3 Criteria for Startup Success

Stanford University

Marc Andreessen is no stranger to the challenges of achieving startup success, possessing in-the-trenches entrepreneurship experience as a co-founder of Netscape and Ning. And as co-founder of the venture capital firm Andreessen Horowitz, he uses his experience and insight when evaluating projects to discover the next big thing.

During his visit to our DFJ ETL seminar series earlier this year, Andreessen described the three criteria needed for high-tech startup success.

Is there a big market?

Does your company plan to disrupt established companies in an existing market, or do you believe your offering will do something amazing in a new market?

Will your company or product provide a fundamental change?

Andreessen believes that a new company must bring a product to market that can “punch through the status quo.” As an rough indicator, consider if your product will cause a “10x” type improvement in technology or a significant economic change.

How outstanding is the founding team?

Do you have a great technologist on the team? Or how about more than one? Also, does the founding team have members with complementary skill sets, including someone with a deeper understanding of markets and sales?

In the following clip, Andreessen expands on the criteria for market, product, and team, and even explains which of three areas a wise investor might be willing to compromise on.