Marc Andreessen, former serial entrepreneur now of VC firm Andreessen Horowitz, was a guest speaker at Stanford earlier this month.
His lecture was full of insights into what it takes to start a successful business, the importance of product, and the current climate of venture capital and entrepreneurship.
One of the most interesting segments details Andreessen’s three requirements for a successful startup:
1. Enormous market (either existing, or new)
2. A fundamental technological or economic change (the product must be “10 times” better/faster/cheaper than what’s on the market now)
3. A kick-arse founding team (tech and sales “superstars” are most important)
By nature, existing companies always have the advantage, he says — so for a new startup to win, it’s going to have to have these truly outstanding qualities.
Interestingly, Andreessen says that, if an investor were to compromise in one of these areas, it would likely be the product.
“A great market is a lot easier to make up for, with iterative product execution, than a poor market… with a small market, even if you do a great job on the product, there just aren’t that many customers, and it’s hard to get big,” he explains.
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