I recently saw a post from a founder who was overwhelmed by everything they were told to figure out before building. Talk to potential customers. What is your total addressable market? What is your go-to-market? Who will you raise money from? Are you building a venture-backable company?
From the way they wrote it, this founder was a builder. I could relate. I am a builder too, and an idea machine. When I am in the flow, it is hard to turn the ideas off.
But building and failing has taught me something I wish I had understood sooner:
Building a company is something you do in parallel with building the product, not after it.
The Builder's Default
My default path is to just start building. And when you are new, all that up-front advice feels like a waste of time.
Seasoned founder: "How are you going to make money?"
New founder: "The product is great. I'll figure that out."
Seasoned founder: "How big is the market?"
New founder: "Everyone will want this!"
Investor: "How much are you raising?"
New founder: "$250K to $1M."
If you have an idea and you are a builder, you have probably had these thoughts. If you don't understand the folly in those answers, this article is for you. I have given every one of those answers myself.
As builders, we do what comes naturally: we build the product, based on our ideas. But we also need to build the company, and that is often not as natural.
Great Products Fail All the Time
Plenty of great products never succeeded. Not because the product was bad, but because the machinery to bring it to customers, or to keep it in the market, was never built. The company was not built properly.
A product is one machine. The company is another one: how customers find you, how they buy, how you get paid, how you support them, and how you stay in business long enough for any of it to matter. You can build a brilliant first machine and still stall because the second one does not exist.
Are You a Builder, Founder or Inventor?
Alex Gibney, director of the new documentary Musk, has been making the case that Elon Musk did not create Tesla: "He didn't invent Tesla, he didn't invent the technology, didn't invent the business plan. He invented a mission and he invested."
I have heard this argument before, and people get heated about it. But it mixes up two different things: the product and the company.
Look at the word he uses: invent. You invent a product. You found a company. You can be an inventor and never found a company, and if you invent something, you will always be its inventor. Founding is a different job. You can be one or both, and they are equally important in different ways.
The most famous example is Steve Wozniak and Steve Jobs. Wozniak designed the Apple I and Apple II. Jobs saw how to sell them and drove the company built around them. Walter Isaacson's biography, Wozniak's own memoir and two Hollywood films each tell that story a little differently, depending on whose part they play up. But Apple needed both, and both are its founders.
The product is not the company, and you have to build both. The idea and the technology are a small part of building a company, let alone a large organization. Funding it, making it, selling it, supporting it and keeping it alive is a separate job, and neither one survives without the other. If you were involved in turning a product into a successful company, I consider you a founder. Saying that someone who built the company is not a founder just shows you don't understand the process.
Electric cars show what happens when only one half gets built. Tesla was far from the first company with a good electric car:
- GM's EV1 was built in the 1990s and leased to drivers in California and Arizona. When the leases ended, GM took the cars back and crushed most of them. A real product with no company committed to making it a business.
- Better Place raised about $850 million for electric cars with swappable batteries and went bankrupt in 2013.
- Fisker built the Karma, one of the most striking cars of its day, and went bankrupt in 2013. Henrik Fisker's second car company went bankrupt in 2024.
Tesla had the car and built the company around it: the funding, the factories, the sales, the service, and the will to keep going when it nearly ran out of money.
It is not just cars. The McDonald brothers created the fast, simple restaurant system. Ray Kroc built it into a company that spread across the world. Hollywood named the movie about him The Founder.
It is clear you need both a company and a product to bring something to market and build something successful and sustainable. That takes founders, builders, inventors, investors and many others along the way.
Why the Acronyms Exist
The industry is full of acronyms: TAM (total addressable market), GTM (go-to-market), CAC (customer acquisition cost), LTV (lifetime value). It is easy to roll your eyes at them.
But they are not there because people love jargon. Millions of businesses have been built, and they keep running into the same walls. Each of those terms is a lesson someone learned the hard way, compressed into a few letters:
- Total addressable market: is there enough demand to support a business, or just enough to support a product?
- Go-to-market: how does a customer actually hear about you, decide, and buy?
- Acquisition cost and lifetime value: does it cost you more to win a customer than that customer is worth?
- Venture-backable: does your growth path match the money you are taking, and the expectations that come with it?
Business is done a certain way because those patterns have played out over and over. The formula is known. The hard part is getting the founder to follow it. That includes me.
"But What About Innovation?"
This is the part I still struggle with. If I do everything the same way everyone else does, how am I being innovative?
What I have learned is this: don't innovate on everything.
Put your originality into the product and the problem it solves. For the rest of the business, how you sell, how you price, how you fund it, the proven playbook is usually the smarter choice. And sometimes the innovation is not a brand-new category at all. It is improving the current landscape with new tools.
Alex Hormozi is a great example. He built Acquisition.com and wrote $100M Offers and $100M Leads, and his whole approach is built around one idea: don't reinvent the wheel. Take what already works, and do it well.
The Brick Wall
As a new founder and builder, you are blind to why those metrics matter until you hit the brick wall of reality. And you will hit it.
Part of it is our blind optimism, or maybe better described as naive optimism. For some reason, I think I can do just about everything. Then reality sets in. Yes, I can do it. But someone else can already do it better, and they have already had the same problems I am having.
Think about it. Is your business really unique in every way? No. Maybe the product is, or your approach. But the fundamentals are the same. How many businesses have been built before yours?
That is not a reason not to build. Build. But understand that there are reasons the processes exist and the terms exist, and too often founders find out why when it is too late to do anything about it.
So while you build the product, build the company next to it. Keep a rough answer to the basic questions: who buys this, how they will find you, how you get paid, and how big this could get. Rough is fine. Revisit the answers as the product changes. Just do not leave them blank.
I Don't Have It Figured Out
I want to be clear about one thing: I am not writing this from the finish line. I don't have it figured out. I am still building, and still learning to build the company alongside the product. Some days I follow the formula. Some days the idea machine wins.
If you have an opinion about this, put it in the comments. I want to hear how other builders handle it.
Go build!