Marc Andreessen argues that many of the most successful technology franchises began as working products before they became companies. He gives examples (Netscape, Microsoft, Apple, Facebook, Twitter) and contrasts product-first success stories with riskier attempts where entrepreneurs invent companies first and try to find a product/market fit. The core claim: a preexisting, deployed product provides clear evidence of market demand and reduces the risk of founding a company.
Chapters
There are products that become companies, and then there are companies that come up with a product. And one of the interesting things over the years is that many of the most successful technology franchises were products first, way before they ever became companies. And so, just in my own experience, Netscape was based on a research project at University of Illinois that we had worked on for three years prior. In fact, the team had come together at Illinois before we started Netscape. Microsoft, Bill Gates and Paul Allen were like, deep into PCs early on, before they even thought there was a software business. Jobs and Wozniak built the first Apple as hobbyists. More recently, Mark Zuckerberg had Facebook running out of his dorm room way before he ever thought of starting a company. And then my other favorite example is Twitter. Twitter was a side project at a company called Odeo, and Odeo wasn't working. Twitter was a couple of guys who basically knew that the Odio product, which was a podcasting product, was going to fail. And so they were frustrated and unhappy. And so they started the side project Twitter, and it just started to take off. And so the product that becomes a company is a really good template. And here's my theory on that is because it's a demonstration that the product has to exist. The market needs the product so badly that somebody actually built it and deployed it. And you can actually see evidence that people want it even before there was an economic motivation to do so. That's market demand. Something magical is going on there. At that point. We see a lot of failure cases, which is smart entrepreneurs sitting around saying, I really want to start a company, and now let's go try to figure out something interesting and good to do. And it's very easy in that process. We found to fool yourself into believing that there's a market and that there's a need. Because you want to find something, you have a very strong motivation to come out with an answer. It's very hard to go through that process for three months and then say, you know what, we can't come up with any good ideas. Let's just go back to our day jobs. Moral of the story is it has to be a really good idea that often will be an idea that is preexisting at the time you decide to start a company. And if it isn't, be really careful because you're walking on sharp rocks at that point with a high risk of falling off the cliff into the ocean.
