Friday, June 29, 2007

Marc Andreesen's Blog: Startup advice

I just discovered Marc Andreesen's blog. There are a number of interesting posts here about doing your own startup. One post was about what VCs look for when they invest in a company. The second was about how to get to know VCs. And the third was about the most important thing for a startup.

What do VCs look for in a company?
  • Founder risk - right founding team for the opportunity?
  • Market risk - is there really a market for this?
  • Competition risk - are there too many startups/incumbents in this space? Is this startup sufficiently differentiated?
  • Timing risk - too early for this? Too late?
  • Financing risk - how much total capital will be required? How certain are we?
  • Marketing risk - will this startup be able to cut through the noise? How much does it cost to acquire a customer?
  • Distribution risk - are there certain distribution partners required? How will it get them?
  • Technology risk - Can the product be built? Does it require fancy, new, unproven technology? Is it dependent on some other tech breakthrough?
  • Product risk - can this team build the product?
  • Hiring risk - what positions does the startup need to fill into order to execute this plan?
  • Location risk - is the team not located in Silicon Valley?
How to get to know VCs?
  • VCs work through referrals
  • Work at a VC-backed startup, kick butt, get promoted, and network all the way
What is the only thing that matters for a startup?
  • Out of team, product, and market--it's market.
  • A great market (with lots of potential customers) pulls product out of the startup
  • There's a concept called Product-Market Fit (PMF)--being in a good market with a product that can satisfy that market
  • If you're Before PMF (BPMF), focus obsessively on getting to PMF. Most startups fail because they can't get to PMF before they run out of cash.

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