CEO.COM
May 29, 2013
7 Ways Founders Can Impress Marc Andreessen

Entrepreneurship is a gamble almost any way you look at it, but there are certainly ways to assemble a winning hand.

Perhaps one of the best people to ask for advice on this subject is Andreessen Horowitz co-founder Marc Andreessen, who has been on both sides of the process. After creating the first widely used web browser and founding another billion-dollar plus software company, Andreessen went on to become a highly successful venture capitalist with an investment portfolio including startups like Twitter, LinkedIn, Skype, Groupon, Zynga and Instagram.

As a result, Andreessen ranks second on Forbes’ Midas List 2013 with a net worth of $600 million and more than enough clout to offer these seven entrepreneurial guidelines in this interview with Harvard Business Review:

1. Ask yourself if you’ve got what it takes.

Andreessen only bets on entrepreneurs with the golden trifecta: innovation, entrepreneurship and leadership.

“We’re trying to find a product innovator who is entrepreneurial and wants to start a company, and who also has the bandwidth and discipline to become a CEO,” he said. “When people like that actually deliver and work hard for 10 years, the results are miraculous. If they fall down on any of those three fronts, generally it’s a casualty.”

Founders who lack one of these characteristics will need to find a business partner who can help them complete the equation, as it could prove difficult to learn such skills so late in the game. While Andreessen thinks the CEO role can be taught to innovators, he doesn’t “spend a lot of time trying to teach CEOs to be innovators.”

2. Don’t sell yourself short.

Andreessen isn’t impressed by founders who build companies solely to sell them off.

“If somebody comes in here and says his goal is to sell his company, we won’t invest,” he says. “There are plenty of other venture capitalists who will fund him. For us, companies that are built to be independent are the most attractive. As for companies that are built to be sold, most acquirers are pretty smart and can smell that. It’s ironic, but it’s very hard for such a company to actually find a buyer.”

Of course, selling could one day be your big break, but that’ll come on it’s own if you’re focused on doing everything you can to build a strong, independent company.

3. Construct a fortress.

Speaking of building your business, you can dream about it all you want, but don’t even think about going public until you’re truly a force to be reckoned with. As Andreessen advises entrepreneurs who hope for an IPO, “Build a company that’s so big and powerful and well defended that it can withstand the pressures of being public.”

A big aspect of your defense system should be cash. Andreessen advises having “at least two years’ worth of cash on the balance sheet in case your revenue goes to zero.” It can happen, and you’ll fizzle out if not prepared.

4. Give your product the attention it deserves. . .

Because there’s no excuse for shabby results or empty promises, Andreessen is a strong believer in the lean start up model, which centers on by making the product as great as it can be.

“The only thing that matters is getting the product right—developing a product that people want and use and love and will pay for—before you do all the other stuff. That is a tremendously healthy move, because it centers these companies on the substance of what they’re building.” 

5. …but don’t forget you’re running a business.

As with any passion, beware of getting so caught up in your product that you throw every other good business practice out the window. You don’t want to end up like one of the many founders Andreessen considers to be “in complete denial” about what it takes to build a company.

“If you don’t take sales and marketing seriously, nobody is ever going to know about you,” Andreessen says. “Nobody is ever going to buy the thing. You’re going to end up losing. “

6. Become an analytics master.

The big data explosion just keeps getting bigger, and if you don’t develop a sturdy process for crunching your organization’s numbers, you’re likely to fall behind—or never even get off the ground.

“The best of the companies we’re seeing now are unbelievably good at analytics,” Andreessen says. “They have this incredible closed loop where they analyze data and feed the numbers directly back into the process virtually in real time, running a continuous improvement loop.”

7. Unleash the artist within.

While analytics are extremely important, so is the way you implement your newfound understanding.

“The best founders are artists in their domain,” says Andreessen. “They operate instinctively in their industry because they are in touch with every relevant data point. They’re able to synthesize in their gut a tremendous amount of data—pulling together technology trends, their companies’ capabilities, their competitors’ activities, market psychology, every conceivable aspect of how you run a company.”

  • ash varma

    This is really excellent advice. Coming from a truly major player in this sector, I, particulalrly. loved the last point re “unleashing the artist within!” Thanks, again. Regards

  • Brian McDermott

    Thank you Marc Andreessen and CEO.com for a valuable article. Entrepreneurs should be aware that nothing is easy and shortcuts are rare when building a truly successful company. What I REALLY hear Marc say, however, is that it is STILL all about the fundamentals. Sure, those fundamentals might change in form (e.g., Big Data/Analytics) but the function and end game remain the same. Success still results from offering a product or service that is unique and valued by customers; supporting it properly with marketing, sales and operations/logistics investments and making sure you know, as soon as possible, what the heck is going on with the product, customers and company resources, then using that knowledge to do it even better. Oh, and run the biz like it’s going to be yours forever. Old school wisdom in the New Economy!