Team, product, or market, which do you think most closely predicts success or failure for a startup?

Marc Andreessen argues that market is king.

And he has some good points:

• 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.

I agree, of the three, a good market most consistently produces success, in the short term.

However, I disagree that market is the most important factor in the long term.

If you’re evaluating two companies, a great team without a good market, and a terrible team with a good market, the terrible team does have a better chance to survive the first year.

But in 5-10 years when that market is completely changed who are you going to wish you had invested in?

A good team can start in a bad market and transition to a good market, bad team are less likely to adapt.

In order for my position to be true we need to answer:
How often does the market change?
How often do good teams without a good market successfully adapt to a good market?
How bad are bad teams at adapting when the market changes?

These are big questions to be further broken down in later posts. But my current hunch is that I’d rather bet on a team that knows how to pivot than a market that might dry up in the near future.

To summarize, in the short term having product market fit is going to guarantee some level of success. In the long term, because markets can change so much, I think a team is much more important.

Photo by Mat Reding on Unsplash.