

Ask PG:  Feature or Business Question from Investors - phil_KartMe

What does it mean when an investor asks: Is this a feature or a business?
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pg
They're saying that a) they worry you don't have sufficient potential, and b)
they are not very smart.

The reason it's a sign the investor isn't very smart is that there's no real
distinction. There are a lot of impressive startups (e.g. Twitter) that could
have been called mere features when they started. So all anyone accusing you
of being a feature is really saying is that you're small, which you both
already know.

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justinsb
They're asking where you're going with the company, without wanting to get
drawn into incremental improvements. Say you built a website that analyzed
your social graph on facebook and showed you who your most connected/least
connected friends were. Suppose you stopped there, or started iterating on
more metrics (who's added the most friends in the last week?): then your
website feels like a feature, and not a long-term business; it's too easy for
facebook to implement the same feature set if you ever generate cash.

But, if you can explain how this feature is just a trojan horse, and you're
going to go across social networks, or introduce a dating service, or
implement some sort of real-world trust/recommendation system, somehow
building long term value and competitive advantage; then you look more like a
business.

They're just asking how you plan to get there, or just to help them understand
ways that you could get there.

