market – Alex Shye
The problem with righteous entrepreneurship
Recently, there have been a lot of press on the troubles of VC firm Kleiner Perkins. They were once legendary in their pick of tech companies, as early investors in Amazon, AOL, EA, Google, Intuit, Netscape, Sun Microsystems, Tandem, etc. More recently, they went all-in with cleantech, and did not come out smelling so great.
Linked to the article from Gigaom is another good article this, and on the problem with righteous investing. VCs play a large role in innovation by picking and choosing the right startups to fund. However, this choice is critical. VCs can’t just pick a lofty mission, and dump money into it. As I’ve been learning (and wrote about in a prior post), the market always wins. Lofty visions are great, but there must be a market, and the market must want your product.
However, VCs are only one side of the story. The other side is the entrepreneurs. And the same law applies: lofty visions are awesome, but at some point the vision meets reality, and the reality of the market wins.
This is critical for entrepreneurs to think about. Passion matters in entrepreneurship. Most people don’t leave perfectly good jobs (with perfectly good paychecks) unless they have a passion for something. The most passionate are often driven by the largest missions, and there are many great missions out there: world peace, feeding the poor, educating the world, etc. Clean tech may be one of these (although I’d bet that timing was the real issue). These missions sound great, but can be huge traps. Maybe they would be great as a non-profit, but as a startup? Tread lightly.
This has been one of my biggest lessons so far in my time as an entrepreneur. Look at yourself and make sure you aren’t being a righteous entrepreneur. Passion is great, but the market always wins.
Posted on December 15, 2013 by alexshye.	Posted in musings, startups	| Tagged entrepreneurship, market, righteous	| Leave a comment
The importance of the market when building a startup
This 100-day blogging challenge is getting difficult. Now, one or two days a week, I hit a writer’s block and just can’t come up with a topic to write about. This is a big reason why I have begun publishing notes on other content. I figure if I share notes on some of the best content I have found, it may be useful to others.
Well today I’m having writers block again. I’ve been thinking about the importance of the market in building a startup, but frankly, I don’t have anything original or interesting to add to prior blog posts that I have read.
So, I’ll just leave you with the best blog post I have ever come across on this topic by Marc Andreeson of Andreeson Horowitz. Some of the best parts paraphrase Andy Rachleff, formerly of Benchmark Capital.
When discussing startups, people tend to argue about the relative importance of the team, product, and market. Marc makes a strong case that the most important factor is the market. He then describes product-market fit (PMF), which is arguably the most important step a startup can take on the road to success.
IMHO, the most important bit is here:
– 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.
You can obviously screw up a great market — and that has been done, and not infrequently — but assuming the team is baseline competent and the product is fundamentally acceptable, a great market will tend to equal success and a poor market will tend to equal failure. Market matters most.
Again, you can find the entire article here, and I highly recommend it. If you have even more time, the Pmarchive contain a bunch of old posts from Marc Andreeson. They are some of the best reading you can find on building startups.
Posted on December 9, 2013 by alexshye.	Posted in startups	| Tagged market, product-market fit	| Leave a comment