How To Start A Technology Company
Technology is transforming the world. Tech legends such as Jeff Bezos, Steve Jobs, Mark Zuckerberg, and Larry Page and Sergey Brin, have inspired a generation of entrepreneurs. If you’re thinking about starting a technology company, I’m going to tell you the one thing that you need to get to build a great technology company.
Starting a technology company is a bit like getting fit: you want to get to the end result really quickly, but to get there, you need to go through processes that will turn you from unfit to fit. If you fixate on the goal, you lose sight of the process and never achieve your goals. You need to focus on the process and fight today to build the technology company you want to own in the future. It won’t be easy.
Competition is fierce and everyone is as convinced you are that they will be the next Jeff Bezos or Steve Jobs.
When asked the most important thing is in a technology company, entrepreneurs invariably say, the team. Intuitively, it feels right. Before you know the product, know the team. And we all like to think that if we throw together the best and brightest, they will develop great products.
If you ask an engineer, they’ll likely tell you that having a great product is the important thing in a technology company.
The truth, however, is that the most important thing to have in a technology company, the thing that is foundational for your task, is getting product-market fit.
What’s wrong with having a great team? Well, consider Leonardo da Vinci. The man invented a tank centuries before they went into mass production. He was the ultimate genius. You can have the brightest and best and they can produce great products for you, but if there’s no demand for those products, you won’t make money. Without a great market, three best products won’t go anyway. And, just because you have a great team, doesn’t mean you’ll develop a great product.
Marc Andreesen, the legendary tech investor, calls product-market fit, “the only thing that matters”.
You see, being a technology company isn’t a guarantee of success. There are exceptional technology companies, good technology companies, bad technology companies, horrific technology companies and average technology companies. That’s obvious.
Not only are there different levels of success, there are also different qualities of teams. Some teams are sensationally smart, some are good, some are terrible, some are just bad and a lot are just okay.
As for products, it’s the same. A wide range of quality from great to awful with average in between.
The same applies to markets.
How do we make sense of all this?
The thing that is the common theme with truly exceptional companies isn’t that they have great teams, or great products, or great markets, it’s that they have product-fit. Starting a technology company is, first and foremost, about finding that blend of product and market that drives truly exceptional companies.
Product-market fit measures the appetite the market has for your product. Leonardo da Vinci’s tank had poor product-market fit because he had a great product but no market. There was no demand for his product. And he was one of the greatest thinkers of all time.
Building a technology company is about building products that are exceptional, easy to use, rich in features, highly extensible, and polished, that meet the needs of a big market, a market that’s growing so fast that you’re struggling to keep up with the demand. When you have product-market fit, you have the world.