In light of all the talk surrounding a potential funding bubble and Series A crunch, entrepreneur and investor Chris Dixon says entrepreneurs need to focus more on the product market.
According to Dixon, there are two markets: financial and product. The two markets are related, but only partially. The financial market is the one between VCs and startups, while the product market is the one between startups and their customers.
Dixon argues that good entrepreneurs spend more time focusing on the product market.
Here are the four questions entrepreneurs should ask to figure out their product strategy:
- Have the products in area X caught up to the best practices of the industry?
- Are they reaching their potential?
- Are they exciting?
- Are there big cultural/technological/economic changes happening that allow dramatically better products to be created?
If the answer is “no,” “no,” “no,” and “yes,” then the product market is telling you “go.”