What are you?
A question I like to ask entrepreneurs is whether their startup is a product or a sales and marketing company. All startups need to do at least a bit of both. You can’t sell without at least a working product, and how good your product is doesn’t matter if you can’t get people to use it.
However, I’ve discovered that the best startups tend to excel on one of the dimensions. For example, in our portfolio Sinemia is primarily a sales and marketing organization and Insider is primarily a product company. Globally, Uber is primarily a sales and marketing organization and Google is primarily a product company.
More important than whether I think a startup is a product company or a sales and marketing company is what the founder thinks. This is because, taken together with their business model, it informs their strategy. And founders need to be aware of this. For example, a SaaS company with global ambitions needs to be a product company, and the founders need to recognize this.
The match, or mismatch, between the type of organization that a founder sees their company as, and their stated ambitions, says a lot about the company’s eventual chance of success.
Originally published at Thoughts of a VC.