I’ve been chatting with a lot of people about their startup ideas lately and noticed that the same issue arises:
Am I a Tech Startup or Small Business?
I think a lot of inexperienced entrepreneurs (including myself) struggle with the question “Is it a Product?”.
What do people mean when they say “Product”? Who cares if it is a product or not?
“What Makes a Successful Company?”
When posed with this, I though back to a Stanford seminar that pushed me to challenge some of my now defunct ideas. In it, Marc Andreessen says that there are two types of startups:
1) A Product that becomes a Company
2) A Company looking for a Product
Deep, but what does that really mean?
“It’s a demonstration that the product has to exist. The market needs the product so badly, that somebody actually built it, and deployed it and you can actually see evidence that people want it, even before there is an economic motivation to do so.” – Marc Andreesseen
What is a Tech Startup?
While this seems obvious, it’s difficult to execute on. I’ve been digesting this for a few weeks now and I’m finding that a lot of ideas are easily dummied or MVP’ed down to a blog to start… but a blog alone is not a VC investible business. To support this, I dug up this old Paul Graham article on How to Fund a Startup. He spells it out pretty nicely in the “Consulting” section:
“To be a startup, a company has to be a product business, not a service business. By which I mean not that it has to make something physical, but that it has to have one thing it sells to many people, rather than doing custom work for individual clients.” – Paul Graham
So before you dream of getting accepted into some Tech Incubator, ask yourself if your idea can scale. If you do have an idea that scales, you probably already feel the pain of needing to find the right Technical Co-Founder.