Manning up in Silicon Valley

– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. The views expressed are her own. –

This week, Marc Andreessen announced that Ning, the social networking platform company he co-founded in 2004 and that went on to raise nearly $120 million, had “agreed to merge” with the lifestyle blog network Glam Media. Yet few believe it will be a marriage of equals.

“Merger” was almost uniformly put in wink-wink quotations in press accounts of the deal. Outside investors didn’t buy it, either. “My guess is that Glam thinks it is gaining some credibility by adding Andreessen to its board, and in return Glam is putting Ning out of its misery,” said one VC who asked not to be named.

Andreessen seemed further undermined – if unintentionally so — by Ning’s CEO Jason Rosenthal, who published his own announcement at Ning’s site, writing that Ning had “signed an agreement to be acquired” by Glam.

If Andreessen gussied up the deal a bit, can anyone really hold it against him? Andreessen clearly wanted to be respectful of Rosenthal and Ning’s founding team. He had investors to consider, particularly Ning’s later-stage investors, who bought into Ning’s $750-plus million valuation just 26 months ago. (The company is reportedly selling for $150 million in Glam stock.) And certainly, Andreessen wouldn’t be first in putting a positive spin on a less-than-sunny situation.

Founder-market fit a key for startups

– Chris Dixon is the co-founder of Hunch and of seed fund Founder Collective. This blog originally appeared here. The views expressed are his own. –

An extremely useful concept that has grown popular among startup founders is what eminent entrepreneur and investor Marc Andreessen calls “product/market fit,” which he defines as “being in a good market with a product that can satisfy that market.” Andreessen argues persuasively that product/market fit is “the only thing that matters for a new startup” and that “the life of any startup can be divided into two parts: before product/market fit and after product/market fit.”

But it takes time to reach product/market fit. Founders have to choose a market long before they have any idea whether they will reach product/market fit. In my opinion, the best predictor of whether a startup will achieve product/market fit is whether there is what David Lee calls “founder/market fit”. Founder/market fit means the founders have a deep understanding of the market they are entering, and are people who “personify their product, business and ultimately their company.”