Introduction: Against popular belief and common practice, I would argue that founders should first focus on building the foundation of an enduring company before diving into product development.
In the startup world, there’s often a tendency to get obsessed with building the perfect product first. However, in my experience, company building should always come first. Building a company that can scale, adapt, and innovate is what will allow you to create successful products over time. Without a strong company foundation, even the best products are likely to fail.
What is Company Building?
Company building is the process of establishing a scalable and sustainable business that is venture-backable. It goes far beyond just creating a product—it involves structuring teams, setting up operations, securing funding, ensuring compliance, and defining a long-term strategy, mission and grand vision. It’s about creating an ecosystem that allows products to grow, evolve, and scale.
While product building often feels urgent, especially when there’s a sense of excitement about a new idea, company building is ultimately what matters in the long run. Products will evolve, pivot, or fail, but your company—the infrastructure, teams, systems, and leadership you put in place—will remain the backbone that carries you through the highs and lows of business cycles.
Why Company Building Matters More Than Product Building:
Put it simply, You product will die, your business will die, You company should survive and outlive most of these changes.
- Attracting Investors: Investors don’t just fund products—they fund companies. A well-established company structure that is scalable and has long-term viability is what attracts venture capital, even if the product is still in the early stages. Founders who focus on building a strong company framework are positioning themselves to raise money, recruit top talent, and manage challenges when they inevitably arise.
- Attracting and Retaining Talent: It is the company, not just the product, that attracts talent. Even though a product may initially attract employees, a strong company culture and long-term vision are what keep top talent—even when products fail or pivot. Talent wants to be part of a business that can endure and grow, not just work on a product that may not survive in the market.
- The Ability to Pivot: A great company isn’t tied to just one product. Companies that are well-built can pivot, adapt to market needs, and create new products or ventures over time. The strength of a company comes from its ability to reinvent itself, which is a crucial trait for survival in a dynamic market.
- Sustaining Growth Through Cycles: A well-built company will endure market cycles—whether that means downturns, product failures, or leadership changes. Companies that have solid structures in place—clear financial strategies, strong leadership, and well-defined operational systems—are better equipped to handle both the highs and lows that come with business.
Real-Life Example: Google’s Success Beyond Its First Product
Take Google, for instance. Many people believe Google’s success is due to its search engine, but the real game-changer came later with Android. Initially, Google made its name in search, but it was the company-building decisions that led them to dominate the mobile operating system space with Android. Google’s success didn’t come from just one product—it came from building a company that was adaptable enough to diversify into new markets. The shift into Android was a pivotal moment in Google’s evolution, and it’s one of the key factors that cemented its position as a tech giant.
Why Investors Bet on Experienced Founders
It’s no surprise that second-time founders or ex-successful startup employees often receive funding even before they have a product. Investors are betting on their ability to build a venture-backable company, not just a product. These founders have a proven track record of building, scaling, and managing companies, which is why investors feel confident in their potential to succeed—even without a finished product.
Why Do Investors Trust Experienced Founders?
- Proven Track Record: Founders who have successfully scaled a startup before (e.g., ex-Google, ex-Visa, ex-SpaceX, or ex-OpenAI) have demonstrated that they can manage the complexities of building a company. Investors know that these founders can execute, navigate challenges, and build a company that can survive and thrive, even when starting with just an idea.
- Scalability and Long-Term Viability: Investors are primarily concerned with the scalability of the company. They know that products will change and evolve, but a strong company structure allows the business to scale in different directions, whether through product pivots or market expansions.
- Strong Leadership and Vision: A key part of company building is leadership. Experienced founders can inspire their teams, attract investors, and maintain focus on long-term goals, even when the product itself is still in its infancy. They understand that the company needs a strong vision and the ability to adapt, regardless of which product is in development.
- Ability to Adapt and Pivot: A well-structured company can survive and thrive through product failures or pivots. Founders with experience know how to adjust the business direction when needed, ensuring that the company continues to grow even if the initial product doesn’t work out.
The Core of the Bet: Investing in the Company, Not Just the Product
Ultimately, the bet is on the founder’s ability to build a company that can create scalable, sustainable success over time. Even without a product, the right founder can establish the groundwork necessary to create something that can attract investment, customers, and talented individuals.
By building the right company infrastructure, they are preparing the business to handle challenges and build great products in the future.
Conclusion: The Company Is What Matters.
In the end, the product is just one piece of the puzzle. While product building is important, company building is what will sustain the business through the inevitable product pivots, failures, and market changes. Founders who focus on building scalable, sustainable companies will always have the ability to create great products—products that can succeed, pivot, or fail based on the strength of the company behind them.
A great company doesn’t just create great products once; it has the ability to create great products over and over again, adapting to the ever-changing business landscape. This is why, in the long run, company building is far more important than product building.
Follow us on X for latest posts and updates
Join and interact with our Telegram community
_______________________________________
_______________________________________
