The importance of timing

This is a topic we wrote about before – and will probably continue to write about.

Many of our friends still believe that success of startups is a function of hard work, good team and supportive investors. Some acknowledge the role of good strategy and even luck.

The again and again, timing proves to be the most important factor determining the business’s, or business model’s, success or otherwise.

Case in point this time is the electric car manufacturers in China. Many of you have already learnt about Nio’s recent drastic share price decline.

Another number, which many might not know, is that the top three electric car startups have only sold less than 40,000 cars, or about 5% of total new energy (electric or hybrid) cars sold.

The other 95% went to traditional manufacturers.

The challenge for the likes of Nio is that – they are probably too late into the market. Most of these companies started about five years ago – by that time traditional manufacturers already realised the threat (or the future) of electric vehicles, and started investing heavily into that.

The state subsidies benefited everyone, though traditional players, which have much more powerful channels, partnerships, branding and access to capital, probably benefited the most.

With the overall new car market in decline in China and government slowly removing the subsidies – the future is probably bleak for Nio and its counterparts.

How about Tesla, you might ask? Well, Tesla started way earlier (in 2003) when most traditional car manufacturers were still hesitant about the prospects of electric vehicles.

It took Tesla more than a decade to establish its brand, a painful decade. However, now it is recognised as a leading player (and still a cool brand for many). Its Model 3 is also the top selling EV in the US last month.

When timing is right, the effects of your hard work are amplified; when timing is wrong, you might end up with nothing, despite all the hard work.