Thomas Edison’s Startup

For the unitiiated, Marc Andreessen (the co-founder of Netsape) started blogging a few weeks ago. Marc is on a serious role so far, providing all sorts of gems about the in’s and out’s of a starting a technology venture and hiring the right teams. If you aren’t tracking it and this stuff interests you, don’t miss it.

In Marc’s most recent post, he expounds upon the only thing that matters when thinking about a startup. In sum, the only thing that matters according to Marc is the market. You may have a great team and a stellar product, but if the market isn’t there you’ll most likely fail, according to Marc.

With all due respect to Mr. Andreessen, I think his conclusions are not only wrong, but sadly discouraging. Innovation, invention, those great out-of-left-field ideas that someone is tenacious enough to bring to product and introduce them in a clear way. The ideas that not only fufill a need, but create wants. The ideas that, in effect, create markets.

On every corner and side street in New York City, there is either a street coffee vendor or a deli or coffee shop ready and willing to sell you coffee for $.50. Could anyone have foreseen the “market” for Starbucks to wedge its way into practically every 100 meters in New York City and sell their coffee for three to four times as much? Where did that market come from?

The portable music player market existed for years before the iPod came along. The market was effectively demarcated by the early players like Diamond (which eventually became Rio). And then, the iPod came along and absolutely obliterated the boundaries of what everyone presumed the portable music market to be.

Marc sort of addresses those rare market-creating products that come along every so often, but he frames it in a “product/market fit” argument. The failing there is that he’s writing off the market as some fixed, pre-defined entity. The task of the startup is to somehow make your product fit within it.

I’d much prefer to view the dance between product and market as something far more fluid and highly reciprocal. A product can expand, and in rare cases, create a market. A market can inevitably drive the strategic direction of a product. Factors like ease-of-use, elegant design, and aesthetics that can evoke emotions and loyalty, and others can help shape wants that we never would have conceived of prior.

At the risk of sounding like a broken record on this blog, this is again about honing in a real need (or want) and attacking it with good design. Good design broadens your potential market and can create loyalty that is nearly impossible to attain otherwise.

Thomas_Edison But even if we forget design for a second, what of the market for phonographs? Or moving pictures? Or a toaster? How would Thomas Edison react to Marc’s argument? Wait…how would Marc circa 1993 react to Marc’s argument today?

4 Comments Thomas Edison’s Startup

  1. Clyde Smith

    I hear you on the issue of markets. I recently finished reading Blue Ocean Strategy and that’s totally about the kind of market creation that you describe.
    What’s especially cool about the book is the authors discuss processes for creating new markets that don’t rely on excessive creativity, though that wouldn’t hurt!

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  2. Jimbo

    Maybe Marc is right, and you are right, a la chicken/egg? Maybe the I-pod market was there all along, and nobody saw it except mac?
    Talent hits a target no one else can hit; Genius hits a target no one else can see.” — Arthur Schopenhauer (1788-1860)

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  3. Criggs

    I think we need to consider our definitions. Innovation is about making leaps in existing markets. Invention is the stuff of market creation. Rarely do inventions re-define existing markets within the original lifespan of the product.
    Innovation is almost entirely dependent on existing, stated – if misunderstood – expectations and unmet needs: in two words, existing markets.
    Apple doesn’t create markets. They went into the existing MP3 player market, co-opted a REALLY good idea from a couple of kids, and put corporate resources and a maniacal “Apple” perfectionism to its design. The key to the longevity of innovation is the tie-in. VHS players enhanced their networks with manufacturers of tapes and Hollywood studios. iPods captured value and customers through software and content. Microsofts Windows…yadda yadda.
    Light bulbs were inventions, but they were innovations on a stated market: artificial lighting. The commercial success came from cheaper parts and the willingness of a network of stakeholders to see the value in substituting their existing market behaviors.
    Cheers, love this site….
    -Criggs

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  4. Rich Ziade

    Criggs:
    The “creation” I’m talking about is really about perception. My point about Marc’s original write-up was that it made a dangerous assumption: that the market landscape is static and we play within it. We may not create markets per se but we can turn a niche into something massive with great design and innovation.
    Glad you enjoy the site.
    -Rich

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