Last May, we ran a TEDx event focused on the future of post-quake Christchurch. It arose from the rubble at lightning speed; in just two and a half months, we pulled together 17 speakers from New Zealand and around the globe, a roster of sponsors that ranged from big corporates to government agencies to self-employed photographers, and an on-site audience of 700 people.
If you are well familiar with TED, this result may not sound surprising, but TED has not penetrated the New Zealand market as well as it has in the U.S. We had to tell the TED story, over and over again. We had to describe the iconic 18-minute format, over and over again. We had to convince politicians and citizens and CEOs that it was worthwhile, in the midst of our damage and our devastation and our broken homes and our toilets that didn’t work, to spend time coming together to share ideas.
But here’s the thing: it didn’t take much convincing. As soon as we explained what we were up to, people came on board. “Thank goodness,” they said. “Just what we need,” they said. “How can we help?” they said.
As a team, we put in thousands of hours to make that event work. But the reason for its success, the reason we were able to pull it off, is that the timing was right. In other words, the market was ready.
The importance of the market being ready was first driven home to me back in 2009, when Marc Andreessen was busy writing the best business blog in the world. In a post titled “The Only Thing That Matters,” he said, “market is the most important factor in a startup’s success or failure,” and elaborated as follows:
“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….
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.”
My Spin colleague Matt Straz touched on this point in his column "The Lessons Of Instagram" earlier this week:
“Category matters. Let’s face it: If Instagram wasn’t part of a category like photo-sharing -- one that Facebook also wanted to dominate -- the company would never have been acquired for a billion dollars.”
TechCrunch co-founder Keith Teare went a step further, and said it’s not even about photo-sharing; it’s about mobile: “…the true meaning of the acquisition for Facebook was that it represents an inexpensive bet on helping the company face up to its challenges on mobile… Instagram represents the iconic deal at the beginning of a new era of mobile computing, characterized by consumers using devices to capture and share their lives with each other, and having no need of desktops or laptops to do so….
Over the next few years billions of smart phones will ship and be used by consumers to manage and record their lives. Enterprises will discard dated architectures to empower employees to use mobile for most tasks. Governments will use mobile to deliver services to citizens… In all of this existing businesses will either be reinvented or die.”
Instagram has a great product, from which I’m assuming they have a great team. But the lesson here is clear: $1 billion is the price tag for the market, not the product. Andreessen -- whose VC company, Andreessen Horowitz, is an Instagram investor -- has done it again.
Got any experience with great markets? Lousy ones? Let me know in the comments or on Twitter.