pmarca: on product / market fit

There are three primary factors that go into a startups success: team, product, & market. pmarca postulates that team--even though it's the common pick--is not the most important key to success. Nor is product (as much as engineering would like to think it is).

"In a great market—a market with lots of real potential customers—the market pulls product out of the startup."

Great products have failed while poorer quality products or teams have succeeded. The product only has to be good enough for the market and the team only has to be good enough to deliver that level. They both don't need to be the best.

If you have a great market you can upgrade the team and the product.

"in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter—you’re going to fail."

Rachleff’s Law of Startup Success:

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.

Serial entrepreneurs are susceptible to focusing on the team given that they often think their people choices led to their success. This is often reinforced by popular opinion.

Tim Shephard: “A great team is a team that will always beat a mediocre team, given the same market and product.”

Transformative products can sometimes create huge new markets. A recent example is VMWare. In this example, it doesn't matter how good the team is as long as they can produce quality good enough for the market.

Rachleff’s Corollary of Startup Success: The only thing that matters is getting to product/market fit.

When product / market fit is right, it's obvious to see: growth is substantial.

Most startups fail because they don't attain product / market fit. Two main parts of a startup's life: before product/market fit (call this “BPMF”) and after product/market fit (“APMF”).

When you are BPMF, focus obsessively on getting to product/market fit. Do whatever is required to get to product/market fit.

"When you get right down to it, you can ignore almost everything else."

There are a suprising number of really well-run startups that are "heading straight off a cliff due to not ever finding product/market fit."