The External Environment

Its amazing how many of the factors that determine the success of startups are outside the control of of the team. These include regulations, the state of the economy ( boom/bust), and the readiness of markets, both on the input side and the output side.

Infosys could not have made it big without the pool of engineers created by the educational infrastructure, the downturn in the US economy in the 1990s, and the development of communication technology in the 1980s. They could not have made it without the patronage of the government which granted land at concessional terms, and a plethora of tax breaks which continue to this day despite Narayan Murthy’s view that the IT sector no longer needs sops.

In the light of the above, spend a lot of time thinking about the external environment and what it means for the success of your idea. What in your external environment is favourable/unfavourable to the success of your idea?

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