dialogue: 0,0:02:13.92,0:02:15.75,Default,,0000,0000,0000,,Maybe that's the most important thing?
Dialogue: 0,0:02:15.75,0:02:17.30,Default,,0000,0000,0000,,And then of course,\Nthe timing.
Dialogue: 0,0:02:17.30,0:02:20.11,Default,,0000,0000,0000,,Is the idea way too early and\Nthe world's not ready for it?
Dialogue: 0,0:02:20.11,0:02:23.56,Default,,0000,0000,0000,,Is it early, as in, you're in advance\Nand you have to educate the world?
Dialogue: 0,0:02:23.56,0:02:24.37,Default,,0000,0000,0000,,Is it just right?
Dialogue: 0,0:02:24.37,0:02:27.23,Default,,0000,0000,0000,,Or is it too late, and there's\Nalready too many competitors?
Dialogue: 0,0:02:27.23,0:02:29.82,Default,,0000,0000,0000,,So I tried to look very carefully\Nat these five factors
Dialogue: 0,0:02:29.82,0:02:30.87,Default,,0000,0000,0000,,across many companies.
Dialogue: 0,0:02:30.87,0:02:33.06,Default,,0000,0000,0000,,And I looked across all 100\NIdealab companies,
Dialogue: 0,0:02:33.06,0:02:34.52,Default,,0000,0000,0000,,and 100 non-Idealab companies
Dialogue: 0,0:02:34.52,0:02:37.15,Default,,0000,0000,0000,,to try and come up with \Nsomething scientific about it.
Dialogue: 0,0:02:37.57,0:02:39.90,Default,,0000,0000,0000,,So first, on these Idealab companies,
Dialogue: 0,0:02:39.90,0:02:41.77,Default,,0000,0000,0000,,the top five companies --
Dialogue: 0,0:02:41.77,0:02:45.19,Default,,0000,0000,0000,,Citysearch, CarsDirect, GoTo,\NNetZero, Tickets.com --
Dialogue: 0,0:02:45.19,0:02:47.26,Default,,0000,0000,0000,,those all became billion-dollar successes.
Dialogue: 0,0:02:47.26,0:02:49.18,Default,,0000,0000,0000,,And the five companies on the bottom --
Dialogue: 0,0:02:49.18,0:02:51.98,Default,,0000,0000,0000,,Z.com, Insider Pages, MyLife,\NDesktop Factory, Peoplelink --
Dialogue: 0,0:02:51.98,0:02:54.38,Default,,0000,0000,0000,,we all had high hopes for,\Nbut didn't succeed.
Dialogue: 0,0:02:54.89,0:02:57.83,Default,,0000,0000,0000,,So I tried to rank across all \Nof those attributes
Dialogue: 0,0:02:57.83,0:03:01.08,Default,,0000,0000,0000,,how I felt those companies scored\Non each of those dimensions.
Dialogue: 0,0:03:01.08,0:03:04.54,Default,,0000,0000,0000,,And then for non-Idealab companies,\NI looked at wild successes,
Dialogue: 0,0:03:04.54,0:03:08.12,Default,,0000,0000,0000,,like Airbnb and Instagram and Uber\Nand Youtube and LinkedIn.
Dialogue: 0,0:03:08.13,0:03:09.38,Default,,0000,0000,0000,,And some failures:
Dialogue: 0,0:03:09.38,0:03:11.18,Default,,0000,0000,0000,,Webvan, Kozmo, Pets.com
Dialogue: 0,0:03:11.18,0:03:12.46,Default,,0000,0000,0000,,Flooz and Friendster.
Dialogue: 0,0:03:12.46,0:03:14.47,Default,,0000,0000,0000,,The bottom companies had intense funding,
Dialogue: 0,0:03:14.47,0:03:16.55,Default,,0000,0000,0000,,they even had business models\Nin some cases,
Dialogue: 0,0:03:16.55,0:03:17.70,Default,,0000,0000,0000,,but they didn't succeed.
Dialogue: 0,0:03:17.70,0:03:20.56,Default,,0000,0000,0000,,I tried to look at what factors\Nactually accounted the most
Dialogue: 0,0:03:20.56,0:03:23.11,Default,,0000,0000,0000,,for success and failure across\Nall of these companies,
Dialogue: 0,0:03:23.11,0:03:24.94,Default,,0000,0000,0000,,and the results really surprised me.
Dialogue: 0,0:03:25.34,0:03:27.01,Default,,0000,0000,0000,,The number one thing was timing.
Dialogue: 0,0:03:27.64,0:03:30.14,Default,,0000,0000,0000,,Timing accounted for 42 percent
Dialogue: 0,0:03:30.14,0:03:32.64,Default,,0000,0000,0000,,of the difference\Nbetween success and failure.
Dialogue: 0,0:03:32.64,0:03:34.74,Default,,0000,0000,0000,,Team and execution came in second,
Dialogue: 0,0:03:34.74,0:03:35.56,Default,,0000,0000,0000,,and the idea,
Dialogue: 0,0:03:35.56,0:03:38.48,Default,,0000,0000,0000,,the differentiability of the idea,\Nthe uniqueness of the idea,
Dialogue: 0,0:03:38.48,0:03:39.88,Default,,0000,0000,0000,,that actually came in third.
Dialogue: 0,0:03:39.88,0:03:41.85,Default,,0000,0000,0000,,Now, this isn't absolutely definitive,
Dialogue: 0,0:03:41.85,0:03:44.07,Default,,0000,0000,0000,,it's not to say that \Nthe idea isn't important,
Dialogue: 0,0:03:44.07,0:03:47.71,Default,,0000,0000,0000,,but it very much surprised me that\Nthe idea wasn't the most important thing.
Dialogue: 0,0:03:47.71,0:03:50.31,Default,,0000,0000,0000,,Sometimes it mattered more when \Nit was actually timed.
Dialogue: 0,0:03:50.31,0:03:53.68,Default,,0000,0000,0000,,The last two, business model and funding,\Nmade sense to me actually.
Dialogue: 0,0:03:53.68,0:03:56.05,Default,,0000,0000,0000,,I think business model\Nmakes sense to be that low
Dialogue: 0,0:03:56.05,0:03:58.43,Default,,0000,0000,0000,,because you can start out\Nwithout a business model
Dialogue: 0,0:03:58.43,0:04:01.90,Default,,0000,0000,0000,,and add one later if your customers\Nare demanding what you're creating.
Dialogue: 0,0:04:01.90,0:04:03.30,Default,,0000,0000,0000,,And funding, I think as well,
Dialogue: 0,0:04:03.30,0:04:06.08,Default,,0000,0000,0000,,if you're underfunded at first\Nbut you're gaining traction,
Dialogue: 0,0:04:06.08,0:04:07.36,Default,,0000,0000,0000,,especially in today's age,
Dialogue: 0,0:04:07.36,0:04:09.43,Default,,0000,0000,0000,,it's very, very easy to get\Nintense funding.
Dialogue: 0,0:04:09.43,0:04:12.55,Default,,0000,0000,0000,,So now let me give you some specific\Nexamples about each of these.
Dialogue: 0,0:04:12.55,0:04:15.46,Default,,0000,0000,0000,,So take a wild success like Airbnb\Nthat everybody knows about.
Dialogue: 0,0:04:15.46,0:04:18.52,Default,,0000,0000,0000,,Well, that company was famously\Npassed on by many smart investors
Dialogue: 0,0:04:18.52,0:04:19.67,Default,,0000,0000,0000,,because people thought,
Dialogue: 0,0:04:19.67,0:04:22.72,Default,,0000,0000,0000,,"No one's going to rent out a space\Nin their home to a stranger."
Dialogue: 0,0:04:22.72,0:04:24.44,Default,,0000,0000,0000,,Of course, people proved that wrong.
Dialogue: 0,0:04:24.44,0:04:26.30,Default,,0000,0000,0000,,But one of the reasons it succeeded,
Dialogue: 0,0:04:26.30,0:04:29.28,Default,,0000,0000,0000,,aside from a good business model,\Na good idea, great execution,
Dialogue: 0,0:04:29.28,0:04:30.02,Default,,0000,0000,0000,,is the timing.
Dialogue: 0,0:04:30.02,0:04:33.30,Default,,0000,0000,0000,,That company came out\Nright during the height of the recession
Dialogue: 0,0:04:33.30,0:04:35.12,Default,,0000,0000,0000,,when people really needed extra money,
Dialogue: 0,0:04:35.12,0:04:36.93,Default,,0000,0000,0000,,and that maybe helped people overcome
Dialogue: 0,0:04:36.93,0:04:39.78,Default,,0000,0000,0000,,their objection to renting out\Ntheir own home to a stranger.
Dialogue: 0,0:04:39.78,0:04:40.90,Default,,0000,0000,0000,,Same thing with Uber.
Dialogue: 0,0:04:40.90,0:04:41.95,Default,,0000,0000,0000,,Uber came out,
Dialogue: 0,0:04:41.95,0:04:44.11,Default,,0000,0000,0000,,incredible company,\Nincredible business model,
Dialogue: 0,0:04:44.11,0:04:45.17,Default,,0000,0000,0000,,great execution, too.
Dialogue: 0,0:04:45.17,0:04:46.66,Default,,0000,0000,0000,,But the timing was so perfect
Dialogue: 0,0:04:46.66,0:04:48.80,Default,,0000,0000,0000,,for their need to get drivers\Ninto the system.
Dialogue: 0,0:04:48.80,0:04:51.93,Default,,0000,0000,0000,,Drivers were looking for extra money;\Nit was very, very important.
Dialogue: 0,0:04:51.93,0:04:55.70,Default,,0000,0000,0000,,Some of our early successes, Citysearch,\Ncame out when people needed web pages.
Dialogue: 0,0:04:55.70,0:04:58.18,Default,,0000,0000,0000,,GoTo.com, which we announced\Nactually at TED in 1998,
Dialogue: 0,0:04:58.18,0:05:01.51,Default,,0000,0000,0000,,was when companies were looking for\Ncost-effective ways to get traffic.
Dialogue: 0,0:05:01.51,0:05:03.08,Default,,0000,0000,0000,,We thought the idea was so great,
Dialogue: 0,0:05:03.08,0:05:05.85,Default,,0000,0000,0000,,but actually, the timing was probably\Nmaybe more important.
Dialogue: 0,0:05:05.85,0:05:07.28,Default,,0000,0000,0000,,And then some of our failures.
Dialogue: 0,0:05:07.28,0:05:10.76,Default,,0000,0000,0000,,We started a company called Z.com,\Nit was an online entertainment company.
Dialogue: 0,0:05:10.76,0:05:12.20,Default,,0000,0000,0000,,We were so excited about it --
Dialogue: 0,0:05:12.20,0:05:14.75,Default,,0000,0000,0000,,we raised enough money,\Nwe had a great business model,
Dialogue: 0,0:05:14.75,0:05:17.99,Default,,0000,0000,0000,,we even signed incredibly great\NHollywood talent to join the company.
Dialogue: 0,0:05:17.99,0:05:20.38,Default,,0000,0000,0000,,But broadband penetration\Nwas too low in 1999-2000.
Dialogue: 0,0:05:20.38,0:05:22.54,Default,,0000,0000,0000,,It was too hard to watch\Nvideo content online,
Dialogue: 0,0:05:22.54,0:05:25.35,Default,,0000,0000,0000,,you had to put codecs in your browser\Nand do all this stuff,
Dialogue: 0,0:05:25.35,0:05:27.98,Default,,0000,0000,0000,,and the company eventually\Nwent out of business in 2003.
Dialogue: 0,0:05:27.98,0:05:29.07,Default,,0000,0000,0000,,Just two years later,
Dialogue: 0,0:05:29.07,0:05:31.96,Default,,0000,0000,0000,,when the codec problem\Nwas solved by Adobe Flash
Dialogue: 0,0:05:31.96,0:05:35.63,Default,,0000,0000,0000,,and when broadband penetration\Ncrossed 50 percent in America,
Dialogue: 0,0:05:35.63,0:05:37.59,Default,,0000,0000,0000,,YouTube was perfectly timed.
Dialogue: 0,0:05:37.59,0:05:39.32,Default,,0000,0000,0000,,Great idea, but unbelievable timing.
Dialogue: 0,0:05:39.32,0:05:42.76,Default,,0000,0000,0000,,In fact, YouTube didn't even have\Na business model when it first started.
Dialogue: 0,0:05:42.76,0:05:45.04,Default,,0000,0000,0000,,It wasn't even certain that \Nthat would work out.
Dialogue: 0,0:05:45.04,0:05:47.18,Default,,0000,0000,0000,,But that was beautifully, \Nbeautifully timed.
Dialogue: 0,0:05:47.18,0:05:48.73,Default,,0000,0000,0000,,So what I would say, in summary,
Dialogue: 0,0:05:48.73,0:05:51.51,Default,,0000,0000,0000,,is execution definitely matters a lot.
Dialogue: 0,0:05:51.51,0:05:52.76,Default,,0000,0000,0000,,The idea matters a lot.
Dialogue: 0,0:05:52.76,0:05:54.52,Default,,0000,0000,0000,,But timing might matter even more.
Dialogue: 0,0:05:54.52,0:05:56.56,Default,,0000,0000,0000,,And the best way to really assess timing
Dialogue: 0,0:05:56.56,0:05:59.18,Default,,0000,0000,0000,,is to really look at whether \Nconsumers are really ready
Dialogue: 0,0:05:59.18,0:06:00.72,Default,,0000,0000,0000,,for what you have to offer them.
Dialogue: 0,0:06:00.72,0:06:02.68,Default,,0000,0000,0000,,And to be really, really honest about it,
Dialogue: 0,0:06:02.68,0:06:04.94,Default,,0000,0000,0000,,not be in denial about\Nany results that you see,
Dialogue: 0,0:06:04.94,0:06:08.15,Default,,0000,0000,0000,,because if you have something you love,\Nyou want to push it forward,
Dialogue: 0,0:06:08.15,0:06:11.22,Default,,0000,0000,0000,,but you have to be very, very honest\Nabout that factor on timing.
Dialogue: 0,0:06:11.22,0:06:12.09,Default,,0000,0000,0000,,As I said earlier,
Dialogue: 0,0:06:12.09,0:06:15.48,Default,,0000,0000,0000,,I think startups can change the world\Nand make the world a better place.
Dialogue: 0,0:06:15.48,0:06:16.88,Default,,0000,0000,0000,,I hope some of these insights
Dialogue: 0,0:06:16.88,0:06:19.53,Default,,0000,0000,0000,,can maybe help you\Nhave a slightly higher success ratio,
Dialogue: 0,0:06:19.53,0:06:21.75,Default,,0000,0000,0000,,and thus make something great\Ncome to the world
Dialogue: 0,0:06:21.75,0:06:23.59,Default,,0000,0000,0000,,that wouldn't have happened otherwise.
Dialogue: 0,0:06:23.59,0:06:25.93,Default,,0000,0000,0000,,Thank you very much,\Nyou've been a great audience.
Dialogue: 0,0:06:25.93,0:06:27.42,Default,,0000,0000,0000,,(Applause)