10 ms·

The Unauthorized Story of Andreessen Horowitz

173 points by DLay 6y ago

meowkit 6y ago
This is an interesting piece and definitely fits with my perception of a16z. Their podcasts are really good and cover a wide range of tech subjects at a medium-high level for those not familiar. Content is usually aggressively future looking and often brutally honest and this article makes me think that is all by design now. Also look at their portfolio[0], makes you realize how big of a hand they have in the startup pie. Didn't realize they funded Coinbase. Explains a lot of their crypto-content. I've seen a lot of skepticism on HN about crypto, but the a16z podcasts have convinced me it will be a critical component of finance and the web going forward. [0] https://a16z.com/portfolio/ https://a16z.com/portfolio/
- dcl 6y ago
  Anything specifically that makes you think crypto(coins, tokens, etc) will be a critical component of finance? Is there a specific podcast you can recommend on the topic?
  - wyck 6y ago
    Its not coins or tokens, but the blockchain that is already being integrated into traditional and decentralized finance. All the major financial players are working on some sort of smart contracts to reduce paperwork and more precisely the people that do the paperwork. And that's just the tip of the iceberg.
    - dcl 6y ago
      Ahh, blockhain and smart contract technology. I take it that a16z are hoping to get a piece of that major financial player action by investing in that space?
      - wyck 6y ago
        Big Time.
    - stainforth 6y ago
      Couldn't they create RESTful APIs instead?
      - wyck 6y ago
        No, a blockchain is an immutable ledger, you can't equate a blockchain to an API. That would be like comparing an apple to a car. Lots of blockchain tech (defi) use various API's in their own ecosystems, some private, and some public like Chainlink's oracle system.
    - sulam 6y ago
      I’m probably ignorant to some big issue here, but it’s. It obvious to me that ledgers solve a big problem. Yes contracts are a big problem in general, but the ledger seems like they’re giving me a new pen to sign them with or a new box to put them in. The work in contracts is in the negotiation and I don’t see that’s affected at all.
- bigtones 6y ago
  Yeah really well written and researched piece. This is the first I had heard of Newcomer, it might be worth subscribing to.
harrisreynolds 6y ago
This was an interesting piece. I must say though that I don't love the a16z podcasts. The couple that I listened to were fairly bland. They need more personality/charisma etc. I find the TWIST podcast by Jason Calacanis much more interesting mainly because of his engagement/personality/authenticity etc. I actually think I could do better with a bit a practice. @wennmachers ... hit me if you want to chat! (I figured I "go direct" here! :-)
- vulcan01 6y ago
  > TWIST podcast by Jason Calacanis Hmm... the only podcasts I seem to find online by Calacanis are All-In and Angel. Which one do you recommend (or both)?
  - bigtones 6y ago
    TWIST - 'This Week In Startups' is the Jason Calacanis podcast the parent was referring to, it's an acronym.
    - vulcan01 6y ago
      Oh, I see :) thank you!
  - deleted 6y ago
    [deleted]
propter_hoc 6y ago
I've realized in the last few years that VC is fundamentally marketing. Getting pitched by the best founders and getting the biggest LPs is all about how well a VC can position themselves as a thought leader. That's why most of the day job of a VC is basically content marketing: blogging, writing surveys of the tech landscape, appearing on startup pitch competitions, getting quoted in the media.
- ackbar03 6y ago
  This would suggest that there is an imbalance and a lot more capital than startup projects though. Is it really that extreme over there in silicon valley?
  - codingprograms 6y ago
    Yeah. There’s a lot of startups, but only a few that are actually promising from a risk reward perspective. VC investing is about home runs. So they all fight over investing in a few companies
  - staysaasy 6y ago
    It depends a bit on the stage. It is definitely that competitive for the best growth stage companies, where "best" roughly means "highest growth in a market that can sustain a venture-level return (which in practice means a $1B+ valuation)." These companies tend to be large enough that they naturally gain access to investors, there's cheap capital everywhere, and there just aren't that many companies in big markets that are on aggressive growth trajectories. Fwiw it also isn't just silicon valley at this point, the funding patterns increasingly hold across much of north america.
  - Fordec 6y ago
    It's not about the lack of startup projects, it's the lack of genuine unicorn projects that pays for the other 19 companies that fail in their portfolio along the way from MVP to IPO. Everyone has ideas for companies that can be worth millions. But the current orthodoxy around VC economics balk if your game plan is to be a 50M sale. Either you make the big time, or you can be a tax write off when you fail. A "moderate" success won't pay the Limited Partners back at the end of the 10 year vesting cycle the billions the put in at the start.
1vuio0pswjnm7 6y ago
"That same year, John Carreyrou revealed that Theranos had "struggled with its blood testing technology." Theranos had mostly raised money outside of Silicon Valley. But some venture capitalists tied their reputations to defending the company anyway. Marc Andreessen, who tweeted prolifically at the time, appeared to develop an affinity for blocking people who tweeted negatively about Theranos."
- santoshalper 6y ago
  Like most of SV today, a16z's primary function is manufacturing and selling bullshit.
- cromulent 6y ago
  I remember the tweet from him mentioning the "Hacker news haters" when we dared to discuss doubts about Theranos here.
suhail 6y ago
Since the media likes to roll this way, I'll post the part Eric buried at the end: "I talked to Wennmachers for over an hour for this story on the condition that I wouldn’t quote her. She asked me to write that she strenuously disagreed with many of this story’s characterizations and facts."
- santoshalper 6y ago
  I'm sure it would have appeared much earlier in the article if she had agreed to be quoted.
Barrin92 6y ago
reading the article is really how i always felt about the a16z podcast. it feels so 'advertise-ish' the few times I listened to it. Like some sort of manufactured low key sales pitch on the companies they invest in. Anyway I think the general takeaway from the article is the degree to which VC culture has become media/influencer/entertainment dominated. I really had to laugh when I read his "build" article and the next thing I read was that he pumped countless of dollars into clubhouse, a digital nightclub. So much for building real stuff. I feel like at this point if you put all the VC people together they couldn't build a bus station. Never been the biggest fan of Elon personally but in contrast to all the valley types he and his companies to me represent what technologists should actually do, build companies that actually manufacture things.
- ausbah 6y ago
  I wouldn’t say Musk is immune to manufactured advertisting. there certainly has been some informal or not to reinforce his brand of of “real life Iron Man who will solve all the world’s problems”
rzodkiew 6y ago
Whole VC industry is set up on pushing one simple lie: that you need VCs to create a successful company. Everything else is marketing endeavours to try to sell this convincingly. It's all the capitalists realising that to make software you don't need no factories anymore, which means much lower initial investment. So the marketing machine had to start and created this bizarre ecosystem of hyper growth, fuelled in kinda' pyramid fashion (all the money that is pumped into startups is spent on services provided by other startups they've financed). The whole system attracts money hungry teenagers, which can be convinced that ethics are an obstacle to be overcome, and we end up with what we have today.
- simonebrunozzi 6y ago
  Well, but... You'd still have to pick your poison. Growing slowly without raising large amounts of capital might mean "some" success, but you might eventually be eaten up by a well-funded competitor. Pick your poison, they say.
  - rzodkiew 6y ago
    It's all about what you define as a success. Personally, I think that owner of a bakery on a corner of my street that is visited by all the locals is successful. Is that a success as measured by the VCs? Probably not. Pinboard is an example of that in tech. Also, yeah raising capital is helpful if you can do it in a smart way, and use that as a leverage to continue what you are doing. That usually means not listening to the VCs, as their goal is for you to grow as fast as you can and keep raising bigger rounds, so they can report how great of investors they are, not for you to build a sustainable (successful) business. You can see that replayed over and over. Is Whatsapp successful? It was definitely raising quite a bit of capital, but still ended up being eaten by a well-funded competitor. I'd say that when you have VCs on your board who will actively push you to sell, so they can register profit, it increases chances of you being swallowed, by someone bigger. Unless you're saying that being eaten up, means outcompeted and pushed towards bankruptcy.
- sjg007 6y ago
  You don't really need VCs, you need Bezos to run you a tab. In fact I don't know why Amazon and AWS don't do this. The tab should have some leeway obviously with AWS taking on some risk but it seems like a no brainer.
sjg007 6y ago
I wonder if there's any bad blood between YC and a16z now based on the Zenefits story? I mean this article basically said Parker was thrown under the bus. This suggests that a16z is not founder friendly. As much as the collective "we" rails against cancel culture it seems to me he was cancelled. I mean a regulatory fine would be expected... and others have done worse.

173 points by DLay 6y ago

This is an interesting piece and definitely fits with my perception of a16z. Their podcasts are really good and cover a wide range of tech subjects at a medium-high level for those not familiar. Content is usually aggressively future looking and often brutally honest and this article makes me think that is all by design now. Also look at their portfolio[0], makes you realize how big of a hand they have in the startup pie. Didn't realize they funded Coinbase. Explains a lot of their crypto-content. I've seen a lot of skepticism on HN about crypto, but the a16z podcasts have convinced me it will be a critical component of finance and the web going forward. [0] https://a16z.com/portfolio/ https://a16z.com/portfolio/

dcl 6y ago
Anything specifically that makes you think crypto(coins, tokens, etc) will be a critical component of finance? Is there a specific podcast you can recommend on the topic?
- wyck 6y ago
  Its not coins or tokens, but the blockchain that is already being integrated into traditional and decentralized finance. All the major financial players are working on some sort of smart contracts to reduce paperwork and more precisely the people that do the paperwork. And that's just the tip of the iceberg.
  - dcl 6y ago
    Ahh, blockhain and smart contract technology. I take it that a16z are hoping to get a piece of that major financial player action by investing in that space?
    - wyck 6y ago
      Big Time.
  - stainforth 6y ago
    Couldn't they create RESTful APIs instead?
    - wyck 6y ago
      No, a blockchain is an immutable ledger, you can't equate a blockchain to an API. That would be like comparing an apple to a car. Lots of blockchain tech (defi) use various API's in their own ecosystems, some private, and some public like Chainlink's oracle system.
  - sulam 6y ago
    I’m probably ignorant to some big issue here, but it’s. It obvious to me that ledgers solve a big problem. Yes contracts are a big problem in general, but the ledger seems like they’re giving me a new pen to sign them with or a new box to put them in. The work in contracts is in the negotiation and I don’t see that’s affected at all.
bigtones 6y ago
Yeah really well written and researched piece. This is the first I had heard of Newcomer, it might be worth subscribing to.

harrisreynolds 6y ago

This was an interesting piece. I must say though that I don't love the a16z podcasts. The couple that I listened to were fairly bland. They need more personality/charisma etc. I find the TWIST podcast by Jason Calacanis much more interesting mainly because of his engagement/personality/authenticity etc. I actually think I could do better with a bit a practice. @wennmachers ... hit me if you want to chat! (I figured I "go direct" here! :-)

vulcan01 6y ago
> TWIST podcast by Jason Calacanis Hmm... the only podcasts I seem to find online by Calacanis are All-In and Angel. Which one do you recommend (or both)?
- bigtones 6y ago
  TWIST - 'This Week In Startups' is the Jason Calacanis podcast the parent was referring to, it's an acronym.
  - vulcan01 6y ago
    Oh, I see :) thank you!
- deleted 6y ago
  [deleted]

propter_hoc 6y ago

I've realized in the last few years that VC is fundamentally marketing. Getting pitched by the best founders and getting the biggest LPs is all about how well a VC can position themselves as a thought leader. That's why most of the day job of a VC is basically content marketing: blogging, writing surveys of the tech landscape, appearing on startup pitch competitions, getting quoted in the media.

ackbar03 6y ago
This would suggest that there is an imbalance and a lot more capital than startup projects though. Is it really that extreme over there in silicon valley?
- codingprograms 6y ago
  Yeah. There’s a lot of startups, but only a few that are actually promising from a risk reward perspective. VC investing is about home runs. So they all fight over investing in a few companies
- staysaasy 6y ago
  It depends a bit on the stage. It is definitely that competitive for the best growth stage companies, where "best" roughly means "highest growth in a market that can sustain a venture-level return (which in practice means a $1B+ valuation)." These companies tend to be large enough that they naturally gain access to investors, there's cheap capital everywhere, and there just aren't that many companies in big markets that are on aggressive growth trajectories. Fwiw it also isn't just silicon valley at this point, the funding patterns increasingly hold across much of north america.
- Fordec 6y ago
  It's not about the lack of startup projects, it's the lack of genuine unicorn projects that pays for the other 19 companies that fail in their portfolio along the way from MVP to IPO. Everyone has ideas for companies that can be worth millions. But the current orthodoxy around VC economics balk if your game plan is to be a 50M sale. Either you make the big time, or you can be a tax write off when you fail. A "moderate" success won't pay the Limited Partners back at the end of the 10 year vesting cycle the billions the put in at the start.

1vuio0pswjnm7 6y ago

"That same year, John Carreyrou revealed that Theranos had "struggled with its blood testing technology." Theranos had mostly raised money outside of Silicon Valley. But some venture capitalists tied their reputations to defending the company anyway. Marc Andreessen, who tweeted prolifically at the time, appeared to develop an affinity for blocking people who tweeted negatively about Theranos."

santoshalper 6y ago
Like most of SV today, a16z's primary function is manufacturing and selling bullshit.
cromulent 6y ago
I remember the tweet from him mentioning the "Hacker news haters" when we dared to discuss doubts about Theranos here.

suhail 6y ago

Since the media likes to roll this way, I'll post the part Eric buried at the end: "I talked to Wennmachers for over an hour for this story on the condition that I wouldn’t quote her. She asked me to write that she strenuously disagreed with many of this story’s characterizations and facts."

santoshalper 6y ago
I'm sure it would have appeared much earlier in the article if she had agreed to be quoted.

Barrin92 6y ago

reading the article is really how i always felt about the a16z podcast. it feels so 'advertise-ish' the few times I listened to it. Like some sort of manufactured low key sales pitch on the companies they invest in. Anyway I think the general takeaway from the article is the degree to which VC culture has become media/influencer/entertainment dominated. I really had to laugh when I read his "build" article and the next thing I read was that he pumped countless of dollars into clubhouse, a digital nightclub. So much for building real stuff. I feel like at this point if you put all the VC people together they couldn't build a bus station. Never been the biggest fan of Elon personally but in contrast to all the valley types he and his companies to me represent what technologists should actually do, build companies that actually manufacture things.

ausbah 6y ago
I wouldn’t say Musk is immune to manufactured advertisting. there certainly has been some informal or not to reinforce his brand of of “real life Iron Man who will solve all the world’s problems”

rzodkiew 6y ago

Whole VC industry is set up on pushing one simple lie: that you need VCs to create a successful company. Everything else is marketing endeavours to try to sell this convincingly. It's all the capitalists realising that to make software you don't need no factories anymore, which means much lower initial investment. So the marketing machine had to start and created this bizarre ecosystem of hyper growth, fuelled in kinda' pyramid fashion (all the money that is pumped into startups is spent on services provided by other startups they've financed). The whole system attracts money hungry teenagers, which can be convinced that ethics are an obstacle to be overcome, and we end up with what we have today.

simonebrunozzi 6y ago
Well, but... You'd still have to pick your poison. Growing slowly without raising large amounts of capital might mean "some" success, but you might eventually be eaten up by a well-funded competitor. Pick your poison, they say.
- rzodkiew 6y ago
  It's all about what you define as a success. Personally, I think that owner of a bakery on a corner of my street that is visited by all the locals is successful. Is that a success as measured by the VCs? Probably not. Pinboard is an example of that in tech. Also, yeah raising capital is helpful if you can do it in a smart way, and use that as a leverage to continue what you are doing. That usually means not listening to the VCs, as their goal is for you to grow as fast as you can and keep raising bigger rounds, so they can report how great of investors they are, not for you to build a sustainable (successful) business. You can see that replayed over and over. Is Whatsapp successful? It was definitely raising quite a bit of capital, but still ended up being eaten by a well-funded competitor. I'd say that when you have VCs on your board who will actively push you to sell, so they can register profit, it increases chances of you being swallowed, by someone bigger. Unless you're saying that being eaten up, means outcompeted and pushed towards bankruptcy.
sjg007 6y ago
You don't really need VCs, you need Bezos to run you a tab. In fact I don't know why Amazon and AWS don't do this. The tab should have some leeway obviously with AWS taking on some risk but it seems like a no brainer.

sjg007 6y ago

I wonder if there's any bad blood between YC and a16z now based on the Zenefits story? I mean this article basically said Parker was thrown under the bus. This suggests that a16z is not founder friendly. As much as the collective "we" rails against cancel culture it seems to me he was cancelled. I mean a regulatory fine would be expected... and others have done worse.