Making the Future | Marc Andreessen on Invest Like the Best with Patrick O’Shaughnessy

Check out Invest Like the Best Show Notes and Episode Page

Key Takeaways

  • “Software is eating the world” – Marc Andreessen
    • We are getting better at making more with less
  • If you want more job creation, you want more technology and productivity growth
    • Chart of the century – provides a great outline on the dilemma we are facing when it comes to this equation
  • System shock – Covid provided a catalyst for many macro level business decisions that wouldn’t have been made
  • “The more detached the legacy system (college & university) gets, the more practical and pragmatic the private sector will get” – Marc Andreessen
  • It’s time to build everything – we have too much bureaucracy on production

Intro

  • Marc Andreessen (@pmarca), early Silicon Valley entrepreneur and venture capitalist at Andreessen Horowitz, discusses software’s impact on the future, Covid implications on business, current state of the education system, and more
  • More Podcast Notes with Marc Andreessen
  • Host: Patrick O’Shaughnessy (@patrick_oshag)

Software

  • “Software is eating the world” – Marc Andreessen
    • Original concept derived from Buckmister Fuller
    • Economists call this dematerialization – using less raw materials
    • We are getting better at making more with less
      • End goal of software is to do do everything with nothing, saturates physical products
      • E.g., The modern cell phone has eaten plenty of products: CD player, DVDs, GPS, etc.
  • Software is the lever of the world
    • Developers plug in code that have direct real world effects. One day Uber didn’t exist, the next, it was a resource for consumers and contractors
  • Software and automation changes the economic landscape but doesn’t make it worse off
    • “Ask your parent, do they want you to have the same job as them?” – Marc Andreessen
    • If you want more job creation, you want more technology and productivity growth
    • Chart of the century – article by Mark Perry, the relationship of price change over the last century to technology change and productivity growth
      • Prices of the fast sectors are falling (Software, TVs, Cell Phones)
      • Prices of the slow sectors are rising (College Tuition, Healthcare, Housing)
      • Slow sectors are eating the economy as they no limit on price increases due to government backing (counterintuitive to the narrative that software is killing the economy)

Impact of Covid

  • Overall a surface level negative but plenty of consequential positives
  • System shock – provided a catalyst for many macro level business decisions
    • E.g., If your business always wanted to change the remote work policy, this was your ‘no questions’ opportunity
  • Remote work isn’t perfect, but worked better than expected in the ‘knowledge’ worker industry
    • Where you work and where you live has fundamentally shifted

Education

  • Where is the balance between pursuing free online information and receiving university accreditation?
    • Benefit of universities is trending mostly towards the ‘stamp of approval’ or brand recognition
    • Sheep-skin effect – greater income tied to degree, not on equal ability
  • Large companies could pursue their own internal education system as a substitute for college
    • “The more detached the legacy system (college & university) gets, the more practical and pragmatic the private sector will get” – Marc Andreessen
  • Parents of K-12 children saw the class material for the first time from home virtual school
    • Many shocking realizations came as a result

Hardware

  • Covid has had a large impact on supply chain for hardware
    • If you product has 40 components, if you’re missing 1, you don’t have a go-to-market product
  • Flattening of the supply chain – less parts for equal or more productivity

Investing & Andreessen Horowitz (A16Z)

  • Project finance – plan with specific milestones where money gets dispensed as achieved
    • Fail fast and get the most amount of money to the most successful projects
    • Reinvents innovation and venture capital
  • Andreessen Horowitz (A16Z) venture capital strategy:
    • Strong belief that technology is good
    • HP 2.0 – Recreation of the centralized and diversified services of HP in modern day venture capital
    • East vs West investing mentality
      • East: consolidation, professionalization, scale; mostly retirement money in public funds
      • West: the frontier, modernization, innovation; access to private dynamic investments
      • A16Z wants to be fusion of both with the ability to scale innovation

Time to Build

  • It’s Time to Build – article by Marc Andreessen
  • We have too much bureaucracy on production; innovation is stunted by policy
  • It’s time to rebalance – action and production is more important than the process in which you got there
    • We have to enable more ‘Elons’ to be funded and given more access to production
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Notes By Drew Waterstreet

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