Conventional wisdom is that technology markets move so fast that a startup can go from zero to profitable or to IPO in a couple of years. Conventional wisdom is wrong.
These are the words of Brent Holliday, vice-president of technology practise at Vancouver-based investment bank Capital West Partners. In his latest Tech Talk column in monthly mag BCBusiness, Brent dispels the "myth of fast money," arguing that "very few success stories are 'quick hits.'"
He cites a few of said quick hits, such as Club Penguin and Abatis Systems—the former of which when from raw startup to $350 million in two years, and the latter of which skyrocketed it $680 million less than three years. But Brent refers to numerous local examples as what's more realistic: Make Technologies, a Vancouver software company that was started nine years ago, is now seeing tremendous success, making this year's Technology Fast 50. Absolute Software is another example: founded in 1996, its sales didn't take off until 2007.
There are many more examples to mention, but let's cut to the point: most startups take several years to mature. Unless a highly experienced or extremely affluent entrepreneur is heading the project, or a serendipitous bout of luck befalls the team, it may be a while. If everybody could hit two-thirds of a billion dollars valuation in three years, don't you think less people would be climbing the corporate ladder in agony?
If it's your first startup, have patience. And if it's your first time investing in a startup, try thinking for the long term. To end in cliché fashion... "Rome wasn't built in a day."