Consider that it's better to hear that than "You have a feature, not a product". :-)

That said, start from first principles: what's the difference between a "company" and a "product"? Why do you disagree with the VC? What if he's right?

If you're right, what are the defining characteristics of a company? If you can't articulate them, then maybe you don't have a company. If you can, list them out and see if you check all (or most) of the boxes. Ask your VC friend for what he considers the defining characteristics of a company and compare the lists. Think hard about the delta.

And just to seed the discussion with my own thoughts, informed by nothing but speculation... (and in no real specific order)

1. Do you have a defined beachhead market[0] that you're planning to sell to?

2. Do you know where those people are, how to reach them, and what their purchase/use criteria are? Do you already have users/customers?

3. Relative to (1) above, do you know what your "total addressable market"[1] is?

4. Do you have a plan for growing, either by selling your product in additional markets (whether geographical or otherwise) or something else?

5. Do you have plans for future line extensions[2]? Brand extensions[3]?

6. Do you understand the idea of a "whole product"[4] and do you have all the elements of a "whole product"?

7. Do you have a promotion strategy?

8. Do you have a defined sales process?

9. Do you know how you will make money from this thing?

10. Do you know how you will support users/customers after they buy/sign-up?

11. Do you have agreements / partnerships with VAR's[5] / distributors (if applicable)?

12. Do you have plans to up-sell[6] / cross-sell[7] to your initial customer base?

13. Do you have a roadmap for future improvements to the (existing) product?

14. Do you know your COGS (Cost of Goods Sold)[8] or equivalent metric?

15. Do you know that - given your revenue model and COGS - you can turn a profit?

16. If this is a B2B play, what about professional services as a complementary aspect of your business? Do you have a model for that?

17. If you're selling a physical product, do you have deals with suppliers? Manufacturers? Logistics companies?

18. How hard would it be for somebody else to clone your product? Could they easily do so at a cheaper price and undersell you?

19. What's your primary vector of competition? Product superiority? Operational excellence? Price? Customer intimacy? Something else?

Of course it's not necessarily the case that you will know/have ALL of this stuff on day 0. But if you're far enough along to be seeking VC investment, you probably ought to have answers (preferably good answers) for most of these, if not all.

[0]: https://executive.mit.edu/blog/launching-a-successful-start-...

[1]: https://en.wikipedia.org/wiki/Total_addressable_market

[2]: https://en.wikipedia.org/wiki/Product_line_extension

[3]: https://en.wikipedia.org/wiki/Brand_extension

[4]: https://en.wikipedia.org/wiki/Whole_product

[5]: https://en.wikipedia.org/wiki/Value-added_reseller

[6]: https://en.wikipedia.org/wiki/Upselling

[7]: https://en.wikipedia.org/wiki/Cross-selling

[8]: https://en.wikipedia.org/wiki/Cost_of_goods_sold