15 ms·

The Mind of Marc Andreessen

281 points by cpeterso 12y ago

kondro 12y ago
This is completely off-topic but I find it so hard to convince myself to read a 14,000 word (or any other long-form) article anymore. At least the New Yorker doesn't try to maximise ad revenue by splitting this across 25 pages.
- mcmullen 12y ago
  Especially ones that probably won't leave me feeling like I know anything more about the world after finishing. I look forward to the brief HN user summaries over the coming hours.
- M8 12y ago
  I doubt the subj man himself would read it. Would probably ask an assistant to summarize. PS: maybe authors are paid per word?
- sixQuarks 12y ago
  I don't mind reading long-form content, it's just that I can't do it on a computer or mobile. Give me a beach chair and a magazine, and I'll gladly read the whole thing. Computer, just can't do it.
  - pibefision 12y ago
    Me too. I'm sending it to my Kindle, it's great to read this types of articles.
  - mng2 12y ago
    Yeah, my hard copy is probably going to show up Wednesday or Thursday. Sometimes I wish the discussion on New Yorker articles would get delayed a week.
  - rodgerd 12y ago
    I hear that. I subscribe to the paper versions of some magazines in preference to their online versions precisely so I can read them story at a time over breakfast and pass them around the family.
- igravious 12y ago
  I was plo/ugh|w/ing through it until I noticed the size of the scroll-bar nubbin relative to the length of the scroll-bar itself and thought, "uh oh" to myself. Little later had to bail when there wasn't enough meat to chew on. So no full summary here: partial summary is -- a16z and their ilk make Silicon Valley tick, Andreesen is a foul-mouthed visionary, Horowitz is less interesting, together they make a good team. Don't mean to come across as glib. I enjoyed what I read and it's up to the New Yorker's typical standards.
  - deleted 12y ago
    [deleted]
- nodata 12y ago
  kondro stood there facing towards us with his john lennon style glasses that looked like he had recently been to a high-end designer shop. the glasses had black thin rims as he surveyed his audience with friendly blah blah blah Too much detail. The New Yorker should produce a tl;dr version like The Economist does (http://www.economist.com/blogs/newsbook/2014/11/economist-espresso http://www.economist.com/blogs/newsbook/2014/11/economist-es...)
  - chetanahuja 12y ago
    Heh... Exactly. Too much "atmosphere". Too much repetition of that "one page on a specific person's story and one page on the systematic social trend this person's story illustrates" is now gone beyond slightly annoying to the point of tediousness. Newyorker is pretty much cartoons and the small one page or less articles for me now. I'll make exceptions for Anthony Lane's movie reviews and occasional longer form articles. And anything with Malcom Gladwell's name just makes me angry at this point.
  - po 12y ago
    Maybe you're not their target audience? I think the New Yorker is geared toward people who like the process of reading and enjoy when the author paints a picture in their mind. If you just want the tl;dr version, then there's other places to go. I think it's nice that they reach a different kind of audience.
  - smacktoward 12y ago
    Telling the New Yorker that they should produce TL;DR versions of their work is like telling Thomas Keller that the French Laundry should serve Soylent.
  - Nimitz14 12y ago
    had no idea this existed although i have a subscription, thanks!
- pietro 12y ago
  I've never finished an article in the New Yorker, not because of their length, but because of their lack on content relative to said length. It's all decorum and posturing.
- mw67 12y ago
  Copy the text into a text reader (such as Voice Dream), and listen to it
- Estragon 12y ago
  I took the advice elsewhere in the thread to read the last 1/3rd of the article. It seemed pretty good.
joaorico 12y ago
His old blog is no longer online, but someone collected it here. Very much worth reading: http://pmarchive.com/ http://pmarchive.com/ edit: Ah, it was published as an ebook as well this January: http://a16z.com/2015/01/09/pmarca-blog-ebook/ http://a16z.com/2015/01/09/pmarca-blog-ebook/ His current blog: http://blog.pmarca.com/archive/ http://blog.pmarca.com/archive/
keithwhor 12y ago
tl;dr: Andreessen makes bets on technology x people. The tech has to be provocative and world-changing, but more importantly, the people behind the tech have to be thoughtful, bold and unique in their worldview. Interesting points: - A16z makes bets on consumer tech in later rounds (more risk earlier, increased cost later worth the more sure bet) - i.e. Oculus - Invests in enterprise tech earlier (less risk of a fickle consumer / competition) - What's better than telling investors (or at least a16z) what they want to hear is providing them with insight as to why their assumptions might be wrong and you have better answers (phrased here as "It’s a delight when they look at you with contempt—You idiot—and then walk you through the idea maze and explain why your idea won’t work.") Read the article, you won't regret it. Some of my favorite excerpts: [1] In 1996, when Horowitz was a Netscape product manager, he wrote a note to Andreessen, accusing him of prematurely revealing the company’s new strategy to a reporter. Andreessen wrote back to say that it would be Horowitz’s fault if the company failed: “Next time do the fucking interview yourself. Fuck you.” Ordinarily, relationship over. “When he feels disrespected, Marc can cut you out of his life like a cancer,” one of Andreessen’s close friends said. “But Ben and Marc fight like cats and dogs, then forget about it.” [2] A16z led Airbnb’s B round. Soon afterward, the company was battered by headlines about renters who trashed a San Francisco home. It wasn’t axe murders, but, Chesky said, “It was a P.R. nightmare. We had just expanded from being ten people living in a three-bedroom apartment and we had no idea how to be a billion-dollar company. Marc came to our office at midnight and read the letter I’d written to our community about the Airbnb Guarantee, and the two changes he made changed the company forever. I’d said we guarantee five thousand dollars for property damage, and he added a zero, which seemed crazy.” Andreessen also added the proviso that claimants would have to file a police report, which he correctly believed would discourage scam artists. “And he told me to add my personal e-mail address. He gave us permission to be bold.” [3] A favorite Andreessen response to underlings’ confusion was “There are no stupid questions, only stupid people.” Jim Barksdale, the company’s C.E.O., said, “I’d tell Marc after meetings, ‘You don’t have to tell a dumb sumbitch he’s a dumb sumbitch.’ ” Andreessen told me, “I needed Netscape to work, it had to work—it was my one-way door—so I was absolutely intolerant of anything that got in the way”—meaning, he clarified, “people.” He could never relax: “I am very paranoid. And the down cycle hurt a lot more than the up cycle felt good.” [4] [...] Peter Thiel suggests, is that Andreessen may not be as suited to making early, counterintuitive investments as he is—a point that Andreessen concedes: “Peter is just smarter than I am, and in a lateral way.” But, Thiel says, Andreessen is well positioned, because of his broad knowledge and flexible mind-set, to respond to incremental changes in an array of fields. And that, he argues, is what the times reward: “While Twitter is a lesser innovation than flying cars, it’s a much more valuable business. We live in a financial age, not a technological age.” [5] One challenge for Andreessen is whether venture itself has a skills problem. If software is truly eating the world, wouldn’t venture capital be on the menu? The AngelList platform now allows investors to fund startups online. Its co-founder Naval Ravikant said that “future companies will require more two-hundred-thousand-dollar checks and way fewer guys on Sand Hill Road.” Jeff Fagnan, of Atlas Venture, which is the largest investor in AngelList, said, “Software is already squeezing out other intermediaries—travel agents, financial advisers—and, at the end of the day, V.C.s are intermediaries. We’re all just selling cash.” Andreessen sometimes wonders if Ravikant is onto something. He’s asked Horowitz, “What if we’re the most evolved dinosaur, and Naval is a bird?” Already, more than half the tech companies that reached a billion-dollar valuation in the past decade were based outside Silicon Valley. And as Andreessen himself wrote in 2007, before he became a V.C., “Odds are, nothing your V.C. does, no matter how helpful or well-intentioned, is going to tip the balance between success and failure.” [6] He acknowledged, though, that his optimism dims once human beings—with their illogic, hidden agendas, and sheer bugginess—enter the equation. “We’re imperfect people pursuing perfect ideas, and there’s tremendous frustration in the gap,” he said. “Writing code, one or two people, that’s the Platonic ideal. But when you want to impact the world you need one hundred people, then one thousand, then ten thousand—and people have all these people issues.” He examined the problem in silence. “A world of just computers wouldn’t work,” he concluded wistfully. “But a world of just people could certainly be improved.”
julianpye 12y ago
Most people think that creating innovative products relies on 'trend-spotting' and on reacting quickly to demands. But that is reactive. You can have a much bigger impact if you're willing to shape the future. This is why Doug Leone quoted is wrong when he refers to the PC and the iPhone as black swans, because they were not. They were products attempting to shape the future. Marc has an uncanny talent at detecting what startup may shape the future and creating a set of financial tools to ensure that market acceptance can happen. This talent is what makes A16Z so amazing - they are so different from the average bean-counting VCs, whose sets of tools are focused on financial exits and powerplays inside boards.
- mstade 12y ago
  Out of interest, do you base this on external observation or any first-hand experience working with A16Z?
- normloman 12y ago
  Yeah but history is littered with products that failed at shaping the future (Apple Newton, Web TV, Early VR headsets). The black swan part is that few could have predicted the iPhone or the PC would succeed.
  - cookiecaper 12y ago
    The funny thing about all the products you listed is that later iterations of these concepts have made (or are now about to make, in the case of VR) major impacts. Perhaps part of the reason these products failed to "shape the future" was because they didn't have the business and financial backing that can be offered by firms like Andreessen-Horowitz.
    - normloman 12y ago
      Na, they did. It's more about timing. And it takes some luck to get the timing right.
numair 12y ago
This is incredibly thorough, honest and entertaining. The writer has done an excellent job. Andreesen's candid comments about Gurley/Benchmark are hilarious. The whole bit about his rural upbringing influencing his full-on embrace of a tech-utopian future is something I could fully understand; whenever I hate our industry, I go spend some time in a beautiful rural environment until I remember why it's so frustrating. I'm glad the writer explained the influence of Mike Ovitz and the CAA culture on how A16Z operates. One of my closest friends was an agent at CAA in the late 90s, and we used to spend a lot of time talking about their operating strategy. CAA took over the entertainment agent world by being more resourceful, cultured, helpful and -- most importantly -- way more professional than everyone else (I was told a great story of how Donald Trump, while searching for an agent during the time of The Apprentice, took a meeting with CAA; upon entering and finding a conference table of perfectly suited, perfectly punctual agents waiting for him, he exclaimed, "you're all hired!"). I'd be interested to compare an old-school CAA client pitch with a modern A16Z startup meeting. I also think the rest of the Valley and its VCs don't understand the CAA way, and why it is so superior to their golf-club way of doing business. The behind-the-scenes look at Instacart's latest funding round was really interesting. Understanding the psychology that leads to massive funding rounds -- and how you're either getting bid up by each partner in the after-pitch conversation, or bid down until they don't want to participate -- is something that doesn't get much public visibility. Again, such an honest look at the inner workings of Andreesen and his colleagues. Andreesen is, quite clearly, at the top of the game in the VC business. His success is well deserved. I am sure everyone in SV will be talking about this article this week. This article is of great service to everyone who isn't deep in the SV game, but who wants to understand how it works (or should work).
- foobarqux 12y ago
  > Andreesen is, quite clearly, at the top of the game in the VC business. Shouldn't his returns have some bearing?
- littletimmy 12y ago
  Just curious: what do you find "frustrating" in a beautiful rural environment?
- 12y ago
ghshephard 12y ago
This was an absolutely wonderful, and really accurate insight into not only Marc, but the business of VC. Getting to go behind the doors, and sit in on the conversations the GPs were having regarding the valuation of instacart alone made the article worth reading. It clocked in at 13,500 words, and I couldn't tear myself away from it. I don't think I was tempted, for even a second to divert my attention. Highly recommended.
olalonde 12y ago
> And that Benchmark’s best-known V.C., the six-feet-eight Bill Gurley, another outspoken giant with a large Twitter following, advised Horowitz to cut Andreessen and his six-million-dollar investment out of the company. Andreessen said, “I can’t stand him. If you’ve seen ‘Seinfeld,’ Bill Gurley is my Newman”—Jerry’s bête noire. Sheds some light on http://pmarchive.com/guide_to_startups_part9.html http://pmarchive.com/guide_to_startups_part9.html
Fede_V 12y ago
It's kind of ironic that Marc Andreessen dismissed the New Yorker several times in the past as an 'elitist east coast literary magazine' yet this profile is absolutely fantastic, and very generous as well. I'd be curious to hear what he thinks of it! I also wish the article touched on Andreessen's thoughts about publicly financed science. Basic scientific research is something that the government puts a lot of money in too, and that should be robustly defended.
dunkelheit 12y ago
Most of the article reads like a pr piece sugar-coating Marc and a16z, and the part about his wife is unapologetic celebrity gossip :). I also doubt that depictions of the workings of VC firms from this article should be taken at face value. To be fair, the author tries to ask some adversarial questions towards the end of the article, but for example Alex Payne's criticism (link: https://al3x.net/2014/06/17/dear-marc-andreessen.html https://al3x.net/2014/06/17/dear-marc-andreessen.html) is dismissed with a casual ad-hominem attack. The vision Marc presents for blue-collar workers (work a lot and be poor or work when you feel like it and be very poor) is hardly enticing. The future he is envisioning is one of extreme inequality, with a handful of people controlling most of the advanced technology that keeps the world running. And a16z clearly want to be among these people.
- leoc 12y ago
  > Most of the article reads like a pr piece sugar-coating Marc and a16z This really isn't so. The whole article is peppered with jabs at Andreesen's personality, skill-set, track record, self-awareness and skull shape. And when the writer reports Andreesen blowing off Payne as “a self-hating software engineer”, he didn't do that to make Andreesen look good or sound persuasive.
- WaltPurvis 12y ago
  > Most of the article reads like a pr piece sugar-coating Marc and a16z Seriously? I thought the article portrayed Andreessen as an egotistical blowhard and kind of an all-around prick, with questionable skills as a visionary and investor; it certainly didn't strike me as an encomium.
- dang 12y ago
  > The vision Marc presents for blue-collar workers (work a lot and be poor or work when you feel like it and be very poor) Where does he present that? I don't think he did. I really don't think that the article is a PR piece. It has to be one of the most substantial articles about VC investing to have appeared in the non-technical press for years, and it's a complex profile. It may not be accurate (I wouldn't know), but is far from all sugar, and dismissing it with an offhand swipe seems unproductive.
downandout 12y ago
It's interesting that he says that they want to shape the future - like all VC's - and yet many of their portfolio companies [1] do no such thing. Do ShoeDazzle and Fab really "shape the future"? There are lots of companies on that page that, based on the description of his thought process, he shouldn't have written checks to. [1] http://a16z.com/portfolio/ http://a16z.com/portfolio/
- _delirium 12y ago
  The article briefly touches on that incongruence (i.e. that despite Andreessen's techno-visionary rhetoric, much of his firm's portfolio looks like fairly typical tech companies): even as you philosophize about ushering in a new age of democracy, you also have to make money for your L.P.s. And, while the ideal startup advances both goals, most, in truth, advance neither. The V.C. Bryce Roberts told me, “It’s an ego game, where you want to believe you’re changing the world. But how can you write a check to Fab and believe that giving people discounted tchotchkes is changing the world?” The article then changes topic and doesn't really discuss that further though.
  - jkestner 12y ago
    “It’s an ego game, where you want to believe you’re changing the world. But how can you write a check to Fab and believe that giving people discounted tchotchkes is changing the world?” I don't feel that the article succumbed too much to that rhetoric, unlike most media both closer and further from the tech industry. But in an article with supposedly real talk from VCs, Bryce's is the realest. Should've also pushed harder against the "push a button to work" Uber-utopia.
  - vasilipupkin 12y ago
    I think the binary thinking here is quite a bit simplistic. Think of "changing the world" not as a zero or 1 proposition but as a continuum. Some companies/products change the world for the better by 0.98 and some other ones only by 0.02. That doesn't mean you shouldn't fund the 0.02s. Because a lot of 0.02 in aggregate change the world by a lot.
dylanjermiah 12y ago
On the topic of A16Z v. Benchmark, especially from 09 onwards Benchmark has done ridiculously well. Early on Uber(a, b + c), Snapchat (a + b), Instagram (a + b), Dropbox (b), Nextdoor (a, b + c), Hortonworks (a, b), Zendesk (b, c + d), New Relic (a, b + c) and Twitter (c + d). I'm sure I'm missing a few as well. I'd love for the fund data to be available!
- fredwilson 12y ago
  Benchmark has been on a tear in VC not seen since KP did it in the mid/late 90s. they are absolutely the best in the business right now
  - deleted 12y ago
    [deleted]
- eeho 12y ago
  wow. I love pmarca's Jerry:Newman comparison, but with Gurley's portfolio as impressive as it is, maybe George Costanza:Lloyd Braun is the better Seinfeld analogy
alexandersingh 12y ago
Marc, you grow an excellent beard.
marincounty 12y ago
"She told me that Andreessen satisfied most of the criteria on her checklist: he was a genius, he was a coder, he was funny, and he was bald. (“I find it incredibly sexy to see the encasement of a cerebrum,” she explained.) For his part, Andreessen felt that “she was spectacular! My biggest concern was that she wanted to live a jet-set life.” In one of the seventeen e-mails he sent her the next day, he asked, “What’s your ideal evening?” She responded, “Stay home, do e-mail, make an omelette, watch TV, take a bath, go to bed.” This is a bit much? I do wish the down to earth couple well! That's the one positive about being broke; you never need to second quess their motives?
cyphunk 12y ago
Just a reminder that this is the same guy that calls snowden a traitor
- mk00 12y ago
  Just a reminder that not everyone agrees with you
  - CyberDildonics 12y ago
    Well it was in writing so I'm not sure what more you want, it isn't really an subjective thing.
  - knice 12y ago
    [And on video](http://www.cnbc.com/id/101733893 http://www.cnbc.com/id/101733893)
  - elchief 12y ago
    If your boss is breaking the law, and you don't do anything about it, you're a coward.
- gadders 12y ago
  And thinks that Thomas Piketty is talking rubbish. So he has that in his favour.
- genericresponse 12y ago
  How is this relevant to the conversation? How is this a positive contribution to the dialog? How is this meaningful towards the essay about Andreesen?
  - geomark 12y ago
    I would say that it might shed some light on Adreesen's view of the world. Snowden is a very polarizing figure and which side of the Snowden issue one agrees with says a lot about a person.
jeffreyrogers 12y ago
Here is a more critical (and much shorter) viewpoint from the New York Times: http://www.nytimes.com/2015/05/03/upshot/andreessen-horowitz-dealmaker-to-the-stars-of-silicon-valley.html http://www.nytimes.com/2015/05/03/upshot/andreessen-horowitz...
mathattack 12y ago
Given how prolific he is on Twitter [0] I'm curious if he writes his own tweets. [0] https://twitter.com/pmarca https://twitter.com/pmarca
tdees40 12y ago
One day we'll all laugh at sentences like: "Disrupt to differentiate by becoming a dream-execution machine."
- jmngomes 12y ago
  I think a lot people already do...
7_7 12y ago
I don't like it. This article looks to me like an ad piece. It has very little substance. There is something bothering me in this article and the "startup culture" in general. Everyone thinks they make the world a better place. Silicon Valley's (the TV series) satire is spot on this. No matter what half brain dead app someone creates, it's supposed to revolutionize and "disrupt" some meaningless aspect of our lives. Of course technology helps the man overcome many problems, be smarter, healthier etc. But it is no panacea. We have the technology of the 21st century with the education of 1500 as to what to do with it. So everyone is making apps for cats or creates a temporary and indivudual-based solution for "problems" that we shouldn't have all along (creating additional problems). This is a huge waste of potential. If you really want to make the world a better place focus on the things that matter. At the very least be honest with what you are doing. Someone wants to make money and that's fine. The probability that the the world will benefit from it is most of the times incidental. In some weird way am glad this was on HN. </rant>
- te_chris 12y ago
  I know what you mean, this excerpt in particular makes him seem like someone with a very bitter inferiority complex: "So he later saw Amazon as a heroic disseminator of knowledge and progress. “Screw the independent bookstores,” he told me. “There weren’t any near where I grew up. There were only ones in college towns. The rest of us could go pound sand.”" I understand his point, but it seems more like 'I didn't get what I want so fuck you all' rather than something actually productive.
  - lkbm 12y ago
    In his experience, independent bookstores only serve a subset of the population. Amazon serves all the population. If ever there was a good reason to favor Amazon, this seems like one.
- larrys 12y ago
  "This is a huge waste of potential." That is the point that is often lost. I think this everytime I see someone who actually went to school and has a degree in something "serious" (with job security) throwing that away to do a startup idea. Shark Tank even had this. Robert Herjavec egging on a "board certified dental surgeon" to leave his career (was on "Beyond the Tank") to be able to sell (what started out as) Christmas sweaters. [1] The Dentist making a point that it was a tough decision because he had spent 10 difficult years going through Dental school and other training. [1] http://www.businessinsider.com/tipsy-elves-shark-tank-success-story-2014-12 http://www.businessinsider.com/tipsy-elves-shark-tank-succes...
jgalt212 12y ago
Has A16Z made a non-Series A investment in the last three years that didn't require perfect execution and everything to break right for them to come out ahead?
ThomPete 12y ago
I am all for being a techno optimist but Marc comes of as someone who haven't really understood the problems that he is helping create which is sad because he is influential enough for it to matter.
- look_lookatme 12y ago
  Can you articulate what the "problems that he is helping create" are?
- dylanjermiah 12y ago
  Specifically what problems is he helping create? Why are these problems bad?
- stevenh 12y ago
  I'm not sure which problems you are referring to, but one problem made worse by two of the sites he is involved with is freebooting. Sites like Facebook and Imgur profit off of the value of original content created by third parties in the hopes that most of the value will be squeezed out of it before the creator notices or has a chance to send a DMCA takedown notice. I increasingly stumble across complaints from artists whose videos will have as few as 150 views on YouTube, while the pirated copies that someone uploaded directly to Facebook (with all of the true creator's information removed) have millions of views. One person I directly contacted was a woman named Leslie Hall, whose stolen video on Facebook had over 20 million views, which is more than twice as many views as all of her YouTube videos combined. She has been uploading videos to YouTube for nearly a decade in her struggle to make a name for herself, and when she finally got some attention, it was in a corrupted form where no one knew her name or how to find more of her videos (other than the 0.02% of people who bothered to use Google-fu on the lyrics to find the answer). She also lost tens of thousands of dollars in YouTube Partnership ad revenue, de facto stolen from her by Facebook. The comments section was full of people who loved her, but they all had no idea who she was. Since Facebook refuses to do the ethical bare minimum and swap freebooted viral content with a link to the original creator's true source, all she succeeded in doing was to send a DMCA takedown notice and get the Facebook video page deleted, destroying all of the organic momentum that was pushing in her favor. This problem will naturally become much worse now that Facebook has tweaked their algorithms to heavily favor the spread of videos directly uploaded to Facebook, while punishing external links to YouTube by automatically preventing them from becoming as popular. Imgur has a similar problem which is especially damaging to webcomic artists. It is such a destructive problem that even /r/funny on reddit has banned the practice of sharing links to rehosted webcomics. Imgur, however, is still perfectly happy to do it. Every day you can find multiple webcomics on Imgur's front page containing an album of half of a webcomic artist's life's work, usually without any link to the creator's actual website. This pirated copy gains millions of views, and the artist is left with nothing to show for it, not even a page hit. All of those millions of views represent potential fans who perhaps would have liked to buy a book from the artist or some other merchandise, and the artist would have been able to pay the rent for another year. Instead, all of that money goes to Imgur ad revenue and T-shirt sales. Imgur also passively gets all the cognitive goodwill from their users who mistakenly associate the pleasure of reading the stolen comics with Imgur, rather than with the artist where it belongs. Most artists I inform of this theft are incredibly sad about it but have already reached the stage where they feel utterly defeated and helpless. I feel that some sort of reform is needed to compel large sites to implement something similar to the Content ID system on YouTube, or at least require due diligence in finding the true creator and 302 redirecting the link of the stolen copy to the true source.
meritt 12y ago
This is a good parallel to "The Hard Thing About Hard Things" by Ben Horowitz. Covers a lot of the same material but gives more background on Marc.
js2 12y ago
Another profile of Marc from August 2000: http://archive.wired.com/wired/archive/8.08/loudcloud_pr.html http://archive.wired.com/wired/archive/8.08/loudcloud_pr.htm... For those who don't know the outcome of Loudcloud, it would eventually sell the managed services business to EDS and rebrand the software portion of the business as Opsware. Opsware would later be acquired by HP. HP would later acquire EDS.
otoburb 12y ago
>>One partner suggested that LearnUp was a “ten on thirty”—ten million dollars should buy a third of the company, which would then be valued at forty million. “It’s more like ten on fifteen or twenty,” Horowitz said, cutting the company’s value in half. “Or six on twelve,” Andreessen said, whittling it further. Soon after the meeting, Ringwald turned LearnUp into an enterprise company. Can somebody help explain how these calculations work according specifically to the article? The numbers make no sense to me if I use the article's explanation of this VC verbal shorthand. "Ten on thirty" gives a $40M valuation? How? And how does "ten on fifteen" halve the valuation - according to the article paragraph above, wouldn't that double the valuation by investing $10M for just 15%, instead of 30%-33% equity stake? EDIT: Thank you for the replies. I appreciate the responses.
- tinkerrr 12y ago
  Ten on Thirty means $10M invested in a company currently being valued at $30M (before their investment, or pre-money valuation), so the whole company is valued at $30M + $10M = $40M after the investment. Ten on Fifteen/Twenty means $10M invested in a company currently being valued at $15M/$20M, so the valuation after the investment would be $25M/$30M.
- an4rchy 12y ago
  Basing it on the statement from the article this is how I read it: 10/30 gives 33%(1/3rd) at a valuation of 40 million 10 + 30 = 40 So $40 million valuation for $10 million investment which gives them 33% of the company. 10/15 would imply 33%(1/3) at a valuation of 10+15 = 25 $25 million dollars is close to $20 million which is half of the original $40 million. Marc's 6/12 implies 6 million investment at 18 million valuation for 50% of the company.
  - otoburb 12y ago
    I mistakenly thought that the second number was a rough equity stake; that the second number was the current valuation should have crossed my mind but didn't. Makes much more sense now. Thanks!
  - CPLX 12y ago
graycat 12y ago
The article does seem to have a good description of how Silicon Valley venture capital thinks and works. Of course, again, on average the venture firms have poor ROI: http://www.kauffman.org/newsroom/2012/07/institutional-limited-partners-must-accept-blame-for-poor-longterm-returns-from-venture-capital-says-new-kauffman-report http://www.kauffman.org/newsroom/2012/07/institutional-limit... http://www.avc.com/a_vc/2013/02/venture-capital-returns.html#disqus_thread http://www.avc.com/a_vc/2013/02/venture-capital-returns.html... Yes, apparently the Silicon Valley information technology (IT) venture firms are trying to evaluate everything that comes in the door having to do with IT. There's a problem doing this: By analogy, it's like picking dart throwers. Only a tiny fraction of the dart throwers are actually experts, and the rest are amateurs throwing wildly. But, there are so few experts and so many more amateurs that, on average, nearly all the darts in the center of the target come from lucky amateurs and not real experts. So, net, the Silicon Valley is trying to evaluate the huge fraction of amateurs that mostly need just luck. Much better would be to concentrate on the few real experts who need much less in luck. "Few"? Right, but so is the number of desired successes, and the number of real experts should be sufficient. Then, with the article, we come to a significant point: The Silicon Valley venture capital (VC) firms just do not know how to plan, do, and evaluate projects from real experts. Some people do know: The shortest description of project planning is: Step 1: Pick a good problem. Step 2: Use IT to get a good solution. So, sure, in Step 1 want to solve a suitably important problem, one where the first good or a much better solution will be a must have and not just a nice to have for enough people so that the number of people times the average earnings per person is enough to make a real unicorn. Or, in crude, simple terms, maybe want a must have solution for a big ass problem in a big ass market. Sure, the ideal situation, although likely not in IT, would be a safe, effective, inexpensive one pill taken once cure for any cancer. Such a project would just "cut right through" (borrowing from the movie Moneyball) all the nonsense about body language, vision to change the world, how to manage 100, 1000, 10,000 people, hard scrabble backgrounds, tone of voice, assertive manner, clothes selections, etc. And, sure, in Step 2 want to use IT to get the "first good or much better solution", defensible, with barriers to entry, etc. So, from the article, apparently Silicon Valley VCs don't know how to evaluate projects that follow the two steps above. Does anyone know how to do such evaluations? Sure: For Step 1, that the problem being solved is suitably important should, like the example of the cancer pill, be obvious. Right, here get to rule out considering projects such as Fab, PopSugar, Zulily, SnapChat, AirBnb. So, what's left is Step 2, and evaluating that is mostly just technical. While apparently Silicon Valley is next to hopeless at evaluating new, powerful technology, our better research universities, NSF, NIH, DARPA, etc. are quite good, thank you. So, an example of a project with really good technology? Sure: http://iliketowastemytime.com/sites/default/files/sr71_blackbird_leaking_fuel_cell19.jpg http://iliketowastemytime.com/sites/default/files/sr71_black... Sorry, Marc: On my BoD I want -- it's crucial and I insist -- people who can understand my business, including the crucial core, unique IT, and for that, Marc, I want to know what you did in your STEM field Ph.D. program and have done in research since. E.g., I want people like the dissertation advisors in STEM fields in top research universities and problem sponsors at NSF, NIH, DARPA. How many Silicon Valley VCs do you know who qualify? I want people like those who looked at Kelly Johnson's engineering drawings and approved the SR-71; Marc, their batting average is much better than yours or nearly any VC (Chris Sacca may be on the way to being the only exception), and they fund just off pieces of paper. Marc, from the article your evaluations look like you would have asked Kelly Johnson if his SR-71 could also fly to Mars and refuse to fund him unless he enthusiastically said "Mars? Yes, and to infinity and beyond!" or some such nonsense. Look, Marc, it was Mach 3+, 80,000+ feet, 2000+ miles without refueling, never shot down -- as needed, as planned, as accomplished. Marc, in simple terms, in IT, you just do not know very well what you are doing; on my BoD, can't use you; your wildly irrational flights of nonsense could sink my company.
jmduke 12y ago
One morning, as I sat down to breakfast with Andreessen, a rival V.C. sent me a long e-mail about a16z’s holdings. The V.C. estimated that because Andreessen’s firm had taken so many growth positions, its average ownership stake was roughly 7.5 per cent (it’s eight per cent), which meant that to get 5x to 10x across its four funds “you would need your aggregate portfolio to be worth $240-$480B!” You would, in other words, need to invest in every Facebook and Uber that came along. When I started to check the math with Andreessen, he made a jerking-off motion and said “Blah-blah-blah. We have all the models—we’re elephant hunting, going after big game!” Uh, is there a more robust/cogent thought that explains this?
- Estragon 12y ago
  I don't think there needs to be... after all, he cites LBJ as a role model, and LBJ was known to give similar responses to hard questions. https://www.google.com/search?q=lbj%20substantial%20organ&oq=lbj%20substantial%20organ https://www.google.com/search?q=lbj%20substantial%20organ&oq...
- vasilipupkin 12y ago
  I think I'll take a stab at this. Suppose you do need the aggregate to be worth around 400 billion to deliver decent returns. If Andreesen Horowitz catches the next 2 Facebooks ( worth 200 billion each ) over the next 10-15 years and loses money on every single other deal ( an extremely pessimistic assumption ), they can deliver it. Is this a guaranteed outcome? No, but it certainly seems reasonable / plausible
  - presty 12y ago
    > Suppose you do need the aggregate to be worth around 400 billion to deliver decent returns. If Andreesen Horowitz catches the next 2 Facebooks ( worth 200 billion each ) over the next 10-15 years and loses money on every single other deal ( an extremely pessimistic assumption ), they can deliver it. your assumption is that A16Z would own 100% of those 2 next Facebooks... which I don't think I need to point out how wrong that is (sorry, I just did) let's assume something more realistic, like a16z getting 20% of each 200B company that appears - they would need to invest on the next TEN Facebooks (at an earliesh stage), and that seems a bit harder. and let's not forget that most "unicorns" don't even go past the 10B when IPOing, so in reality, they need a lot more than 10 FBs...
burnte 12y ago
I think you've more than earned your pay for this comment. Excellent astroturf, A+. Would turf again.
- dang 12y ago
  > Excellent astroturf, A+. Would turf again. Accusing a fellow commenter of astroturfing is not allowed on Hacker News. Please don't do this or any other kind of personal attack here. It's sad that comments that offer nothing but generic dismissals and teardowns automatically get upvoted, while an enthusiastic—and more substantive, agree with it or not—comment gets accused of being a paid fraud. Edit: I've detached this subthread from its original parent (https://news.ycombinator.com/item?id=9523498 https://news.ycombinator.com/item?id=9523498) and marked it off-topic.
  - burnte 12y ago
    Stating that I feel a comment is astroturf is not a personal attack. It may be against the rules, and I will refrain from as such, but it is most certainly not a personal attack, it is a statement that I feel the _comment_ is disingenuous, and I said so in a light-hearted manner at that. The comment seemed over the top in its praise, and was not a teardown at all. Further, I see nothing in the rules about calling out astroturf, the closest I saw was about being civil, which I most certainly was. I pointed out the comment felt like astroturfing, and said absolutely nothing impolite, rude, or even slightly uncivil. I'm sorry you saw it otherwise. It was meant to be a lighthearded poke, hence the ebay-style comment at the end.
    - dang 12y ago
      I believe you that you didn't mean it that way, but that's a sign of how easy it is to convey things you don't mean, such as that a person is deliberately lying and being paid for it. The negative effect of a comment like that is probably a hundred times greater than the maximum one would ever imagine when posting it. And it only takes a few to poison the discourse. The biggest problem with trying to hold this site to the HN guidelines is that most violations are unintentional. Obvious trolling is easier to deal with. If you're curious about our reasoning re astroturfing, follow the links back from https://news.ycombinator.com/item?id=9277068 https://news.ycombinator.com/item?id=9277068. I've posted about it quite a bit.
lukasm 12y ago
"Apple and Microsoft got started with venture money;" Microsoft is bootstrapped
- presty 12y ago
  http://www.quora.com/How-much-venture-capital-did-Microsoft-raise?share=1 http://www.quora.com/How-much-venture-capital-did-Microsoft-...
  - lukasm 12y ago
    Not true.
oneiric 12y ago
"The toilet in the powder room is so visionary, and the surrounding dimmer lights so flattering, that I had to study it for some time to figure out how it flushed." What is this toilet???
- jodrellblank 12y ago
  What is this toilet??? I'll take "stupid" and "badly designed" for $1.
deleted 12y ago
[deleted]

281 points by cpeterso 12y ago

This is completely off-topic but I find it so hard to convince myself to read a 14,000 word (or any other long-form) article anymore. At least the New Yorker doesn't try to maximise ad revenue by splitting this across 25 pages.

mcmullen 12y ago
Especially ones that probably won't leave me feeling like I know anything more about the world after finishing. I look forward to the brief HN user summaries over the coming hours.
M8 12y ago
I doubt the subj man himself would read it. Would probably ask an assistant to summarize. PS: maybe authors are paid per word?
sixQuarks 12y ago
I don't mind reading long-form content, it's just that I can't do it on a computer or mobile. Give me a beach chair and a magazine, and I'll gladly read the whole thing. Computer, just can't do it.
- pibefision 12y ago
  Me too. I'm sending it to my Kindle, it's great to read this types of articles.
- mng2 12y ago
  Yeah, my hard copy is probably going to show up Wednesday or Thursday. Sometimes I wish the discussion on New Yorker articles would get delayed a week.
- rodgerd 12y ago
  I hear that. I subscribe to the paper versions of some magazines in preference to their online versions precisely so I can read them story at a time over breakfast and pass them around the family.
igravious 12y ago
I was plo/ugh|w/ing through it until I noticed the size of the scroll-bar nubbin relative to the length of the scroll-bar itself and thought, "uh oh" to myself. Little later had to bail when there wasn't enough meat to chew on. So no full summary here: partial summary is -- a16z and their ilk make Silicon Valley tick, Andreesen is a foul-mouthed visionary, Horowitz is less interesting, together they make a good team. Don't mean to come across as glib. I enjoyed what I read and it's up to the New Yorker's typical standards.
- deleted 12y ago
  [deleted]
nodata 12y ago
kondro stood there facing towards us with his john lennon style glasses that looked like he had recently been to a high-end designer shop. the glasses had black thin rims as he surveyed his audience with friendly blah blah blah Too much detail. The New Yorker should produce a tl;dr version like The Economist does (http://www.economist.com/blogs/newsbook/2014/11/economist-espresso http://www.economist.com/blogs/newsbook/2014/11/economist-es...)
- chetanahuja 12y ago
  Heh... Exactly. Too much "atmosphere". Too much repetition of that "one page on a specific person's story and one page on the systematic social trend this person's story illustrates" is now gone beyond slightly annoying to the point of tediousness. Newyorker is pretty much cartoons and the small one page or less articles for me now. I'll make exceptions for Anthony Lane's movie reviews and occasional longer form articles. And anything with Malcom Gladwell's name just makes me angry at this point.
- po 12y ago
  Maybe you're not their target audience? I think the New Yorker is geared toward people who like the process of reading and enjoy when the author paints a picture in their mind. If you just want the tl;dr version, then there's other places to go. I think it's nice that they reach a different kind of audience.
- smacktoward 12y ago
  Telling the New Yorker that they should produce TL;DR versions of their work is like telling Thomas Keller that the French Laundry should serve Soylent.
- Nimitz14 12y ago
  had no idea this existed although i have a subscription, thanks!
pietro 12y ago
I've never finished an article in the New Yorker, not because of their length, but because of their lack on content relative to said length. It's all decorum and posturing.
mw67 12y ago
Copy the text into a text reader (such as Voice Dream), and listen to it
Estragon 12y ago
I took the advice elsewhere in the thread to read the last 1/3rd of the article. It seemed pretty good.

joaorico 12y ago

His old blog is no longer online, but someone collected it here. Very much worth reading: http://pmarchive.com/ http://pmarchive.com/ edit: Ah, it was published as an ebook as well this January: http://a16z.com/2015/01/09/pmarca-blog-ebook/ http://a16z.com/2015/01/09/pmarca-blog-ebook/ His current blog: http://blog.pmarca.com/archive/ http://blog.pmarca.com/archive/

keithwhor 12y ago

tl;dr: Andreessen makes bets on technology x people. The tech has to be provocative and world-changing, but more importantly, the people behind the tech have to be thoughtful, bold and unique in their worldview. Interesting points: - A16z makes bets on consumer tech in later rounds (more risk earlier, increased cost later worth the more sure bet) - i.e. Oculus - Invests in enterprise tech earlier (less risk of a fickle consumer / competition) - What's better than telling investors (or at least a16z) what they want to hear is providing them with insight as to why their assumptions might be wrong and you have better answers (phrased here as "It’s a delight when they look at you with contempt—You idiot—and then walk you through the idea maze and explain why your idea won’t work.") Read the article, you won't regret it. Some of my favorite excerpts: [1] In 1996, when Horowitz was a Netscape product manager, he wrote a note to Andreessen, accusing him of prematurely revealing the company’s new strategy to a reporter. Andreessen wrote back to say that it would be Horowitz’s fault if the company failed: “Next time do the fucking interview yourself. Fuck you.” Ordinarily, relationship over. “When he feels disrespected, Marc can cut you out of his life like a cancer,” one of Andreessen’s close friends said. “But Ben and Marc fight like cats and dogs, then forget about it.” [2] A16z led Airbnb’s B round. Soon afterward, the company was battered by headlines about renters who trashed a San Francisco home. It wasn’t axe murders, but, Chesky said, “It was a P.R. nightmare. We had just expanded from being ten people living in a three-bedroom apartment and we had no idea how to be a billion-dollar company. Marc came to our office at midnight and read the letter I’d written to our community about the Airbnb Guarantee, and the two changes he made changed the company forever. I’d said we guarantee five thousand dollars for property damage, and he added a zero, which seemed crazy.” Andreessen also added the proviso that claimants would have to file a police report, which he correctly believed would discourage scam artists. “And he told me to add my personal e-mail address. He gave us permission to be bold.” [3] A favorite Andreessen response to underlings’ confusion was “There are no stupid questions, only stupid people.” Jim Barksdale, the company’s C.E.O., said, “I’d tell Marc after meetings, ‘You don’t have to tell a dumb sumbitch he’s a dumb sumbitch.’ ” Andreessen told me, “I needed Netscape to work, it had to work—it was my one-way door—so I was absolutely intolerant of anything that got in the way”—meaning, he clarified, “people.” He could never relax: “I am very paranoid. And the down cycle hurt a lot more than the up cycle felt good.” [4] [...] Peter Thiel suggests, is that Andreessen may not be as suited to making early, counterintuitive investments as he is—a point that Andreessen concedes: “Peter is just smarter than I am, and in a lateral way.” But, Thiel says, Andreessen is well positioned, because of his broad knowledge and flexible mind-set, to respond to incremental changes in an array of fields. And that, he argues, is what the times reward: “While Twitter is a lesser innovation than flying cars, it’s a much more valuable business. We live in a financial age, not a technological age.” [5] One challenge for Andreessen is whether venture itself has a skills problem. If software is truly eating the world, wouldn’t venture capital be on the menu? The AngelList platform now allows investors to fund startups online. Its co-founder Naval Ravikant said that “future companies will require more two-hundred-thousand-dollar checks and way fewer guys on Sand Hill Road.” Jeff Fagnan, of Atlas Venture, which is the largest investor in AngelList, said, “Software is already squeezing out other intermediaries—travel agents, financial advisers—and, at the end of the day, V.C.s are intermediaries. We’re all just selling cash.” Andreessen sometimes wonders if Ravikant is onto something. He’s asked Horowitz, “What if we’re the most evolved dinosaur, and Naval is a bird?” Already, more than half the tech companies that reached a billion-dollar valuation in the past decade were based outside Silicon Valley. And as Andreessen himself wrote in 2007, before he became a V.C., “Odds are, nothing your V.C. does, no matter how helpful or well-intentioned, is going to tip the balance between success and failure.” [6] He acknowledged, though, that his optimism dims once human beings—with their illogic, hidden agendas, and sheer bugginess—enter the equation. “We’re imperfect people pursuing perfect ideas, and there’s tremendous frustration in the gap,” he said. “Writing code, one or two people, that’s the Platonic ideal. But when you want to impact the world you need one hundred people, then one thousand, then ten thousand—and people have all these people issues.” He examined the problem in silence. “A world of just computers wouldn’t work,” he concluded wistfully. “But a world of just people could certainly be improved.”

julianpye 12y ago

Most people think that creating innovative products relies on 'trend-spotting' and on reacting quickly to demands. But that is reactive. You can have a much bigger impact if you're willing to shape the future. This is why Doug Leone quoted is wrong when he refers to the PC and the iPhone as black swans, because they were not. They were products attempting to shape the future. Marc has an uncanny talent at detecting what startup may shape the future and creating a set of financial tools to ensure that market acceptance can happen. This talent is what makes A16Z so amazing - they are so different from the average bean-counting VCs, whose sets of tools are focused on financial exits and powerplays inside boards.

mstade 12y ago
Out of interest, do you base this on external observation or any first-hand experience working with A16Z?
normloman 12y ago
Yeah but history is littered with products that failed at shaping the future (Apple Newton, Web TV, Early VR headsets). The black swan part is that few could have predicted the iPhone or the PC would succeed.
- cookiecaper 12y ago
  The funny thing about all the products you listed is that later iterations of these concepts have made (or are now about to make, in the case of VR) major impacts. Perhaps part of the reason these products failed to "shape the future" was because they didn't have the business and financial backing that can be offered by firms like Andreessen-Horowitz.
  - normloman 12y ago
    Na, they did. It's more about timing. And it takes some luck to get the timing right.

numair 12y ago

This is incredibly thorough, honest and entertaining. The writer has done an excellent job. Andreesen's candid comments about Gurley/Benchmark are hilarious. The whole bit about his rural upbringing influencing his full-on embrace of a tech-utopian future is something I could fully understand; whenever I hate our industry, I go spend some time in a beautiful rural environment until I remember why it's so frustrating. I'm glad the writer explained the influence of Mike Ovitz and the CAA culture on how A16Z operates. One of my closest friends was an agent at CAA in the late 90s, and we used to spend a lot of time talking about their operating strategy. CAA took over the entertainment agent world by being more resourceful, cultured, helpful and -- most importantly -- way more professional than everyone else (I was told a great story of how Donald Trump, while searching for an agent during the time of The Apprentice, took a meeting with CAA; upon entering and finding a conference table of perfectly suited, perfectly punctual agents waiting for him, he exclaimed, "you're all hired!"). I'd be interested to compare an old-school CAA client pitch with a modern A16Z startup meeting. I also think the rest of the Valley and its VCs don't understand the CAA way, and why it is so superior to their golf-club way of doing business. The behind-the-scenes look at Instacart's latest funding round was really interesting. Understanding the psychology that leads to massive funding rounds -- and how you're either getting bid up by each partner in the after-pitch conversation, or bid down until they don't want to participate -- is something that doesn't get much public visibility. Again, such an honest look at the inner workings of Andreesen and his colleagues. Andreesen is, quite clearly, at the top of the game in the VC business. His success is well deserved. I am sure everyone in SV will be talking about this article this week. This article is of great service to everyone who isn't deep in the SV game, but who wants to understand how it works (or should work).

foobarqux 12y ago
> Andreesen is, quite clearly, at the top of the game in the VC business. Shouldn't his returns have some bearing?
littletimmy 12y ago
Just curious: what do you find "frustrating" in a beautiful rural environment?
12y ago

ghshephard 12y ago

This was an absolutely wonderful, and really accurate insight into not only Marc, but the business of VC. Getting to go behind the doors, and sit in on the conversations the GPs were having regarding the valuation of instacart alone made the article worth reading. It clocked in at 13,500 words, and I couldn't tear myself away from it. I don't think I was tempted, for even a second to divert my attention. Highly recommended.

olalonde 12y ago

> And that Benchmark’s best-known V.C., the six-feet-eight Bill Gurley, another outspoken giant with a large Twitter following, advised Horowitz to cut Andreessen and his six-million-dollar investment out of the company. Andreessen said, “I can’t stand him. If you’ve seen ‘Seinfeld,’ Bill Gurley is my Newman”—Jerry’s bête noire. Sheds some light on http://pmarchive.com/guide_to_startups_part9.html http://pmarchive.com/guide_to_startups_part9.html

Fede_V 12y ago

It's kind of ironic that Marc Andreessen dismissed the New Yorker several times in the past as an 'elitist east coast literary magazine' yet this profile is absolutely fantastic, and very generous as well. I'd be curious to hear what he thinks of it! I also wish the article touched on Andreessen's thoughts about publicly financed science. Basic scientific research is something that the government puts a lot of money in too, and that should be robustly defended.

dunkelheit 12y ago

Most of the article reads like a pr piece sugar-coating Marc and a16z, and the part about his wife is unapologetic celebrity gossip :). I also doubt that depictions of the workings of VC firms from this article should be taken at face value. To be fair, the author tries to ask some adversarial questions towards the end of the article, but for example Alex Payne's criticism (link: https://al3x.net/2014/06/17/dear-marc-andreessen.html https://al3x.net/2014/06/17/dear-marc-andreessen.html) is dismissed with a casual ad-hominem attack. The vision Marc presents for blue-collar workers (work a lot and be poor or work when you feel like it and be very poor) is hardly enticing. The future he is envisioning is one of extreme inequality, with a handful of people controlling most of the advanced technology that keeps the world running. And a16z clearly want to be among these people.

leoc 12y ago
> Most of the article reads like a pr piece sugar-coating Marc and a16z This really isn't so. The whole article is peppered with jabs at Andreesen's personality, skill-set, track record, self-awareness and skull shape. And when the writer reports Andreesen blowing off Payne as “a self-hating software engineer”, he didn't do that to make Andreesen look good or sound persuasive.
WaltPurvis 12y ago
> Most of the article reads like a pr piece sugar-coating Marc and a16z Seriously? I thought the article portrayed Andreessen as an egotistical blowhard and kind of an all-around prick, with questionable skills as a visionary and investor; it certainly didn't strike me as an encomium.
dang 12y ago
> The vision Marc presents for blue-collar workers (work a lot and be poor or work when you feel like it and be very poor) Where does he present that? I don't think he did. I really don't think that the article is a PR piece. It has to be one of the most substantial articles about VC investing to have appeared in the non-technical press for years, and it's a complex profile. It may not be accurate (I wouldn't know), but is far from all sugar, and dismissing it with an offhand swipe seems unproductive.

downandout 12y ago

It's interesting that he says that they want to shape the future - like all VC's - and yet many of their portfolio companies [1] do no such thing. Do ShoeDazzle and Fab really "shape the future"? There are lots of companies on that page that, based on the description of his thought process, he shouldn't have written checks to. [1] http://a16z.com/portfolio/ http://a16z.com/portfolio/

_delirium 12y ago
The article briefly touches on that incongruence (i.e. that despite Andreessen's techno-visionary rhetoric, much of his firm's portfolio looks like fairly typical tech companies): even as you philosophize about ushering in a new age of democracy, you also have to make money for your L.P.s. And, while the ideal startup advances both goals, most, in truth, advance neither. The V.C. Bryce Roberts told me, “It’s an ego game, where you want to believe you’re changing the world. But how can you write a check to Fab and believe that giving people discounted tchotchkes is changing the world?” The article then changes topic and doesn't really discuss that further though.
- jkestner 12y ago
  “It’s an ego game, where you want to believe you’re changing the world. But how can you write a check to Fab and believe that giving people discounted tchotchkes is changing the world?” I don't feel that the article succumbed too much to that rhetoric, unlike most media both closer and further from the tech industry. But in an article with supposedly real talk from VCs, Bryce's is the realest. Should've also pushed harder against the "push a button to work" Uber-utopia.
- vasilipupkin 12y ago
  I think the binary thinking here is quite a bit simplistic. Think of "changing the world" not as a zero or 1 proposition but as a continuum. Some companies/products change the world for the better by 0.98 and some other ones only by 0.02. That doesn't mean you shouldn't fund the 0.02s. Because a lot of 0.02 in aggregate change the world by a lot.

dylanjermiah 12y ago

On the topic of A16Z v. Benchmark, especially from 09 onwards Benchmark has done ridiculously well. Early on Uber(a, b + c), Snapchat (a + b), Instagram (a + b), Dropbox (b), Nextdoor (a, b + c), Hortonworks (a, b), Zendesk (b, c + d), New Relic (a, b + c) and Twitter (c + d). I'm sure I'm missing a few as well. I'd love for the fund data to be available!

fredwilson 12y ago
Benchmark has been on a tear in VC not seen since KP did it in the mid/late 90s. they are absolutely the best in the business right now
- deleted 12y ago
  [deleted]
eeho 12y ago
wow. I love pmarca's Jerry:Newman comparison, but with Gurley's portfolio as impressive as it is, maybe George Costanza:Lloyd Braun is the better Seinfeld analogy

alexandersingh 12y ago

Marc, you grow an excellent beard.

marincounty 12y ago

"She told me that Andreessen satisfied most of the criteria on her checklist: he was a genius, he was a coder, he was funny, and he was bald. (“I find it incredibly sexy to see the encasement of a cerebrum,” she explained.) For his part, Andreessen felt that “she was spectacular! My biggest concern was that she wanted to live a jet-set life.” In one of the seventeen e-mails he sent her the next day, he asked, “What’s your ideal evening?” She responded, “Stay home, do e-mail, make an omelette, watch TV, take a bath, go to bed.” This is a bit much? I do wish the down to earth couple well! That's the one positive about being broke; you never need to second quess their motives?

cyphunk 12y ago

Just a reminder that this is the same guy that calls snowden a traitor

mk00 12y ago
Just a reminder that not everyone agrees with you
- CyberDildonics 12y ago
  Well it was in writing so I'm not sure what more you want, it isn't really an subjective thing.
- knice 12y ago
  [And on video](http://www.cnbc.com/id/101733893 http://www.cnbc.com/id/101733893)
- elchief 12y ago
  If your boss is breaking the law, and you don't do anything about it, you're a coward.
gadders 12y ago
And thinks that Thomas Piketty is talking rubbish. So he has that in his favour.
genericresponse 12y ago
How is this relevant to the conversation? How is this a positive contribution to the dialog? How is this meaningful towards the essay about Andreesen?
- geomark 12y ago
  I would say that it might shed some light on Adreesen's view of the world. Snowden is a very polarizing figure and which side of the Snowden issue one agrees with says a lot about a person.

jeffreyrogers 12y ago

Here is a more critical (and much shorter) viewpoint from the New York Times: http://www.nytimes.com/2015/05/03/upshot/andreessen-horowitz-dealmaker-to-the-stars-of-silicon-valley.html http://www.nytimes.com/2015/05/03/upshot/andreessen-horowitz...

mathattack 12y ago

Given how prolific he is on Twitter [0] I'm curious if he writes his own tweets. [0] https://twitter.com/pmarca https://twitter.com/pmarca

tdees40 12y ago

One day we'll all laugh at sentences like: "Disrupt to differentiate by becoming a dream-execution machine."

jmngomes 12y ago
I think a lot people already do...

7_7 12y ago

I don't like it. This article looks to me like an ad piece. It has very little substance. There is something bothering me in this article and the "startup culture" in general. Everyone thinks they make the world a better place. Silicon Valley's (the TV series) satire is spot on this. No matter what half brain dead app someone creates, it's supposed to revolutionize and "disrupt" some meaningless aspect of our lives. Of course technology helps the man overcome many problems, be smarter, healthier etc. But it is no panacea. We have the technology of the 21st century with the education of 1500 as to what to do with it. So everyone is making apps for cats or creates a temporary and indivudual-based solution for "problems" that we shouldn't have all along (creating additional problems). This is a huge waste of potential. If you really want to make the world a better place focus on the things that matter. At the very least be honest with what you are doing. Someone wants to make money and that's fine. The probability that the the world will benefit from it is most of the times incidental. In some weird way am glad this was on HN. </rant>

te_chris 12y ago
I know what you mean, this excerpt in particular makes him seem like someone with a very bitter inferiority complex: "So he later saw Amazon as a heroic disseminator of knowledge and progress. “Screw the independent bookstores,” he told me. “There weren’t any near where I grew up. There were only ones in college towns. The rest of us could go pound sand.”" I understand his point, but it seems more like 'I didn't get what I want so fuck you all' rather than something actually productive.
- lkbm 12y ago
  In his experience, independent bookstores only serve a subset of the population. Amazon serves all the population. If ever there was a good reason to favor Amazon, this seems like one.
larrys 12y ago
"This is a huge waste of potential." That is the point that is often lost. I think this everytime I see someone who actually went to school and has a degree in something "serious" (with job security) throwing that away to do a startup idea. Shark Tank even had this. Robert Herjavec egging on a "board certified dental surgeon" to leave his career (was on "Beyond the Tank") to be able to sell (what started out as) Christmas sweaters. [1] The Dentist making a point that it was a tough decision because he had spent 10 difficult years going through Dental school and other training. [1] http://www.businessinsider.com/tipsy-elves-shark-tank-success-story-2014-12 http://www.businessinsider.com/tipsy-elves-shark-tank-succes...

jgalt212 12y ago

Has A16Z made a non-Series A investment in the last three years that didn't require perfect execution and everything to break right for them to come out ahead?

ThomPete 12y ago

I am all for being a techno optimist but Marc comes of as someone who haven't really understood the problems that he is helping create which is sad because he is influential enough for it to matter.

look_lookatme 12y ago
Can you articulate what the "problems that he is helping create" are?
dylanjermiah 12y ago
Specifically what problems is he helping create? Why are these problems bad?
stevenh 12y ago
I'm not sure which problems you are referring to, but one problem made worse by two of the sites he is involved with is freebooting. Sites like Facebook and Imgur profit off of the value of original content created by third parties in the hopes that most of the value will be squeezed out of it before the creator notices or has a chance to send a DMCA takedown notice. I increasingly stumble across complaints from artists whose videos will have as few as 150 views on YouTube, while the pirated copies that someone uploaded directly to Facebook (with all of the true creator's information removed) have millions of views. One person I directly contacted was a woman named Leslie Hall, whose stolen video on Facebook had over 20 million views, which is more than twice as many views as all of her YouTube videos combined. She has been uploading videos to YouTube for nearly a decade in her struggle to make a name for herself, and when she finally got some attention, it was in a corrupted form where no one knew her name or how to find more of her videos (other than the 0.02% of people who bothered to use Google-fu on the lyrics to find the answer). She also lost tens of thousands of dollars in YouTube Partnership ad revenue, de facto stolen from her by Facebook. The comments section was full of people who loved her, but they all had no idea who she was. Since Facebook refuses to do the ethical bare minimum and swap freebooted viral content with a link to the original creator's true source, all she succeeded in doing was to send a DMCA takedown notice and get the Facebook video page deleted, destroying all of the organic momentum that was pushing in her favor. This problem will naturally become much worse now that Facebook has tweaked their algorithms to heavily favor the spread of videos directly uploaded to Facebook, while punishing external links to YouTube by automatically preventing them from becoming as popular. Imgur has a similar problem which is especially damaging to webcomic artists. It is such a destructive problem that even /r/funny on reddit has banned the practice of sharing links to rehosted webcomics. Imgur, however, is still perfectly happy to do it. Every day you can find multiple webcomics on Imgur's front page containing an album of half of a webcomic artist's life's work, usually without any link to the creator's actual website. This pirated copy gains millions of views, and the artist is left with nothing to show for it, not even a page hit. All of those millions of views represent potential fans who perhaps would have liked to buy a book from the artist or some other merchandise, and the artist would have been able to pay the rent for another year. Instead, all of that money goes to Imgur ad revenue and T-shirt sales. Imgur also passively gets all the cognitive goodwill from their users who mistakenly associate the pleasure of reading the stolen comics with Imgur, rather than with the artist where it belongs. Most artists I inform of this theft are incredibly sad about it but have already reached the stage where they feel utterly defeated and helpless. I feel that some sort of reform is needed to compel large sites to implement something similar to the Content ID system on YouTube, or at least require due diligence in finding the true creator and 302 redirecting the link of the stolen copy to the true source.

meritt 12y ago

This is a good parallel to "The Hard Thing About Hard Things" by Ben Horowitz. Covers a lot of the same material but gives more background on Marc.

js2 12y ago

Another profile of Marc from August 2000: http://archive.wired.com/wired/archive/8.08/loudcloud_pr.html http://archive.wired.com/wired/archive/8.08/loudcloud_pr.htm... For those who don't know the outcome of Loudcloud, it would eventually sell the managed services business to EDS and rebrand the software portion of the business as Opsware. Opsware would later be acquired by HP. HP would later acquire EDS.

otoburb 12y ago

>>One partner suggested that LearnUp was a “ten on thirty”—ten million dollars should buy a third of the company, which would then be valued at forty million. “It’s more like ten on fifteen or twenty,” Horowitz said, cutting the company’s value in half. “Or six on twelve,” Andreessen said, whittling it further. Soon after the meeting, Ringwald turned LearnUp into an enterprise company. Can somebody help explain how these calculations work according specifically to the article? The numbers make no sense to me if I use the article's explanation of this VC verbal shorthand. "Ten on thirty" gives a $40M valuation? How? And how does "ten on fifteen" halve the valuation - according to the article paragraph above, wouldn't that double the valuation by investing $10M for just 15%, instead of 30%-33% equity stake? EDIT: Thank you for the replies. I appreciate the responses.

tinkerrr 12y ago
Ten on Thirty means $10M invested in a company currently being valued at $30M (before their investment, or pre-money valuation), so the whole company is valued at $30M + $10M = $40M after the investment. Ten on Fifteen/Twenty means $10M invested in a company currently being valued at $15M/$20M, so the valuation after the investment would be $25M/$30M.
an4rchy 12y ago
Basing it on the statement from the article this is how I read it: 10/30 gives 33%(1/3rd) at a valuation of 40 million 10 + 30 = 40 So $40 million valuation for $10 million investment which gives them 33% of the company. 10/15 would imply 33%(1/3) at a valuation of 10+15 = 25 $25 million dollars is close to $20 million which is half of the original $40 million. Marc's 6/12 implies 6 million investment at 18 million valuation for 50% of the company.
- otoburb 12y ago
  I mistakenly thought that the second number was a rough equity stake; that the second number was the current valuation should have crossed my mind but didn't. Makes much more sense now. Thanks!
- CPLX 12y ago

graycat 12y ago

The article does seem to have a good description of how Silicon Valley venture capital thinks and works. Of course, again, on average the venture firms have poor ROI: http://www.kauffman.org/newsroom/2012/07/institutional-limited-partners-must-accept-blame-for-poor-longterm-returns-from-venture-capital-says-new-kauffman-report http://www.kauffman.org/newsroom/2012/07/institutional-limit... http://www.avc.com/a_vc/2013/02/venture-capital-returns.html#disqus_thread http://www.avc.com/a_vc/2013/02/venture-capital-returns.html... Yes, apparently the Silicon Valley information technology (IT) venture firms are trying to evaluate everything that comes in the door having to do with IT. There's a problem doing this: By analogy, it's like picking dart throwers. Only a tiny fraction of the dart throwers are actually experts, and the rest are amateurs throwing wildly. But, there are so few experts and so many more amateurs that, on average, nearly all the darts in the center of the target come from lucky amateurs and not real experts. So, net, the Silicon Valley is trying to evaluate the huge fraction of amateurs that mostly need just luck. Much better would be to concentrate on the few real experts who need much less in luck. "Few"? Right, but so is the number of desired successes, and the number of real experts should be sufficient. Then, with the article, we come to a significant point: The Silicon Valley venture capital (VC) firms just do not know how to plan, do, and evaluate projects from real experts. Some people do know: The shortest description of project planning is: Step 1: Pick a good problem. Step 2: Use IT to get a good solution. So, sure, in Step 1 want to solve a suitably important problem, one where the first good or a much better solution will be a must have and not just a nice to have for enough people so that the number of people times the average earnings per person is enough to make a real unicorn. Or, in crude, simple terms, maybe want a must have solution for a big ass problem in a big ass market. Sure, the ideal situation, although likely not in IT, would be a safe, effective, inexpensive one pill taken once cure for any cancer. Such a project would just "cut right through" (borrowing from the movie Moneyball) all the nonsense about body language, vision to change the world, how to manage 100, 1000, 10,000 people, hard scrabble backgrounds, tone of voice, assertive manner, clothes selections, etc. And, sure, in Step 2 want to use IT to get the "first good or much better solution", defensible, with barriers to entry, etc. So, from the article, apparently Silicon Valley VCs don't know how to evaluate projects that follow the two steps above. Does anyone know how to do such evaluations? Sure: For Step 1, that the problem being solved is suitably important should, like the example of the cancer pill, be obvious. Right, here get to rule out considering projects such as Fab, PopSugar, Zulily, SnapChat, AirBnb. So, what's left is Step 2, and evaluating that is mostly just technical. While apparently Silicon Valley is next to hopeless at evaluating new, powerful technology, our better research universities, NSF, NIH, DARPA, etc. are quite good, thank you. So, an example of a project with really good technology? Sure: http://iliketowastemytime.com/sites/default/files/sr71_blackbird_leaking_fuel_cell19.jpg http://iliketowastemytime.com/sites/default/files/sr71_black... Sorry, Marc: On my BoD I want -- it's crucial and I insist -- people who can understand my business, including the crucial core, unique IT, and for that, Marc, I want to know what you did in your STEM field Ph.D. program and have done in research since. E.g., I want people like the dissertation advisors in STEM fields in top research universities and problem sponsors at NSF, NIH, DARPA. How many Silicon Valley VCs do you know who qualify? I want people like those who looked at Kelly Johnson's engineering drawings and approved the SR-71; Marc, their batting average is much better than yours or nearly any VC (Chris Sacca may be on the way to being the only exception), and they fund just off pieces of paper. Marc, from the article your evaluations look like you would have asked Kelly Johnson if his SR-71 could also fly to Mars and refuse to fund him unless he enthusiastically said "Mars? Yes, and to infinity and beyond!" or some such nonsense. Look, Marc, it was Mach 3+, 80,000+ feet, 2000+ miles without refueling, never shot down -- as needed, as planned, as accomplished. Marc, in simple terms, in IT, you just do not know very well what you are doing; on my BoD, can't use you; your wildly irrational flights of nonsense could sink my company.

jmduke 12y ago

One morning, as I sat down to breakfast with Andreessen, a rival V.C. sent me a long e-mail about a16z’s holdings. The V.C. estimated that because Andreessen’s firm had taken so many growth positions, its average ownership stake was roughly 7.5 per cent (it’s eight per cent), which meant that to get 5x to 10x across its four funds “you would need your aggregate portfolio to be worth $240-$480B!” You would, in other words, need to invest in every Facebook and Uber that came along. When I started to check the math with Andreessen, he made a jerking-off motion and said “Blah-blah-blah. We have all the models—we’re elephant hunting, going after big game!” Uh, is there a more robust/cogent thought that explains this?

Estragon 12y ago
I don't think there needs to be... after all, he cites LBJ as a role model, and LBJ was known to give similar responses to hard questions. https://www.google.com/search?q=lbj%20substantial%20organ&oq=lbj%20substantial%20organ https://www.google.com/search?q=lbj%20substantial%20organ&oq...
vasilipupkin 12y ago
I think I'll take a stab at this. Suppose you do need the aggregate to be worth around 400 billion to deliver decent returns. If Andreesen Horowitz catches the next 2 Facebooks ( worth 200 billion each ) over the next 10-15 years and loses money on every single other deal ( an extremely pessimistic assumption ), they can deliver it. Is this a guaranteed outcome? No, but it certainly seems reasonable / plausible
- presty 12y ago
  > Suppose you do need the aggregate to be worth around 400 billion to deliver decent returns. If Andreesen Horowitz catches the next 2 Facebooks ( worth 200 billion each ) over the next 10-15 years and loses money on every single other deal ( an extremely pessimistic assumption ), they can deliver it. your assumption is that A16Z would own 100% of those 2 next Facebooks... which I don't think I need to point out how wrong that is (sorry, I just did) let's assume something more realistic, like a16z getting 20% of each 200B company that appears - they would need to invest on the next TEN Facebooks (at an earliesh stage), and that seems a bit harder. and let's not forget that most "unicorns" don't even go past the 10B when IPOing, so in reality, they need a lot more than 10 FBs...

burnte 12y ago

I think you've more than earned your pay for this comment. Excellent astroturf, A+. Would turf again.

dang 12y ago
> Excellent astroturf, A+. Would turf again. Accusing a fellow commenter of astroturfing is not allowed on Hacker News. Please don't do this or any other kind of personal attack here. It's sad that comments that offer nothing but generic dismissals and teardowns automatically get upvoted, while an enthusiastic—and more substantive, agree with it or not—comment gets accused of being a paid fraud. Edit: I've detached this subthread from its original parent (https://news.ycombinator.com/item?id=9523498 https://news.ycombinator.com/item?id=9523498) and marked it off-topic.
- burnte 12y ago
  Stating that I feel a comment is astroturf is not a personal attack. It may be against the rules, and I will refrain from as such, but it is most certainly not a personal attack, it is a statement that I feel the _comment_ is disingenuous, and I said so in a light-hearted manner at that. The comment seemed over the top in its praise, and was not a teardown at all. Further, I see nothing in the rules about calling out astroturf, the closest I saw was about being civil, which I most certainly was. I pointed out the comment felt like astroturfing, and said absolutely nothing impolite, rude, or even slightly uncivil. I'm sorry you saw it otherwise. It was meant to be a lighthearded poke, hence the ebay-style comment at the end.
  - dang 12y ago
    I believe you that you didn't mean it that way, but that's a sign of how easy it is to convey things you don't mean, such as that a person is deliberately lying and being paid for it. The negative effect of a comment like that is probably a hundred times greater than the maximum one would ever imagine when posting it. And it only takes a few to poison the discourse. The biggest problem with trying to hold this site to the HN guidelines is that most violations are unintentional. Obvious trolling is easier to deal with. If you're curious about our reasoning re astroturfing, follow the links back from https://news.ycombinator.com/item?id=9277068 https://news.ycombinator.com/item?id=9277068. I've posted about it quite a bit.

lukasm 12y ago

"Apple and Microsoft got started with venture money;" Microsoft is bootstrapped

presty 12y ago
http://www.quora.com/How-much-venture-capital-did-Microsoft-raise?share=1 http://www.quora.com/How-much-venture-capital-did-Microsoft-...
- lukasm 12y ago
  Not true.

oneiric 12y ago

"The toilet in the powder room is so visionary, and the surrounding dimmer lights so flattering, that I had to study it for some time to figure out how it flushed." What is this toilet???

jodrellblank 12y ago
What is this toilet??? I'll take "stupid" and "badly designed" for $1.

deleted 12y ago

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