Marc Andreessen — Lessons, Predictions, and Recommendations from an Icon

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Marc Andreessen — Lessons, Predictions, and Recommendations from an Icon

@Pmarca

A16z podcast

  • “Strong Convictions, loosely held”
    • The poles are “Fail Fast” and “See the Course”
    • Marc is old-fashioned: Failing fast/pivoting just used to be called fucking up
    • Seeing the course is admirable to the point where it becomes obstinacy and tilting at windmills
    • Judgment is knowing which direction to go, and is the test of a good founder
    • However, the counterfactual will always remain
      • If you pivoted, maybe you should have just kept going and it would have worked
      • If you kept going, it might have worked better if you pivoted
    • A16z Partner Meetings:
      • VCs can’t reverse themselves, we make a commitment for 10+ years of money, time and bandwidth
        • And can no longer invest in current and future competitors
      • In VC, the difference is between good and great investments, and good is the enemy of great
        • Good seems fine and never seem to go anywhere
        • Some have extremely strong strengths and magical, and despite having significant problems those are the ones they want to invest in
      • Rule to avoid picking consensus good and not the great ones is very hard to do
      • Each GP (General Partner) can trigger a deal without a vote or a consensus
        • However, we make internal Red Teams to argue against
        • Despite all the counter arguments then they can go forward
  • “Fighting Well”
    • Mark and Ben Horowitz argue like an old married couple
    • To read a great story about how they argue via email, read Ben’s book, The Hard Thing About Hard Things
    • Why is Ben worth arguing with?
      1. He would argue right back at me, wise leaders want those that speak truth to power
        • In some companies, the path to success is arguing back, others is the opposite – quit the second kind
      2. He was often, if not always right
      3. He is amazing working with people (not true of me), communicate clearly and make people feel
    • Other Books for Those Getting out of College:
    • Really, I get most of my education by reading from history: Ford, Morgan, Edison, etc. –
      • 1870-1920 is a really interesting period
      • The way you are taught history, about magical legends they are not relateable, but the well written biographies that get into their heads before they became those legends
      • People haven’t changed a bit, those personalities types remain and a lot more to see
      • Cyrus The Great
      • Ben Franklin, Walter Isaacson
      • Walt Disney, Neil Gabbler
      • Schulz and Peanuts: A BiographyPeanuts was the longest continuous piece of art in American History
      • Wizard of Menlo Park – Edison
        • We are much better at the commercialization part, but he would just invent things like the phonograph like it was no big deal
      • Anything you miss about 90’s internet?
        • I thought I missed the whole thing in the 90s – great PC companies were already built in the 70s/80s
        • Then we realized the importance of the internet (this was laughable at the time) – a new frontier
  • The next frontier always looks cult/fringe right until it breaks into the mainstream (e.g. Mobile, Social)
    • As these markets saturate, the chance to dislodge an established player (ie Facebook, Google) gets harder and is a zero sum game – less opportunity (though possible)
    • What do the nerds do on nights and weekends?
      1. Bitcoin – crypto currency
        • The most emotionally loaded concept after god – it makes people mad
        • Most people have trouble being objective when trying to understand, including bank CEOs – they just get really upset
        • Bitcoin just still keeps on working
        • Will keep investing in it: Coinbase in the biggest one
        • 21 with a brilliant founder, more output of ideas/minute than anyone ever
      2. Quantified self
      3. Food hacking
      4. Robotics is finally tractable
        1. Drone Companies:
          • Airware– Commercial drones will be a giant market (e.g. insurance inspections to review roofs, cell tower inspection, oil/gas drilling rigs,
          • Skydeal– Autonomous consumer drones for hobbyists, it can fly itself without you controlling it, no collisions
      5. AI/Deep Learning (check out Tensor Flow from Google)
        • Today, 1 guy can build his own self driving car
        • Dangers are overblown completely – Promethean Fallacy – we are going to invent the thing that kills us (embedded in our psyche)
          • Same as Golem, Frankenstein, John Henry, etc.
          • This has always been the response and it always just ends up being a tool to the benefit of mankind
        • Job Displacement from AI?
          • 5 Million jobs destroyed by 2020 by AI (World Economic Forum)
          • But the US economy will destroy 20 Million jobs and create 23.5 million jobs = net increase of 3.5 million jobs in 2016 alone
          • News story only share net jobs, but avoid the gross jobs
          • People underestimate the size, complexity of the US economy
          • 5 million jobs are destroyed every quarter in the US
          • 5 million professional drivers in the US – we redeploy this many jobs every 3 months already – this is not outside the scope of what is possible
          • Is rate of job destruction/creation in the US is rising or falling over time?
            • Most people believe it is rising
            • In the US, the reverse is happening – falling slowly for decades
            • Every year the US economy is less dynamic – this is bad, we are not creating enough opportunity = This is the problem, it shows we are not innovative…
    • Handling FOMO – Fear of Missing Out
        • Clear signs of something happening that you are not a part of
        • Some VCs specifically avoid this
        • They try to not think about this – ignore the hot and the cold and what is IT really and make our own evaluation…
        • On average the hot are priced 2-4X the price of the Cold for the same quality level
          1. This is fine, but we try make our own decision
        • Easy to say, hard to do
    • Non VC investors that Impress
      • Value investors (Buffet style)
        1. In some way the opposite of what VCs would so
        2. They bet against change, VCs bet on change
        3. But both aim at original thinking, how things are vs. what they are believed to be
        4. Only other place with long term investors
      • What Would you teach?
        • How to build things: Broadly, not just tech (art, science) done through projects/objectives to make things
          • For whatever you want to make, learn about how people made stuff like that in the past, get into their heads and what they were like – they were not that different than you
          • “Everything in the world around you is made by people no smarter than you” – Steve Jobs
        • Read Smart People Should Build Things
        • Steve Martin: “be so good they can’t ignore you”
      • Advice to 20 year old self at Netscape:
        • I don’t do replays well, I don’t play that game
      • Successful?
        • Father-in-law: John Arrillaga – helped build Silicon Valley
          1. One of the biggest developers in Silicon valley real estate
          2. Doesn’t take on debt for investments
          3. “Tech is fine, the real money is in real estate”
        • Morning Rituals: Sleep in as long as possible
          • “The perfect day is caffeine for 10 hours, alcohol for 4”
        • Favorite Movies/Documentaries:
          • TV more than movies: Mr Robot – absolute genius
          • Halt and Catch Fire: Best fictional portrayal of what a tech start is really like
            1. Loosely based on Compaq in Texas
            2. Critics think it’s too dramatic, tech folks think it’s right
          • Silicon Valley
        • Billboard:
          • “Raise Prices” in heart of San Fran – the # of theme of their struggling companies is they are not charging enough for their product
            1. Conventional wisdom is to price low, get volume, etc.
            2. But they price too low to afford the sales/marketing needed to get anyone to buy it
          • If people won’t pay more, is your product actually any good?
        • Recent Change of Mind:
          • Very deep into healthcare, in response to very smart founders telling us we are dumb
          • Still trying to work out the Moonshots/big challenges, and why are we waiting for gov./big cos to do these things
            1. Too daunting, too difficult vs. you’re just being a wimp
            2. Is there a middle/shade of grey?– Where Tesla makes sense, but a flying Tesla does not
            3. How far can we stretch the limits of what we can do
          • “We wanted flying cars, we got 140 conferences” – Peter Thiel
            • He concedes that Twitter is actually important, just to provoke the conversation
        • Requests:
          • Work for A16z companies
          • Build new things
          • Come to us for funding

 

 

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