I was recently rereading Marc Andreessen’s well-known essay on Product Market Fit, and it struck me that nearly 7 years later, I still hear about companies that seem to be ignoring (or are ignorant of) the advice he shared.

His entire post is worth reading (go read it), but the key part is that many startups fail because they never reach product-market fit. Instead, they put the priority of their attention not on the market, but on the team or the product. In doing this, they fail to recognize something of critical importance: because the startup must exist in the Market and will be defined by it, it must focus on the Market and not exclusively on the internal machinations of the Product and Team.

Now, looking at many startups that get attention, you’d think that they have at least a somewhat decent understanding of The Market. VCs are bought in, the press is pandering, top-notch job applications are pouring in. They may even have a small, impassioned user base. All signals point towards a future where the great ideas are met by a receptive Market, the world is made better, and everyone’s wallets come away a bit thicker.

Unfortunately for the company, the Market they’ve been accepted by isn’t “The Market of Customers”, but rather “The Market of Engineers/Designers/VCs/Reporters/etc.” Or in my shorthand, The Market of Team.

My hypothesis is that this misunderstanding of who they’re being accepted by, and how important that acceptance is, causes many companies to fail and never reach True Product Market Fit.

Why is this situation so dangerous? Because while you’re moving towards this False-PMF, there’s a high probability that you’re moving away from what the True Market really wants. Is the Team a subset of the True Market? Maybe! But it’s also a statistically insignificant subset of the Market.

“But my team is really smart, and they love the product!” Great! They’re also biased. Just consider the standard difference between the experiences and mentality of your average Silicon Valley Engineer, and your average Facebook/Snapchat/Twitter/etc. user. It’s like asking the Saudi King what the average day in his country is like. Will it be interesting? Sure. Will it be representative? No.

Unless you want your market to just be the maximum number of people that are similar to your team — or worse, just members of your team — it’s important to realize the distinction between Team and Market, and put more weight on the latter.

In real life situations, it’s not going to be cut-and-dry. It’s not that The Market is going to say “build this” and that The Team will say “no, let’s build this opposite thing”. Instead, you’ll likely start by listening to different Market signals and begin planning accordingly.

Then, you’ll get sidetracked by the everyday concerns that are raised by team members with strong beliefs. “This is more technologically elegant,” “I personally would love this feature,” “I can’t think of a single person who would want this,” “We need to get something out the door immediately.” You’ve remained focused on The Market, just the wrong one. You end up in the mire.

This isn’t an unavoidable situation, it just requires a bit of extra attention to what you’re focusing on. I’m as guilty as the next person at getting distracted by things that seem to be important, only to find out too late that I’ve been waylaid by the immaterial.

All you need to do is focus on what the True Market wants, hear from the customers of The Market, and purposefully shape yourself to fit the Market, not the Team.

San Francisco