Marc Andreessen wrote an excellent blog post . His view is, when you look at the three key components to success (team, product, and market), that the market is the most important reason that a startup succeed.
Andreessen quotes what he calls “Rachleff’s law” named after venture capitalist Andy Rachleff. Rachleff’s law goes as follows:
- 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.
I agree with Rachleff’s law. You do need to pick a great market to win. There’s no doubt about it.
Rachleff’s law is an investors view of why startups succeed. Here’s my view as an entrepreneur of what it takes to succeed:
A. You need a great market to go after.
I don’t care how good you and your team are, an unforgiving market will kill your chances of success. This leads to my second rule of startup success…
B. You need a great team.
Great teams find great markets. And great teams pivot when they attack an unforgiving market.
Great teams don’t give up when they are faced with obstacles. Instead they use to persevere.
And the good news is you are completely in control of the team you build. So aim high and choose great co-founders and great team members that fit and will positively add to your company culture.
This leads to my third rule of startup success…
C. You need great investors.
Every company has investors. This includes bootstrapped companies where you’re investing your own funds.
You will fail if you if there is a mismatch between you and your investors. In fact,
You are in deep trouble if an investor decides to pull their support because you will have to scramble to find funding. Some companies make it through, but many excellent companies are killed through no fault of their own when an investor pulls their support.
So choose your investors wisely.
Because a great team going after a great market with supportive investors is unstoppable.
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