Marc Andreessen: Will a16z Go Public & Why Labour Displacement with AI is Wrong?

1. 0:00 – 1:27

   Intro

   1. MAMarc Andreessen0:00

      I'm competing with myself. Life just gets a lot simpler if you just assume everything is your own fault. Everybody's feeling very tense and nervous and anxious and fearful, but everybody's pretending they're not feeling that way.

   2. HSHarry Stebbings0:08

      It has taken me 10 years, it has taken me 3,000 shows, but finally today I'm so proud to have Marc Andreessen on the show.

   3. MAMarc Andreessen0:16

      I think every time we've passed on a promising venture company over price, I think it's been a mistake. There's nothing that we're missing today that we could solve by going public.

   4. HSHarry Stebbings0:23

      The man who has built one of the greatest firms of our time. They manage over $90 billion.

   5. MAMarc Andreessen0:28

      The tech industry is more centralized in Silicon Valley than it has been in its entire existence, and I think it's AI.

   6. HSHarry Stebbings0:33

      And have invested in some of the most generational companies.

   7. MAMarc Andreessen0:36

      This entire labour displacement thing is 100% incorrect. [laughs] It's completely wrong. Essentially, every large company is overstaffed. It's at least overstaffed by 25%. I think most large companies are overstaffed by 50%. I think a lot of them are overstaffed by 75%.

   8. HSHarry Stebbings0:47

      This was a very special one for me, and I hope you enjoy the episode. Ready to go? [upbeat music] Marc, y-you probably don't know this, but I started this show when I was 18 years old, and you were one of three names that I wanted to have on the show back in 2015. I have to admit, I've ticked off the other two, and so I'm a bit worried that I'm gonna have to stop after doing this show.

   9. MAMarc Andreessen1:21

      [laughs]

   10. HSHarry Stebbings1:21

       But I'm so touched that you agreed to join me, so thank you for joining me.

   11. MAMarc Andreessen1:25

       Good. I'm thrilled to be here.

2. 1:27 – 7:50

   Why Introspection is Overrated: The Dangers of Learning from the Past

   1. HSHarry Stebbings1:27

      Now, I was running listening to every show that you've done before, and you recently said that you don't introspect and introspection is potentially overrated. I really struggled with this 'cause I thought we learnt from mistakes, and I valued experience in that way. Can you help me understand the lack of value placed on introspection, and do we not learn from mistakes?

   2. MAMarc Andreessen1:48

      Y-you know, we do learn from mistakes, uh, but the problem is learning from mistakes sometimes is good and sometimes it's bad, right? Um, and if, if we just talk business for a moment, like in the venture mindset, this is a very big problem. There's a founder version of the mistake, there's a venture version of the mistake. The founder version of the mistake is if a founder starts a company in a category and the founder doesn't work, the founder is then emotionally angry at that category for the rest of his life, um, and will not acknowledge, uh, when there's something that's gonna work in that category. Um, and I, I've just seen that like over and over and over again. Um, and, and, and that's fine 'cause most founders go on to do other things, and that's fine and good, and it, it generally doesn't damage them from a business standpoint. In venture, the same thing, [laughs] the same thing happens. If you invest in a category, or if, if you invest in a kind of company, uh, or you invest in a kind of founder, um, and it doesn't go well, it's extremely easy to learn from the mistake, right, and to basically say, "All right, I touched that hot stove. I'm never doing it again." And then, you know, y-you can tell me what happens next, right? Which is the next thing shows up and pattern matches, and it's the thing that you should invest in, and you have the chance to invest in, and... But, but you touch the scalded, scalded stove, and you know you're, you know you're learning from your mistakes, right? You're doing the responsible thing, and so you don't do it. And so I think there's something that's particularly pernicious [laughs] about learning from your mistakes in venture capital. And then I, I think that's also somewhat true about life. You get married multiple times. As they say, it's the triumph of hope over experience. Like, I think probably you want hope to triumph over experience, um, in, in that domain, and, and I think there's a lot of other domains of life in which that's probably true.

   3. HSHarry Stebbings3:11

      I totally understand what you're saying when... Especially when you say about, "Hey, it's easy to lose money in a sector and then think the sector by nature is cursed," or, "It's so difficult. You can't make money in healthcare. You can't make money in X."

   4. MAMarc Andreessen3:21

      I, I'm old enough to remember internet search. Like, you can't make money in internet search. [laughs] Like, the internet search companies in the 1990s did not work out well. [laughs]

   5. HSHarry Stebbings3:29

      So then how do you-- When you are guiding conversation, when you are guiding partners-

   6. MAMarc Andreessen3:34

      Yeah

   7. HSHarry Stebbings3:34

      ... how do you ensure that they have a fresh mind with every new company and every new investment and are not plagued by the downsides of bluntly lost money before?

   8. MAMarc Andreessen3:43

      Yeah, so and by, by the way, just the other example, [laughs] by the way, is AI. [laughs] AI was a tremendously good way to lose a lot of money in venture capital from 194- [laughs] from 1945 to 2017, right? [laughs] So there are... I mean, look, when, when I was getting my computer science degree in the late '80s, like AI was like d- AI was like the one field that you knew would never succeed. Like, there, there had actually been an investment boom for AI in the '80s and it failed, and everybody, including all the computer scientists, were like, "Yeah, this field is dead." And that, and that happened like five times over the course of, uh, uh, of AI over the last 80 years. Um, and so like that, the, you know, so again, another, another great example. So, so look, I, I, I think a couple of things in her- in terms of how we, we run our firm, or, or how you run a firm like this. So, so one is, as you well know, the, there are v-very important, there are two categories of mistakes, right? There's, there's the mistake of commission and there's the mistake of omission, or, or there's the mistake of cost and there's the mistake of opportunity cost. Um, and so of course, the mistake of a cost is you invest $10 million in a startup, it fails, you loses the money, you lose the money, that's bad. Um, the, the, the, the, the, the mistake of omission is you don't invest in Google [laughs] and you lose $100 billion of opportunity cost, right? Um, and so n- of course, venture is like the most polar- you know, m- it's the most polarized possible economic field, um, in, in which, in which this is true. And by the way, if you're running a, if you're running a, you know, and if you're running a bond business or something, uh, you know, debt, debt business or something, you know, where you can't... you, you, you just can't lose money or the whole thing doesn't work, then obviously you can't run this kind of model. In that case, you better learn from your mistakes. But, but in venture, you, right. In, in venture, I, I think you're always much more worried about the mistake of omission than you're worried about, about the mistake of commission. And then to your question, like, I think in a lot of ways that's the key thing that Ben and I do at this point in our lives, um, in, in, in our roles at the firm is, you know, we're, we're not like micromanaging the vest- the investment decisions of the firm, and we have, I think, spectacular, you know, senior partners and junior partners that are doing a great job of that, and we're, we're in the room for it and so forth, but, like, we're not, we're generally not advocating for or against a deal. But what we are trying to do is to get everybody to constantly have this, uh, let's say risk-forward, um, worry about the mistake of omission before o- over, over the mistake of commission, uh, mindset. This anti [laughs] scalded stove phenomenon. You know, we, we just routinely remind people like, "Yeah, you're emotional about this because of your bad experience three years ago or six years ago or 10 years ago," and just like let that go. You, you, you no, you no longer have to pay for that sin and, and, and, and you're completely liberated to be able to kinda let that emotion, uh, you know, fade into the distance and, and be able to focus on the opportunity in front of you.

   9. HSHarry Stebbings5:59

      My biggest regret or omission experience is one of your companies, actually. It's Eleven Labs. We could have invested at the seed round, but we would have only got 1% mark, and naturally, as an emerging manager, I thought it was important to retain the high ownership model I promised my LPs.How do you reflect or advise me on when to break the rules versus when to maintain doing what I said I would do?

   10. MAMarc Andreessen6:25

       So, uh, you know, quite honestly, it's, it's the s- it's the simplest answer in the world, and it's the hardest answer in the world, and it's, it's the answer that I think every great investor ends up resolving to 30 years in [laughs] frankly. Um, I, I had this, um, I actually had this discussion actually with Arthur Rock, uh, you know, who's sort of the light- you know, obviously the light, um, um, virtually the creator of, of, of, of modern venture capital. Um, and he, and he actually, he actually wrote a paper on, on, on this topic, and I'll just give you his conclusion, which is also my conclusion. Arthur Rock, for people who don't know, he invested in Apple and Intel [laughs] right, right in the seed rounds and, like, in many, many other great companies for, like, 30 years, was that, uh, he would have, uh, been a better venture investor had he fed all of the business plans, uh, and pitch decks straight into the shredder, uh, upon receiving them, um, and if he had spent 100% of his time on the resume. Um, a- and I think that's basically right, which is the great, the great founders will, you know, basically buy you enormous upside that may break rules in all kinds of directions, um, and may bre-break precedent in all kinds of directions. Um, and the world's best business plan executed by a mediocre team will almost certainly get lapped by a great team. Now, l-let me say, having said that, this sounds easy. Of course, why is that hard is 'cause it's somewhat tautological, right? Because we define great founders as the ones that [laughs] have great outcomes. And so it's a lot easier after the fact to be able to say, "Oh yeah, you know, Steve Jobs was a great founder," when you look at the suc-success of Apple. But nevertheless, I think that is the answer, um, which is when you have special people, um, you should back them almost, you know, basically al-almost without consideration of other factors, and when, when you don't, you shouldn't. And at the end of the day, you know, it, it, like, that simply

3. 7:50 – 11:59

   The One Trait Marc Andreessen Looks For in Every Founder

   1. MAMarc Andreessen7:50

      is the core thing.

   2. HSHarry Stebbings7:51

      How do you think about detecting greatness in founders when your benchmark is founders at late stage or when they're great? You obviously have been on the board of Facebook for many years with Zuck and seen him at a later stage as well as an early stage. I spend my time interviewing public company CEOs all the time, Mark. I'm so used to really fine-tune Daniel Ek. When I meet a seed founder that's rough and unpolished, of course they don't seem as good. How do you think about that challenge in projecting earlier and seeing if they're good given how much time you spend with perfection?

   3. MAMarc Andreessen8:21

      I'll just say, look, I think people have different takes on this. Uh, my personal formula is basically that follows, is, is basically as follows, which is you, you need high IQ as table stakes. Like, you just need somebody who's, like, incredibly smart. My basic test is if I have my notebook open, um, and they're talking, am I, like, writing down lots of notes or not? Um, and if I'm writing out lots of notes and I'm learning from them, then, like, that, that indicates that their, their level of, you know, intelligence and some of the other attributes that we'll talk about, but, you know, indicates, you know, clearly that, that they're very smart. Um, but I think that's table stakes 'cause I think just intell- just intelligence, you know, there are many people who are very smart, who are just grinders or just, you know, as they say, kind of the, you know, kind of the, the clerk mentality, you know, I'm gonna, you know, put me in the, in the back office somewhere, um, or, you know, doing research or something, and I'm, I'm never gonna build something, and that, and that's fine. But, you know, IQ is not enough. I think w- the second thing you need really is what, what my partner Ben calls courage, um, which is basically, you know, um, an absolute determination, uh, to succeed, um, and to be able to, you know, confront problems directly and to be able to basically pound through anything. Um, and, you know, there's various kinds of ways to phrase this, but, uh, you know, I think the Navy SEALs have the, have the, uh, have the term, uh, embrace the suck. [laughs] Um, so there's, you know, there, there's something to that. Um, I sometime... I always like the old Looney Tunes cartoons, and I always like to say I want the founder who leaves a founder-shaped hole in any brick wall that he runs into, you know, like, like a cartoon character.

   4. HSHarry Stebbings9:37

      Yeah.

   5. MAMarc Andreessen9:37

      Um-

   6. HSHarry Stebbings9:38

      My favorite is when they run off a mountain, and they keep running. I don't know if you see this. [laughs] Yeah. Brilliant.

   7. MAMarc Andreessen9:43

      And then, and then, and then they're suspended in midair for a moment, and they hold up the sign, and it says, "Oops." Um, uh-

   8. HSHarry Stebbings9:48

      [laughs]

   9. MAMarc Andreessen9:48

      Or, or my favorite one actually of that is, uh, there was, uh, one of the, one of the little kid characters in it at one point, little, I don't know, little, uh, pig or something, uh, uh, did the thing, and he goes out over the cliff, and he's hanging in midair, and he holds up a sign, and he says, uh, "I'm in second grade. They haven't taught us about gravity yet."

   10. HSHarry Stebbings10:01

       [laughs]

   11. MAMarc Andreessen10:01

       [laughs] Which, by the way, the, the, of course, these, this also happens in, in, in startups. Um, this is, you know, what's that great-

   12. HSHarry Stebbings10:09

       But Reid Hoffman told me to build a parachute on the way down, so [laughs] ...

   13. MAMarc Andreessen10:12

       Yeah, exactly. Yeah, that sounds great. You know? Get out, get out your, uh, get out, get out your knitting needle and, and, and get going. Um, and so... And then I think the third thing, so sort of IQ plus courage, and then I think it's something, and this is kind of courage, but I would describe it as, like, it's like, f- I don't know, something fundamental. It's, like, drive, um, ambition. Um, you know, I, I occasionally quote, uh, Nietzsche. Nietzsche, it's, it's will to power. Um, you know, it's, it's sort of this determination. Uh, 'cause, you know, courage can just be I'm gonna solve problems, and like that, I would argue that's not enough for... And, you know, Ben might say that that's not what he means, but, like, it's not just solving problems. There's something about, like, am- y- you know, ambition. And, and you know, in, in, [laughs] you know, and the world being what it is, some, you know, that ambition, a lot of people express that as, like, ambition, you know, ambition to change the world, improve the world, humanity, da, da, da. I think that stuff's all great. I think those founders are great. I think those missions are often very, uh, compelling at, at, you know, attracting, you know, lots of smart people. I think that's great. But I do, I do think there's a more fundamental ambition, which is I want to build something of my own [laughs] that, that really demonst- and I wanna really demonstrate what I can do. Um, and I have a very primal drive to do that. And, you know, it gets kind of, you know, you cast aspersion, uh, people cast moral aspersions on it, and they call it greed or whatever, so people don't wanna talk about that. And it's not, I'm not even talking about the money component. I'm talking about, like, I wanna build something. Um, and, and then what I, what I find on that, that one in particular, well, actually, number two and three, like, y- you don't necessarily see them on the resume, but, like, you can generally see them in the background. I think if you spend enough time, you know, with people, you can get a sense of, like, okay, you know, was their entire life basically a sequence of basically things being handed to them, um, and then, you know, sort of credential achievement, you know, which is, which is a lot of, you know, what, what, you know, what, what kind of we see in the sort, the sort of elite workplace. Um, or, or do you have somebody where it's like, oh, when they were 14, they built this. When they were 17, they built that. When they were 20, they did this. And, you know, they've kind of always been kind of in that, you know, whether that's building a product or a technology or a company or a, you know, an art or, like, whatever it is, you know, sort of this primal drive to

4. 11:59 – 16:25

   Are the Best Founders Broken? What Makes the Best Founders?

   1. MAMarc Andreessen11:59

      create.

   2. HSHarry Stebbings11:59

      Do you find drive through pain the most contributing factor su- s- to, to success?

   3. MAMarc Andreessen12:05

      The full version of the theory is all the great founders are broken in some way, right? And so they've got the, you know, and they, you get into kind of psychoanalysis quickly, but you get into the kind of broken home, you know, or, you know, Steve Jobs being adopted or whatever, and you kind of have all these stories, um, and, you know, kind of, kind of the, you know, the, uh, you know, the metaphor is like when the, when, when, when, when the bone breaks, it either doesn't heal, or when it heals, it, you know, it's stronger. And so you're trying to get people who are kind of responding to kind of childhood pain through, um, you know, through, through, through kind of overachievement. Um, and, and I think there's something to that. And in particular, I think what, what there is to that, that, that is really important, I, I often talk about it of, like-You need some reason to get out of bed in the morning, um, that's not just, "I have a job," or is not just, "I don't wanna embarrass myself," or it's not just, "I, I wanna be responsible." You, you, you have to have like a primal reason when things are really, really bad [laughs] like when the shit really hits the fan, um, and you're just miserable and like you dread checking your email and you just simply like do not wanna know like what the new bad news is 'cause there's so much bad news that you just can't even cope with what you have. Like you need a very, very, very primal reason to get out of bed and continue to fight that way. Um, and so I, I think there is something about, you know, maybe trauma in the background that explains that. Having said that, um, some of the best founders in history have no trace of trauma in their background that I can tell. Um, and I'll just give you two examples. Uh, Zuckerberg is one who, you know, grew up in a classic upper middle class, you know, New Jersey household, very, you know, very close with his parents and his family, you know. Um, and then, you know, Bill Gates, you know, his father was a lion of the, you know, Seattle establishment and he went to pr- all the best, you know, prep schools and Harvard and, you know, as, as, again, as far as I know, had a perfectly great childhood. People who knew both of those guys in their teenage years said like these are driven guys, right? I mean, it's, it's, it, you know, it's, it's very core to their, to their origin stories. Um, and, and, and so like you, you, you just, you have to, you have to be open to the idea that some people are just born that way.

   4. HSHarry Stebbings13:44

      What's your primal reason today for continuing to build Andreessen with the ferocity and ambition that you still have?

   5. MAMarc Andreessen13:52

      Well, of course, that would require introspection. Um, [laughs] so I don't know if I'm gonna give you-

   6. HSHarry Stebbings13:59

      And you're, you're elegantly backing into it, okay? [laughs]

   7. MAMarc Andreessen14:02

      [laughs] I don't, I don't know if I'm gonna give you a great answer to that. I will tell you what I tell myself. I'll tell you what I tell myself is at this point what I tell myself is I'm sort of, I'm competing with myself. Um, by, by which to say like I am trying to figure out how to be the best possible version of what I can be, uh, and what I can do. Um, and so the, the, the way I think about it basically is like, okay, how, how good... Uh, uh, did you read, uh, was it Jocko Willink's book, uh, E- Extreme Ownership? Did you ever come across that?

   8. HSHarry Stebbings14:24

      Yeah. I, I love Jocko Willink. I also listen to his motivational talks when I go to the gym. Brilliant. [laughs]

   9. MAMarc Andreessen14:28

      100%. And you know his thing on extreme ownership, right?

   10. HSHarry Stebbings14:31

       Sure.

   11. MAMarc Andreessen14:32

       So his thing, uh, uh, so for people who haven't heard, his thing on extreme ownership is just, I mean, you know, this famous Navy SEAL commander, you know, a very, very, very accomplished guy, um, you know, and the kinda guy people would happily follow into battle or would be a great, you know, would be a great CEO or a great founder, you know, that, that kind of personality. And he has this thing, he says, "Extreme ownership," and he says, "Look, life just gets a lot simpler if you just assume everything is your own fault." [laughs] Right? And it's just like, oh, I don't know, like, you know, whatever, whatever, this LP didn't invest or this founder didn't take my money or whatever. It's like, oh, okay, it's my fault. It's not his fault. It's my, my, it's my fault. Clearly I didn't do a good enough job. Clearly I can do better. And then it, it basically, his argument is it gets you kind of productively focused, um, on, on, on improvement. And so I, I, I found it that like [laughs] ... Put it this way. When I'm in my own head and I'm mad about somebody [laughs] doing something that I don't like, the number one stress-relieving thing I can do is I can say, "Oh, that's my fault." [laughs] Right? C- 'cause then it gives me, it gives me ownership of the problem and it gives me something that I can, I c- I can do. And then by the way it, it, it also drains away resentment, right? It means that I'm not resentful and angry at somebody else, right, 'cause I'm just like, okay, I'll just, I'll just improve, improve myself on that. So, so I, I operate in that psychology as much as I can. I try to maintain that psychology. I do that. Um, but, but [laughs] by the way, um, I, I recommended to Ben when that book came out, I fell in love with it and I recommended to Ben, I said, "We need to send this to all of our founders and like teach this." And he's like, "Marc, you're out of your mind. Like our founders already have the problem where they take too much responsi- you know, they take too much of the weight of the world on themselves. [laughs] They're, they're already miserable half the time. Like we don't need to saddle them with more of that." But I think there, I think there's something very, very powerful in that. Um, it also has the enormous advantage of it's, it's, it becomes an intrinsic, intrinsic motivation over an ex- extrinsic motivation, right? So it's not a motivation to put points on a board. It's not a motivation to achieve a certain net worth. It's not a motivation to, you know, whatever, be in some league table to win some prize, you know, it, these sort of external markers. 'Cause the problem with all the external markers of success is are you gonna get up in the morning when it really, really sucks? Like the external, the extrinsic motivations don't do that. Um, uh, a- and so you, you, you need something intrinsic and, and, and for me that's the intrinsic motivation which is like I know I can do this better.

5. 16:25 – 17:23

   Why Everything Being Your Fault Changes Everything

   1. HSHarry Stebbings16:25

      You said that you're competing with yourself. Do you feel you're your best version of yourself today?

   2. MAMarc Andreessen16:32

      I think I'm in my best version of myself k- relative to [laughs] all my prior versions, [laughs] versions of myself.

   3. HSHarry Stebbings16:37

      Yeah.

   4. MAMarc Andreessen16:37

      But I am, you know, I'm still far short of what I would like to be. So, um, I, uh, I, I, I, I, I know of many, many areas of improvement, I guess I'd put it that way, uh, my, uh, yes.

   5. HSHarry Stebbings16:47

      What's the biggest one that you'd like to change?

   6. MAMarc Andreessen16:50

      Oh, I mean, I c- I mean, there's like, I don't know, there's probably like, there's probably like 100. I mean, I'm, um... So, like I- I'll give you an example. I have a, a strength and a liability which is I get emotional. Um, and so the, the advantage of emotion is like when I, when I commit, I deeply commit, um, and I fall in love with things and I become incredibly determined. Um, and I'll, I'll, I'll, I'll, I'll kind of go, you know, very long lengths, um, uh, ki- kind of out, out, out of a sense of, of, of emotion or love. Um, you know, the negative is, you know, I will get emotional and I've spent, [laughs] I've spent a lot of time, and people who know me will tell me, I've sp- uh, will tell you I've spent a lot of time, you know, trying to not, you know, um, yeah, trying to not, uh, let's say get negatively emotional

6. 17:23 – 25:37

   Fame, Criticism & How to Deal with Haters

   1. MAMarc Andreessen17:23

      in meetings.

   2. HSHarry Stebbings17:23

      Do you care what people say about you? It's something I'm trying to work on, but I still desperately care, honestly, Marc, and it desperately upsets me when I read [laughs] bad things.

   3. MAMarc Andreessen17:32

      So I have a bunch of friends in the entertainment business, um, who I basically I, I look at and I say like, "There's no way I could possibly do what you do," which is like make myself vulnerable on a, [laughs] on an 80-foot screen that way. And they're like, "Yeah, that's, that's the har- you know, that's the hard part of it." And then I always ask like, you know, "Do you read your own reviews?" Like, "Do you read what people say about you?" And they all basically say this exact same thing, which is they say, "I tell everybody I don't and then of course I do." [laughs] Right? And so it's, it's, it's very hard to avoid that. I, I, I do think don't read the comments, um, is a, uh, is generally a very good life, uh, life guideline. But by the way, I will say YouTube comments have gotten much better. Um, so may- maybe your YouTube comments are productive now, but, um, I think in general don't read the comments, uh, is helpful. I mean, it's really hard. I mean, you know, everybody's human. I think it's really hard when somebody like is cursing you out or calling you, you know, saying horrible things. Uh, you know, it's very hard for that not to stick. Um, I would say I'm pretty happy, um, I'm pretty happy not, not paying attention to that. Um, are, are you aware, uh, are you aware at this point of, uh, the concept of the meme of retard maxxing?

   4. HSHarry Stebbings18:31

      Uh, I, you know what? If I'm totally honest, I've seen it on like every comment of our-... thread where I say like, "Oh, I've got Marc coming on the show," and everyone's like, "Ask Marc about retard maxing. Ask Marc about retard maxing." [laughs] And then y- honestly, it's one of those moments where I'm just like, "Okay, get back to, like, my normal research," 'cause I presume retard maxing is not politically correct and I shouldn't ask it. But you brought up retard maxing, so, uh, no, [laughs] to be honest.

   5. MAMarc Andreessen18:55

      Well, so first of all, first of all, retard maxing is totally politically correct because retard is no longer... I mean, we, uh, now have 18 other- we have 18 other terms that apply to people who are, like, you know, developmentally disabled, and so, like, re- retard was long since l- l- it now means, it now means something completely different. Uh, and it turns out what it means, specifically in the context of retard maxing... Well, let me explain why, why, [laughs] why I came across this. So the internet meme machine is just absolutely spectacular. I, I think, like, the process of cultural ev- evolution of internet memes is, like, absolutely amazing. I think, like, the whole, like, the looks [laughs] the whole, like, clavic- I don't even know if you're into this, the looksmaxing, like that entire, you know, the, the whole, like, clavic- clavicular, um, uh, you know, uh, um, all, all the terms now are, are mainstreaming. Um, and obviously there's many internet meme, uh, examples. But, you know, one of my favorite websites in life is knowyourmeme.com [laughs] which is the, the comprehensive catalog of memes. And so, like, the cultural evolution of what's happening online I just, I just think is incredible and wonderful, um, in, in, in so many ways. And then I got in this, this dust-up online a couple weeks ago about intr- introspection, uh, that you mentioned. And then a, a friend of mine sent me this thing and he said, "Oh, y- y-," he's like, "Oh, here's your answer." He's like, "You're, you're retard maxing." A- and I said, "I'm, I'm what?" Um, and he said, "Oh, watch these videos." And there was this guy we can link to, um, who's on YouTube, who has basically, I don't know, 100 videos on retard maxing. A- and [laughs] he, he, he, he's like my, he's like my new life coach. You know, fr- I don't- haven't met him, but, like, from a distance. And it's basically just, like, you know, retard... It's just, like, okay, like, fine. Like, r- retard max. Go to work, do a good job, come home. It's fine. [laughs] Um, start a company, succeeds, fails, it's fine. Um, have too much to eat one night at dinner, it's fine. Uh, go to the gym, don't count your reps, it's fine. [laughs] You know, ask a girl if she wants to go out with you, if she says no, it's fine, right? And so, it, it's, it's the, it's the, it's the simpler form of the, uh, of, of the extreme ownership, right? Um, or, or it's the form of it that basically has said maybe another form of it that says I, I, I don't need to take all this in on myself, I can just let it go. Um, and so-

   6. HSHarry Stebbings20:44

      The thing I, the thing-

   7. MAMarc Andreessen20:45

      Yeah

   8. HSHarry Stebbings20:45

      ... the thing I love about the internet, Marc, is there is some guy who is doing these retard maxing videos who now has Marc Andreessen as one of his biggest fans. [laughs] And you're just like, how great is that?

   9. MAMarc Andreessen20:55

      They're incredible. Well, it's like 100 30-minute videos about retard maxing, and you would think that after the first two minutes he'd kinda covered it. [laughs]

   10. HSHarry Stebbings21:04

       Oh, no. We go to Cabo. [laughs]

   11. MAMarc Andreessen21:05

       But no. [laughs] And by the way, they're all hysterical. They're all absolutely fantastic. And it's literally, like, him on his porch in the middle of nowhere with, like, a cigar, and it's like a half hour. It's just absolutely, absolutely, absolutely spectacular. Um, and so anyway, like, I, I, I do think there's something to that, which is like, okay, b- back to your, back to your original question, it's just like, okay, like, in addition to all the emotional pain that life has already put on us or that we've already put on ourselves, um, you know, and by the way, you know, a lot of it legitimately so for, for the things that we actually do to other people and so forth. But it's just like, okay, how much are we gonna torture ourselves? Um, and, and, you know, there's, there's something about modern culture or modern Western culture or something where we've become, like, very guilt-oriented and very, you know, very into, like, self-flagellation and very into, you know, this whole, whole concept of the hair shirts, you know, the, you just like we, we wear these metaphorical garments that just are, like, tremendously painful. And, and so it's just, like, all right, like, uh, uh, there's a point at which, you know, maybe there's a point at which, like, s- some of that is helpful to, like, correct bad behaviors, but, you know, it's clearly gone way too far. And, and people get, like, way too down the rabbit hole on this, and it becomes very disabling, and I, you know, you probably know a lot of people who are like that. So the way I think about it is, like, inherently what you, you know, what you do, what I do, what, you know, venture startups, like, look, this is, these, this is a high-risk... These are high-risk operations, right? Um, and, you know, sometimes they go right, but they go wrong in a thousand ways before they go right, and then even then they may not work. Um, and, like, y- y- so the, the, the nature of the beast is, like, just, like, tremendous variability and pressure. Uh, by the way, another thing I always thought about a lot as a founder, and I really see this now as a VC, is that in particular founders have a very hard time ever finding anybody they can confide in, right? Because if, if you, if as a founder you, you feel like if you admit that you have an issue, like you're being a bad leader, right? 'Cause you're, you're showing a crack in the armor, and if your people pick that up, they're gonna lose confidence in you. Um, or if word gets around that, like, you're second-guessing yourself or that your thing isn't going well or that you don't have total confidence in it, then it'll, you know, th- all of a sudden investors won't wanna invest and candidates won't wanna join. And, and so there, there's this need of somebody, you know, if you're gonna lead one of these things you have to do it with such a brave face. Uh, and then, you know, kind of [laughs] I always, I always go to call it, it's a metaphor sort of that, you know, the, the duck looks totally placid above water and then is paddling furiously underwater. And so I, I just think, like, in particular, founders have a very hard time finding anybody that they can actually confide in. And then, and then what happens is I think everybody individually has an inaccurate view of what everybody else is feeling, right? 'Cause, 'cause, 'cause I think in practice everybody's kinda feeling, you know, kind of, you know, very tense and nervous and anxious and, you know, fearful and so forth, but everybody's pretending they're not feeling that way. But everybody thinks everybody else is doing great. Everybody else thinks they're the only one that's, like, faking the smiles at the party. And so I think it's, like, incredibly important, uh, to be able to have an internal psychological mechanism to be able to deal with that and not have that overwhelm you. And I, yes, let me just say, at least this week, my, my nomination is retard maxing.

   12. HSHarry Stebbings23:38

       You can, you can kill me, you can tell me I don't, I don't wanna ask that. I, I remember I did a show with Orlando Bravo and it basically turned into a therapy session, and then he kinda became my adopted father. Good dude. Gave me a lot of advice. Um, what am I scared of? I'm, I'm scared that I'll be Macaulay Culkin, Marc. Do you remember Home Alone?

   13. MAMarc Andreessen23:54

       Yep. [laughs]

   14. HSHarry Stebbings23:54

       Yeah, that... The kid whoever knew when he was young, and then it's like, oh, yeah, what, what is he doing now? Oh, kinda no one knows. I have nightmares about being Macaulay Culkin of venture. What are, what are you scared of? To me, you're, you're the great Marc Andreessen of Andreessen Horowitz. You got nothing to be scared of.

   15. MAMarc Andreessen24:10

       I mean, I've been through kinda every version of this. Um, uh, yeah, I mean, like, I've been through kind of every version of this myself. There's a famous, uh, F. Scott Fitzgerald line, uh, where he said in the 1920s, where he said, you know, author of The Great Gatsby, um, and he said, uh, "There are no second acts in American lives." Like, you get one shot and that's it. And, and fortunately, I think, like, he was very, very, very deeply wrong about that. Um, and I th- and s- and I think he was definitely wrong about that for American lives, and I think, I think he was generally wrong about that for, you know, for, for, for, for lives at, at least elsewhere in the West.Um, maybe a little bit less so in Europe, but I, I think still, you know, more, more than m- m- more than not. Um, a- anyway, the, the, the point being, like, we don't... I mean, look, [laughs] somebody once told me there are two great stories, uh, o- o- oh, the glory of it and oh, the shame of it, right? And so, oh, the glory of it is, like, the story of great success. Oh, the shame of it is the story of, like, great disaster. But then the even better version of it is oh, the glory of it followed by oh, the shame of it, followed by oh, the glory of it, right? And, and right, and so the recovery, right? Um, and, and, you know, getting back up on your feet and, and, and then re- and then, and then re-achieving and, and re- rebuilding. Um, and so, you know, I don't know. I think as long as you're still alive, um, and as long as you've conducted yourself in a way that, you know, you haven't, you know, brought, you know, some sort of really fun- you know, some sort of fundamental, like, legal issue on your head or something like that. I think generally, um, at, at least in, in our world, um, I, I think, uh, I, I think second chances are actually available for a lot of people. Uh, and by the way, of course, a lot of the great success stories have this in their background as you know, right? Um, uh, and, and you know, including Steve Jobs himself.

7. 25:37 – 30:50

   Is Venture Now Go Big or Go Home? The Real Future of VC

   1. HSHarry Stebbings25:37

      Of course. Um, you mentioned the nature of the beast there being our business. Um, I've been a student of the business, hence reading so much of your writing for years. When we look forward, what do you... How do you think about the future of venture? Is it as simple as go big or go home? Obviously, we see Andreessen be so big now.

   2. MAMarc Andreessen25:57

      So I believe, and, and we try to run the firm this way, I believe the core of the business is, is, is a permanent state of affairs. Um, and it's, and it- the core of the business is early stage. Um, the, the, the c- the core of the business is a, a founder or a small founding team with a dream [laughs] and a clean sheet of paper, and, you know, ideally a garage, [laughs] although these days, you know, it's hard to keep the kids in the garage, so maybe they have an, you know, a house or an office. [laughs] Um-

   3. HSHarry Stebbings26:20

      They're expensive in Palo Alto, Marc, okay? These are not cheap garages. [laughs]

   4. MAMarc Andreessen26:23

      Palo Alto garages are indeed expensive, yes. Um, but you look, a c- a couple of kids, a couple of kids and a dream and a clean sheet of paper, um, and then first money in, and then, you know, the first two years, um, like, th- that is the core of the business. Like, that, that really fundamentally is the core of the business. Um, you know, look, a, a metaphor we use all the time at, at, at the firm is called... It's, it's, it's, like, b- startups are like baking a cake. If you leave the sugar out of the cake, [laughs] like, if you, if you bake the cake and you leave the sugar out of the cake, you can't pour sugar on the cake afterwards and fix your mistake, right?

   5. HSHarry Stebbings26:52

      [laughs]

   6. MAMarc Andreessen26:52

      Right? Like, sugar has to go in the cake. Um, and so that first two years is when you're baking the cake. Like, that first two years when you're really figuring out what the formula is of what you're doing and what the product is and what the company is and what the business is and what the culture is and who the team is, like, those decisions are, like, absolutely fundamental. And if you get those right as a founder, like, the payoff from that will go for decades. And if you get those wrong, like, even if your company succeeds, you're gonna live with those sins forever. They're gonna extrapolate out. Um, and so, like, it's, like, like, that's it. Like, that is the core of the business. And, like, m- many great companies, you know, later on bring in lots of other partners and growth stage investors and, you know, and other people to the team and build boards and it's, it's fantastic and it's great. But, you know, there really is no substitute for that kind of inception point, um, you know, that, that, the, that early moment. There's no substitute for being the investor that does that. And then, you know, as you know, like, the, the, the investor who's engaged with the company at that stage, um, it often becomes the key advisor to those founders for, for the rest of the company's life, um, right? Um, and so 'cause, you know, 'cause you build this incredible emotional bond and then, you know, you have, like, complete context on why all the decisions got made and, and you, you know, you remember how it first started. Um, and by the way, you remember how hard, how hard it was. And so I, I think there's just no substitute for, for, for the early stage, and I, I think, like, a firm like ours... Uh, this is what I always tell our folks. Like, look, at the end of the day, the early stage business has to work. If the early stage business works, we have option value on doing all this other stuff, but that, that always is the core of the business.

   7. HSHarry Stebbings28:13

      To what extent is the late stage fund a function of executing on the omissions of the early stage fund?

   8. MAMarc Andreessen28:20

      So it's basically, I think it's in two p- it's in two parts. Um, it, the, so part of it is, yes, fixing the mistakes of omiss- uh, of mistakes of omission, uh, fixing the mistakes, and bec- and becoming partners later. And, and look, th- that can work really well. [laughs] Those can be very good investments. You know, and we, we do get very close to some of those founders. Um, you know, but again, it's, it's not... You know, they, they always at that point have somebody early on who, who they're very close to, so we, you know, we do see the difference there. Um, and, and then look, the other part of it is doubling, you know, doubling down, you know, doubling down on the companies that are working or growing. And, and I would just say on that, you know, look, you know, part of that's just ec- you know, just economics, which is if you have the chance to do that, you know, you should do that as a professional investor. But there's, th- there's a- another really fundamental thing where we decided, wh- why we decided to go so big in growth, um, on, on that front, which is, um, this is less true now, but it, you know, 10 years ago, 15 years ago, um, these companies would raise money from venture investors, and then they would get to a certain point, and then they would raise money from a completely different kind of investor, um, that was not tech-centric. Um, and then they would all of a sudden end up in this situation where they had b- l- you know, it's, it's a conflict between investment mentalities and a con- a conf- fundamental conflict on the cap table over things like, you know, level of risk, level of reinvestment, you know, level of, of, um, you know, w- you know, how fast they should go public, when, if, if they should sell the company. Uh, do they need to replace the founder, bring in a professional CEO? You know, the, the, the, if you bring in, if you bri- the, the, to the extent you bring in non-tech mentality, non, whatever you wanna call it, Silicon Valley mentality, growth stage investors, y- you do set yourself up for, like, you're, you're now gonna get a different set of pressures. Um, and so one of the things we wanted to be able to do is to be able to, you know, with our, with our founders that have the chance to build something really great, like, we wanna be able to be their partner across, you know, potentially every round that they do. Um, and, and then as a consequence of that, y- you know, they can, they can basically preserve our mentality on their cap table for longer and longer and longer. Um, and, and I, and I think that that, that works pretty well.

   9. HSHarry Stebbings30:05

      Is it possible to literally... I, I, I love what you said there 'cause I love the boutique craftsman style of venture, but is it, is it literally possible to care about a $5 million seed check when you have $15 billion that you raise at once?

   10. MAMarc Andreessen30:18

       Yes. And it, it is, [laughs] and the reason for that, t- twofold. Uh, one is just the, the, you know, the, the conceptual kind of reasons that I described, but the other is just pure, on pure economics, it is. Um, because, as you know, the upside on the $5 million check is every bit as big as the upside on a $500 million growth investment, right? A- and, and this is what's so unusual about venture. If, if I make a $5 million seed investment and, and I nail it, I, I, you know, I can make $10 billion on that, $100 billion on that. If I make a $500 million growth investment and I nail it, I can make $10 billion or $100 billion on it. It's this... Y- you see what I'm saying? It's the s- it's the same upside.

8. 30:50 – 33:32

   Does Price Matter Anymore? The Dangerous Truth About Valuations

   1. HSHarry Stebbings30:50

      Do you buy the, oh, entry price doesn't matter 'cause we're gonna have hundred billion dollar companies? Like, I just see the round inflation across every round. It makes my life harder with the greater super specs Marc, large funds [laughs] make my life harder 'cause you have a different cost of capital. Do you buy the, uh, if it's $100 billion, the entry price doesn't matter, or do you think differently?

   2. MAMarc Andreessen31:11

      Yeah. So look, the, the entry price definitely matters in particular as, as you go, in particular, as, as, as the company grows in size. Um, but it, and by the way, it matters for a couple reasons. And th- and this is a lesson that gets, like, relearned [laughs] over and over again [laughs] and will be learned many times in the future, uh, which is, you know, the old Don Valentine thing, which I do think is correct, which is more companies die from, from, um, uh, indigestion than from starvation, um, which is it, over-funding is actually very dangerous to the operations of a company. Um, by the way, this is the one piece of startup advice that I think is, like, tremendously grounded in reality for which everybody has many examples in the past. No founder ever listens to it. [laughs] My, my, my track record of ever convincing any founder on this point, I think is zero, but I, I, I will keep trying. Um, and so I would just say number one-

   3. HSHarry Stebbings31:54

      It's so flattering. Oh, I want to give you money. Okay. You think I'm brilliant. Great. [laughs]

   4. MAMarc Andreessen31:59

      Yeah. Yeah. Well, y- yeah. And then, you know, they come up with 18 reasons, you know, they come up with 18 reasons why, and then they, you know, and then, you know, I, I'll really push them on and they're like, "Well, we're gonna have a lockbox and we're gonna put the mon- " You know, it's like, "No, you're not." Like... [laughs]

   5. HSHarry Stebbings32:09

      [laughs] I've never had the lockbox.

   6. MAMarc Andreessen32:10

      Nobody's ever gonna-

   7. HSHarry Stebbings32:11

      I've never seen it.

   8. MAMarc Andreessen32:12

      Nobody's ever gonna do the lockbox. Nobody ever does the lockbox. So, so, so, like, uh, so, so back to your question, I would just say, look, I th- I think, I think, I think high v- I'll come back to high valuation in a second, but I think there's a, an actual core fundamental linked thing that's very important, which is the amount of money. Over-funding is actually just as dangerous or more dangerous than under-funding, number one. Um, and then number two, look, the problem with these high valuations is like, okay, God help you if you need to clear the bar next time and you can't, right? And so, uh, you know, every, every rou- every round sets a, you know, sets, sets a post. It sets, sets a threshold, a hurdle, uh, for being able to raise in the future. And like, and, you know, and, and, and, you know, this is something that people learn every cycle, you know, kind of for the first time in, in a hard way, uh, which is no in- no, no new investor wants to do a down round in anybody else's company. If you put th- th- th- the investor hat on and you're like, "I'm gonna go do a down round in this company [laughs] 'cause I'm gonna be the hero and save the company or whatever, 'cause it, it, it raised too high last time, and now I'm gonna do the rational investment," like, everybody's just gonna hate me. Like, the employees are gonna hate me. The other investors are gonna hate me, [laughs] right? The founders are gonna end up hating me. Um, and so, so nobody ever does a down round, uh, in somebody else's company. And so setting these posts high is, is, is intrinsically a problem. Once again, I would say this is advice that generally [laughs] people completely disregard. So, so I think both of those are problems, and there, and there will be... Look, there will be... There are problems like that in the system now, and there will be more problems in the future. Having said that, I will tell you, at least on the venture side, growth is a little bit different. On the venture side, um, I think every time we passed on a promising venture company over price, I think it's

9. 33:32 – 36:31

   "Stop Chasing Diamonds in the Rough": Why Most VCs Get This Completely Wrong

   1. MAMarc Andreessen33:32

      been a mistake.

   2. HSHarry Stebbings33:32

      Have the best companies been the most expensive?

   3. MAMarc Andreessen33:36

      Um, uh, so I think the underlying question, and tell me if you agree with this, the underlying question is the question of diamonds in the rough. Is that right?

   4. HSHarry Stebbings33:45

      Yeah. Like, whenever I've done a good deal, it's never worked out.

   5. MAMarc Andreessen33:49

      [laughs] That's right.

   6. HSHarry Stebbings33:50

      [laughs]

   7. MAMarc Andreessen33:50

      So, okay. So here's another thing we say in the firm, which is don't ever do diamonds in the rough, only do diamonds.

   8. HSHarry Stebbings33:55

      [laughs]

   9. MAMarc Andreessen33:56

      So this is another thing. This is actually an investor ego thing, I think, um, which is you basically say, "Wow, I'm the investor that's gonna go find the thing that nobody else knows about."

   10. HSHarry Stebbings34:04

       Mm.

   11. MAMarc Andreessen34:04

       Right? Um, or the, or the, you know, the other, another form of this would be like, you know, all these other investors are herd animals. Um, you know, they're all just copycatting each other, and, like, I'm the one who's gonna be different. You know, I'm gonna go do, um, you know, do the thing nobody else can, nobody else can think of. By the way, Peter Thiel does that really well. [laughs] Nobody else does that well. [laughs] There's-

   12. HSHarry Stebbings34:22

       And you're probably not Peter Thiel.

   13. MAMarc Andreessen34:23

       And you're probably... [laughs] Having spent a lot of time with Peter, I, you and I, let's say I am not Peter Thiel. Uh, and yes, and, and, and, and you, you the listener probably are not as well. Um, uh, like all... Uh, put it, put it this way. Or maybe I could say this. Um, there's a tremendous amount of, oh, VCs are, you know, it's like VCs are stupid, VCs are bl- you know, they're herd an- you know, they're herd animals. They're blind. They, you know, they're consensus-seeking. They're heat-driven. Um, you know, they only do the obvious thing. You know, they don't appre- you know, and you often get this from, you know, they don't appreciate my special thing. Having said that, the general pattern is, you know, and this is, like, 9 out of 10 times, or I would even say probably 95 out of 100 times and maybe 99 out of 100 times, which is, like, if it's got merit, uh, to be investable for venture, th- [laughs] there are a lot of really smart and hungry VCs out there, um, and they are working extremely hard to sniff these things out. Um, and it's their full-time job, and it's all they do. Um, and so I, I, yeah, I think it's really unusual to have the diamond in the rough. Um, and, and, and usually if it's the diamond in the rough, it usually means two things. It, it basically means, number one, it means, like, a company that's, like, offside in some fundamental reason. So, and, and by the way, it's in the wrong place, [laughs] right? Um, or it was... It's, it's, like, ca- it's, it's, like, structured wrong. Like, there's a reason why it's a diamond in the rough that actually ends up becoming a big problem. You know, the example people use, which I think is legitimate, which I think there was a point when Uber was available for investment by anybody on AngelList. So it's like, yeah, every once in a while there's one of those. And look, there's a reason... You, you know this. There's a reason where if you just look at the great out- outcomes of venture over the last 50 years, if you, if you just, if rank the outcomes, it's just, like, it's the same names over and over and over again. Uh, you know, and, and it rotates, you know, every decade or so there's some rotation in the names, but, like, the, the, the persistence is, is incredibly strong, and I think, I think the core reason... Oh, by the way, that's the other reason you have a diamond in the rough. The other reason you have a diamond in the rough is you have a founder who fundamentally is just too ornery to just do things the obvious way, um, and they're just, like, hyper disagreeable, and they're just like, "Ah." And they, these are often the founders that, like, have all these theories about how venture is terrible and awful, and these VCs are all evil, and they're, like, very focused on, like, terms and control and, like, all this stuff. Uh, and it's just, and they kind of alienate [laughs] and so the... And then by the time you meet them, it's just like they've alienated, like, six of the mainstream venture firms, and now they're the diamond in the rough. And, and it's like, and then again, it's like, okay, every once in a while one of those is gonna succeed, but, like, I'm not sure that I would want, you know, I'm not sure I would want that to be my business.

10. 36:31 – 38:02

    Do You Actually Need to Like Founders? The Uncomfortable Answer

    1. HSHarry Stebbings36:31

       Do you need to like the founders you invest in, Marc?

    2. MAMarc Andreessen36:35

       So I say no. [laughs] Opi- opinions vary. You know, I said earlier I'm emotional both in good and bad ways. Like, it, you do end up getting very close to people, um, and you do end up wanting to have a high level of trust, and it certainly helps if you like each other and trust each other and, um, uh, and so forth. But, like, I- I- I would just say on the other hand, like, some of the best founders in history, and, you know, look, I, I give you example after example of in the distant past, you know, they were not very likable people. Um, and, and a lot of... You know, by the way, the same thing is true of many of the great artists, s- many of the great filmmakers, many of the great lit- you know, literary geniuses, many of the great philosophers, um, you know, many of the great, by the way, political leaders. Um, you know, these people, you know, but CEO, there's a lot of cases where these people are, like, not, not likable. Um, and yeah, and I, and I f- and, and so I say no, you don't, 'cause I think, like, if, uh, if you're trying to fulfill your personal emotional needs at work, like, I think that's a very fundamental problem, and you shouldn't try to do that. Um, [laughs] the, the Harry S. Truman quote, "If you, if you need a friend, get a dog." Like-

    3. HSHarry Stebbings37:32

       [laughs]

    4. MAMarc Andreessen37:33

       Like, the p- the, the point, or another version of this is, you know, where I say, "Do not bring your whole self to work." Like, whatever you do, do not bring your whole self to work. Like, if, if you show up and you're a professional and you're great to deal with and you're very productive and you're h- you know, and you're, you're, you add value in, in every engagement that you do, and if that's true for you as a VC and you're working with a founder and you're never friends, um, and you just, like, have a great working relationship and you don't, you know, and the company in the later years, whatever, sells or whatever, and you never talk to each other again, like, I've seen that work many times. Um, and it, I think it's totally fine.

11. 38:02 – 41:52

    When Will a16z Go Public?

    1. HSHarry Stebbings38:02

       Marc, do you want to take Andreessen public? It's the question that came up time and time again. But when you look at the machine that's been built, would you like to take it public?

    2. MAMarc Andreessen38:11

       Yeah, so I think the f- I, I think we basically don't have to confront, uh, i- in a serious answer, like, we really, we don't have to confront that question, um, which is there, there's... But this way, there's nothing that we're missing today, um, that we could, we could solve by going public, um, which as you know, by the way, is also increasingly true of a lot of the companies, right? That we, that we both invest in. Um, and so I, I don't think so. I, I mean, I would never rule, I would never rule anything out. Um, we have, you know, Ben and I have run public companies before. Ben's been the CEO of a public company before, uh, specifically, and so, you know, we know what that entails. So I'll tell you my, my, my funny version of this story. So, um, when we first, uh, started a16z, we went around and we met with a lot of the top VCs at the time. This is in 2009, 2008, 2009, and kind of pitched them on what we were doing and, and got a variety of very interesting feedback. Um, and, and some of them became very, you know, very helpful to us and, and, and really helped us, but, um, we got some very interesting feedback. And o- one legendary VC told us at the time, he said, "The, the thing you're gonna hate the most about being a VC is you're gonna hate, you're gonna hate the LPs. Like, just like these LPs, like, they are just, like, the worst people in the world." And he, and he, he gave us what we call the, the mushroom talk, uh, which is he said, "You need to treat LPs like mushrooms," uh, which is you put them in a cardboard box, you put the lid on the cardboard box, you put the box under the bed, and you don't open it for two years. Uh, a- and we said, "Okay, um, you know, that's one mentality." And then we said, "Well, wait a minute. We've been running public companies for the last 15 years. We've been dealing with hedge fund managers. And say what you will about LPs, like, whatever, whatever you think, at least when you walk in the room, you know they're not short your stock." [laughs] Right? Like, if you wanna deal with, like, pain-in-the-ass investors, go public. And so, and of course, what we found is our, our LPs have been incredible. Like, our LPs have been, like, incredibly supportive. They've been incredible partners. We, you know, we, we, we obviously we try to treat them as partners, but, you know, it's just been an incredibly productive relationship that, you know... And, and as you know, like, the best LPs understand, they understand venture, they understand the time horizon, they understand the, you know, the risk, uh, you know, aspects that we were talking about earlier, um, and they've given us license to do a tremendous number of things, um, you know, that have been very risky, of which, you know, some have worked and some haven't. And so it's been an incredibly pr- productive partnership. And so I just go all through, all through that to say, like, I, I can imagine venture firms going public. I think you'd, you'd have to have a real theory on the value that you would get, and you would have to really sign up for what it really takes to run a public company these days, which I would just say, like, public company CEOs have a very hard job.

    3. HSHarry Stebbings40:20

       If you were a betting man, which I guess you might be, who would go public first, Andreessen or General Catalyst?

    4. MAMarc Andreessen40:28

       That's a good question. I haven't actually talked to Hemant about that. Um, he is certainly... Uh, so say this, he's certainly building a firm that could go public. Um, I, I don't, but I don't know whether he would or not.

    5. HSHarry Stebbings40:38

       How big a check do you have to write as an LP to get in a meeting with Marc Andreessen?

    6. MAMarc Andreessen40:42

       Oh, you... [laughs] I would shunt that question to my head of IR. Um-

    7. HSHarry Stebbings40:46

       [laughs] Fair enough. It was, it was a press. I was just intrigued.

    8. MAMarc Andreessen40:50

       I, I will say this. I will say this. It's actually, uh, it's, it's actually I think the same answer as your, as your seed and a- as your, your question about you care about the $5 million investment. Um, you- there are certain LP, there are certain LPs that are really, really smart. Um, and then specifically, there are certain LPs that are very influential in the LP community. Um, and they are, they are not necessarily the same LPs as the ones who write the biggest check. Um, and so I, I should say that, and, uh, uh, we probably shouldn't get into names, but there are certain LPs where I would 100% meet with them independent of check size. Um, and, you know, those, those, those are the great, are the really great ones.

    9. HSHarry Stebbings41:18

       What product do you not have in the Andreessen suite today that you would most like to have?

    10. MAMarc Andreessen41:25

        Uh, you mean investment, investment pro- you mean investment strategy?

    11. HSHarry Stebbings41:28

        Yeah.

    12. MAMarc Andreessen41:28

        Yeah. Um, so the two that we've kicked around for a long time, um, are, uh, public equity on the one hand and then credit on the other hand. Um, and I think there's really good reasons to do both, and then there's issues with both, um, in terms of, uh, i- issues specifically with respect to running, doing them inside a venture firm. Um, and so we've, we've never, we've never, we've never kind of hit the catalyst moment where we've pulled the trigger on either one, but th- th- those would probably be the two nominations.

12. 41:52 – 1:00:58

    Why Silicon Valley Is More Dominant Than Ever?

    1. HSHarry Stebbings41:53

       If I were asking you about diamonds in the rough, one of which you mentioned earlier, I would say that, well, I'm in Europe, and so location can help you find diamonds in the rough. Do you think you have to be in San Francisco today or Silicon Valley today if you're building an AI company?

    2. MAMarc Andreessen42:09

       Yeah. So let me start by saying I wish that we could decentralize tech. Um, you know, I, I come across as a Silicon Valley partisan a lot and a Northern California partisan. [laughs] I should, by the way, note I didn't grow up here. [laughs] You know, I'm an immigrant. I'm an, you know, internal in, in the US immigrant to, uh, to, to California. Um, by the way, I haven't left. [laughs] Which is increasingly-

    3. HSHarry Stebbings42:28

       You haven't gone to Miami? I got lots, like why has he moved to Miami? I'm like, has he moved to Miami? My research tells me no, but so, fuck, okay, maybe he's done a Sergey. [laughs]

    4. MAMarc Andreessen42:37

       No, I'm a Calif- I'm a Calif- I'm a California. I'm, I'm very dug into California. Um, and so like, look, I, I am very keenly... I am not a, I am not a Silicon Valley partisan in the sense of like I think everything should be in Silicon Valley, or I think it'd be good if everything was in Silicon Valley. Like, I don't believe that. And, and I am a very, very keen [laughs] I would say, student of all the issues, uh, in Silicon Valley, and I c- I c- I could spend a long time taking you through them. You, you probably know them all already. Um, but like Silicon Valley has real issues as a, as a place, i- including by the way, just like practical issues, cost, cost of living, cost of housing, trans- you know, the cost of tr- you know, transportation, commutes, like, you know... And then, and then when you get into politics and it's a whole nother kind of parade of horribles. Um, and, and so like th- there are a lot of issues. Um, uh, and then, you know, look, San Francisco proper, there are a lot of issues. Like, it, it, you know, it's a city that 100% does not want to grow. [laughs] It's a city for which like the voters o- on average do not want business to be there. Um, you know, it's a city that's, you know, has real issues for, you know, quality of life, um, and so forth. Um, and so like, i- like I would love to see the, I would love to see the industry spread throughout the US and then spread throughout the world. I would love to see that. Um, I was very optimistic about that happening in, in, in, you know, 2020, 2021. Um, I thought, you know, COVID was obviously horrible, but the, the sudden phenomenon of video conferencing, um, and then, and then, and then, you know, Slack and, and then virtual workplace and, you know, all the hybrid and all these new methods, you know, management methods and technologies that were brought to bear to help companies, you know, decentralize and, and run from home. I, I mean, I was blown away in 2020 that like the banking system didn't collapse, [laughs] the stock market didn't collapse, you know. That, that it turned out you could just like put all these companies online and they could just keep running. The Valley didn't collapse. You know, in fact, a lot of Valley companies grew a lot. And so I was very enthusiastic between 2020 and let's say 2023, that we had cracked the code on how to finally get away from the geographic constraints of Silicon Valley. Um, I think in the last two years, I think that that process has like whiplash reversed in an incredible way. And, uh, and, and I think the tech industry is more centralized in Silicon Valley than it has been in its entire existence. Um, and I think it's AI v- very specifically. Um, and I think, you know, something very close to 100% of the quality AI companies are in California, and specifically in a 20-mile radius, uh, of where I'm sitting right now. There are exceptions, um, and ElevenLabs of course is one of the big exceptions, and Black Forest Labs and, you know, we have a whole bunch that we're very proud of, Mistral. Um, you know, there are definitely exceptions, um, but like, man, if you look at just like the value creation numbers, and if you look at the talent base, and if you look at the flow of where people are going, um, you know, it, it for better or for worse, it's in Northern California. Um, and so I, I, I just think in practice this region is gonna be the, is gonna be, is gonna be the, is gonna be more central than it's been, you know. I- in the next decade it'll be more central than it's been in the last 50 years.

    5. HSHarry Stebbings45:12

       You, you mentioned the multitude of problems that are in the Valley and kind of California more generally. Um, when you look at the state of play in the US today, are you more optimistic today or are you less optimistic today?

    6. MAMarc Andreessen45:27

       Um, I'm a lot more optimistic than I was two years ago, um, and I'm a lot less optimistic than I was 20 years ago. There is something magical i- in the American, I don't know what you wanna call it, gestalt character psyche. Th- there's some, there's something in... And, and, and look, a lot, quite honestly, a lot of it is the i- inflow of people from all over the world, and a, a lot of that is the, the great Europeans who have moved here, you know, over, over the last, [laughs] you know, 400 years. Um, right? Um, it, there's something about having a country that is this big, um, and this powerful and this, you know, kind of, let's say, lucky and blessed in its geographics, um, and its, and its, uh, you know, natural resources and size and scale and all the rest of it, that nevertheless is like incredibly dynamic and has like risk-taking at the core of its DNA. Um, and, and a, and a willingness and a history of like throwing the harpoon at like really big bets in extremely aggressive ways. Um, and there's just something amazing about that. And, uh, you know, you always kind of worry, or at least I always kind of, you know, always kind of worry that that's diminishing and kind of, you know, there's this, this term managerialism, uh, w- I use a lot. But you, you know, you always kind of worry that everything's just becoming managerial, everything's becoming bureaucratic, everything's becoming stale, and there's certainly, you know, lots of aspects of the US in which that's true. Um, but having said that, it's like w- when, when the new thing like appears, like there's something in the American gestalt that like jumps at it like crazy, like throws the harpoon unbelievably hard. And, and it, it's exactly what we're seeing in AI right now, right? Like v- the level... I mean, it's, it's, it's actually a thing that's I think even really under-discussed. The level of enthusiasm, um, uh, capital, uh, uh, concentration, um, the level of determination on the part. I, I, yeah, yeah, I'm sure you s- you know, E- Elon's TerraFab presentation [laughs] the other night, right? It, it, it's just like you watch that thing, my jaw's on the floor, right? I'm just like, I cannot believe... You know, look, I spend all day with like these incredibly like competent, capable people with all these great, uh, uh, ambitions and, you know, I, I get to work with Elon, you know, on, on some things. But I, I, I watch that thing and I just like my jaw's on the floor, um, a- at, at the scope of the ambition. And y- the honest truth is Elon would say there's only one place in the world where that could be achieved, that could be accomplished and achieved. It's here. Um, you know, there's only one place in the world where Elon would be able to do what Elon has done over the course of the last 30 years. You know, thank God that he, you know, came here, uh, to do it. Um, and, um, like, oh my God, like that's amazing, you know, what the AI companies are doing. I, the big AI labs I think is absolutely amazing. What the mega- what NVIDIA's doing is absolutely amazing. Um, and so there, there's just, there's just, there's just something to that. Um, by the way, I understand why a lot of other parts of the world don't want that. You know, I, I would say, you know, young Marc would be like, "This is crazy. Why doesn't everybody see this? Why doesn't everybody do this?" Obviously, it's not all pure upside. Like, there is part of it, you know... The American character I think is rougher, right, uh, than a lot, than, than, than a lot of other, a lot of other countries, a lot of other cultures, and so that, you know, there are definitely pros and cons to it.

    7. HSHarry Stebbings48:13

       Do you worry about the inequality that we're seeing in sp- in terms of wealth inequality? You know, I, I didn't feel... I, to me, it feels like it's greater than it's ever been, and I think we're seeing wealth created in technology larger than it's ever been, obviously.Do you worry about that wealth inequality?

    8. MAMarc Andreessen48:29

       Yeah. So to start with, it's definitely not greater than it's ever been [laughs] . And we know that because we know history. Um, and we know the natural mode of history for thousands of years was, like, there's a strong man, like, and we call him the king or the prince, right? Or the whatever tribal leader, and, like, he has all the stuff. And [laughs] and then there are the serfs, and then they just, like, work the fields, and they don't have any stuff, right? Um, and then, you know, God forbid, you know, then, you know, typically in human history, then there are the slaves, and they also don't have any stuff, right? Uh, or any, or any rights. Um, and so the... I would say the long run state of, of human history has been, like, a much greater, m- much more profound level of inequality than anything under capitalism. Um, and so, uh, so number one, I would [laughs] I would challenge the premise of the question. Um, and then two is like, look, you, you, you... I mean, you know the debate. The debate about inequality always is, would you rather live in a society that has a faster level of aggregate growth, um, and, and a, and a generally rising standards of living across the board, but with greater inequality? Um, or would you ra- rather live in a society which has lower standard of living, lower growth, or maybe even no growth or declining, uh, growth, um, in which things are more equal? Um, and like I said, like, I... Look, I h- I have a lot of European friends who say, like, "Look, Marc, you don't understand. Like, for a normal person, living in Spain is, like, much better than living in the US 'cause, like, the baseline is just, like, much more secure." And I, I, I buy that, and I think that's probably true. Um, having said that, like, if you want the country that is going to go to the moon, um, and build AI and all the rest of the stuff that is happening here, you know, y- you're go- you're gonna have, you're gonna have a dispersion... Of, of course, you're gonna have a dispersion of outcomes. Um, I, I think if you look at the economic growth rate itself, it actually tells you a lot. Um, and a- as you know, there are, you know, just as an example, there are a bunch of European countries now that are either, you know, flat or shrinking. Um, and, you know-

    9. HSHarry Stebbings50:07

       Do you worry, do you worry about the future of Europe when you look at that flat or sinking growth rate for many European countries? Do you worry about it?

    10. MAMarc Andreessen50:14

        Yeah. So I would say I am a tremendously... I am, I am, a- I am, like, tremendously pro-European. I, I am, like, pro-European at my very core. Like, I'm an Anglophile and a Francophile and a, you know, Germanophile. Um, and, um, you know, like, I, I, I, I love all these countries. I love all these people. Uh, I, I think it's absolutely, you know, the, the... E- every country in Europe I think has made, like, fundamental contributions to civilization. Um, I think the human capital in Europe is just, like, absolutely amazing [laughs] . You'll, you'll hate what I'm about to say. Um, but, uh, I... One, one of my things at the firm is I say, "We, we should back every single European founder who moves to the US." Like, we should just reflexively say yes, uh, uh, 'cause they're just-

    11. HSHarry Stebbings50:50

        I 100%, I 100% agree with that. I think the data would agree with that, too. [laughs]

    12. MAMarc Andreessen50:54

        Yeah, exactly. And, and, right, that's a combination of two things, right? That's a combination of the, just the, the raw level of talent, uh, and, and by the way, the great education system and, like, everything else that goes with that, uh, you know, the, which Europe, Europe has a lot, you know. And then couple- coupled with, again, their... If the move to the US indicates a, a, a willingness to seek risk, right? And, and, and, and throw things up in the air, you know, to go after, after a greater level of achievement. And so, but anyway, like, I, I, I, I would... I wanna see... I... 100%, I, I would love to see Europe flourish. I would love to see Europe be a full-scale, like, every bit as dynamic and, and exciting as, as the US is on all these fronts. I would love to see AI in Europe be a huge thing. I would love to see London... I mean, God willing, we'll, you know, we'll have elements of that. But I would love to s- ... You know, obviously, London has already played a key role with DeepMind, and, you know, Eleven Labs is, you know, is, is, is heavily based there now. Um, but, you know-

    13. HSHarry Stebbings51:38

        If I were, if I were to make you head of the EU, Marc-

    14. MAMarc Andreessen51:42

        Yeah

    15. HSHarry Stebbings51:42

        ... uh, what would you change about Europe? You can change anything. It's a magic wand. To incite growth and ambition in a way that would allow us to seek new levels of achievement.

    16. MAMarc Andreessen51:55

        So I, I honestly think this conver- ... I have had this conversation many times. Um, so I've, I've, over the course of 30 years, been visited by lots of, you know, heads of state, senior officials, you know, um, uh, you know, people, uh, uh, people working on different kinds of, you know, commissions studying this kind of thing and so forth. And, and, and basically, the conversation's always [laughs] it's always the same. Uh, I don't know good news or bad news, the conversation's always the same. Um, you know, which is we really want a Silicon Valley, you know, kind of phenomenon in location X. Um, and then I say, "Well, okay. Then do A, B, C, you know, D, E, F. Here's, here are the things that you do to do it." And then they say, "Well, what if we can't do those things?"

    17. HSHarry Stebbings52:26

        [laughs]

    18. MAMarc Andreessen52:28

        Right? And, and it's that same conversation. It's that same, it's that same conversation over-

    19. HSHarry Stebbings52:31

        Oh, we couldn't do that. No, no, no, no, no. That's way better.

    20. MAMarc Andreessen52:34

        No, no, no, no, no.

    21. HSHarry Stebbings52:34

        No.

    22. MAMarc Andreessen52:34

        Yeah. Clearly, we can't do those things, but there must be some other set of [laughs] set of things we can do.

    23. HSHarry Stebbings52:38

        Do you have an option B? [laughs]

    24. MAMarc Andreessen52:40

        Ex- exactly. Well, and this is the thing, is you and e- I think every one of our, of our, of our listeners can fill in exactly what, you know, A, B, C, D, E, F are. By the way, you know, as, as you know, Mario Draghi just did this, right? He just, like, wrote, you know, the Draghi report, um, two years ago. He, he just did this. He just studied the issue. He just... It... Everything's in that... You know, just read that report and do those things, right? Um, and you'll notice what's not happening is any of the [laughs] any of those things.

    25. HSHarry Stebbings53:02

        When you think about all the people that you've met who have been heads of state or in positions of political power, which one were you most compelled to feel you wanted to invest with, work with? They, they... You'd wanna work with them.

    26. MAMarc Andreessen53:16

        Um, so I will, I will, um, I will say, like, in the last five... I'll just say this. In the last five years, um, it's the heads of, I would say, in particular, UAE, um, Saudi, um, Qatar, uh, Kuwait. Um, there is something really special, uh, happening in those countries. I find there's a lot of very talented people, politicians, European politicians, heads of state, former heads of state, where when you get them in private, they know everything. Um, they know what needs to be done. You just pick a topic, and they know it. A- again, it's, it's, it's almost like the policy discussions have been had so many times that we kind of know all the answers already. It's just we, we either like or we don't like the answers to... And, and, and specifically, right, of course, we, we d- we, we like or don't like the consequences of the answers. We don't, we don't like the trade-offs.

    27. HSHarry Stebbings53:58

        Sure.

    28. MAMarc Andreessen53:58

        But, like, I, I think there's a lot of people who, like, know... I, I think there's a lot of people who know, like, okay, this, this, it, th- there is a formula. There are a set of things to be done, and it could be on this question of having a tech industry, or it could be on some, some other, you know, pressing issue, you know, fiscal whatever, whatever, whatever the issue is. And they kind of know what it is, and then they kind of explain, you know, "Here's why we can't do that." [laughs] And then they kind of go back, and then they kind of go out in public, and they kind of, kind of half pretend that they don't know what the answer is. And so I, I don't know whether that's... I don't know whether to view that as encouraging or d- I guess the encouraging thing is I think the intelligence level's probably higher than it looks. The discouraging thing is, you know, the courage part of it is probably not quite there.

    29. HSHarry Stebbings54:35

        And then they get unelected, and then the cycle starts again. [laughs]

    30. MAMarc Andreessen54:39

        Well, so there is this, uh, I mean, we don't know, and just, just talk geopolitics the whole time, but there, there is this really fascinating, as you know, the big, you know, the big difference, the American constitutional system versus the European kind of parliamentary system. There is this thing where when a, when an American president becomes deeply unpopular, he sinks down to, like, forty percent approval rating. Like, when a European politician [laughs] becomes unpopular, he gets down to, like, six percent.
13. 1:00:58 – 1:03:49

    Why Labour Displacement Theory Around AI is Totally Wrong

    1. MAMarc Andreessen1:00:58

       important question and, of course, essential to what we-

    2. HSHarry Stebbings1:00:59

       Well, I guess that actually the question is does that whole economic theory change when we believe that we will seeThe labor being eaten when actually software spend is no longer software spend, it moves into human labor spend, in which case the TAMS explode and we have bigger companies than we could ever have. But a, a Harvey of the world actually eats a large part of legal work and junior lawyers. Uh, my girlfriend's a junior lawyer, so yeah, don't kill me.

    3. MAMarc Andreessen1:01:29

       Yeah.

    4. HSHarry Stebbings1:01:29

       But you're gone. Um, does, does the TAM explode and how do we feel about that?

    5. MAMarc Andreessen1:01:35

       Yeah. So you have friends I'm sure who were great coders before AI and are now using AI-

    6. HSHarry Stebbings1:01:39

       Mm-hmm

    7. MAMarc Andreessen1:01:39

       ... for coding.

    8. HSHarry Stebbings1:01:40

       Mm-hmm.

    9. MAMarc Andreessen1:01:41

       What's the thing that they all report?

    10. HSHarry Stebbings1:01:44

        They're far more productive, uh, they couldn't live without it. Um-

    11. MAMarc Andreessen1:01:49

        And? And? A- are they working fewer, more or fewer hours than before?

    12. HSHarry Stebbings1:01:54

        Um, more.

    13. MAMarc Andreessen1:01:55

        More. Yeah, so th- this entire labor displacement thing is 100% incorrect. [laughs] It's completely wrong. It's classic zero-sum economics. It's the lump of labor fallacy. It happens over and over and over again. It's always been wrong. [laughs] It's gonna be wrong again.

    14. HSHarry Stebbings1:02:09

        Can you even believe it for mediocre people? And I know that sounds very judgmental and horrible, but most social media managers, Marc, are crap. Okay? S- I'm getting in trouble for this, not you. They're crap. If you get a social media tool that is AI-driven and can replace an average social media manager for AT&T, surely you'd do it.

    15. MAMarc Andreessen1:02:26

        I don't say this to, I don't say this to be insulting, but it- it's, it's the classic Marxist analysis. [laughs]

    16. HSHarry Stebbings1:02:32

        Yeah.

    17. MAMarc Andreessen1:02:32

        Right? Which is there's a certain amount of work to be done, and either the machines do it or the humans do it, and so, you know, surely, surely those jobs go away. The, the answer has to be... A- and this is what technology's always done, and this is what AI's gonna do, and this is why I went through the long description that I did of the, the hyperdemocratization of AI. Every single one of those people who's a social media manager today now has AI. They all have AI, they all have AI or they're about to have AI. A- and they're gonna have it at their fingertips, and if they want to... And, and then anything that they wanna do in their life, in their work, in their career, in their profession, in their job for the rest of time, they're gonna be able to use AI to do those things. Um, and, and they're gonna be able to use AI to become a better version of themselves, they're gonna be able to use AI to be able to learn new skills, they're gonna be able to use AI to become more productive at work. They're gonna use AI to be able to not do a lot of the grunt work they're doing today so that they can do higher value work. And then now I'm just talking classical economics, which is just, you know, the kind of the, the other side from Marxism. Classical economics says that the, the actual function, the actual economic function of technology, and this includes AI, the actual function is to raise productivity and specifically to raise marginal productivity of the individual worker. And again, this has happened many, many times. You take an individual worker who used to write on pencil and paper and you give them a typewriter, and then they're used to writing on a typewriter, and then you give them a word processor, and then they're used to do hand accounting, and now you give them a spreadsheet. You know, and, and, and, and, and. Um, by the way, social media manager, a job that didn't exist before the internet. [laughs] Right? Technology actually creates the... Right, creates the new job.

14. 1:03:49 – 1:10:22

    Are Companies 75% Overstaffed? The Most Controversial Take on Hiring

    1. MAMarc Andreessen1:03:49

       And so AI-

    2. HSHarry Stebbings1:03:49

       Maybe, maybe I'm a European communist, Marc, but then why are we seeing layoffs? [laughs] Why are we seeing layoffs everywhere? Why, why is every CEO-

    3. MAMarc Andreessen1:03:56

       Oh

    4. HSHarry Stebbings1:03:56

       ... I'm meeting saying, "Oh, we're flat headcount," or, "We're reducing"?

    5. MAMarc Andreessen1:03:58

       Oh. Oh, that's very easy. So, uh, number one, uh, interest rates. Um, so it, as you know... So interest rates, interest, in- interest rates, uh, we're, we're at zero. Um, and then interest rates went from 0 to 5% uh, at, at, at, at, at, at record speed like three years ago. Um, and, and companies, companies... Uh, every company had to repla- every big company had to replan all of their financial... All their cost of capital went up five points. Like, they all had to completely replan financials. And then number two is they all overhired during COVID. Like the... Y- I mean, you know. I mean, the, the, the, the, the hiring binge that companies went on in COVID was just, like, wild, right? And, and it was the, and it was the combination of the two. It was, it was the interest rates going to zero during COVID, and then it was the, just the complete loss of discipline at all these companies when they went virtual, um, and when employees just became a, you know, an icon on a screen, um, and they just, you know, became just like, "Yeah, just like oh, hire like tons more of them." Um, and so w- specifically what you have happening right now is you have essentially every large company is overstaffed. We could debate how much. It's at least overstaffed by 25%. I think most large companies are overstaffed by 50%. I think a lot of them are overstaffed by 75%. Um, a- and, and then, a- and now they all have the silver bullet excuse, right? "Ah, it's AI." Right? And, and, and, and I know this. I, I know this, I know this for a f- I know this... [laughs] Well, I know this for a fact 'cause number one, I talk to them. [laughs] But, but number two, I know this for a fact because AI, uh, until like, literally until like December, right, was not actually good enough to do any of the [laughs] to, to do any of the jobs that they're actually cutting. And, and so it- it like it just can't have been AI. So the other thing is people look at the hiring rate for new, for new hires, right? And they look at, you know, at the, at the, at the spike in how hard it is for new college grads to get new jobs. Um, and, and again, people peg that on AI. But I think that's actually two things. Number one is, okay, of course the companies that overhired and, and overinvested and now have to bring down their spend, um, and their headcount, obviously they're not gonna hire ve- very many people, so that, that's part of it. And then the other is, you know, one might make the observation that maybe the skill set of a lot of college graduates over the last decade doesn't necessarily match with the job market, right? Um, and that's a, you know, very uncomfortable conversation for people to have. Um, but I, I think that, that, that also has... I, I mean, if you talk to any employer they'll immediately tell you that.

    6. HSHarry Stebbings1:05:56

       Final one before we do a quick fire. You are probably the best copywriter of our time. It's Time to Build, American Dynamism, Software is Eating the World. I picture you in this kind of musky room, uh, kind of American countryside billowing out as you come up with these titles. What is your copywriting process?

    7. MAMarc Andreessen1:06:16

       Uh, it's the culmination of raw frustration. Um, [laughs] it's the s- amount-

    8. HSHarry Stebbings1:06:23

       That ruins the romanticism of my imagination, but keep going. [laughs]

    9. MAMarc Andreessen1:06:26

       It's the Mount Etna, it's the Mount Etna exploding, uh, uh, uh, p- phenomenon. Um, so, um, it, it's, it's, it's basically always when I just literally can't take it anymore. Um, and I just think that, like, there's just like s- fundamentally people, you know, uh, th- you have to... People just, people are thinking the wrong thing. [laughs] It's always the old joke. People are thinking... You know, something is saying, some- somebody's saying something wrong on the internet. Um, you know, that kind of extrapolated up. And so it's, it's when I just think, like, there's a fundamental misperception in the world, um, and it's just not correct. And then of course I have the, you know, I have a sufficient ego to be able to say I can, I can correct that. Um, and so it, it's usually that. Um, I, uh, uh, basically everything that you mentioned, the actual drafting in every case has been like two hours. Um, it's just like, it's just, it rip it and go. But it's, it's becau- it's because I spent the preceding two years getting increasingly frustrated. Um, and I don't know about you. You, do you have an internal monologue?Do you talk to yourself in your head?

    10. HSHarry Stebbings1:07:17

        Yeah.

    11. MAMarc Andreessen1:07:18

        Yeah.

    12. HSHarry Stebbings1:07:18

        Are you kidding me? All the time, especially when I run. Yeah.

    13. MAMarc Andreessen1:07:21

        Yeah, exactly right. And so, so what hap- what... You're probably like this, too. So what happens is I'm just arguing with myself all the time. Um, and so by the time I write, I've been arguing with myself in my own head for two years and trying to figure out what the good arguments are, and then it just all kinda comes... It just... d- g- I just, like, drop it on the page.

    14. HSHarry Stebbings1:07:35

        I, I asked Doug Leone this, but I'm intrigued 'cause you have the same challenge. The weight of your voice is so significant. How do you ensure that people will fight back when the weight is as great as it is?

    15. MAMarc Andreessen1:07:46

        So number one, it's, it's [laughs] let's say, it's nice. Um. [laughs]

    16. HSHarry Stebbings1:07:53

        [laughs]

    17. MAMarc Andreessen1:07:53

        There's an upside to it. Um, uh, so, uh, I don't, I, I would say I don't wanna lose the upside. I do like the upside to it. Um, um, but yeah, look, I... The very specific form of that is I think, well, so there's actually, maybe you could say two problems. There's the giving advice part, and then there's actually the just asking questions part, which is also a problem 'cause people will interpret the, the, the questions as, as advice or directives. Um, I, I just think you have to, like, the way I think about it is if I'm, if I'm dealing with one of my partners at the firm or if I'm dealing with one of our porfo- portfolio CEOs, I just ha- I actually have to be really careful to say, "Look, I'm not... I don't know what the right thing to do here is. I, I don't have the information that you have. Um, I, I, I, I don't believe I can dictate, um, you know, what this is." Um, uh, I used to use... Do you remember the concept of, of an in-flight magazine? Does that ring a bell?

    18. HSHarry Stebbings1:08:34

        No, but tell me.

    19. MAMarc Andreessen1:08:36

        So, so in the old days, before, before phones and, and, and, and tablets, um, uh, when you took an airline flight, there was an air- there'd be a magazine from the airline in the, in the, in the pocket of the seat. That's what everybody would kinda sit there and read if they didn't bring anything. So it'd be like the, you know, the Southwest Airlines in-flight magazine. And then the, the, the pejorative was, like in venture, it was basically, uh, uh, board members who gave advice, uh, uh, by way of in-flight magazine, um, which is, you know, they flew in for the board meeting. They read the magazine. The magazine said, you know, Java's gonna be a big thing, and so they said, "What's our Java strategy?"

    20. HSHarry Stebbings1:09:02

        [laughs]

    21. MAMarc Andreessen1:09:04

        Right? Or f- or f- or f- or for every other new thing that came along and, you know, maybe the current version of that is whatever, whatever I read on X yesterday or whatever I saw on a YouTube video or whatever, right? Um, or in the newspaper. Um, so y- you do have to be, like, really, really careful, uh, I think, um, as you, as you get more senior in this field. You have to be, be really careful both in your firm and also with, with, uh, uh, with founders, you know, God forbid, telling them what to do, A. Uh, B, suggesting what they do, which is sort of the same as telling them what to do, which is dangerous. And then, C, even just asking questions, um, you know, becomes very dangerous 'cause they interpret the questions. And so it, you just, I think you just have to acknowledge that up front and bend over backwards and kinda say, "Look, uh, you know, this is genuinely not what I'm trying to do, and I'm just gonna ask questions," um, and do that. Um, generally, the w- the way that plays out, like in our firm is, it, like I, I said earlier, like Ben, Ben and I almost never... We almost never weigh in on a direct way on an investment, um, that one of our partners is working on. Um, and the reason is just 'cause, like we don't, we don't want that warping effect to take place bec- bec- bec- and specifically because we know we lack, we lack the knowledge, uh, to be able to do that. Um, and so, and, and then in particular, and in particular, maybe obvious, but doing that in public is particularly dangerous, right? If there are other people around, and then there's, like, perceived social pressure. Um, and so if we're gonna have, like, a difficult conversation with somebody or we're gonna really question something, it's, we, we, you, you know, we have to take it one-on-one, um, and, and, and have to be very careful in, in how often we do that.

15. 1:10:22 – 1:14:12

    Why a16z Invested $300M into Adam Neumann

    1. HSHarry Stebbings1:10:22

       We're gonna do a quick fire round, and we're gonna start with an easy one. Adam Neumann and Flow was a controversial deal. Why did you, why did you do it? What, what was the thinking behind it?

    2. MAMarc Andreessen1:10:33

       Um, so at the height of the WeWork, um, meltdown, um, when, when it was in the newspaper every single day, um, and, and, and, you know, kind of, yeah, and kind of, you know, reach- reaching its, its endpoint, um, I talked to a friend of mine who is one of the legends of the real estate world, um, uh, who I won't name, but, um, is a very, very credible, very famous real estate guy. And he said, "Look," he's like, "Whatever people say [laughs] about this whole thing," he said, "Look, there are only two people in the history of the world who have built brands, uh, built compelling brands where people care about, uh, the brand, uh, care about the name on the building, uh, for commercial real estate in the history of the entire world." And he said, "One of them is president of the United States, um, and the other is Adam Neumann." Um, and so he said, "Pe- people need to understand, like, yeah, this is not, like, whatever. It's going... This one's going sideways now, but, like, this guy is, like, a generational or all-time talent in that industry, um, at doing that." And, and of course, not just the brand, but, like, the act- the val- you know, the value proposition, like the, the, the, the thing that's underneath that. Um, and so that, you know, that all, you know, that, that, you know, that really, that really stuck with me, right? 'Cause then, then that was up against the absolute wall of negativity, right, at the time where people were just tripping all over themselves to just say the worst possible things they could about the guy. Um, and then, yeah, and then we, we got to know him after that. Um, and, you know, as, as, as you know, like became, you know, thoroughly convinced or rein- reinforced our view that he was a, a generational talent. And I, I [laughs] and I think, yeah, we feel very strongly that that, that that is the case, and we're, we're very happy with that investment.

    3. HSHarry Stebbings1:11:49

       What was the most controversial deal or most disagreed upon deal internally from your memory?

    4. MAMarc Andreessen1:11:55

       I, I don't think we've had individual, individual deals that are really controversial internally, 'cause we, we, we get... So the deal we kinda make with all of our investing partners is they all get to c- they all get to take risk. So they all get to go out on a limb and do the things that other people are gonna think are dumb. Um, and so they don't generally, like, backbite each other on that. Um, uh, so I don't think it's really that as much. Um, I, the, the bigger issue, I think, is probably more, and I'd put this more on, on Ben and me than anybody else, but it's just like, okay, what are the kinds of investments that we do? Like, what's, like, what ca- you know, what sectors are in and out of the strike zone, right? Um, and I'll ju- I'll just give you an, I'll give you an e- I'll give you an example. I mean, the most straightforward example is the deal we didn't do we should have done is the Anduril Series A. Um, right? Which was like-

    5. HSHarry Stebbings1:12:35

       Sure

    6. MAMarc Andreessen1:12:35

       ... which was just, like, sort of obvious that it was gonna be special. And, you know, Palmer, we had worked with Palmer at Oculus, and it was just, you know, and his colleagues were clearly very capable, and it was just kind of obvious that, you know, there was something, you know, very special. But it was just, like, at the, the, the, the, say, like, the politics, the cultural elements of that at the time when it first came around, I would say we got scared off, um, in a way that I very much regret. Um, and so you'll notice that, like, we are now extremely enthusiastic investors in defense tech and in, um, you know, things involving law enforcement, national security, public safety. Um, and, you know, say 100% we would not make that same mistake again. Um, and so I, and I think it, I think it has to do with us actually... You see what I'm saying? It's, it's like, it's, it's risk-taking at the conceptual level beyond the level of an, of an individual company. Um, and, and yeah. And then, like I said, it's, it's, it's generally Ben and me when, when we f- when we screwed that up.

    7. HSHarry Stebbings1:13:22

       You sit down with your kids and you can tell them one thing that you think would make them the most proud about what you've done, what would that one thing be?

    8. MAMarc Andreessen1:13:30

       You know, it's, it's impact on the world, and it's, it's in the form of what I described earlier, um, with the, you know, the idea of, you know, the economic idea of consumer surplus. But, but conceptually, it's just like, wow, like stuff that I worked on or built or helped build is something that's really like it's, it's all over the world and people all, all over the world are using it and, and, and it's been tremendously, you know, on, on, on net tremendously beneficial. Um, I think that's one. And then look, the other, the other that I think rises in, in, um, in, uh, in importance over time is just the number of people, um, that hopefully I've been able to have a positive impact on. Um, so, you know, the number of people who I've been able to, you know, help or support, um, or help get through hard times or teach different things to, uh, who've been on... you know, gone on to be very successful. And I, and I, and I think as time, as time's passing, it's more of that second category.

16. 1:14:12 – 1:16:21

    First Meeting with Mark Zuckerberg

    1. HSHarry Stebbings1:14:12

       Penultimate one. What was the most memorable first founder meeting you've ever had? Not the best founder or anything like that, just the most memorable first founder meeting.

    2. MAMarc Andreessen1:14:21

       First meeting with Mark Zuckerberg. Um, it, it was amazing. Uh, 'cause Mark's like 19 or whatever, uh, and it was Mark and Sean Parker. Um, and I knew Sean a little bit, but not well, and I'd never met Mark before. Um, and Sean talked the entire time. Um, th- Sean literally talked the entire time. Just talk, talked a mile a minute. Every idea. It was just absolutely amazing. Um, uh, sh- and, and Mark, like, didn't talk. And, and, and, um, and, uh, so Sean, so Sean and I basically talked the whole time and, and Mark sat and listened. And I walked away and I was just like, "Wow, that was really weird." I was like, "One of two things has happened here. Like, either he's completely unsuited for the job 'cause, like, he literally doesn't talk, um, or he's, like, listening and absorbing everything that people are saying [laughs] around him and he's gonna be on a vertical learning curve like crazy 'cause he doesn't have the ego need to just, like, say things. He can, he, he can just, like, absorb." Um, and, and, and of course, it turned out to be [laughs] to be number two, which is... You know, and I've talked about this before, like, he's just on this incredible learning curve and has been his entire life in, in the most, like, amazing way. Um, but yeah, I would say that, that one. I've never told that story before, but that, that was memorable.

    3. HSHarry Stebbings1:15:18

       I love that. And it was amazing-

    4. MAMarc Andreessen1:15:19

       The second, the second meeting, the second meeting I got him to talk. And by, and by the way, and by the way, everything Sean said was right and it was all genius.

    5. HSHarry Stebbings1:15:27

       [laughs] I would love to have seen that.

    6. MAMarc Andreessen1:15:30

       Yeah.

    7. HSHarry Stebbings1:15:30

       Final one. You've been an incredible entrepreneur, you've been a great investor, and you're also an amazing firm builder. If I were to push you, and one of the greats in venture submitted this one, but I can't tell you who it was, um, if I were to push you on which one you'd most like to be remembered for in history, what would it be?

    8. MAMarc Andreessen1:15:50

       What were my choices?

    9. HSHarry Stebbings1:15:52

       Entrepreneur-

    10. MAMarc Andreessen1:15:53

        Entrepreneur

    11. HSHarry Stebbings1:15:54

        ... firm builder, or investor.

    12. MAMarc Andreessen1:15:56

        Yeah. I think en- entrepreneur. I, I... and, and, you know, Ben and I are lucky in that we, we've been able to... You know, a16z itself has been an entrepreneurial project. Um, and so, uh, yeah, I would, I would... If I, if I could choose, that would definitely be the one.

    13. HSHarry Stebbings1:16:09

        Mark, I cannot thank you enough for doing this. As I said, 10 years I wanted to do this, so thank you so much for joining me.

    14. MAMarc Andreessen1:16:15

        Awesome. Thank you. I really enjoyed it. The questions are fantastic, and I've, I... Look, and you've been doing an incredible job, so I, I also really appreciate the chance.

Episode duration: 1:16:32