Why the Right Timing Matters for a Startup

In Sequoia Capital’s pitch deck template, there is a dedicated slide addressing the question: “Why is now the right time to launch your startup?” Why was it too early to launch a similar solution two or three years ago, and why might it be too late in a couple of years? Startup founders often provide counter-examples, trying to show that this question isn’t important. Based on my experience, for the vast majority of startups, it is possible to explain why the timing is right. In some cases, this factor is more pronounced; in others, trends are rising over 3–5 years.

Why is this question primarily important for the founder and only secondarily for attracting investment? In principle, companies can create markets. However, creating markets requires significant investment, time, and effort. Market creation does not always end in success. Startups simply do not have these resources, so they ride existing trends that push the market forward. When the right market dynamics are in place, roughly at the same time, several teams come to the reasonable conclusion that they can make money from it. That’s why competitors usually appear around the same time — and investments follow.

Sometimes, startups do launch well before a market hype occurs. In such cases, companies usually grow more slowly and attract fewer investments. For example, this happened with the leaders of the Robotic Process Automation (RPA) market. UiPath was founded in 2005, Automation Anywhere in 2003, and Blue Prism in 2001, but substantial investment rounds didn’t begin until 2015–2018. As I recall, this was due to a combination of factors:

1. During that period, hype around Deep Learning, computer vision, and OCR was growing, allowing these technologies to become part of process automation. More data from legacy systems became available, and it became technically possible to automate more processes.

2. After the 2008 crisis, there was a general upward trend in efficiency optimization, and from 2011 onwards, “software ate the world.”

3. Major consulting firms began promoting this category as part of Digital Transformation and the Future of Work.

The right moment can be influenced by several factors:

• A major technological breakthrough (e.g., LLMs in the current wave of AI startups).

• Significant macroeconomic shocks which affect profit margins of companies in a given sector (e.g., adoption of TravelTech during and after COVID).

• Significant shifts in the labor market (e.g., Uber and Airbnb emerged when many people lost jobs and were trying to make ends meet).

• Changes in user preferences (e.g., in Vertical SaaS, adoption often occurs thanks to a new generation of workers).

• The emergence of necessary infrastructure (e.g., for many startups, this was the widespread adoption of smartphones and broadband internet).

• Shifts in government policy or regulation (e.g., current trends in the U.S. encourage wider adoption of robotics).

Raising investments is not the cause of the right timing — it is a consequence. That is why founders need to focus not on what is trendy among investors, but on what is in high demand among customers. If there is demand, your sales will grow. Sooner or later, one of the thousands of investors will notice your trend. This is why timing is crucial when launching a startup.

Analyze trends wisely, raise investments, and build unicorns!