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Marc Andreessen: The Most Successful Companies Started as Products, Not Companies

By Marc Andreessen · Startup Growth · 1 min read

There are products that become companies, and companies that come up with a product. The most successful franchises were products first — way before they became companies. Netscape, Microsoft, Facebook, Twitter.

Key Points

Products that become companies are a better template than 'I want to start a company, now what?'
When someone builds a product before there's an economic motivation — that's proof of market demand
It's easy to fool yourself into believing there's a market because you want to find one

It's very easy to fool yourself into believing there's a market because you have a very strong motivation to come out with an answer.

Products Become Companies

Andreessen: Many of the most successful technology franchises were products first, way before they ever became companies. Netscape was a research project at the University of Illinois we'd worked on for three years. Bill Gates and Paul Allen were deep into PCs before they thought there was a software business. Jobs and Wozniak built the first Apples as hobbyists.

More recently — Zuckerberg had Facebook running out of his dorm room before he ever thought of starting a company. Twitter was a side project at Odeo. The guys knew Odeo's podcasting product was going to fail, so they started Twitter. And it just took off.

Netscape, Microsoft, Apple, Facebook, Twitter — all products first, companies second.

Proof of Market Demand

Andreessen: The product that becomes a company is a really good template. It's a demonstration that the product has to exist — the market needs it so badly that somebody actually built it and deployed it. You can see evidence that people want it even before there was an economic motivation. That's market demand. Something magical is going on.

Someone built it before there was an economic motivation. That's proof of market demand.

Don't Fool Yourself

Andreessen: We see a lot of failure cases — a smart entrepreneur saying 'I really want to start a company, now let's figure out something interesting to do.' It's very easy in that process to fool yourself into believing there's a market. You have a very strong motivation to come out with an answer.

It's very hard to go through that process for 3 months and say — we can't come up with any good ideas, let's go back to our day jobs. It has to be a really good idea, often pre-existing before you decide to start a company. If it isn't, be really careful — you're walking on sharp rocks with a high risk of falling off the cliff.

You have a strong motivation to come out with an answer. It's easy to fool yourself into believing there's a market.