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> If you're in the right network, then having the wrong product, wrong market, wrong team, wrong market fit, bad traction, etc. doesn't really matter because th

by vecter 4y ago

> If you're in the right network, then having the wrong product, wrong market, wrong team, wrong market fit, bad traction, etc. doesn't really matter because those networks will "fix" those problems for you. No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers. Conversely, if you do solve a burning problem for a lot customers, getting VCs onboard will be the least of your concerns.

te_chris 4y ago
I think you’re missing the point: being in market is its own privilege
- barry-cotter 4y ago
  Being in market is a product of choice or luck. Insofar as it’s good judgment that’s not privilege that’s being better, merit. Luck, winning the lottery of interests, isn’t merit but there’s no interesting sense in which it’s privilege either.
  - rexreed 4y ago
    Having the right friends in the right networks help you both with market choice and product choice and also provide necessary insights for product-market fit. Not having the right friends or networks means that you have to indeed rely on choice or luck. Having the right network is a significant insight / inside advantage.
spaetzleesser 4y ago
“No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers.” From my observation VC money gives companies the opportunity to recover from mistakes (“pivot”) which is something companies without deep pockets can’t do.
- vecter 4y ago
  More money definitely means more time to pivot and potentially make something work. However, most companies still fail, even after raising large amounts of money. My contention with OP's point is the absoluteness of the statement they made. They basically claimed that knowing the right people will fix all of your problems. If you read what they wrote, that's almost literally what they said. That is in practice extremely far from the truth. For every successful VC-funded company, there are hundreds that never make it to product-market fit. So clearly VC funding and knowing the right folks isn't sufficient for success. In making such a strong (and in general provably false) claim, the OP is also taking away credit from Figma for their wild success. They got there through understanding their customers and building the best product on the open market. Period. It's strange because Figma's success has basically nothing to do with "having enough VC money to pivot around to find product-market fit", which is the central tenet of yours and OP's point. Figma was on the right track the entire time. So this whole point is moot when talking about Figma.
  - rexreed 4y ago
    My comment was not about VC, it was about networks. If you're in the right networks problems will get fixed. Most VCs, to be blunt, are not in the right networks. The vast majority of VCs are "dumb money". The smart money is much harder to get precisely because of the value of the network. If you can get in with that network, your chance of success is high. Simply getting "venture capital" doesn't mean you're in the right network. In fact, the vast majority of the time, it doesn't. Which is why I agree also with what you said that VC money may give you more time to pivot, but doesn't guarantee success. I agree. That's why it has nothing to do with VC and everything to do with the right network.
    - vecter 4y ago
      You can s/VC/right network/ and I would still strongly disagree with your assertion that even if you're in the "right networks", that problems will get fixed. Startups are fundamentally about finding product-market fit. No network can do the hard work of finding PMF for you. Your claim seems to be that if you know the right people, you'll be successful. That's just flat-out wrong. So many startups are founded by people "in the right networks" and still fail. The vast vast vast majority of them do. How does knowing "the right people" (whoever this vague shadowy group of people are, I'm not even sure how you would define them) fix your problems for you? Even more strangely, this has literally nothing to do with Figma. Like I stated earlier, they were successful because they worked on the right idea and executed flawlessly. What did their network do for them?
rchaud 4y ago
> No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers. How many SV entrepreneurs actually care about that? What problem is Snapchat solving? Or DoorDash for that matter? The game is about raising capital, first and foremost. Especially in a system where the amount of money you can raise is inversely proportional to the company's actual profitability. Losing money hand over fist? Let us introduce you to our pals at Softbank and the Saudi Arabia "Vision Fund".
- vecter 4y ago
  I think it's pretty obvious what problems Snapchat and DoorDash are solving. Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. Maybe you personally don't find value in those companies, but hundreds of millions of people use Snapchat and tens of millions of people use DoorDash, so clearly they find value in it. To go further on your point though, how did the Vision Fund solve any problems for entrepreneurs? It gave them a lot of money which they burned through, but then the floor fell out on businesses that weren't sustainable.
  - rchaud 4y ago
    > Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. This is a marketing pitch, not a problem. Restaurants have delivered since time immemorial and with better margins than anything Doordash has managed. The Snapchat "problem" was solved with two cans and a string. At least that was still an ad-free experience.

by vecter 4y ago

te_chris 4y ago

I think you’re missing the point: being in market is its own privilege

barry-cotter 4y ago
Being in market is a product of choice or luck. Insofar as it’s good judgment that’s not privilege that’s being better, merit. Luck, winning the lottery of interests, isn’t merit but there’s no interesting sense in which it’s privilege either.
- rexreed 4y ago
  Having the right friends in the right networks help you both with market choice and product choice and also provide necessary insights for product-market fit. Not having the right friends or networks means that you have to indeed rely on choice or luck. Having the right network is a significant insight / inside advantage.

spaetzleesser 4y ago

“No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers.” From my observation VC money gives companies the opportunity to recover from mistakes (“pivot”) which is something companies without deep pockets can’t do.

vecter 4y ago
More money definitely means more time to pivot and potentially make something work. However, most companies still fail, even after raising large amounts of money. My contention with OP's point is the absoluteness of the statement they made. They basically claimed that knowing the right people will fix all of your problems. If you read what they wrote, that's almost literally what they said. That is in practice extremely far from the truth. For every successful VC-funded company, there are hundreds that never make it to product-market fit. So clearly VC funding and knowing the right folks isn't sufficient for success. In making such a strong (and in general provably false) claim, the OP is also taking away credit from Figma for their wild success. They got there through understanding their customers and building the best product on the open market. Period. It's strange because Figma's success has basically nothing to do with "having enough VC money to pivot around to find product-market fit", which is the central tenet of yours and OP's point. Figma was on the right track the entire time. So this whole point is moot when talking about Figma.
- rexreed 4y ago
  My comment was not about VC, it was about networks. If you're in the right networks problems will get fixed. Most VCs, to be blunt, are not in the right networks. The vast majority of VCs are "dumb money". The smart money is much harder to get precisely because of the value of the network. If you can get in with that network, your chance of success is high. Simply getting "venture capital" doesn't mean you're in the right network. In fact, the vast majority of the time, it doesn't. Which is why I agree also with what you said that VC money may give you more time to pivot, but doesn't guarantee success. I agree. That's why it has nothing to do with VC and everything to do with the right network.
  - vecter 4y ago
    You can s/VC/right network/ and I would still strongly disagree with your assertion that even if you're in the "right networks", that problems will get fixed. Startups are fundamentally about finding product-market fit. No network can do the hard work of finding PMF for you. Your claim seems to be that if you know the right people, you'll be successful. That's just flat-out wrong. So many startups are founded by people "in the right networks" and still fail. The vast vast vast majority of them do. How does knowing "the right people" (whoever this vague shadowy group of people are, I'm not even sure how you would define them) fix your problems for you? Even more strangely, this has literally nothing to do with Figma. Like I stated earlier, they were successful because they worked on the right idea and executed flawlessly. What did their network do for them?

rchaud 4y ago

> No amount of VC money can fix a bad company that doesn’t solve a burning problem for customers. How many SV entrepreneurs actually care about that? What problem is Snapchat solving? Or DoorDash for that matter? The game is about raising capital, first and foremost. Especially in a system where the amount of money you can raise is inversely proportional to the company's actual profitability. Losing money hand over fist? Let us introduce you to our pals at Softbank and the Saudi Arabia "Vision Fund".

vecter 4y ago
I think it's pretty obvious what problems Snapchat and DoorDash are solving. Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. Maybe you personally don't find value in those companies, but hundreds of millions of people use Snapchat and tens of millions of people use DoorDash, so clearly they find value in it. To go further on your point though, how did the Vision Fund solve any problems for entrepreneurs? It gave them a lot of money which they burned through, but then the floor fell out on businesses that weren't sustainable.
- rchaud 4y ago
  > Snapchat lets people stay in touch in fun ways and DoorDash lets people eat food without having to go out and get it themselves. This is a marketing pitch, not a problem. Restaurants have delivered since time immemorial and with better margins than anything Doordash has managed. The Snapchat "problem" was solved with two cans and a string. At least that was still an ad-free experience.