Marc Andreessen, Product/Market Fit

This is a discussion of Marc Andreessen's "The only thing that matters", also sometimes entitled "Product Market Fit." (June, 2007) It is part of a series of discussions of foundational texts on What is a startup business?

Marc Andreessen

Marc Andreessen co-authored Mosaic, the first web browser, founded Netscape, and Andreessen-Horowitz, the venture fund. He is outspoken and active on twitter.

Product/Market Fit

Andreessen opens by declaring that the post is about "the only thing that matters for a new startup." Towards the end of the essay he tells us:

The only thing that matters is getting to product/market fit. (Marc Andreessen, all bold in original)

He begins with some context. He divides the causes of startup success into three components: team, product and market, which he borrows from Andy Rachleff, and goes on to quote Andy:

• When a great team meets a lousy market, market wins
• When a lousy team meets a great market, market wins.
• When a great team meets a great market, something special happens. (Andreessen quoting Andy Rachkeff)

This is a counterintuitive claim. Many people who discuss startups will claim that the founder, or the founding team, is the single most important thing and that "smart" people will figure out how to make something successful.


I just googled what to look for in a startup team and this is the first link that appeared: 5 things angel investors should look for in a startup Note that team shows up twice on this list (#1 all star team and #4 integrity).

Markets trump founders

Andy seems to be saying that the market is more important. Andreessen summarizes the logic in two key statements:

In a great market -- a market with lots of real potential customers -- the market pulls product out of the startup. (Marc Andreessen)

and

Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn't matter -- you're going to fail. (Marc Andreessen)

I think the second statement is non-controversial, and the primary reason that people fail to start a business is that they don't make things people want. The first, though, is interesting. It suggests that if  you pick the right product or service, you might succeed in spite of a mediocre team. (Mediocre teams rejoice).

Contrast: This view contrasts with the view that the right founder will figure it out, but there is a subtle variation. Chris Dixon has proposed that you need the right founder for a particular market, and that not all founders are suited to all markets. I don't think of this as an opposing view, so much as an interesting addition.

Q: Although I think that many people have said picking the right founder is key, I cannot recall a single key text where this is clearly laid out. Can the reader recall such a text?

Advice

The essay culminates in a piece of advice though:

When you are BPMF [before product/market fit] , focus obsessively on getting to product/market fit.

Do whatever is required to get to product/market fit. Including changing out people, rewriting your product, moving into a different market, telling customers no when you don't want to, telling customers yes when you don't want to, raising that fourth round of highly dilutive venture capital -- whatever is required.

When you get right down to it, you can ignore almost everything else. (Marc Andreessen)

The best part of this is the singular goal he proposes.

Q: I wonder to what extent this contradicts the advice of others. I think this is compatible with Graham's advice to focus on growth. It is not compatible or incompatible with Thiel's advice to earn a monopoly by solving a unique problem. There is nothing that indicates the problem or solution has to be unique. That is more of an issue for Thiel who hasn't specified what he means by his uniqueness criterion. There is also nothing here about having a monopoly.