Well, as some of my readers (namely my roommates) may know, I have been dealing with a rat infestation in my apartment recently, hence the delay in publishing this. I’m not sure if there is some sort of parallel I can draw between startups and fighting with landlords, 311, and rodents, but perhaps I will find one. Until then, let’s get into installment II of my new and improved letter.
1) Read Something:
The Only Thing That Matters - Marc Andreessen, 2007
About: I found this piece imbedded in We Don’t Sell Saddles Here and liked it so much that I wanted to feature it. It was written by Marc Andreessen, the co-founder of Andreessen Horowitz (a16z).
Key Takeaway: Team, product, and market are what drive a startup and determine its success or failure. However, the key question is how much weight to ascribe to each one. While conventional wisdom often suggests that team or product are the most critical to startup success, Andreessen takes a different stance arguing that “market” is what matters above all else.
Broader Discussion:
So, why does Andreessen think that “market” is the most important factor in determining whether or not a product succeeds? To him, if there isn’t a market, none of the other components matter, and I tend to agree with this notion. If people do not want or need your product, then it doesn’t matter how good it is, nobody is going to buy it. Let’s think about this in more micro terms. I am not a good tennis player. It has never been my sport. Ever since I got kicked out of tennis lessons in 5th grade for “joking around” (I was actually trying) I have never particularly cared for it. So now, imagine someone comes to me with the nicest, newest, most effective tennis racquet in the world, and says hey, you can have this tennis racquet, but you have to give me some money for it. My response would be no. I don’t play tennis, so why would I buy this racquet? I don’t care how nice it is. It doesn’t solve any problem that I have, and so I am not going to pay for it. Obviously, in this example there ARE people who WOULD pay money for the racquet in question, but my point (Andreessen’s point) is that really nice products don’t necessarily guarantee revenue.
On the team front, Andreessen’s point is basically that the quality of the team can have an impact one way or the other, but it isn’t the end all be all. I.e good teams can exist at failed startups, and bad teams can exist at successful startups. I first think it is important to define what a “good team” is vs a “bad team”. Andreessen says that team quality can be thought of as the:
“suitability of the CEO, senior staff, engineers, and other key staff relative to the opportunity in front of them. You look at a startup and ask, will this team be able to optimally execute against their opportunity? I focus on effectiveness as opposed to experience, since the history of the tech industry is full of highly successful startups that were staffed primarily by people who had never “done it before”
Honestly, I don’t get much out of this definition. If he is focusing on effectiveness, does that mean that a good team is one that is effective and a bad team is one that is ineffective? In which case, wouldn’t a good team essentially imply a successful startup? I don’t know, maybe I am missing something, but I don’t love that definition. I personally think that if we want to assess the impact the quality of a team has on the success of a startup, then we need to keep the outcome independent of the analysis. I think that a quality team is one with chemistry. One where you have people that work well together, who have a shared vision, who make up for one another’s weaknesses, and compliment each other’s strengths. Conversely, a bad team is one where members do not click, there is no semblance of a shared vision, and the group of people is not greater than the sum of its parts. If we accept these as the definitions of good and bad teams respectively, then I think the conclusion changes a little bit. I still agree with Andreessen that a good team is not more important than market in determining outcome. A good team will hopefully be able to produce a good product, but if a market doesn’t exist then the company will fall flat regardless. However, I actually think that a bad team can have a way bigger impact than the market. Andreessen uses the example of bad teams being able to create products and succeeding because the market is so strong, but I think about it the other way. I think that there are probably a ton of examples of companies in huge markets that have failed because a terrible team has prevented them from getting to the point where they could readily serve that market. In these instances, the quality of the team determined the outcome, not the market. So in short, I think that a good team is less important than the market, but I think that a bad team can be more of a determinant of failure than the market because it can stop a startup in its tracks even if a huge opportunity exists.
Ultimately, I agree with Andreessen that market should be considered very carefully, but I don’t think it is the “only thing that matters”. Yes, great teams building great products don’t always produce great companies because if a market doesn’t exist then there won’t be any revenue stream. Alternatively, sub-par products with large markets can do incredibly well. Think about Venmo, that app is so bad it is a joke, but guess what? I use it almost every day and I have no intention of switching to Zelle or any other competitor. However, I think that the other thing that truly matters is not hiring a bad team. A team that lacks chemistry can actively work against itself, and cause a startup to fail even if there is a huge market.
2) Reflect on Something
Being polite and being clear about what you want are NOT mutually exclusive
Okay, I may have found the connection between the rat situation and startups: I need to communicate clearly about what I want. Honestly, it sounds simple, but it isn’t that easy. I grew up in a house where being polite was non-negotiable. I can remember my mom on more than one occasion (jokingly?) threatening finishing-school if we didn’t use our manners. Being polite was coded into my DNA; it still is. Recently though, I have realized that there is sometimes a conflict between being polite, and being clear about what I want. Manners are all about pleasing people. I am polite because I see it as a way to ingratiate myself with others, and who doesn’t like being liked? The problem is, that telling people what I want does not always feel particularly polite. I think that is why my inclination is sometimes to beat around the bush and use words like “just” and “only” and “if it isn’t too much of a hassle” when I ask people for things. However, these are fillers that risk diluting the importance and urgency of my asks. What I think is critical, is recognizing that being clear and firm is not impolite. In fact, I genuinely believe that most people respect it. I want to be clear, I am not advocating for being demanding, I don’t think that gets anyone very far. Instead, I am saying that I have found that firmly asking for what I want is not inherently impolite, and is necessary to get places. A firm ask creates a clear set of expectations, which in turn reduces the possibility of 1) disappointment and 2) awkward future conversations where two parties who thought they were on the same page realize that they clearly were not. And that brings me back to rats. While my roommates and I don’t want to totally incinerate the bridge between us and our landlord, we do want to make it clear that the current state of our apartment is absolutely unacceptable. We have been cordial and polite in every email, but there is no ambiguity around what we want and what our expectations are. Ultimately, being clear about what I want and being a polite person are not mutually exclusive. Yes, they absolutely can be, but the do not have to be.
3) Detail Current Process:
The focus this week has been:
Creating multiple URLs to distribute to small communities via reddit and other online community forums (for free)
Leverage recent connections with press to understand what other offerings are and what the market for remote socialization tools actually looks like.
Virbar:
Current stats:
Monthly/Daily Active Users: 0
Revenue: 0