The Pmarca Guide to Startups, part 4: The only thing that matters (2007) | Hacker News Reader

The Pmarca Guide to Startups, part 4: The only thing that matters (2007)

blog.pmarca.com

15 pointsteej6 comments

Hey quick feature request for hn, can we have a tag thing for well written pieces like these that are actually about startups as opposed to fluff pieces that I can find on digg/slashdot/reddit?

Doesn't this fall down on its face as soon as you have a competitor with a team or product significantly better than yours? I wouldn't base my strategy on not having very much competition.

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

The market needs to be fulfilled and the market will be fulfilled, by the first viable product that comes along.

The product doesn't need to be great; it just has to basically work. And, the market doesn't care how good the team is, as long as the team can produce that viable product.

In short, customers are knocking down your door to get the product; the main goal is to actually answer the phone and respond to all the emails from people who want to buy."

"Doesn't this fall down on its face as soon as you have a competitor with a team or product significantly better than yours?"

No. For many reasons:

- If they're significantly better, they won't be for long.

- If the pie is big enough, there will still be plenty of business even if your slice is relatively small

- Imperfections in the market (friction) will give lagging competitors a chance to catch up

- Many commercial customers will buy anything but what their competitors are buying. There has to be more than one offering.

- If the market is big enough, underdogs can still find their niche, which may be bigger than entire markets for other products.

Bottom line: Lots of customers makes up for every other problem just like a rising water level in a stream covers even the most jagged rocks.

Marc really needs to start writing again. Really really.

This highlights one big advantage of bootstrapping over taking investment. Since you are being funded by customers, you're less likely to make a big mistake by missing your market. If you're not making what the market wants, you won't be around long enough to screw up that badly.

Not only that, but bootstrapping, and building a v1.0 that's the smallest thing that's useful, and then iterating over that while listening to your customers.

Basically, use the product development process as a way to find out about the market. Basically, use it as a way to acquire what Eric Ries calls "Validated learning about customers": http://startuplessonslearned.blogspot.com/2009/04/validated-...

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