Marc Andreessen & Ben Horowitz on Entrepreneurs, Then and Now [a16z Podcast]
|David Senra||Jul 8, 2019|
Marc Andreessen: Two categories of entrepreneurs that have risen in the last decade.  O to O: Online to offline. Like Airbnb, Lyft, Uber etc. Those founders are much more operationally focused than the previous generation. It’s not just software. Those companies have a big real world logistical operations component. That has turned out to be a different kind of founder. They are more of a throwback. Like the semiconductor founders from 30 years ago: Harder core, dirt under the fingernails.
Marc Andreessen:  The other is the rise of the deep domain expert in a science like biology. A biology or chemistry PhD. [In the past] If you met a newly minted biology PhD they wouldn’t know that much about computers. Now they basically have a dual PhD in computer science. . . So you have these dual discipline founders. That is enticing. I think that is new.
Marc Andreessen: [On the founding of A16Z] There was a throwback element to what we were doing. We could talk about the history of venture. We spent a lot of time digging into the history. We were inspired by the people who came before us.
Marc Andreessen: [Another difference] We took seriously this idea of building the institution. In particular the building of a network and ecosystem. We made a long term, systematic, and costly investment [in the network]. That’s why we have all these operating functions and all these professionals here.
Marc Andreessen: A lot of people in the early 90s [investors, press] doubted the future of the Internet. We pitched all the big media companies [in the 90s]. They said the future [of the internet ] is AOL because AOL pays us for our content. On the internet we have to spend money to put up our content so that’s [obviously] never going to work. This thing is happening that will fundamentally change the world and people pooh pooh it. That might be the logical response because a lot of new things come along and people claim it will change the world. Most of those things don’t. . .Maybe our lot in life as founders is to be the fringe element.
Ben Horowitz: Prices of companies are always incorrect. Always. They are valued on future performance and no one knows what that is.
Ben Horowitz: What is going to be the user interaction model after the iPhone? What is the next platform? That is a big open question right now.
Marc Andreessen: [When analyzing an opportunity] We default into thinking this will happen [default optimism]. We don’t spend a lot of time on will this happen. Will this be a thing? Instead let’s assume it does happen. If it does happen where does it go? How high is up? How big can it get? You are looking for the things that can get really, really big.
Marc Andreessen: A Peter Thielism we quote all the time: It is not the first company that gets all the money. It is the last company in the market that gets all the money. In other words, it is the company that takes the market and forecloses the opportunity for startups behind it.
Marc Andreessen: Edison tried 3,000 compounds for the light bulb before he figured out the filament.
Ben Horowitz: Just knowing that you are not the stupidest entrepreneur of all time is really valuable. [His book The Hard Thing About Hard Things is about this]
Ben Horowitz: The thing that helped us the most was copying Michael Ovitz’s model at CAA. That jump-started us by five years. I can’t believe how well it worked. [You can read more about Ovitz’s model in his book Who Is Michael Ovitz?]
Marc Andreessen: Book recommendation: Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts by Annie Duke. She talks about what is the nature of a mistake in a probabilistic domain? She uses the term resulting. Resulting is the process of looking at a bet that was made in a probabilistic domain that didn’t pan out and concluding that was a mistake. If you are in a probabilistic business resulting is the root of all evil because you will learn the wrong lessons. She says the thing to do is clearly separate process and outcome. Probabilistic domains means you don’t know the outcome of any bet ahead of time. [Since you don't know the outcome ahead of time] You need to design the best possible process to generate the best possible set of outcomes over time.
Ben Horowitz: Jeff Bezos has a real good idea. He says we rate people on their inputs not the outputs.
Stewart: From the entrepreneur’s perspective having a whole lot of money takes away a very critical forcing function which is: I’m about to run out of money. I better figure this out.
Marc Andreessen: Favorite two books of the year: How History Gets Things Wrong: The Neuroscience of Our Addiction to Stories and Can't Hurt Me: Master Your Mind and Defy the Odds.
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