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a16za16z Podcast | Talent, Tech Trends, and Culture -- with Ben, Marc, and Tyler Cowen
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CHAPTERS
- 0:01 – 2:23
How Ben and Marc Met at Netscape
Tyler Cowen opens by asking how the two met in 1995. Ben recalls Marc interviewing him about Lotus Notes, and Marc explains why Ben saw early that the internet would win.
- •Marc interviewed Ben for a product management role at Netscape
- •Ben had worked on Lotus Notes, where about half the code base was making LAN protocols work together
- •Marc says Lotus Notes was built assuming the internet would not work
- •Ben figured out early that the internet would do what Notes did
- 2:23 – 4:04
Loudcloud and the Idea of the Cloud
Marc explains how their time at AOL, where traffic surges blasted advertisers' websites offline, inspired Loudcloud. The idea was to hand infrastructure over to professionals.
- •Netscape was sold to AOL in 1998
- •AOL's traffic fire hose would overwhelm advertisers' websites such as J.Crew's
- •Companies were unprepared for the internet to work at scale
- •The cloud idea: a system that load balances and scales with demand
- 4:04 – 7:58
Founding a16z and Betting on Talent
Ben explains why they started a venture firm in 2009: great tech companies are run by their founders, yet venture capital was built to replace them. He describes treating the firm as a talent business built on long-term relationships, and Marc discusses how extreme founders are.
- •Great companies were run by founders for a long time, yet conventional VC wisdom was to replace them
- •Only a founder can get to the next product-market fit
- •Michael Ovitz's CAA network concept inspired the long-view approach to relationships
- •Marc says founders are not normal and may be getting more extreme
- 7:58 – 10:21
Blockchain as a New Computing Platform
Ben argues that asking for blockchain's killer app is the wrong approach and compares it to earlier platforms like the smartphone. Its new feature is trust, which enables programmable money and contracts and digital property.
- •Nobody ever predicts the killer app of a new platform
- •Smartphones were worse than PCs but had GPS and a camera
- •Blockchain is slower and harder to use but adds trust without relying on governments or companies
- •Applications include programmable money, contracts and digital property
- 10:21 – 15:33
The Future of Retail, Wearables, AR and VR
Marc predicts that traditional retail will mostly disappear because of delivery logistics and over-levered economics. He sees audio, medical sensors and eventually optics as the key wearables, and argues VR will be far bigger than AR.
- •Retail will survive mainly as experiential retail, while delivery takes over
- •Third-party retailers are over-levered, as Toys R Us showed
- •Audio such as AirPods is a deceptively important wearable
- •Body sensors could predict heart attacks before they happen
- •Marc argues VR will be a thousand times bigger than AR, a contrarian view in the Valley
- 15:33 – 19:22
Martin vs. Fresh Prince and TV Lessons for Founders
A lighter segment starts with Ben explaining a tweet about Fresh Prince and Martin people, followed by rap recommendations. Marc then names three TV shows and what each teaches about startups.
- •Ben explains the Fresh Prince of Bel-Air versus Martin distinction
- •Ben recommends Will Smith for people who think they dislike rap
- •Marc says Halt and Catch Fire is the most accurate portrayal of a tech startup
- •Burn Notice shows that a good founder needs every conceivable skill
- •Succession shows dysfunction at certain larger companies
- 19:22 – 24:18
Culture, Hollywood and Seeing Different Kinds of Talent
Ben describes the firm's Cultural Leadership Fund, which connects cultural figures with tech CEOs and builds a talent pipeline. Ben and Marc discuss how Hollywood and Silicon Valley see different kinds of talent and are now converging.
- •The fund connects cultural leaders with tech founders to share the firm's early advantage
- •It gives CEOs insight into moving culture and different types of talent
- •Ben says talent can look different and be hard to see, as with his own blind spot about helpfulness
- •Marc says Valley companies like Netflix and Amazon are now decoding culture while media companies take tech seriously
- 24:18 – 26:09
Will Location Matter More or Less in 20 Years?
Marc says both effects will occur. Telepresence and collaboration tools will make distributed work easier, but the enormous prizes for winning startups will push people to be in the same room, making the Valley more central.
- •Telepresence, VR, Slack and GitHub will make distributed organizations easier to run
- •Telepresence robots give a sense of physical presence beyond a screen
- •Winning companies could be 10 to 100 times the size of Google and Facebook
- •Those stakes will push founders to optimize everything, including being co-located
- 26:09 – 28:48
Managerial Intelligence and Emergent Platform Behavior
Ben says managerial intelligence combines systems thinking with the ability to truly see the people in your organization. Marc, asked about the tweet storm, draws the lesson that successful platforms let users surface behaviors their creators never imagined.
- •Most people are not systems thinkers, as the minimum wage example shows
- •Great managers understand employees' motivations and see decisions through their eyes
- •Marc jokes that his inability to shut up led to the tweet storm
- •Users invented many of Twitter's key behaviors, like retweets
- •The product principle is to let users innovate
- 28:48 – 30:14
Barbecue, Luxury and Non-Profit Sushi
Ben says time is what separates excellent barbecue, illustrated by a conversation between Kanye West and his wife's cousin about luxury. Marc then reacts to Tyler's favorite question about non-profit sushi.
- •Ben's answer on excellent barbecue is simply time
- •Kanye West said time is luxury and that is why he makes luxury records
- •Marc is strongly repulsed by the idea of non-profit sushi
- 30:14 – 32:21
What Wall Street and Government Misunderstand About Tech
Marc says the gap with Wall Street is partly cultural and an opportunity he might not want to fix. Ben says the government wrongly assumes technology isn't inevitable and should stop debating whether to hold it back.
- •Marc cites a cultural delay between Wall Street and the Valley as part of the opportunity
- •Ben quotes Andy Grove: technology is inevitable, like steel
- •Ben says restrictions on stem cell research were costly
- •Ben says technology has good and bad effects but is overwhelmingly positive, and argues for debating how to make it great
- 32:21 – 34:37
The Last Thing Software Will Eat: Picking Small Teams
Marc says the last thing software will eat is organizing and selecting small groups of people to do something new. He traces venture carry to 1600s whaling expeditions and compares it to green-lighting movies and funding startups.
- •The challenge is organizing a small number of people to do something new and picking which to fund
- •The term carry comes from whaling expeditions in the 1600s
- •About three quarters of the time the boat came back
- •Judging a crew under pressure is like green-lighting a startup or a Hollywood film
- •Marc says they would fund and retire if they could automate it
- 34:37 – 38:24
Book Recommendations and Closing Misconceptions
Ben recommends a book on Genghis Khan for what it shows about inclusion, and Marc recommends Timur Kuran's Private Truths Public Lies on preference falsification. The conversation ends with a playful question about each other's misconceptions.
- •Ben says the Genghis Khan book is a management book about choosing for talent over caste or tribe
- •Marc describes Kuran's theory of preference falsification
- •Marc says it explains how suppressed views can cascade into revolutions
- •Ben jokes that Marc knows him so well that he has no misconceptions
- •Marc ends with a Will Smith joke
