The life of any startup can be divided into two parts — before product/market fit and after product/market fit.

— Marc Andreessen, Andreessen Horowitz General Partner and Serial Entrepreneur

The only thing that matters is getting to product/market fit.   Rachleff’s Corollary of Startup Success:  Andy Rachleff is the co-founder and CEO of Wealthfront; also co-founded VC firm, Benchmark Capital.

Over a decade ago, Andreessen wrote the following statement: “If you ask entrepreneurs or VCs which of team, product, or market is most important, many will say team.”  It’s obvious from the quotes above that the “team” answer is incorrect.  Hers’s why according to Andy Rachleff, the #1 company killer is lack of market:

• When a great team meets a lousy market, market wins.
• When a lousy team meets a great market, market wins.
• When a great team meets a great market, something special happens.

Startups should be obsessed and focused on getting to product/market fit. The path often takes several iterations, pivots, and includes costly mistakes. Companies should begin with an MVP (minimum viable product) with features that are compelling enough to get people to buy it.  “Minimum” is critical because several iterations will likely be required before you can prove product/market fit.

When you attempt to identify your target audience, look for those who are “desperate” for your product, either because the product is new and a disrupter; or your product is less expensive, easier to use, more convenient, or even more available.  Once you have identified your “niche” market and become accepted, you can scale, having found product/market fit.

There are tests available to prove product market fit:

1. The Sean Ellis
2. The David CummingsTest

What brought this topic to mind was a recent article in INC. magazine entitled “Raising the Bar”. It summarizes the story of the RX BAR and the two founders. As best friends, they started the company in the basement of Peter Rahal’s home with only $10,000.  Inspired by the lack of a simple, clean protein bar, they created a minimalist formula and made their label on PowerPoint.  Their initial marketing effort was going door to door, giving them away for free to retail outlets and cross-fitness gyms.

And then, the classic line was uttered by Peter’s father as they discussed finding investors while working in Rahal’s kitchen.  Peter’s father entered the kitchen and the summary of his comment was, “You guys need to shut the fuck up and just sell a thousand bars…”  The founders called it a defining moment.

Dad told them to find product/market fit rather than worry about funding, etc. Obviously, they found their market and 5 years later sold to Kellogg for $600 million.  Peter Rahal and Jared Smith still run the company today as a subsidiary of Kellogg.  Whether by accident or knowledge in business, Peter’s father correctly directed them to make sure their product was accepted.  They had a great team and a receptive market and something special did happen.