What Entrepreneurs Can Learn From Olympic Silver Medalists
Originally posted August 2016
The Summer Olympics have come and gone, once again reminding just how unfair it is to be the silver medalist. The spotlight is at its brightest each Olympics and yet somehow that spotlight has no time for the silver medalist or, heaven forbid, the bronze medalist.
Remember who finished second to Usain Bolt in the Men’s 200 meters? Probably not. How about which team finished second to Michael Phelps and the US 100M relay team? Runner up to Simone Biles in the vault? No and no. Although Andre De Grasse, the Great Britain relay team and Maria Paseka think you’re a jerk with a short memory, you’re not alone (and depending on if you’re a jerk or not, possibly neither are they). It seems that only in the Olympics can you be quickly forgotten for being the 2nd best at something out of 7.4 billion possible contenders.
But the tech world isn’t all that dissimilar in its treatment of startup silver medalists, especially the blogosphere. Everyone loves the market leaders, but even if the press doesn’t give the same fawning praise to Lyft as it does to Uber, it doesn’t mean being the silver medalist in your vertical isn’t worth aspiring too. Clearly being number two in CRM (SAP), consumer electronics (Samsung), enterprise messaging (HipChat) is a fast track to making you and your investors incredibly wealthy.
However, the same is not true for the silver medalists in laundry pick-up and delivery (Prim), on-demand parking (Zirx) or virtual closets (99dresses). All finished second (at least for a moment in time), but the difference is that the silver was the same as failure. The difference? Market size.
In the age old investor dilemma of what to prioritize (product vs. market vs. team), Marc Andreessen is the most salient at articulating why market is by by far the most important of the three:
In a great market — a market with lots of real potential customers — the market pulls product out of the startup.
The market needs to be fulfilled and the market will be fulfilled, by the first viable product that comes along. The product doesn’t need to be great; it just has to basically work. And, the market doesn’t care how good the team is, as long as the team can produce that viable product.
In short, customers are knocking down your door to get the product; the main goal is to actually answer the phone and respond to all the emails from people who want to buy. And when you have a great market, the team is remarkably easy to upgrade on the fly.
This is the story of search keyword advertising, and Internet auctions, and TCP/IP routers.
Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team, and it doesn’t matter — you’re going to fail.
You’ll break your pick for years trying to find customers who don’t exist for your marvelous product, and your wonderful team will eventually get demoralized and quit, and your startup will die.
This is the story of videoconferencing, and workflow software, and micropayments.
In honor of Andy Rachleff, formerly of Benchmark Capital, who crystallized this formulation for me, let me present Rachleff’s Law of Startup Success:
The #1 company-killer is lack of market.
Every time I read Andreessen’s post on this, I can’t help but think of Jan Brady, herself the silver medalist of the Brady Bunch, and her meme-able complaint about her sister Marcia:
Bringing us back to the Olympic silver medalist, the truth is that it’s better to be the German soccer team (football, I know) or Serbian basketball team, than it is to be Maria Peseka. Why? The market for soccer and basketball ensures that as long as you’re standing on the podium, you will still be wildly successful.
It probably was not possible for Maria Paseka to choose from a wide variety of markets before she launched her Olympic career, but that doesn’t mean you can’t be more thoughtful in choosing yours.
Gary Coover is a tech and startup business model junkie who honed his snark through years of strategy/BD work, co-founding a startup, and a few years in Korea and the Bay Area working for Samsung. Gary currently runs Global Operations for the Samsung Accelerator, helping architect, launch and scale the Accelerator and its startups in New York, San Francisco and Tel Aviv. His opinions are his own, as are his tweets, which are occasionally above average.
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