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"(1) It appears, really is quite clear, that they have high contempt for initial contacts from entrepreneurs via e-mail." - First, what is your sample size? D

"(1) It appears, really is quite clear, that they have high contempt for initial contacts from entrepreneurs via e-mail." - First, what is your sample size? Do you have any idea how many meetings they give come through email? Just because they may have rejected you (no idea), doesn't mean they reject everyone. Second, I would suggest that a cold email is probably the worst way to approach ANY VC. "A16Z wants to believe that they have 'deep domain knowledge' where they invest and, thus, wants to believe that anything new that A16Z has not heard of must be nonsense. If some supporting technical material is not easy reading for them, then they believe that they are justified in just regarding it as nonsense." - I would disagree. That being said I think you're misunderstanding the point of the VC business. It is NOT to create / promote new technologies only. It is to promote businesses and segments that they believe will be profitable (in general). "But, looking at the partners of A16Z, it's tough to find one with enough technical qualifications and/or accomplishments to (A) get a tenure track position in the engineering school of a leading research university, (B) be an editor of a leading technical journal of original research, (C) publish a peer-reviewed paper of original research in a technical field in a good or better journal of original research, or (D) get an NSF grant for original research." - Ok. But again you're measuring the success of a VC on technical acumen. What are technologies generally used for? To solve problems. In business domains. You want to go through that partner list again and tell me they don't have experience in various business domains? "Net, A16Z apparently is not competent to review or even to direct a competent review of technical material in information technology." - They don't make a claim to. Next? "What the A16Z financial performance really is is likely not easy to discover." - Let's see. Google "a16z performance returns". First article: http://finance.fortune.cnn.com/2012/07/23/nice-ira-andreessen-horowitz-returns-first-fund-twice-over/ http://finance.fortune.cnn.com/2012/07/23/nice-ira-andreesse... . I must be a genius. Yes, this is but the first data point; however, it's a start.....and based on other more recent data points (oculus, etc.), it may be suggested they're doing well. It's nice that you want to brush how most VCs are judged as successes or not (by the performance of their portfolio) as secondary in comparison to what you want to judge them by. "You seem to suggest that the project for which the OP is some recruiting is for an internal information system to do causal modeling and make valuable predictions for venture investing." - I'm sorry you inferred that. Allow me to be perfectly clear. I have no idea what they are recruiting for. I could imagine a lot of projects....the above is something that is certainly not out of bounds "It would appear that they want to do cross tabulation and curve fitting; sorry, there is nearly no chance those techniques will work. Why? In simple terms, they are looking for new, exceptional cases, and looking at 'averages' from the past, even of successes in the past, is just intellectual self-abuse." - It may appear like that to you; however, I would suggest it's probably much more complex. They could be performing (for example) some clustering techniques (k-means, k-medians, what not) across the investments. They could be performing a variety of analytics on the talent development portion to gain a better understanding of expectations of the companies and candidates. They could be doing a lot of things... "If they are making money, then, fine." - I'm pretty sure that's not the case with you. I'm pretty sure that even if it was shown they're beating even 80% of other VCs you would still be hyper critical of their technical evaluation skills. "I've been around technical work in US national security, US business and start ups, including one of the most successful venture funded companies ever, and high end academic research, hold a Ph.D. in engineering from one of the world's best research universities, have published peer-reviewed original research in computer science, applied mathematics, and artificial intelligence" - Do you want a cookie? "and in comparison the technical qualifications of A16Z look like a bad joke." - Yet their business and venture capital qualifications appear to be quite good. "By an analogy, A16Z is looking for nurse practitioners instead of MD physicians. Both are necessary, but the nurse practitioners are not sufficient. There is a difference!" - They're not looking for MD physicians as the portfolio companies have the technical expertise.

graycat 13y ago
> Second, I would suggest that a cold email is probably the worst way to approach ANY VC. Sorry they are having trouble handling e-mail. It's an old technology and relatively easy to work with. E-mail is just simple text, much like HN posts. Such simple text works great at HN. Too bad the 'high tech' A16Z can't work with simple text. With all their efforts to find good investment opportunities, they might just look at their incoming e-mail and then read it. But your statement seems to indicate that they want to ignore e-mail, and that does appear to be the case. Ignoring e-mail is bizarre, but they are free to do so. For the rest of your post, you miss the big, huge point: As is commonly asserted, one of the better parts of a new project is new technology that is powerful and valuable, intellectual property, 'secret sauce', with a high technological barrier to entry, for solving a big, important problem. Such technology, at least in my interest, is definitely just in the service of making money, the green kind. If a project claims to be able to solve a huge problem so far unsolved, that many others have tried unsuccessfully to solve, then a crucial, early question for interest in the project is what the heck is the crucial 'secret sauce' that enables the solution, that lets this project do what prior projects could not? Again, of course, the purpose of and interest in the secret sauce is making money. I can 100% absolutely, positively guarantee you that one can write a very carefully written e-mail with a project to solve what is clearly a huge problem with overwhelming and obvious evidence that a company solving this problem will be worth $x billion for x high enough to be historic, and outline some of the crucial secret sauce and have A16Z totally ignore the contact. Call them on the phone and tell them about the e-mail, and they will refuse to dig it out of their inbox and look at it. They will say, "send it again", and someone might say, "I don't think that we can do business along these lines.". "Send it again" is just a manipulation to insult entrepreneurs by a firm that does not value contacts from entrepreneurs. If I get rich, A16Z won't participate. The importance of their abilities to evaluate new, powerful, valuable technology is just that such evaluation is just crucial for any project where one of the main features is such technology. As I made clear, thankfully for US national security, the US DoD has long been excellent at evaluating new technology. If the DoD sees a significant problem and someone comes up with some new, powerful technology for the first or a much better solution, then the DoD will listen and, really, in my experience, for a good case, proceed. My experience is that apparently mostly A16Z won't; they won't even look at their e-mail or listen on the phone. Heck, just finding their phone number takes some effort. Biomedical VCs will evaluate such technology. Information technology (IT) VCs won't. Why? The IT VCs just don't want to care about such technology. Instead they want to make money other ways. As posted by Fred Wilson at his AVC.com some months ago, on average the IT VCs are doing poorly. Still they insist on not even evaluating new technology. Their feet are locked solidly in concrete with their eyes and ears closed, refusing to pay attention to e-mail and phone calls. Really the IT VCs believe that all there is to the 'technology' in IT is little more than routine software development. On average, this attitude fits with the past. But so far, e.g., from A16Z there are only about 15 projects a year that deserve a Series A. And it's easy to see that there are only a few Googles or Facebooks each decade. So, looking at the average projects in the past is a hopelessly poor way to find the 15 Series A projects for this year or the next Google this decade. Still, A16Z won't read their e-mail to find such projects. The situation is fairly clear: The IT VCs want to see traction, up and to the right. Then they want to invest for the big build out and the rapid growth on the way to going public. Sometimes they make money doing this; on average essentially they don't. For your > - They're not looking for MD physicians as the portfolio companies have the technical expertise. No. My remark was in the context of the project of their OP and recruiting. For the goals of that project mentioned in this thread, my analogy with an MD is correct -- they will need one. But they are not recruiting for one. Instead they are recruiting for nurse practitioners. E.g., you mentioned cluster analysis. So, as I explained in terms of the SR-71, could not evaluate that project by cluster analysis of the then history of military aviation and, instead, need to look at the engineering details Kelly Johnson was proposing. Similarly, cluster analysis stands to be nearly hopeless for predicting the future of IT projects and, instead, must look at the details of the projects. It does appear that the project of the OP missed this point. > - Do you want a cookie? It's really tough to communicate with someone who works not to understand. Then even something simple won't come across. The point was, in really simple, baby talk terms, (1) the goal if IT projects is to make money. (2) One of the best possible parts of a new IT project is new, powerful, valuable, technology to provide the first good or a much better solution with a high technological barrier to entry to a big problem where such a solution will be very valuable. (3) To evaluate such a project early on, it is just crucial to evaluate the technology. (4) My background shows that I am competent both to create such technology and to evaluate it, and, more generally understand the potential of such technology in projects in business. From that background, no, I don't want a cookie. Instead it would be good if A16Z would read their e-mail and evaluate projects including any new, powerful, valuable technology. It's not about cookies. It's about evaluating projects. I wrote "If they are making money, then, fine." and you responded > - I'm pretty sure that's not the case with you. I'm pretty sure that even if it was shown they're beating even 80% of other VCs you would still be hyper critical of their technical evaluation skills. Sure. However much money they are making, they shouldn't pass up making much more. The US DoD doesn't do this. Neither does the NIH or the US pharmaceutical industry. People in US national security, biotechnology, and research in mathematics, statistics, and most areas of engineering would say that refusing to evaluate technology must be playing with mice and ignoring elephants. Besides, US VC ROI is so bad that being better than 80% of the US VC firms might well still mean just losing money for the LPs. > It's nice that you want to brush how most VCs are judged as successes or not (by the performance of their portfolio) as secondary in comparison to what you want to judge them by. No, I judge them by making money. Their business they have chosen is IT VC. Then if they refuse to evaluate technology, then they are at high risk of missing out on the next big win of the next decade. Why is this clear? Not really because 'secret sauce' played such a big role in most or even any of the big wins in IT in the past 20 years but because of the overwhelming power of 'secret sauce' demonstrated in US national security and the biomedical industry. The NSF funds research in the mathematical sciences and more mathematical ares of engineering for a very good reason; but Silicon Valley (SV) believes that no business value can come from that work. SV is wrong. They may be very badly wrong, e.g., miss a few new Googles. I wrote "Net, A16Z apparently is not competent to review or even to direct a competent review of technical material in information technology." and you responded > - They don't make a claim to. Next? Let's see: At their Web site can see > At a16z, we bet on entrepreneurs who use software to go after the big problems. Hmm. Sorry, guys, considering just routine software is a huge handicap in going "after the big problems". > We believe this is an incredibly exciting time to be a technology investor. Okay, here they say "technology" and not just routine software. But do they want to evaluate technology? Apparently not. Heck, they won't even read their e-mail. > smartphone users are expected to grow from 1.5 billion today to five billion in the coming years. There they go thinking of sectors again. Maybe with all those new users there will be new problems to solve and valuable companies to solve them. Otherwise they are talking a "rising tide raises all the boats" growth of a factor of only a little over 3 in 5 years, and that's not very impressive. Broadly, super tough to get venture returns from growth of a sector and, instead, need to get such returns from growth of individual projects, maybe in a rapidly growing sector, maybe not. For such projects, 'secret sauce' technology can be one of the best advantages. > These entrepreneurs care enough about all aspects of their product/service that they want (or need) to innovate in all the areas that touch it. So, now they also want to "innovate". That's what I'm talking about where you thought it was just a cookie. But such innovation needs evaluation. Of course, if A16Z just looks at the traction, they they can talk about software, technology, and innovation, refuse to evaluate anything technical, and just count monthly uniques, page views, ComScore data, etc. But A16Z says that they are in "multi-stage" investing, and waiting for traction now risks being quite late, too late. Too late? Just do a little of the arithmetic all of use here at HN can easily do: Pick an Internet connection with, say, 25 Mbps upload bandwidth. Pick a server with, say, an 8 core processor at 4.0 GHz and 64 bit addressing with 32 GB of ECC main memory and an armload of 4 GB disk drives. We're talking $1500 in parts. Send Web pages for 400,000 bits per page. Send 5 simple ads per page. Get enough users to half fill that upload bandwidth 24 x 7. Have the software fast enough and scalable enough that just one or a few such servers can handle the load. Assume $2 per 1000 ads displayed. Okay, let's multiply it out: So send 25 * 106 / ( 2 * 400,000 ) = 31.250 pages a second. Then revenue of 31.250 * 2 * 5 * 3600 * 24 * 30 / 1000 = 810,000 dollars a month. Now, just why does such a project want to accept seed or Series A funding? Has any project successfully thought this way? Sure: Early on Plenty of Fish was just one guy, two old Dell servers, ads just from Google, and $10 million a year in revenue. > If we are right that software is in fact eating the world, There is considerable question if just routine software will yield venture returns. One reason is the low barrier to entry. E.g., China had no trouble doing something like Google. Neither did Microsoft. A16Z seems to accept low technological barriers to entry; that has to be a big mistake, even if they are making money. Heck, my local pizza guy is making money. I'm failing to see why an entrepreneur with a good project should waste time with A16Z who hide their phone number, refuse to read their e-mail, and won't and even can't evaluate crucial secret sauce technology.

graycat 13y ago

> Second, I would suggest that a cold email is probably the worst way to approach ANY VC. Sorry they are having trouble handling e-mail. It's an old technology and relatively easy to work with. E-mail is just simple text, much like HN posts. Such simple text works great at HN. Too bad the 'high tech' A16Z can't work with simple text. With all their efforts to find good investment opportunities, they might just look at their incoming e-mail and then read it. But your statement seems to indicate that they want to ignore e-mail, and that does appear to be the case. Ignoring e-mail is bizarre, but they are free to do so. For the rest of your post, you miss the big, huge point: As is commonly asserted, one of the better parts of a new project is new technology that is powerful and valuable, intellectual property, 'secret sauce', with a high technological barrier to entry, for solving a big, important problem. Such technology, at least in my interest, is definitely just in the service of making money, the green kind. If a project claims to be able to solve a huge problem so far unsolved, that many others have tried unsuccessfully to solve, then a crucial, early question for interest in the project is what the heck is the crucial 'secret sauce' that enables the solution, that lets this project do what prior projects could not? Again, of course, the purpose of and interest in the secret sauce is making money. I can 100% absolutely, positively guarantee you that one can write a very carefully written e-mail with a project to solve what is clearly a huge problem with overwhelming and obvious evidence that a company solving this problem will be worth $x billion for x high enough to be historic, and outline some of the crucial secret sauce and have A16Z totally ignore the contact. Call them on the phone and tell them about the e-mail, and they will refuse to dig it out of their inbox and look at it. They will say, "send it again", and someone might say, "I don't think that we can do business along these lines.". "Send it again" is just a manipulation to insult entrepreneurs by a firm that does not value contacts from entrepreneurs. If I get rich, A16Z won't participate. The importance of their abilities to evaluate new, powerful, valuable technology is just that such evaluation is just crucial for any project where one of the main features is such technology. As I made clear, thankfully for US national security, the US DoD has long been excellent at evaluating new technology. If the DoD sees a significant problem and someone comes up with some new, powerful technology for the first or a much better solution, then the DoD will listen and, really, in my experience, for a good case, proceed. My experience is that apparently mostly A16Z won't; they won't even look at their e-mail or listen on the phone. Heck, just finding their phone number takes some effort. Biomedical VCs will evaluate such technology. Information technology (IT) VCs won't. Why? The IT VCs just don't want to care about such technology. Instead they want to make money other ways. As posted by Fred Wilson at his AVC.com some months ago, on average the IT VCs are doing poorly. Still they insist on not even evaluating new technology. Their feet are locked solidly in concrete with their eyes and ears closed, refusing to pay attention to e-mail and phone calls. Really the IT VCs believe that all there is to the 'technology' in IT is little more than routine software development. On average, this attitude fits with the past. But so far, e.g., from A16Z there are only about 15 projects a year that deserve a Series A. And it's easy to see that there are only a few Googles or Facebooks each decade. So, looking at the average projects in the past is a hopelessly poor way to find the 15 Series A projects for this year or the next Google this decade. Still, A16Z won't read their e-mail to find such projects. The situation is fairly clear: The IT VCs want to see traction, up and to the right. Then they want to invest for the big build out and the rapid growth on the way to going public. Sometimes they make money doing this; on average essentially they don't. For your > - They're not looking for MD physicians as the portfolio companies have the technical expertise. No. My remark was in the context of the project of their OP and recruiting. For the goals of that project mentioned in this thread, my analogy with an MD is correct -- they will need one. But they are not recruiting for one. Instead they are recruiting for nurse practitioners. E.g., you mentioned cluster analysis. So, as I explained in terms of the SR-71, could not evaluate that project by cluster analysis of the then history of military aviation and, instead, need to look at the engineering details Kelly Johnson was proposing. Similarly, cluster analysis stands to be nearly hopeless for predicting the future of IT projects and, instead, must look at the details of the projects. It does appear that the project of the OP missed this point. > - Do you want a cookie? It's really tough to communicate with someone who works not to understand. Then even something simple won't come across. The point was, in really simple, baby talk terms, (1) the goal if IT projects is to make money. (2) One of the best possible parts of a new IT project is new, powerful, valuable, technology to provide the first good or a much better solution with a high technological barrier to entry to a big problem where such a solution will be very valuable. (3) To evaluate such a project early on, it is just crucial to evaluate the technology. (4) My background shows that I am competent both to create such technology and to evaluate it, and, more generally understand the potential of such technology in projects in business. From that background, no, I don't want a cookie. Instead it would be good if A16Z would read their e-mail and evaluate projects including any new, powerful, valuable technology. It's not about cookies. It's about evaluating projects. I wrote "If they are making money, then, fine." and you responded > - I'm pretty sure that's not the case with you. I'm pretty sure that even if it was shown they're beating even 80% of other VCs you would still be hyper critical of their technical evaluation skills. Sure. However much money they are making, they shouldn't pass up making much more. The US DoD doesn't do this. Neither does the NIH or the US pharmaceutical industry. People in US national security, biotechnology, and research in mathematics, statistics, and most areas of engineering would say that refusing to evaluate technology must be playing with mice and ignoring elephants. Besides, US VC ROI is so bad that being better than 80% of the US VC firms might well still mean just losing money for the LPs. > It's nice that you want to brush how most VCs are judged as successes or not (by the performance of their portfolio) as secondary in comparison to what you want to judge them by. No, I judge them by making money. Their business they have chosen is IT VC. Then if they refuse to evaluate technology, then they are at high risk of missing out on the next big win of the next decade. Why is this clear? Not really because 'secret sauce' played such a big role in most or even any of the big wins in IT in the past 20 years but because of the overwhelming power of 'secret sauce' demonstrated in US national security and the biomedical industry. The NSF funds research in the mathematical sciences and more mathematical ares of engineering for a very good reason; but Silicon Valley (SV) believes that no business value can come from that work. SV is wrong. They may be very badly wrong, e.g., miss a few new Googles. I wrote "Net, A16Z apparently is not competent to review or even to direct a competent review of technical material in information technology." and you responded > - They don't make a claim to. Next? Let's see: At their Web site can see > At a16z, we bet on entrepreneurs who use software to go after the big problems. Hmm. Sorry, guys, considering just routine software is a huge handicap in going "after the big problems". > We believe this is an incredibly exciting time to be a technology investor. Okay, here they say "technology" and not just routine software. But do they want to evaluate technology? Apparently not. Heck, they won't even read their e-mail. > smartphone users are expected to grow from 1.5 billion today to five billion in the coming years. There they go thinking of sectors again. Maybe with all those new users there will be new problems to solve and valuable companies to solve them. Otherwise they are talking a "rising tide raises all the boats" growth of a factor of only a little over 3 in 5 years, and that's not very impressive. Broadly, super tough to get venture returns from growth of a sector and, instead, need to get such returns from growth of individual projects, maybe in a rapidly growing sector, maybe not. For such projects, 'secret sauce' technology can be one of the best advantages. > These entrepreneurs care enough about all aspects of their product/service that they want (or need) to innovate in all the areas that touch it. So, now they also want to "innovate". That's what I'm talking about where you thought it was just a cookie. But such innovation needs evaluation. Of course, if A16Z just looks at the traction, they they can talk about software, technology, and innovation, refuse to evaluate anything technical, and just count monthly uniques, page views, ComScore data, etc. But A16Z says that they are in "multi-stage" investing, and waiting for traction now risks being quite late, too late. Too late? Just do a little of the arithmetic all of use here at HN can easily do: Pick an Internet connection with, say, 25 Mbps upload bandwidth. Pick a server with, say, an 8 core processor at 4.0 GHz and 64 bit addressing with 32 GB of ECC main memory and an armload of 4 GB disk drives. We're talking $1500 in parts. Send Web pages for 400,000 bits per page. Send 5 simple ads per page. Get enough users to half fill that upload bandwidth 24 x 7. Have the software fast enough and scalable enough that just one or a few such servers can handle the load. Assume $2 per 1000 ads displayed. Okay, let's multiply it out: So send 25 * 106 / ( 2 * 400,000 ) = 31.250 pages a second. Then revenue of 31.250 * 2 * 5 * 3600 * 24 * 30 / 1000 = 810,000 dollars a month. Now, just why does such a project want to accept seed or Series A funding? Has any project successfully thought this way? Sure: Early on Plenty of Fish was just one guy, two old Dell servers, ads just from Google, and $10 million a year in revenue. > If we are right that software is in fact eating the world, There is considerable question if just routine software will yield venture returns. One reason is the low barrier to entry. E.g., China had no trouble doing something like Google. Neither did Microsoft. A16Z seems to accept low technological barriers to entry; that has to be a big mistake, even if they are making money. Heck, my local pizza guy is making money. I'm failing to see why an entrepreneur with a good project should waste time with A16Z who hide their phone number, refuse to read their e-mail, and won't and even can't evaluate crucial secret sauce technology.