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a16z.com

3 resources from a16z.com we point founders to, and the questions each answers.

📄 Article
✓ Link checked Free Intermediate

The nuanced counterweight: PMF isn't a single binary moment, it can be lost, and 'market' is doing more work than founders think. Read after the Andreessen essay to avoid the common traps.

12 Things About Product-Market Fit

From a16z.com by Andreessen Horowitz (a16z) ~20 min read

  • PMF is a spectrum, not an on/off switch, and it can decay.
  • Product-user fit often comes before product-market fit.
  • Beware false positives from a small, unrepresentative group.
Open a16z.com →
Answers How do I know if I've found product-market fit? When should I pivot vs. persevere? Should I worry that my market is already crowded with competitors? What's the difference between an MVP and just a cheap, half-finished product? I am a domain expert but not a builder, is my idea real or just insider bias? I've exited one company. Does my past success give me founder-market fit in a totally new industry? I'm a student with no work experience. Can I have founder-market fit at all, or should I wait? My first 5 customers were friends who signed up to be nice. How do I know if any of them actually want the product? How do I actually measure whether a launch worked, beyond the vanity upvotes and traffic spike? I relaunched a product that failed the first time. How do I frame it so it doesn't look like I'm just recycling a flop?
📄 Article
Free Intermediate

A focused a16z piece on the single ratio that most captures a business's efficiency and drives its valuation. Great for founders who need to understand the 3:1 benchmark and its limits.

Why Do Investors Care So Much About LTV:CAC?

From a16z.com by Andreessen Horowitz (a16z) article

  • 3x LTV:CAC is a common rule-of-thumb benchmark for healthy unit economics
  • Higher LTV:CAC drives higher margins and therefore higher valuation
  • The ratio can mislead, CAC payback period matters just as much for cash
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Answers How does a marketplace actually make money and solve the chicken-and-egg problem? What are unit economics and why do they matter? How do I calculate CAC (customer acquisition cost) and LTV? What is a good LTV to CAC ratio? How do I build a simple financial model or revenue projection?
📄 Article
Free Intermediate

A16z is the definitive source on marketplace and network-effect business models, having funded and studied more of them than anyone. Their writing explains take rates, liquidity, and the cold-start problem with real rigor.

All About Network Effects & Marketplaces

From a16z.com by Andreessen Horowitz (a16z) long-form article

  • Marketplace revenue is GMV multiplied by take rate, both must be healthy
  • Solve the chicken-and-egg problem by going extremely narrow first
  • Liquidity, not raw scale, is what makes a marketplace valuable early on
Open a16z.com →
Answers What's the difference between SaaS, marketplace, and transactional business models? How does a marketplace actually make money and solve the chicken-and-egg problem?
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