Build a company, not a feature

A lot of entrepreneurs are incredible idea generators and hackers; they have a knack for seeing something that’s broken or something that could be better and creating a solution around that. The problem is this: It’s rare that even very good features make good companies.

It’s rarer still that companies built on a feature make for VC-investable companies with the potential for VC-scale returns. A lot of no-code products fall into this category.

So do you have a company or merely a feature? Let’s explore the red flags investors will look for to determine which bucket your startup falls into.

A nontrivial percentage of the companies that come to me for advice about how to make their pitch decks better have a problem far bigger than a subpar deck. Fundamentally, the idea doesn’t work as a VC-scale startup; and if that is true, it doesn’t really matter how good your idea is. You will never raise money because ultimately, the risk your would-be investors are taking is higher than the reward that is available for them to reap.

The red flags fall into three categories:

Your company is 100% dependent on another product or company.
Your company could very easily be put out of business if an incumbent adds your product as a feature of theirs.
The market size for this feature is too small.

Let’s take a closer look at all three scenarios, as well as how you can evaluate whether these conditions are true for your company.

Build a company, not a feature by Haje Jan Kamps originally published on TechCrunch