Stanford Business School: Marc Andreessen on Change, Constraints, and Curiosity

Full talk here

  • There are thousands of years of history in which lots and lots of very smart people worked very hard and ran all types of experiments on how to create new businesses, inventing new technology, new ways to manage etc. They ran these experiments throughout their entire lives. At some point, somebody put them down in a book. For very little money and a few hours of time, you can learn from someone’s accumulated experience. [1:50]

  • There is so much more to learn from the past than we often realize. You could productively spend your time reading experiences of great people who have come before and you learn every time. [2:20]

  • What Silicon Valley and Hollywood have in common: Very similar entrepreneurial personalities. In Silicon Valley, everyone has a startup idea. In Hollywood, everyone has a screenplay. People move from all over the country to both Hollywood and Silicon Valley. Both have incredibly high quality, high caliber, high achieving cultures. [3:32]

  • To understand the impact of self-driving cars [or any other new technology] I’d go back to history and look at the impact of cars. There were very interesting lessons to how cars rolled out that can be applied 100 years later to figure out both the issues and opportunities with self-driving cars. I try to go back and look for patterns that can be helpful in predicting the future. [7:00]

  • Critics of technology make two arguments: 1) There is no innovation. There is no productivity growth. 2) There is so much innovation that it will destroy all the jobs. It is important to realize these are diametrically opposed arguments. [8:11]

  • If it is so easy to make a super genius AI why don’t you give it a shot? We are looking to fund it. We will happily invest. It may be the last investment we make but it will be a successful one. [10:30] 

  • People underestimate the rate of change in the economy. [11:10]

  • I have a little mental model of Peter Thiel. I have a simulation of Peter on my shoulder. I argue with it all day long. [13:15]

  • Charlie Munger always says you want to construct a mental model of how people think. I could be someone you admire [Elon Musk, Steve Jobs, Thomas Edison etc.]. You want to be able to construct a model of how they think. And then you have your own view on things and compare it to the way they think. The three people I do this most often with are Peter Thiel, Elon Musk, and Larry Page. I think they are the 3 most audacious people who have worked in the valley. [14:15] 

  • One problem with human nature: You develop a theory and you tend to want to prove it. You develop an idea and look for all the evidence that supports it and ignore all the evidence that disproves it. This is how you get locked into your ideas. [18:26] 

    Market sizes [per year]: 
    Global Negative yielding government bonds = $14 trillion
    US Economy = $6 trillion
    Corporate buybacks in the US = $1 trillion 
    VC = $50 billion [32:22]

  • The world is awash in capital. The 20th century worked. The 20th century created enormous amounts of wealth all around the world. That money is sitting in these giant pools primarily people’s retirement savings. That money needs to earn a return of 6%-8% a year to pay for people’s old age. That money is seeking out investment opportunities. [33:30]

  • I don’t think there is a tech bubble. I think there is a tech bust. I think we are running a critical shortage of new technology in the world. You can see this on a financial lease. We as a society can not come up with enough places to productively deploy capital. [34:00]

  • Advice on preparing your kids for the future: Curiosity is really critical. Curiosity and ability to learn. Frankly, our educational system is still dominated by Industrial Age theory. That we are creating cogs for a machine. A lot of K-12 is to get people to work on farms or at factories. [38:30]

  • Comment from the audience: I asked Elon Musk what his advice was for someone who wanted to start a new SpaceX or Tesla. He suggested that I become an internet billionaire first. [50:15]

  • Idea for funding expensive and important projects: It could be a new asset class. Call it tech project finance [a mixture of a venture portfolio and the way a government project like a dam gets funded]. Like Silicon Valley we will have a new idea. We will have milestones. Unlike the Silicon Valley model, we will have a crisp understanding of what those milestones are. We would have a program management office at a level of sophistication that a typical valley startup doesn’t have. We will chart out in detail how that money is going to get spent. What the milestones are along the way. It would be precise, week by week. And we will try to get to a much higher level of predictability to build the thing than a typical startup. [53:05] 

  • If we can’t figure out how to do that then these projects will have to be flukes. A once in a generation Internet billionaire who decides to build a space company and a car company at the same time. Because who is going to do that? [54:00]