David SenraMarc Andreessen: The World Is More Malleable Than You Think
EVERY SPOKEN WORD
150 min read · 29,925 words- 0:00 – 0:56
Caffeine Heart Scare
- DSDavid Senra
[static] I wasn't expecting to start here. I wanna talk about why you were consuming so much caffeine that you noticed that your heart was skipping a beat. [laughing]
- MAMarc Andreessen
[laughing] So I love caffeine. So for, for a very long time, I always said that the ultimate day, like the perfect day was twelve hours of caffeine followed by four hours of alcohol. Like, [laughs] like that, that's just like the ultimate. I did, I did, I did, I did cut out, or at least for now, I've cut out, cut out the, the four hours of alcohol. But, um, yeah, caffeine is just like one of, one of nature's most, most marvelous things. But y- y- it turns out you can overdo it. And so, uh, yeah, a while ago, I was drinking, uh, so much coffee at work that, um, I was sitting in a meeting a couple of years ago, and I started to feel just a little bit-- Something felt off, and I just took my pulse and about-- I was-- realized I was skipping about every tenth heartbeat. So I had, I had like, um, an existential crisis 'cause I'm like, all right, how-- you know, do I need to call nine one one? It's just like, am I about to have a heart attack? Am I about to die? And so I go under the table and I Google, and I'm like, "Is this a problem?" And, and Goog-- and for-- Dr. Google said, "No, it's okay. It's fine. You just might wanna cut back [laughs] a
- 0:56 – 3:24
Zero Introspection Mindset
- MAMarc Andreessen
little bit on the caffeine."
- DSDavid Senra
You said something that I love and I never hear other entrepreneurs think about, uh, talk about, but I think it's super important, that you don't have any levels of introspection.
- MAMarc Andreessen
Yes. Zero. As little as possible.
- DSDavid Senra
Why?
- MAMarc Andreessen
[laughs] Move forward. Go. Yeah, I don't, I don't know. I've just, I've found people who dwell in the past get stuck in the past. It's, it's just, it's a real problem, and it's a, it's a problem at work, and it's a problem at home.
- DSDavid Senra
So I've read obviously four hundred and I think now ten biographies of history's greatest entrepreneurs.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
And that was one of the most surprising things. Like, what's the most surprising thing that you've learned from this? They're like, "Oh, they have little or zero introspection."
- MAMarc Andreessen
Yeah.
- DSDavid Senra
Like, Sam Walton didn't wake up thinking about his internal self. He just woke up, he's like, "I like building Walmart. I'm gonna keep building Walmart. I'm gonna make more Walmarts," and just kept doing it over and over again.
- MAMarc Andreessen
And you probably know if you go back, like before a hundred years ago, it never, it never would have occurred to anybody to be introspective. Like, it's, the, the whole idea of, I mean, just all of the modern conceptions around introspection and therapy and all the things that kind of result from that are, you know, kind of manufactured in the nineteen tens, nineteen twenties.
- DSDavid Senra
Say more about that.
- MAMarc Andreessen
[chuckles] Great men of history didn't sit around doing this stuff at any prior point, right? It's, it's all, it's, it's, it's, it's all a new construct. It was, it was, you know, it was-- Well, so first Western civilization had to kind of invent the concept of the individual, right? Which was like a new concept, you know, several hundred years ago. And then w-- and then, you know, for a long time, it was all right, the individual runs, right? And, like, does, does all these things and builds things and, you know, builds empires and builds companies and builds technology, does all these things. And then, you know, kind of this kind of guilt-based whammy, you know, kind of showed up, uh, from Eur- from Europe, uh, a lot of it from Vienna in the nineteen tens, nineteen twenties, Freud and all, all, all, all, that, that entire movement. And, and kind of turned all that inward and basically said, "Okay, now we need to like, you know, basically second-guess in- the individual. We need to criticize the individual. The individual needs to self-criticize." Right? "The in- the individual needs, needs to feel guilt, needs, needs to look backwards, needs to, you know, dwell on the past." It never resonated with me.
- DSDavid Senra
Do you find a lot of the greatest founders that you've spent time with and backed and partnered with are-- have low introspection?
- MAMarc Andreessen
Yeah, generally. Although i- i- in fairness, um, you know, the, the, the introspection is probably linked to the, the personality trait of neuro- neuroticism, right? Um, so, you know, a lot of, a lot of the best founders are, you know, at I think at like zero percent neuroticism. Like, they, they just don't get emotionally phased by things that happen, which is a superpower when you're an entrepreneur. But having said that, some of the great entrepreneurs are, in fact, very neurotic. Like, it, it, you, you know, that's also the case. It, it, it's not a, you know, it's, it's not, it's, it's, um, maybe it's nice to have to be low neuroticism, but, but not necessary. And so, you know, there are some that kinda get wra- wrapped around the axle, um, on, on kind of personal issues. Um, you know, as you know, the, you know, these days, sometimes that then, you know, kinda turns into, you know, use of, uh, you know, psychedelics, you know, different kinds and hallucinogenic drugs, and, you know, that's like one very interesting kind of trajectory for, you know, kind of the culture of the country, cul- culture of the world, and, you know, we'll, we'll
- 3:24 – 4:54
Psychedelics and Founders
- MAMarc Andreessen
see where that goes.
- DSDavid Senra
So we've recorded, I don't know, like a dozen of these so far, most of them with some of the greatest, you know, founders living for the show. I can't believe how many, how many times on almost every episode psychedelics pops up.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
And they're like, "You should try them." I'm like, "I'm not doing any drugs." [laughs]
- MAMarc Andreessen
Just wanna be clear, I'm not. I've never have. I'm never going to. Like, I, I, I have hor-- I have ti-- You know, the problem is I already have, like, tons of horror stories from people I know or know of that, you know, kinda came out the other side like... Well, actually, I had a [laughs] my, my deepest conversation on this was actually, was actually with, with Huberman. Um, and, um, and I was describing this phenomenon where we see it in Silicon Valley where, you know, kind of there are these guys get under pressure and, you know, they kind of feel anxious or whatever, and they decide to, you know, somebody tells them about psychedelics, and they try it, and, and they kind of come out the other end as a changed person, and, and they kind of come out, like, much more at peace. But then they also tend to, like, quit their companies [laughs] and they, like, move to Indonesia and become a surf instructor. Like, they're, they're just like, [laughs] it's just like peace out, right? They're, they're, they're just done. There's a, been a whole bunch of examples of this, and I, and I was complaining to Huberman about this. And, and true Huberman kind of wise Yoda style, he's like, "Well, you know, how do you know they're not happier?" [laughs] Right? Like, like maybe that was the positive outcome. Like, maybe the thing that was driving them to be a great entrepreneur was a fundamental level of insecurity, right? And kind of this, you know, this kind of unsatisfied, you know, kind of neurotic impulse, um, and now they're just, now they're just satisfied. Now they're just, you know, whatever the serotonin levels or whatever have been recalibrated, that they're just kind of satisfied sitting on the beach and being a surf instructor. Um, and, you know, maybe they're better off. And I'm like, "Yeah, but their company [laughs] is failing." Um, and so anyway, yeah. So, uh, it-- There's a possibility that there's a better version of you or me on the other side of, you know, Ayahuasca, but I, I'm not willing to find out.
- DSDavid Senra
I'm not either.
- 4:54 – 7:18
Motivation Beyond Happiness
- DSDavid Senra
Daniel Ek has the greatest way to put this. Like, he thinks the best entrepreneurs are not optimizing for happiness, they're optimizing for impact.
- MAMarc Andreessen
I think that's true. I think that's true. I think it's certainly true for Daniel-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... who's a, you know, kind of a great case study of that. You know, having said that, I, you know, I always kind of wonder is that, well, intrinsic versus ex- extrinsic motivations. Impact strikes me a little bit as an extrinsic motivation. You know, it's, it's like, yeah, impact, money, fame, you know. And by the way, I think extrinsic motivations are fantastic, and I think, you know, they can be very motivating. The people who get, kind of get the great rewards for building great things, you know, deserve them. But at least what I've found is it's the intrinsic motivations that actually get people up in the morning. Um, and, and, and, and, and there's where you, you know, you're dangerously close to straying into introspection, but, you know, it's like, okay, like, what, you know, what, what is the thing that causes somebody who's now, you know, extremely materially wealthy, extremely successful, you know, to get up in the morning and continue to, you know, kind of punch away at the world? I think those, those tend to be interior.
- DSDavid Senra
What's that for you?
- MAMarc Andreessen
Oh, I mean, that would require introspection. [laughs] I'll, I'll let other people speculate.
- DSDavid Senra
No, you have to have it.
- MAMarc Andreessen
It's, it's a lot more fun to speculate about other-
- DSDavid Senra
So, like, you-
- MAMarc Andreessen
... other people's, uh, other people's introspection.
- DSDavid Senra
But I am curious about you because, like, what you have, you have a series of quotes that I absolutely love. I save on my phone. I reread from time to time. One of them, and I'll, I'll butcher it, but it's just like, "You know, the world is way more malleable than you think, and if you just pursue something with a lot of maximum effort, drive, and energy, the world will recalibrate around you easier than you think."
- MAMarc Andreessen
Yeah.
- DSDavid Senra
And I actually reread that this morning before I came over here, and I was like
- DSDavid Senra
What is that for Marc? Like today, like what are you waking up trying to change in the world?
- MAMarc Andreessen
Yeah, there's, there's a lot that we're actually trying to do. I'm suspicious that that's my actual underlying motivation. Yeah. I-
- DSDavid Senra
Why?
- MAMarc Andreessen
I, just because, like I, like I say, I don't think an external impact is enough to keep people going, or at least I've seen way too many people who had a high level of external impact and then at some point they just stop.
- DSDavid Senra
Okay.
- MAMarc Andreessen
Well, here's the problem with external impact. It's like, okay, it's 4:00 in the morning, you're staring at the ceiling, like, is that enough? [laughing]
- DSDavid Senra
[laughing]
- MAMarc Andreessen
Right? Like, external impact is stuff that's happening to other people, right?
- DSDavid Senra
Yeah.
- MAMarc Andreessen
But it's like, all right, what, what, what is it about you? The, the, the, the story I like to tell myself is that I'm competing with myself, right? The, the story I like to tell myself is I'm getting up in the morning 'cause I'm trying to become a better version of myself. I'm trying to become, you know, smarter and better informed and, you know, have, you know, reach better conclusions and, you know, be and, you know, be, be better at what I do, um, and, and continue to expand my skills. But, you know, again, to, to, to, to, to actually analyze that properly would require a level of therapy that I'm not willing to engage in. Um, [laughing]
- DSDavid Senra
[laughing]
- MAMarc Andreessen
So anyway, so yes, the, the much more-
- DSDavid Senra
[laughing]
- MAMarc Andreessen
... the much more comfortable conversation is the, yeah, what, what are you trying to do in the world, which I would love to talk about.
- DSDavid Senra
I have almost no introspection either, so-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... like I understand that.
- 7:18 – 10:27
Tech as Progress Engine
- MAMarc Andreessen
Yeah, I mean, look, I, we've just, we have had this... It's actually fairly amazing that it's become a controversial, you know, kind of thing, but we just have this like fundamental view that technology is like on balance an enormously powerful force in the world, and, uh, basically that the big problem with the world is that there's, you know, there's not enough technology, there's not enough information, there's not enough intelligence. Um, and you know, we have this opportunity, we have these special sets of technologies that let us fundamentally improve things. Um, and, and then there's this very special, you know, kind of personality type of the entrepreneur, um, who's able to build the product and then, and then able to build the company and build a phenomenon, um, and, and, and really make an impact on things. And, and so, you know, when, when I look at the world, I'm just like, okay, this is just like, this is a very, the world we live in is just a very primitive and crude place as compared to what it should be, um, and what it could be. Um, and so the whole thing that we've been trying to do, you know, for seventeen years at, at our firm is, you know, build kind of the ideal partner to the founders that are, you know, trying to do that based on our own experiences of having been founders that were trying to do that. Overall, the world, especially the Western world, it's just, it's just stagnant. Like the, you know, the, the, the overall kind of theme of things is just everything is stagnant, and we, we could, you know, we, we could talk a lot about, about that. But, you know, every once in a while you have somebody who comes along that's just like, "All right, no, I actually have an idea of how to make things like fundamentally better, and I have a way to build a, build a business around that, and build a company, build an empire around that." Um, and, and that, you know, and, and, and those people, you know, include ourselves in this, but you know, those of us that are trying to do that, um, you know, we're, we're like a rupt movement basically against stagnation. But like, you know, without us, there's nothing but stagnation.
- DSDavid Senra
Right.
- MAMarc Andreessen
But it's actually really funny. Always, it's, there's always this kind of criticism that you get from, you know, whatever the, you know, kind of the, the, as I say, the corporate press or, or, or a kind of outside critics, which is like, "Oh, you know, you VCs are funding the wrong things," or, "You entrepreneurs are building the wrong things." It's like, well, nobody like licensed us to do any of this. Like, we didn't like apply for a permit. [laughing]
- DSDavid Senra
[laughing]
- MAMarc Andreessen
Right? Like get like judged by somebody ahead of time and told, "Yes, you get to do this, you don't get to do this." Like, many people could be trying to do, do this. Anybody can do this. Anybody can, anybody can, you know, start, build a product, start a company, you know, start even trying to be a VC. Like it, it, it's, these are all completely open fields. And it's just, it, it's shocking to me how few people actually give it a shot. And, and, you know, and, you know, the, the, the fate of the world over the next fifteen hundred years is riding on the people who actually want to give it a shot.
- DSDavid Senra
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- 10:27 – 20:01
Founders Versus Managers
- DSDavid Senra
So when you started the firm seventeen years ago, was your thesis exactly the same as it is today?
- MAMarc Andreessen
I'd say the core thesis is the same. Um, the, the specifics have, you know, varied, have changed enormously. Um, you know, we can talk, you know, about both parts of that. But yeah, no, the, the core thesis was kind of the, the startup, the entrepreneur, you know, the founder is gonna be the core, the core engine of progress in the world, and I, I think that, you know, I think that's more true than ever. In fact, when we started, it was still controversial, the idea that a founder would run their own company.
- DSDavid Senra
Even in 2008, 2009?
- MAMarc Andreessen
Yeah. It was still very con... Well, it was very controversial, in fact, and in fact, you know, there were high-profile companies at the time that were getting heavily criticized for, you know, basically having these little kids running around, running these companies. Um-
- DSDavid Senra
Okay. So you, you have this like encyclopedic knowledge of the history of Silicon Valley in your head. I probably read, I don't know, thirty to forty books on it, so at some level, but not that you do. I remember reading a book on Nolan Bushnell, founder of Atari, who was like twenty-seven at the time, and it was excessively rare. It talks about that in his story. It's just like excessively rare for him not to be replaced once Atari started growing with, you know, CEO, like a, an older CEO.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
Like were there other examples that, before him?
- MAMarc Andreessen
Well, so [laughing] Christopher Columbus. [laughing]
- DSDavid Senra
[laughing]
- MAMarc Andreessen
Alexander the Great.
- DSDavid Senra
[laughing]
- MAMarc Andreessen
Right? So, so-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... the, the, the, throughout history, most of the, you know, Thomas Jefferson. Throughout history, most of the great things that have been built have been built by this kind of super charismatic founder type, you know, will to power founder type who, you know, basically built and run something to-
- DSDavid Senra
Okay, hold on
- MAMarc Andreessen
... Henry Ford.
- DSDavid Senra
Hold on. I love that you went here because you-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... don't remember this, but-
- MAMarc Andreessen
Hmm
- DSDavid Senra
... we had dinner in Miami with Jared Kushner like a year ago or something, and me and you would wrestle because I was so excited to, to talk to you, and I was trying to get out of you like, you know, 'cause I think about history's greatest entrepreneurs all day. Like this is what I do seven days a week. Like, who, [laughing] who are these entrepreneurs from history that you like? You started naming country founders.
- MAMarc Andreessen
Yes. True. [laughing] Exactly. There's this like recency bias, right? Which is like the, the world that we live in today is the normal state of the world, and like everything that happened in the past is like weird and different, and those people were like dumber than we are and like all screwed up. And it's like, well, maybe. [laughing] Or, or, or maybe the world worked a certain way for thousands of years, and we're in the weird time. Like, maybe we're in a time that's just like really unusual from a historical, you know, from, from a historical standpoint, and I, I think this, this is one of those dimensions in which that's true. It just, it never would, would've occurred to anybody a hundred, two hundred, three hundred years ago that if somebody was gonna like, you know, start something, that they were gonna be the person who ran it, like obviously. It was just obviously the case. The book that I always recommend on this topic is called The Machiavellians, uh, which is this sort of, uh, famous book from the 1940s, uh, by this guy, James Burns, who's like one of the great geniuses of the 20th century, and he described, the way he describes it basically is he said, look, there have been two like fundamental modes of like business organization over the course of like basically the history of capitalism.Um, there's what he, what he calls bourgeois capitalism, which basically is like founder runs the company, name on the door. And the, the, the classic archetype for bourgeois capitalism was Henry Ford, you know, in the nineteen twenties, and today it's Elon Musk, right? It's just like that, that's you. And by the way, in the old days, it was Ford Motor Company. You know, it's not Musk Motor Company.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
But, you know, everybody knows Tesla and SpaceX, like, you know, these are Elon. And, and, and again, that maps to this historical thing, which is that's also how countries ran, and that's also how, you know, cities ran, and like all, all these things. You just... Religions, by the way. Like, uh, you know, basically everything, you know, founders led the way. That's the historical norm. And then he said-- what he basically says in this book is he goes through and he says the, the, there, there's this new basically model that basically is a artifact. Again, it's an artifact of kinda this weird period of time between the eighteen eighties and nineteen twenties where kind of the modern world, you know, as we know it today kind of formed. Uh, and he said there's sort of a new philosophy of sort of leadership and management, which is called managerialism, sort of the rise of the concept of a manager. A-and specifically a manager as contrasted to a leader. And so therefore the manager, therefore the idea of a management school.
- DSDavid Senra
Right.
- MAMarc Andreessen
Therefore Harvard and Stanford Business Schools, right? Therefore the idea of the manager who replaces the founder running a company. Um, you know, therefore the idea of management as a skill set that can be used to run many different kinds of businesses. Um, in the seventies this then turned into the conglomerate, which was the idea that it doesn't matter what the company does. If you have a good manager, the company should do, you know, thirty different, thirty different things. And so managerialism is this idea that you have this kind of interchangeable management skill and that that can basically run anything. And actually what Burnham says is he says, "Look, people are gonna try to draw a value judgment on this, and they're gonna try to say this is better or worse than the old name on the door model." But he said the reality of the modern world is everything is big.
- DSDavid Senra
Mm-hmm.
- MAMarc Andreessen
Like, you know, for the electrical power grid to get big or the road network to get big or the car industry to get big, um, large scale systems need to be run by people who are trained in how to run large scale systems. And so he said you may or may not... Uh, same thing with countries. Large scale countries are gonna need to be run by people who are good at running large scale things, right? And, and the, and the founding personality type is not the manager personality type. Those are different. And so there's gonna be a handoff when things get big and complicated. And so that, that's the model that Nolan Bushnell talks about, and that's the model that dominated Silicon Valley for fifty years. The problem with his argument is that assumes the managers are going to do a good job, [chuckles] right? And I think if there's like one dominant theme that we're seeing in the last, you know, thirty years, you know, in the West for sure, it's like managers generally, you know, writ large are not doing a great job. Or another way to put it is the, the managers maybe are good at managing something that's gonna be status quo for a long time.
- DSDavid Senra
Mm-hmm.
- MAMarc Andreessen
Like if it doesn't change, maybe they, you know, maybe they can run the banks for a long time, or they can run the power company for a long time or the car company. And as long as the car is the car is the car, you know, or soup is soup is soup, it kinda doesn't matter. But the minute things change, [chuckles] the manager personality type, because it's not the founder personality type, it doesn't know how to deal with change. Not everything is changing. A lot of things aren't changing, but for the things that are changing, they're changing like really, really quickly. I mean, t- SpaceX is like the classic example of this. Imagine being a professionally trained manager, trained at like, you know, a top management school working for a rocket launch company, um, you know, competing with SpaceX. And the, the, the assumption of the entire rocket industry for, you know, the last hundred years has been the rockets are used once and then, you know, that's it. And the economics of launch are dominated by having to build a new rocket every time. And then this like crazy guy in California comes up with this thing where the rockets land on their bung, and you can't replicate it. Okay, your management skill... Like what good are your management skills at that point? And I, and I think there, there's like a whole bunch of interesting areas of human activity where like that shift is happening. And so I think this is where Burnham's thesis collapses, where it's just like, okay, the, the managers actually can't do it. Yep. Yes, there's a need to run things at scale, but no, the managers actually can't do it because they can't adapt.
- 20:01 – 21:32
HP Intel Founder Legacy
- DSDavid Senra
Do you think HP might have been the most influential company in Silicon Valley in history?
- MAMarc Andreessen
It was for sure the most influential company from 1940 to 1980, um, and then probably after that, Intel.
- DSDavid Senra
Well, go to the founders of Intel-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... and you read biographies of them, and they talk about modeling of- off of HP.
- MAMarc Andreessen
Yeah. That's right.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
That's right. Yeah. That's right.
- DSDavid Senra
And then how many founders modeled off of Bob Noyce and Intel after the fact, including Steve Jobs, who was, uh-- would go to Bob Noyce's house for dinner.
- MAMarc Andreessen
Yeah. That's right. By the way, that's another great example because Bob Noyce at least, you know, present-- If you look at photos of Bob Noyce, you're like, "Wow, this guy's like a pillar of society." Like, he's, you know, he's, he's very, very well-dressed, and he's kind of very adult, and he's very like... You know, he's famously the, the, the leader of the Traitorous Eight.
- DSDavid Senra
Yeah. [laughs]
- MAMarc Andreessen
You know, the, the, you know, the, the, they're the group that left Shockley to start Fairchild, and then left Fairchild-
- DSDavid Senra
And then left Fairchild to start Intel
- MAMarc Andreessen
... to start Intel.
- DSDavid Senra
Yeah. Exactly.
- MAMarc Andreessen
And so Bob Noyce was one hundred percent the Steve Jobs of his time, just in the short-sleeved white dress shirt and the skinny black tie.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
But it was-- It's again, it's, it's like the exact same thing. And so I, I, you know, I ne- I never, I, I personally never met Bob Noyce, but I, I could easily imagine Bob Noyce and Steve Jobs sitting down and being able to talk for three hours and completely understanding each other, despite the fact that they, the, the look and feel is like completely different.
- DSDavid Senra
He was almost like a disciplinarian to Steve because Steve was, you know, wild, reckless. Like, "I was also wild and reckless. You need to mature." And I think Bob's wife maybe went to work at, uh, Apple early on too. So it was... He, he talked about this, um, in his biography. Uh, there's a few great biographies of Bob Noyce, but he said that the reason he spent so much time after he was really successful spending time with young entrepreneurs, he said it was, uh, restocking the stream in which he fished from.
- MAMarc Andreessen
Amazing.
- DSDavid Senra
He thought it was really important, and he's like, "I learned from all the guys before me. I need to take the, that, that knowledge I've built up over multiple decades and push it down
- 21:32 – 24:14
Why Start the Firm
- DSDavid Senra
the generation." I wanna go back to starting the firm, though. This is interesting. What was occurring in your life either at that time or before that, that you had this observation that this had to be done?
- MAMarc Andreessen
Oh, so, [laughs] so the-- You know, we've got all these elaborate theories. The, the practical reality of it was Ben, Ben, my partner, Ben, and I had become very active angel investors. Um, and, and I'd been an angel investor since like the mid-90s. Um, but then Ben and I started doing it kind of as a, you know, as a, as a, as a, as a real thing, putting significant time into it, probably starting in, you know, 2003. Well, I, I did it kind of throughout the early 2000s, but 2003, 2004. It's hard to remember now, but if you go back to like 2003, 2004, there weren't like thousands of angel investors. There were like eight. [laughs] It was like, sure, it was like Ron Conway and a, you know, handful of people. And then I, and then Ben and I were running around doing it. And this was very significant in the evolution of the venture capital industry because this was the point at which the traditional VCs got disintermediated by angels and seed investors who kind of inserted in before the VCs arrived, which was this, you know, fundamental change that, that changed the whole industry. But, you know, we, we were part of that. Um, so but as a consequence, like, we were investing in all these new companies, you know, basically at the point of formation. You know, we were basically playing, playing amateur early-stage VC. Um, and, and we were getting-- And we were always like, "We're not going on the board." Like, you know, "You're, you're gonna raise money from a real venture firm later. They're gonna go on your board and whatever and work with you." And what we just found over and over and over and over again was we ended up getting pulled into these companies, um, either because there were issues that just like the other people that they were, you know, working with or their, you know, their... E-either they either hadn't raised venture yet or the, the VCs that they'd raised from couldn't, couldn't help them with. And so we, we just got pulled in, and the reason was we, we, we had been running companies at that point for, you know, whatever, twenty years. Um, and so, you know, we kind- we, we at least had some idea of what we were doing. Uh, and then the other was we kept getting, we kept getting brought in to do conflict re-resolution between the founders and the VCs, right? [laughs] It's, it's, so that when-- 'cause, you know, it's like, you know, especially, especially 'cause again, much more common at that time, especially if the VC's fundamental point of view is the founder's not gonna run the company and we need to like replace you with a professional manager as fast as possible. Like, the founders are not necessarily gonna like that, and they might resist that. And by the way, even if they're on board with that idea, they might not like the person who the, who the VC wants to bring in. And so we, we kept ending up in these kind of basically as arb-arbitrators in this sort of... You know, in, in theory, we were kind of trusted intermediaries 'cause we knew the founders, we knew the VCs, and we could kind of help, help bridge between that. But literally what happened was after a while, we were like spending like eight hours a day just doing, just doing this. And, and we're like, "All right." And, and, you know, it's, it's like weird. It's like you're writing a hundred thousand dollar check, and you're like spending all this time doing it and, and then to basically arbitrate a dispute with somebody who wrote a ten million dollar check. And it's, it's just like, all right, like, we should probably just write the ten million dollar check. And, and that was, that was, that... So it was, it was-- I always think like the best-- The, the founders-- Always one of my theories of like the great founders is they, they tend to be able to operate at kind of the strat-strategic conceptual level and then the practical level at the same time. And so we, so we had a, we had a whole theory I could take you through for the evolution of the venture business.
- DSDavid Senra
Please do.
- MAMarc Andreessen
Yeah. But, but underneath that was just this actual, you know, the, the lived experience of what was actually happening on the ground.
- 24:14 – 28:57
Venture Barbell Theory
- MAMarc Andreessen
The, the big theory of the firm that we, that we had at that time w-was linked to this idea of, um, uh, was linked to this idea of, of founders running the show, but it was also a structural observation of what was happening in, in the venture industry, which was, uh, we-- Basically what we did was we, we sort of in line with your philosophy, we, we went back and we studied a lot of other businesses that are, are, have, have similarities to the venture business. And so we studied private equity, venture capital, or sorry, private equity, hedge funds, investment banks, law firms, um, management consulting firms, ad agencies, accounting firms, you know, basically anything where the, the product is fundamentally a relationship, you know, a knowledge work, you know, kind, kind of relationship as, as compared to something that gets, that gets manufactured. And what we observed is basically an, an, an exam-- A Hollywood talent agency is actually is the one we've, we've probably talked publicly about the most. And so that was, that was a great case study.
- DSDavid Senra
Ove-
- MAMarc Andreessen
Oh, the, the Ove story.
- DSDavid Senra
He was in this studio a few months ago.
- MAMarc Andreessen
Fantastic. And so, and, and he actually, and by the way, he g- he gave us, you know, we always make a point of crediting, like he, he gave us a lot, a lot of this theory, so a lot of this comes from him, but... Well, actually, I'll, I'll follow through, through, through, through, through his, through his, his experience. So when he started his agency, um, in, uh, was it '80 whatever? No. Seventy-five? Seventy-five.
- DSDavid Senra
In the '70s, I think.
- MAMarc Andreessen
In the '70s, like in the mid-'70s. It was actually very similar. It was structurally, it was very similar to when we started, uh, a16z in, in, in 2009, which was the configuration of the industry at that point was basically a bunch of essentially service firms, a bunch of talent agencies, n-none of which were at very high scale.And then each of them was basically a tribe of, of basically sol-solo operators and kind of, kind of lone wolves. Um, and so, so the, so the concept in Hollywood was you had an agent, and that was your guy. And that agent knew whoever that agent knew and had whatever relationships that agent had. But the other agents at your agency were not available to you, and there was no collective benefit to the fact that you were at an agency that had not just your guy, but like a hundred other guys. There was no collective payoff to that. They ran that in that way for a very specific reason, which was this kind of this eat what you kill professional services mentality where everybody should have to go build, build, build their own book of business. But, but you, you end up just dealing with a guy as opposed to a firm. Like, there, there's no firm, there's no, no, no collective thing. And that, that was basically the, the condition of venture capital in two thousand and nine, which is you, you have-- And at this, at this point, we knew all the VCs really well, and we had raised venture, and we had worked with all these other companies, um, that had, that had raised venture. And, and, and basically, all of the sort of legacy venture firms at that point, they were all like that. They were all just like tri-tribes of lone wolves. And then the thing that we knew that was not publicly known was, generally speaking, inside the firms, they didn't even like each other.
- DSDavid Senra
Oh, I hear stories like this all the time. [laughing]
- MAMarc Andreessen
Right. And so it's like, you know, whatever, there's Joe and Mary, you know, who are partners at a venture firm, and you're working with Joe, and Mary has, like, a key connection that you, that you need access to. And so you ask Joe, "Can Mary introduce me?" So and so on. What you don't know is they're having, like, a brutal fight where they, you know, they're, they're, like, trying to destroy each other 'cause they're, they're... 'cause they're fundamentally economics. They're, they're going for, you know, the a, a greater slice of, of, of the profit pool. And so they're really going at it. And so we, we just... we saw example after example of venture firm that was basically e-e-either two things actually. One is either melting down due to just internal strife and conflict, um... Or by the way, the other was generational succession, right? The other, the other issue is a lot of the dominant venture firms in two thousand and nine had been around for thirty or forty years, and they were now on their third generational partners, going to their fourth generational partners. And, and, and, you know, and again, it's the same thing. They, they had been founded by dynamos, and then they were... you know, the later generation people were, were, were, were, were not like that. So we basically said, "Oh, the... this is where the, the obvious thing comes in," is we said, "Look, like that's not gonna last." And so our, our theory of it was what we call death of the middle, or we sometimes... The negative way to frame it is death of the middle. The positive way is the barbell, uh, which is what's happened in all these other industries, which is basically the, the industry gets stretched apart like taffy. Um, and, and, and what you, what you get is you, you get this barbell thing. And on, on one side of the barbell, you get ear-early-stage angel seed investor who are really, like, first money in, like, you know, staying very light on their feet, writing a relatively small check, but, like, being involved in companies extremely early on, um, you know, taking a lot of risk. And then on the other side, you get basically scaled platforms, right? So you, you know, you get large scale enterprises that are, that have, like, a lot of throw weight, a lot of access, very big networks, and then access to a lot of money. The other comparison we always make is to retail shopping, right? Which is there used to be department stores like Sears and JCPenney, which basically where the, the, the brand promise was pretty good selection of products and pretty good prices, uh, right? And then now those are dead. And what you have instead are boutiques like the Gucci store or the Apple store, and then you've got this super scale e-commerce companies like, like Walmart and Amazon. We're to the point where it's just like there's no reason to ever go to a department store 'cause it's got less selection than Walmart and Amazon and it... but it doesn't have the quality tier and the special experience of a Gucci or, or Apple.
- DSDavid Senra
But you had that-
- MAMarc Andreessen
Yeah.
- DSDavid Senra
-thought in mind when you started a16z?
- MAMarc Andreessen
Yeah, a hundred percent. Yeah, exactly.
- DSDavid Senra
Wow.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
Okay.
- MAMarc Andreessen
It was a conceptual leap for venture capital at the time, but the exact same thing had happened to private equity. The exact same thing had happened in hedge funds. The exact same thing had happened in investment-
- DSDavid Senra
And you knew that by what? Just reading about history?
- MAMarc Andreessen
Read-reading. So, like, investment or, uh, investment banks are the classic example. So the... if, if you read about the sort of in... the original investment banks in the US between like eighteen eighty and nineteen twenty, they were all like boutique venture capital firms in the nineteen seventies, nineteen eighties in the US. It was like twenty guys. And-
- DSDavid Senra
These, these are more like merchant bankers.
- 28:57 – 30:02
JP Morgan Boutique Banking
- MAMarc Andreessen
Yeah. Well, and so the, the, the, the, the classic stories that which I love so much. So JP, JP Morgan's one of my kind of favorite historical figures. And, and, and JP Mor- JP Morgan was an example of that. The JP Morgan investment bank was like this, this basically this ti- it had... it was very important, but it was like this tiny little operation. It was, you know, fit in a single office. It was, you know, I don't know, probably twenty principals and some office staff or something. It was, you know, it's not, it was not large. Um, and, and, and actually the, the, the, the hidden secret to, to, to, to JP Morgan was he was the son. The, the, the, the, the father was Junius Morgan.
- DSDavid Senra
Okay. I literally... when you were talking, I was like, "Wait, you, you, you..." I, I was shocking that you would say pick him because I actually found his father more formidable individual than him.
- MAMarc Andreessen
He was. So he was, whi-which I, I... this is almost always the case with any famous public figure, is the father is almost always a more interesting story, which there are a lot of examples of that. But however, yeah, so Junius Morgan, and then, and then JP Morgan has filled a specific economic role that's gotten lost in history, which is basically, uh, Junius Morgan. The Junius Morgan Bank was in London. The JP Morgan Bank was in New York. And the, and what the Morgan family was doing was they were funneling money from the old slow growth economy of Europe into the new high growth economy-
- DSDavid Senra
Yes.
- MAMarc Andreessen
-economy of the US. But again, it was exactly your point, like it was this little boutique family operation.
- 30:02 – 30:41
Religion Split Wall Street
- MAMarc Andreessen
The other great thing about that era of history is these, these were, um, they, they, they were all bifurcated by religion. [laughing]
- DSDavid Senra
Yeah.
- MAMarc Andreessen
[laughing] So they, they were, they were the Protestant investor banks, and there were the Jewish investor banks.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
And they did not mix.
- DSDavid Senra
And no, not at all.
- MAMarc Andreessen
Completely different worlds. And as a consequence, JP Morgan was the, the Protestant banks like, like JP Morgan were able to fund like the railroads, which were considered like the real businesses at the time.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Uh, but then like the... all the disreputable stuff like movie companies and like department stores like that, those are all the Jewish investment banks. Well, by the way, the Jewish found- almost entirely Jewish founders, uh, with like... And then, and Goldman S- Gold- and JP Morgan is the big survivor of that today in the form of JPMorgan Chase. And then, and then on the, on, on the Jewish side, it's Goldman Sachs, you know, is, is the great survivor.
- 30:41 – 31:42
Barbell of Banking
- MAMarc Andreessen
But again, if, if you go back, there were-
- DSDavid Senra
So that's... you consider that the, the barbell in investment banking. You have the, the JP Morgan kinda like family partnership, and then you have the complete scale of like Goldman Sachs.
- MAMarc Andreessen
And so what happened was both JP, both JP Morgan and Goldman Sachs started out, uh, a hundred years ago, they were on the one side of the... or a hundred, a hundred years ago, they were actually in the middle. They were, they were kind of, again, this sort of y-you know, they were boutiques, uh, but they were like o-of their time. They were like y- today, you'd call them like mid-market, um, you know, who's sometimes called bulge bracket, you know, kind of thing, as opposed to just like a solo operator or something. Actually, the, the way, um, uh, uh, uh, JFK's father got started was he literally hung out a shingle in the nineteen twenties, which was, uh, Joseph P. Kennedy, banker-
- DSDavid Senra
Yeah.
- MAMarc Andreessen
-you know, private banker, and he, like, just did deals, and he was, he was like an angel investor at the time. And so, and then you had the big commercial banks, but the big commercial banks had no interest in issuing loans to these speculative, crazy, you know, entrepreneurs. And so in that time, JP Morgan and Goldman Sachs and Kuhn, Loeb and Drexel and all these other kind of mid, you know, mid-market banks, Morgan Stanley, um, the bank that became Morgan Stanley, um, were kind of these mid things. Now, what's happened, you know, sitting here a hundred years later, those are now the, the scaled players. The ones who didn't scale are, are, are kind of long forgotten.Having
- 31:42 – 33:16
Allen & Company Model
- MAMarc Andreessen
said that, there, there's one firm that survives in the old model, and that's Allen & Company. And there are other boutique investment banks today, but Allen and Company was founded in the 1920s and has, you know, has, is uniquely the one that survived in the, in the original model of boutique and deliberately being a boutique investment bank, and has stayed that way for a hundred years. And so one way to think about it is that today, that's the barbell in banking, which is Allen & Company on the one side and then J.P. Morgan and Goldman Sachs on the other side.
- DSDavid Senra
I found one of my all-time favorite quotes when I was reading the book Zero to One. The quote says, "The single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas." That is exactly what AppLovin has done with their new advertising platform, Axon. Axon is the most powerful advertising platform in a generation. Axon allows you to capture undivided attention. Axon ads are full-screen videos that are watched for an average of thirty-five seconds, retention that blows other ad platforms out of the water, and you can launch in minutes. You set the goal, and Axon achieves it. No complex setup, no expertise needed. And Axon scales quickly. They can put your ads in front of over a billion potential customers. Other businesses have seen immediate results, scaled to hundreds of thousands of dollars of spend per day, and increased their revenue by millions. And most advertisers aren't even thinking about this channel yet. Less than 1% of advertisers have access to Axon, so you want to get started quickly, and you can do that by going to axon.ai. That is axon.ai.
- 33:16 – 33:45
Planning the VC Firm
- DSDavid Senra
So are you reading about this while you're founding the firm?
- MAMarc Andreessen
Yeah.
- DSDavid Senra
Before you're founding the firm?
- MAMarc Andreessen
Yeah.
- DSDavid Senra
Like, both?
- MAMarc Andreessen
Well, both. Ben and I spent about a year and a half planning the firm, um, and part, part of it was he was in, we call industrial, industrial servitude. He was working for Hewlett-Packard after we sold our company to HP. So he, he was a-- he was running a big part of HP at the time. And so we, we couldn't literally start a new full-time thing until he got free of that. So we, we had a year and a half, you know, to kinda, to kinda study and think and work.
- DSDavid Senra
And because you had this, this period from 2003 or 2002 when you're doing angel investing, you know-
- MAMarc Andreessen
Yep
- DSDavid Senra
... a lot till you start your company six, seven years
- 33:45 – 36:49
CAA Playbook Lessons
- DSDavid Senra
later-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... you're observing all of the weaknesses in the model, and that's where you have, "Hey, why don't we take the CAA?" I think Ovitz calls it the, like, the phalanx, where it's like-
- MAMarc Andreessen
Right
- DSDavid Senra
... if you have one agent at CAA, you have all of us.
- MAMarc Andreessen
That's right.
- DSDavid Senra
And they would, like, roll deep. I think he says in his book, like, they, they would-- He was like, "Oh, my agent's coming to the premiere." No, it's like twenty agents are coming, and I think they'd be dressed in, like, the same kind of suit maker, and, like, they were, uh, intentionally trying to, to intimidate, like, their competition.
- MAMarc Andreessen
Armani suits, uh, Sulka Shirts was a, a shirt maker in, um, uh, in Beverly Hills, um, and, uh, sober, you know, all sober colors, white shirts. Um, and then I think he had a bulk purchase deal, I think, with the local Jaguar dealer.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
And the legend, at least, has it is that the license plates all said CAA1, CAA2, CAA3. And so, like, you'd go to a premiere, and there would be, like, twenty Jags lined up. [laughs] And then twenty guys in identical suits coming out. And yeah, just, this is exactly the thing. It's just like ima- Now that, you know, that's, that's the Hollywood version, but, like, just i-imagine the psychological impact of that if you're just, like, an old school agent. But this is sort of the, you know, Mi-Michael's a very dear friend. He, you know, he, he became very controversial over the years, and the reason he became so controversial, I think, is just 'cause he smoked his competition so severely. Like, he, he pounded them so hard. There was no response. You're just a guy, you're just a guy working for an old agency, and you've got your clients, and these twenty CAA motherfuckers are showing up, and, like, it's just, yeah, it's this force. And the clients, if you talk to, by the way, you know, a lot of his clients are, you know, still, still active today, you know, from, from the period. If you talk to them, it's just like, yeah, it's just a no-brainer. It's like, do you wanna work with a guy or do you wanna work with a firm? It, it's just obvious. He has-- I don't know if he told you all these stories. Did he tell you about the, his morning schedule thing?
- DSDavid Senra
The, the getting on the bike, doing the karate training call?
- MAMarc Andreessen
No, for the, for the, for the firm, for the firm, for the firm.
- DSDavid Senra
No, no, no.
- MAMarc Andreessen
So, so-
- DSDavid Senra
I love this.
- MAMarc Andreessen
So this is, again, something that's specific to Hollywood, but it's a, it's a great example of the... Okay, so the agency business, at, at the time he started CAA, the agency business was, like, ninety years old or something, right?
- DSDavid Senra
Yeah.
- MAMarc Andreessen
It, like, started out doing Vaudeville bookings and, like, music halls and, like, it, it had been around for, like, decades. And so the people involved in it had had decades to think about, like, the best way to do it, and they had arrived at a set of practices. And one of the practices, I, I think I'm getting this right, one of the practices was at every agency, they would have their staff meeting in the morning at nine AM. Um, and they would basically share, you know, whatever information was gonna get shared in the agency would get shared at that point. And oh, you know, this studio head wants a script to do. He wants to do a crime thriller, and here's the script and whatever. And then, you know, this is, like, the point where there would be minimal, you know, whatever, minimal handoff existed to the other agency. And so this is where everybody would kinda get updated. And so the, the staff, the staff meeting would go from, like, nine AM to ten AM, and then at ten AM, they would start calling their clients, and they'd be like, "Oh, you know, we heard there's a, you know, whatever, there's gonna be a casting call for, you know, this great new role for this professional thief or whatever, and you should consider doing that." And so of course, Michael's like, "All right, well, we'll have our staff meeting at seven AM." [laughs]
- DSDavid Senra
[laughs]
- MAMarc Andreessen
"We'll be done at eight."
- DSDavid Senra
Yeah.
- MAMarc Andreessen
"Between eight and nine, we'll call all the clients. By the way, we won't just call our clients. We'll call their clients." [laughs] Right? And so imagine you're, whatever, Paul Newman, and you've got some agent you've been working with for twenty years, and he calls you at, your agent calls you at eleven o'clock and is like, "I've got this great role." And you say, "Oh, the guys at CAA called me about that three hours ago."And, and your agent's like, "They don't represent you." And Paul's like, "Yeah, isn't it great? Isn't that fantastic?"
- DSDavid Senra
[laughs]
- MAMarc Andreessen
And so you just, again, you just like, you rinse and repeat that a thousand times, and it just-- it-- to the client, it's just, like, completely obvious what
- 36:49 – 39:03
First Principles vs. Status Quo
- MAMarc Andreessen
to do. Um, and, and so yeah. So the, the, the mo- the reason I go through this, the, the moral of the story is, again, it's sort of this, this idea, i-i-incumbency, you know, incumbency status quo. Like, you, you just end up, you end up with-- you end up in any business, you just end up with all these embedded assumptions. Generally, and, and then, you know, ninety years later, right? So the, the, so the founders of the agencies were f- ninety years ago, they weren't involved anymore. So the people who were running competitive agencies were managers, not, right? Same thing, managers, not founders, right? And so the... And, but the thing a manager never does, unless they're under duress, is, is, is, is reconsider fundamental assumptions. Like, they hate that. Like, they, they-- like, that's not... The whole point of running something big is you don't have to do that. You get to run the big thing at scale. You don't have to, like, go in and, like, reinvent it from scratch. Like, that sounds like a nightmare, right? And so... But, but anyways, as a consequence of that, you end up with, like, all these embedded, um, uh, assumptions that are basically just, like, unspoken, nobody's questioning. It's not happening. And if you take the time, you can kinda go in and go b- you know, first principles, you can kinda go in and you can say, "Okay, well, how did they arrive at that?" And what, what we've found in just industry, I mean, this is what our founders do every day, is just in industry after industry after industry, there's all these embedded assumptions that made sense in nineteen seventy or nineteen thirty or eighteen eighty that just don't make sense anymore.
- DSDavid Senra
I love that you did it. I always say it's, like, not what you do, it's how you do it. And if the idea that you can take... I'm like, I'm not running a talent agency.
- MAMarc Andreessen
Right.
- DSDavid Senra
But there's so many of these principles that I could apply to venture capital. You-- In your blog archive, which I absolutely love, and I told you I've read, like, multiple times, I did episodes on it, uh, you would give advice to, like, young people, and it's like, "My advice is, like, go work in an industry where that's still the founders of that industry are still working."
- MAMarc Andreessen
Right.
- DSDavid Senra
When I read Ovitz's book, the way I would summarize his approach, because he is in this big, stodgy, slow-moving, you know, very bureaucratic, uh, organization, is like, "Oh, mediocrity is always invisible until passion shows up and exposes it."
- MAMarc Andreessen
Oh, interesting. Yes. Right.
- DSDavid Senra
And that's what he did.
- MAMarc Andreessen
Yeah, that's right.
- DSDavid Senra
He's just like, "There's so many things that you guys could be doing better here. I can't do it in here." And if I remember correctly, he took some of these ideas to his boss.
- MAMarc Andreessen
Oh, yeah, yeah, yeah.
- DSDavid Senra
'Cause th- that guy was his mentor. I can't remember his name. Yeah.
- MAMarc Andreessen
He famously worked for the CEO of William Morris.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Yeah. Which was the, the biggest of the talent agencies at the time.
- DSDavid Senra
Yeah. So were you, were you and Ben essentially just designing what you wish you had when you were founders?
- MAMarc Andreessen
Yeah, that's right. And, and again, and again, that may be a cheat code, but yeah, if you, if you've been the customer, obviously, this, this all becomes a lot more obvious.
- DSDavid Senra
And I don't know if you wanna answer this question or not, but in, um, Warren Buffett's shareholder letters, he has this great line where it's, like, really important to pick, uh, to, to play against weak competition.
- MAMarc Andreessen
Mm-hmm.
- 39:03 – 40:37
Scaling Venture Capital
- DSDavid Senra
Did you feel that there was gonna be we- like, that, that point in time in venture capital history that, that you were, you were gonna be playing against weak or weaker competition?
- MAMarc Andreessen
I would say not exactly. We didn't view them as weak. We, we viewed them as basically... It-- We viewed them as running on a status qu- on a, on a status quo set of ideas. Uh, and, and so, and, and to be clear, like, we, we... And, and part of why we think about it this way, we had to raise money from, at the time, uh, in, in the time, what were probably the two best venture fisher firms, so Kleiner Perkins in the nineties, and I worked with John Doerr very closely for five years, uh, in Netscape, and then we, we, Loudcloud, we raised money from, from Benchmark when they were, like, king of the hill, and Andy Rachleff, who was one of the founders of the firm, and is a, you know, legendary, brilliant VC. And so w-we had worked with... W-we just had, you know, through accident of, of, of history, we had worked with two of the whatever top five or whatever peop-people in the field, you know, for a long time. And, and, and, and they were, and are, by the way, um, brilliant at running on, on the model that, that, that they, that, that existed. Like, John was brilliant at that. Andy's brilliant at that. They're still brilliant today. It was less a competition of, oh, these people are soft, or these people aren't smart, or... It was none of that. It was, "No, they're, they're really good at executing against this particular playbook." So at that... And by the way, that's why it's okay. [chuckles] Like, if we're gonna do this, we need to be, we need to be playing by, by a different playbook.
- DSDavid Senra
There was no such thing as, like, scaled venture capital at the time.
- MAMarc Andreessen
No. At, at the time, no. No. Because, because the, the firms all hit this, they all hit this limit. They, they, they all fundamentally hit this limit. They all hit this limit where they just could... The, the, the, the, the idea of a, of a part- like, partnership of equals or even a, even a hierarchical partnership, like, it just, it break, it just breaks at some point 'cause there's just too much internal dissension. It, it's too hard to coordinate, and then, and then everybody's fighting for slices of what was viewed at the time to be a fixed size pie. Um, and so they, none of the, none of the other firms could... They, they, they... Structurally, there was just no way to get to scale.
- 40:37 – 42:52
Private Equity and Mad Men
- DSDavid Senra
Where else did you take ideas from besides the agent business in Hollywood and, like, the merchant bank, investment banking industry?
- MAMarc Andreessen
Oh, I mean, it was just very obvious that it happened in private equity. Like, it, it, you know, this, this was the, the... This was the time when, like... It was actually really... This was around the time when, like, KKR and firms like it were hitting their stride with... They're actually building, like, a lot of operational capabilities in-house. Uh, they were actually building their own, actually, investment banks in-house. Uh, one of the things we've never done, [chuckles] but has, has always been on the idea list, is to actually just have an in-house bank. Um, and, and, and KKR had, had, had actually done that, just, just build a captive bank. Uh, and so they, they, they, you know, they, they had done a bunch of things like that. And so, and we, so we saw it happening, which was the mid-tier, um, private equity firms were collapsing, and you either needed a solo, you know, very light on your feet, kind of solo operator on the one side doing small deals, or you needed to have a scale platform like KKR. It happened in hedge funds. Um, it happened in, uh... But I mean, it had long... So actually, [chuckles] actually, the TV show Mad Men. Uh, Mad Men tells the structural story of this happening in the advertising field in the sixties and seventies. Um, and, and I, I will ruthlessly spoil Mad Men 'cause it's been, it's been, it's been off the air for like tw-twenty years at this point. But, um, you know, a big part of the arc of Mad Men is those guys are working... Sterling, Sterling Cooper is a classic mid-market ad agency. Um, right? Uh, and, and then, and then it's... And, and then, and for whatever, the third, third season, they s- they sell it to McCann, which was the s- the scale player at the time. And, and they show you all the pros, and they clearly talked to people who had been through this 'cause they showed you all the pros and cons of working for McCann, 'cause McCann's this giant machine. And so if Don Draper's used to, like, making all the creative decisions, and now he's just in this conference room arguing with people, um, until he just, like, gets up and walks out. But then Don Draper and Roger Sterling start their own startup. They start, uh, Sterling Cooper Draper Pryce. That, that's the second one, which starts out as a, as a true startup, as a true boutique startup, and then they have this, whatever, year and a half of just, just fucking hell. Like, they can't get anywhere. They can't get clients, like, 'cause, 'cause they're too small. You know?
- DSDavid Senra
Yeah.
- MAMarc Andreessen
They're, they're subscale. And so it, it kinda... And, and then I think, I think in the end, I forget, it's been too long, but I think in the end they end up, I think they end up, uh, selling it. No, no, no, no, no, no, no. Sorry. I got it wrong. They sell the first one to the British ad, ad, ad agency-
- DSDavid Senra
Mm-hmm
- MAMarc Andreessen
... uh, that just, like, completely destroys it, and then they sell the second one to McCann. So, so, so they actually show that process happening twice. Um, and so that, that, again, if you go back to history, that, that is what happened to the ad agencies basically between the forties and the seventies. Like, ba-basically, television catalyzed that. Like, when, when television emerged, advertising became a much bigger deal than it had been before, and it just, it had to be professionalized in a different
- 42:52 – 45:59
Valley Shifts to Full Stack
- MAMarc Andreessen
way. The other thing that happened is, of course, the external environment changes, right? So, so everything we just talked about just has to do with the internal mechanics of how these things run. But, but the other thing happens is the external environment changes, right? And so part of what M- I think what Michael would say, I think he would agree with this, part of what made CAA possible is at one point, basically, Hollywood was just movies, and then there was, like, whatever, a lower kind of TV division. And, and by the seventies and eighties, the, you know, Hollywood was becoming much bigger than just movies, right? It was movies and TV and advertising and music and sports and, you know, ult- you know, politics and culture and, like, all kinds of things. In fairness to the, uh, kind of our competitors, um...You know, Silicon Valley between call it 1950 to 2010 was primarily just in the tools business, right? Primarily the companies that, you know, starting with Hewlett-Packard, the companies that we all backed and built were basically just building tools, and you'd build a tool like an operating system or a disk drive or something, and you'd sell it to people, and they'd figure out what to do with it. Um, it was right around the time we started our firm that the Valley was going from being primarily tools businesses to actually building, um, uh, directly competitive companies in incumbent industries, right? And so Airbnb going directly into the hospitality industry, right? So alternate universe Airbnb is just boutique booking hotel software, right? For, for running Airbnbs. It's a tiny little boutique business building, basically a little spreadsheet software. But no, Airbnb, Brian Chesky decided brilliantly, um, we're just gonna, like, go into the hospitality business and compete with hotels directly. Um, Uber and Lyft in the old world were just taxi dispatch software. In the new world, they're full transportation providers. Uh, Tesla in the old world would've just been software for self-driving cars. Tesla in the new world builds, you know, the entire car. By the way, Face- Facebook, same thing. Prior to Facebook, if you built, like, online ad, you know, software, you were selling it to the media companies. Mark's like, "No, we're just gonna beat the media companies." Like, "We're just, we're just gonna build the entire thing." And so th-this was the other thing that happened was, you know, for us, was that that was right around the pivot point when the Valley's ambitions went from just building tools to going directly into incumbent industries. And, and then, and then this goes back to the scale thing. It's like, okay, well, why do you need to scale a venture firm? It's 'cause the companies need to scale, right? And, and, and then of course, AI now makes that crystal clear, right? 'Cause [chuckles] right, the winning AI companies are raising, you know, billions, tens of billions, in some cases, hundreds of billions of dollars, right? The, the old world of ten million or thirty million dollar or fifty million dollar checks, you know, where, where VCs tap out is just not irrelevant, irrelevant thing anymore.
- DSDavid Senra
But did you know the scale was changing at the time you founded the firm?
- MAMarc Andreessen
We had a pretty good idea. So I'd been, I'd been involved with Facebook, um, you know, basically, you know, informally since inception and then formally on the board since 2007. And so I, I saw the... When that thing hit the knee in the curve, it was just very clear. It was, to us, it was just, like, very clear that-- We didn't know how big it was gonna get, but it was gonna get much, much bigger than the internet 1.0 companies had gotten. Um, and so there was that. What else? It was also around the time Apple was directly entering the cell phone market, which was another great example of this. Um, Silicon Valley didn't use to make cell phones. The original cell phones weren't made by Silicon Valley. They were made by these, like, giant industrial companies like Sony and Nokia and whatever, um, and Motorola in, in Illinois or whatever. And then Silicon Valley would make the chips that go into them or the software. And of course, Steve was like, "Yeah, no, screw that. We're just gonna make a phone," right? There were these signals that it was happening, and then the other thing was just the, the internet itself was maturing, right? Um, and so, you know, at that point, the consumer internet was fifteen years in, um, and, and we had, you know, seen every part of that. And so we, you know, we-- I forget what the number was, but that was probably around the time the global internet penetration was, like, crossing a billion users on its way to five billion.
- 45:59 – 48:53
Meeting Jim Clark
- DSDavid Senra
Yeah, you have a very interesting lived experience where, like, you were there at the very beginning of the internet. One thing that, um, I'm fascinated by, and that actually was gonna be the first question, um, for you, 'cause I've never heard you speak about this, at least on a podcast, but your partnership and relationship with Jim Clark. You were, what, twenty when you met him? How old were you?
- MAMarc Andreessen
I was old-fashioned. I actually graduated from college and got my degree. [laughs] It's a very Stone Age, uh, concept these days. Um, so that was in 1994, so I was probably twenty, twenty-two. Twenty-two.
- DSDavid Senra
So there's this great book, I don't even think you like the book, by, written by Michael Lewis, Silicon Valley's story.
- MAMarc Andreessen
I, I skipped it.
- DSDavid Senra
I read it twice just because I don't know if anything that's in there is true, but the, the, the, the portrait he paints of this very eccentric character is just wildly entertaining to me.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
But what's shocking to me is when you talk to young founders, I'm like, this guy started three... I think he was the first person in history just to found three separate billion-dollar technology companies.
- MAMarc Andreessen
Yeah, I think that's right.
- DSDavid Senra
And almost no one knows who he is.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
Can you just talk about how you met him?
- MAMarc Andreessen
Oh-
- DSDavid Senra
What was like working with him?
- MAMarc Andreessen
I knew exactly who he was, and the reason was because, uh, his company, Silicon Graphics, his first company, they were the company in the Valley between, like, call it 1989 to call it, yeah, '87 to '94 or something. They, they were like whatever Google or OpenAI or whatever, you know, comp-comp you wanna make. Like, they were like the company. And, and by that I mean, like, they were the company where the smartest people in the industry all wanted to work there. The pro-- They, they built the products that were, like, the coolest products you could possibly imagine. They had this incredibly young and vibrant and dynamic culture. Um, and then they hit this, like, cultural moment that was just incredible in, I think, '92, which is, uh, yeah, which was the turning point in, uh, in the movie business when, like, computer graphics really kicked in. And the, the two movies back to back were Jurassic Park and Terminator Two.
- DSDavid Senra
Run on the machines they made.
- MAMarc Andreessen
Built on the machines they made.
- DSDavid Senra
Yes.
- MAMarc Andreessen
It's the technology they made. It's the technology Jim invented was the technology that made that possible. And those movie, you know, those are still two of the great all-time, you know, movies. Um, and but at, but at the time, I mean, I still remember the chills that you get seeing dinosaurs on screen. It's just like, this is... And then there's this company [chuckles] that builds the m-machines that do this. By the way, their, the Silicon Graphics computers are actually in the movie. There's a scene in Jurassic Park where the kids are na-navigating through Unix.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
And it was actually the, uh, it was actually the three-D software. It was actually those, those were actually the, the Silicon Graphics, Silicon Graphics computers. Um, and so, like, they, they just, th-that was, like, this moment where they were just, like, th-th-they're just, like, the, the absolute IT company of all time. But by the way, their legacy lives on in N- in Nvidia. [laughs] Like, the, the, the... Nvidia is Silicon Graphics, uh, basically, uh, uh, with, with one... It's like a trader or same thing. It had to be a new company for reasons we could describe to, to, to do the GPUs instead of the work, instead of the, the workstations and servers. Nvidia fundamentally is, is based on Jim's ideas. That's where that stuff all comes from. And so he, he was already legendary. You, you... And, and again, he was one of these... He was, he was the full deal. He was legendary as a innovator in technology 'cause, you know, he has a PhD in computer science, and he actually, he actually, he himself invented the, the original, forget what they call it, I think it was the Reality Engine. The, the original interactive three-D graphics on a chip thing was actually him. I think it was, like, his PhD thesis. Um, and then, um, and then he started the company, and then he ran the company.
- 48:53 – 54:20
Founder vs. Manager at SGI
- MAMarc Andreessen
And then, and then, and then by the way, and then the VCs brought in a professional manager, and [laughs] by the way, and the reason we know about Nvidia today and not SGI is because of this founder-manager issue, [laughs] which, which we can talk about.
- DSDavid Senra
No, let's talk about that real quick.
- MAMarc Andreessen
Yeah, yeah.
- DSDavid Senra
'Cause I don't remember this part of the story.
- MAMarc Andreessen
Yeah, yeah. So n-now by the way, there, there, there's two sides to the story, and, and, and, and, and, and I wasn't there. Um, uh, uh, and so I, I just reflexively side with Jim Clark, but I'll, I'll, I'll try to at least represent both sides of the story. So, so, so Jim, I d- I don't even remember what's in the Lewis book, but like, Jim's like a true, Jim's like a true, he's like an Elon, he's like a true Elon, Steve Jobs level guy. Um, and so, like, incredibly creative, incredibly bright, incredibly charismatic, but like, he's volatile. Like, he's, he's, he's [laughs] He's exciting. [laughs] Like he's exciting. He's-- So it's like being around him is just like incredibly exciting. There's always some-something new. He always has new ideas. And, and again, that was in that time where it's just like, okay, that's the personality type that clearly can't run the company. And so the VCs brought in a guy, um, out of, uh, Hewlett-Packard, um, uh, who had been trained at Hewlett-Packard, um, and 'cause at the, at the time, what happened is he wanted to hire a, a man-- a professional CEO. He went and hired a general manager out of ei- either Hewlett-Packard or IBM, were the two training grounds, uh, for, for this guy. So they, they, they brought in a really, really sharp guy who by all... I, I don't really know. I think I met him once. I don't really know. By all accounts, he was like very-- he was like a very good example of this kind of HP general manager type who became a, became a CEO. Uh, he took, he took over, he took over the company. And, and by the way, like, in his defense, under him, the company scaled enormously. Like, you know, I forget when he took it over, but it was like '87 or '88 or something. And then, you know, by the time I got to the Valley in '94, like, this company had become huge and, you know, whoever's running the company gets at least some credit for that, so. But, but anyway, they, they got in this classic fight. Like, they, they got in this classic fight. And the, and the classic fight was, you know, you can just-- it, it's the same story every time. The founder's like-- founder's talking to CEO, and the founder's like to the CEO of like, "We need to do things completely different."
- DSDavid Senra
Mm.
- MAMarc Andreessen
And, and the CEO's like, "No, like what we're doing is working. Like stop fucking with-- Stop fucking with the thing that's working." And the founder's like, "No, it's working now, but it's not gonna work in the future." And the manager-- and the, the CEO's like, "Well, then we'll deal with it in the future." And the founder's like, "You can't wait to deal with it in the future, because by the time the future arrives, it's gonna be too late." And the manager is like, "Why are you in my pants? I'm like making you all this money. The company's super successful. Like get out of my shorts." Right? And, and you get in this-- And, and you see this, and that was exactly the deadlock that they got into. And Jim Clark basically made two predictions as the founder of Silicon Graphics. So Silicon Graphics at the time was selling... Their computers basically started list price at like fifty thousand dollars for a desktop workstation and then scaled up into the millions. And Jim was like, "Look, two things are gonna happen." Um, it's amazing that he-- And he figured this out by like nineteen ninety-one or something. He said, "Two things are gonna happen." He said, "Number one, everything that we sell today for fifty thousand dollars is gonna go on a chip, and that's gonna go on a card, and it's gonna go on a PC, and it's gonna cost three hundred bucks. A-and either we're the company that's gonna make that, or we're gonna get destroyed," right? Which by the way, is what happened. That's Nvidia. L-like that's what actually happened, right? So he was completely correct about that. The other thing that he had was, he's like, "Look, these, this idea of standalone computers is not gonna be the thing. These computers are all gonna get networked together, and the network is gonna become the important thing." At the time, there were, there were different terms. There was-- People were using terms like information superhighway or video on demand or five hundred channels. You had, you had all these kind of concepts kinda coalescing around what, what became the internet. Um, and even before the internet kinda became a mainstream thing, Jim was just like, "Look, it's just inevitable that this is all gonna become connected, and then the, the function of a computer is no longer going to be mainly what just the computer does. It's gonna be the fact that it can talk to all the other computers. And, and, and, and we need to do that." And, and to do that, he actually, he actually went to Japan. He actually got this incredible deal. Nintendo, you know, then and now is like, you know, this giant video game company. So he actually had this deal with Nintendo, um, where number one is he actually-- Sil-and Silicon Graphics actually did this, actually built the original three D graphics chip for a, for a consumer game player for the Nintendo sixty-four. So he did that deal, and then he went to, uh, Time Warner, which at the time was, you know, this very important, uh, media company, um, doing all kinds of things. And, and he struck a deal with them to do what's called interactive TV, which was basically pre-internet. Basically, it was like Netflix before Netflix in like nineteen ninety-one, right? Like, [laughs] like amazing foresight, right? Just like amazing foresight. But again, he and the CEO got in this conflict, and the CEO's like, "Look, I, we just can't, we can't, we have to, we have to focus on the thing that we're doing. We're, we're not gonna do these things." And so Jim did the classic founder thing, and he left. And when I met him, basically that was the state that he was in, which was, "Okay, like, you know, I, Jim, am like in the prime of my life. I know I, I have all these ideas. I don't know exactly what to do with my next company, but I know it should be a software company, not a hardware company. I know it needs to be a company that is, is able to anticipate these changes that are happening in the world. Um, and I know that Silicon..." And he was very sad about this. "Silicon Graphics is not the company that's gonna be able to do these things, and so I have to build the, the new company that's gonna do it."
- DSDavid Senra
Brad Jacobs has started eight separate billion-dollar companies. He said, "I've come to know a lot of extremely successful people in my life, and they all have one thing in common. They think differently than most people. All of them, to a person, have rearranged their brains to prevail at achieving big goals in turbulent environments where conventional thinking often fails." What Brad noticed is that great business leaders are pattern spotters, but you can't spot patterns if you can't see all of your data. Most businesses only use twenty percent of their data. Why? Because eighty percent of customer intelligence is invisible. It's hidden in emails, transcripts, and conversations. That's where HubSpot comes in. With HubSpot, all of your data comes together so you can see the patterns that matter. This is important because when you know more, you grow more, and that is a pattern that never fails. Visit hubspot.com today. That is hubspot.com.
- 54:20 – 56:58
Recruiting Dinner Story
- DSDavid Senra
I wanna hear more about what it was like working with him, but there was a, a very astute observation you made in your blog archive 'cause you were trying to... You know, essentially this post was trying to educate founders just like recruiting is the most important thing you're doing at the very beginning of a company, maybe forever, and you're, you're underestimating how difficult it is, and you tell the story of Jim Clark in the blog archive. You're like, "This guy was a legend."
- MAMarc Andreessen
He was, yeah.
- DSDavid Senra
Like, most famous person, best entrepreneur, and he's like, he tried to recruit all these other people and, like, I don't know, it was like a hundred people, and you're like, "You were one of, one of two or three that actually followed through and took the chance and jumped and started working with him."
- MAMarc Andreessen
Yeah, and, and this, again, this is like, I don't know, Zuckerberg or Sergey Brin or Elon or whatever decides to st-start a company. Like, that was his candle power wattage in the community at that time. And so, yeah, you would think that the obvious thing people would just, like, say, you know, "Jim Clark wants to start a company with you," you know, just the obvious thing is you just say yes. Like, [laughs] it was not, it was not happening. And so the, the... I don't know if I told this story, but the, the, my, the crystallized memory is a dinner of twelve of us at El-- this re-rest- famous Italian restaurant in Palo Alto called Il Canearo. It's where a lot, a lot of these companies were formed. Um, it was Jim's favorite restaurant at the time. And so Jim had like a dozen of us, and us being people who were, like, in existing companies who were, like, s-basically technical people who he knew of. Well, this is the thing. He was, he was constrained. He had a non-solicit agreement with Silicon Graphics, and so he couldn't just rip people out, um,And he didn't want to violate that, and so he needed, he needed to basically reach out to the technical community and, and find new collaborators. So there were like a dozen of, of us in there. And I, I remember that, I remember that dinner very, very, um, um, uh, precisely for, for two reasons. Number one is I was the only one of the dozen to basic- to say yes. And then the other was it's the first time in my life I drank red wi- red wine. Um, and I didn't know what to make of it. Um, and so I kept sipping it, um, trying to figure out if I liked it or not, and I didn't realize that I was getting completely hammered [laughing] because I had no idea how to calibrate red wine. Um, and, and so the, the true version of the story is, you know, I leave the dinner and I'm like, "Wow, this is amazing." Like, you know, "I'm gonna say yes to this. We're gonna do this." And I, I go to my car in the parking garage in Palo Alto across the street. And, um, my, my brand-new car, my first, you know, new car I've ever owned, right? My brand-new car, and I, and I, and I, and I gun and I pull it, and I rip the entire front end of the car off. [laughing] It's like this screaming metal sound. So like the whole front of my car is just like hanging on the ground and I'm like, "Oh, fuck me." So anyway, I park the car, get out of the car, walk home.
- DSDavid Senra
No Uber this time.
- MAMarc Andreessen
No Uber. [laughing] I'm just like, you know, a three-mile walk at, you know, whatever, eleven o'clock at night with, you know, six bottles of red wine.
- DSDavid Senra
And you're what, twenty-two?
- MAMarc Andreessen
No problem. Twenty, twenty-two. Yeah, exactly.
- DSDavid Senra
Twenty-two.
- MAMarc Andreessen
I'm like, "I think I probably won't mention this to Jim." [laughing]
- DSDavid Senra
Oh, there's some wild stories in that book. He might have admired you even more.
- MAMarc Andreessen
He might have. Yes. Yes. Yes.
- 56:58 – 57:57
Starting the Next Company
- DSDavid Senra
How many founders of the company? Just you and him?
- MAMarc Andreessen
And so originally, yeah, originally it was him and me. Yeah.
- DSDavid Senra
Okay.
- MAMarc Andreessen
We, we, we started the company. And it, we had a long... We, it was again one of these things where we had a, we had long conversations about like what to do. Well, okay, so then the, the, the, the problem, the problem that he had was th- th- there was the idea of doing the graphics chip, but like, and, and again, that's what NVIDIA did, but NVIDIA was es- essentially a spinoff of SGI. But like at that time, starting a new chip company from scratch would have been tough, and he didn't want to compete with SGI, uh, doing that. And then, and then the interactive s- what you call the interactive... It's lost to history, but this interactive television stre- Like it wasn't time for that yet. It wasn't actually time for Netflix yet. Um, and so it like the, the, the... It was gonna be cost prohibitive. Uh, Time Warner had rolled out this interactive television thing in Orlando, Florida to five hundred people.
- DSDavid Senra
Yeah, and Microsoft was involved in some way.
- MAMarc Andreessen
They were doing, they were doing a ton, and Oracle.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
At the, at the time, like all the big companies were-
- DSDavid Senra
It's all these Bill Gates interfaces.
- MAMarc Andreessen
Yeah, exactly. He talks about that a lot. But the CapEx per, you know, house was like fifty thousand dollars or something 'cause you had to have like a Silicon Graphics workstation in the house, and it just, it wasn't gonna work. And so he couldn't figure that out. Um, and then we, we, we cycled through a whole bunch of ideas.
- 57:57 – 58:33
Nintendo Online Gamble
- MAMarc Andreessen
We actually went-- He actually went back to Nintendo, and we, we almost pulled the trigger on basically building what today you'd call like Xbox Live or what is it called? Play- it's the PlayStation Network or Xbox Live.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Like an online gaming service for the Nintendo 64 in 1994, which might have been a good idea. Um, we thought it was too early. Uh, we almost did that. And then what happened literally was the internet... You know, I, I had worked on the internet in, in college, and then, and then, you know, this is, you know, fortunately only, only a few months later, but the internet just kept growing. Like it just-
- DSDavid Senra
Hold on, hold on, Marc.
- MAMarc Andreessen
Yes.
- DSDavid Senra
You had worked on the internet a little bit.
- MAMarc Andreessen
I had worked on the internet.
- DSDavid Senra
That's a little bit modest.
- MAMarc Andreessen
Yeah, well. [laughs]
- DSDavid Senra
I think a lot of people listening to this will know, but you should probably explain how you were working on the internet.
- 58:33 – 59:45
Building Mosaic Browser
- MAMarc Andreessen
So at the time, it was noth- So this is part of the story. At the time, it was not that big of a de- It's, it's not nearly that much of big of a deal at the time as it, as, as it's viewed now. So, so the internet, I, I, I've told this story many times, so I won't go into huge detail. But yeah, so we, like you know, a group of us at Illinois did this thing called Mosaic, which was the, the first, as I said, first widely used web browser, then the first one with graphics and-
- DSDavid Senra
Explain what was different about what you made compared to what existed before.
- MAMarc Andreessen
Yeah, so the like previous web browsers were like text-based. And so, so, so there was like this nascent concept of the web, but it was like on tech- It was like text-based terminals, um, and then it didn't have graphics. Um, it wasn't point and click. Um, you know, it didn't, it didn't work in the way that you, you would like this spec software to work. Um, and then by the way, it didn't also have like, you know, no scripting language, no security. You know, none of the actual capabilities that like make, make the browser a, a useful thing. And so there, there was this like nascent idea, but it, but it needed to get built into a full thing. And so we, we built the original kind of full, full thing, full browser, uh, at, at, at Illinois. Um, and then we also built the first kind of mainstream web server, like the fir- the first web server, again, that kind of had everything that people needed. You know, this had been but a, a project at, at, at college, and, and then this was a pro-- And, and, and at the, again, at the time, the internet was not viewed as a consumer phenomenon. It, it-
- DSDavid Senra
Wasn't it illegal to commercialize? Steve Case of AOL tells a story-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... that he had to like lobby and get a law changed.
- MAMarc Andreessen
Yeah, that's right.
- DSDavid Senra
What was-
- MAMarc Andreessen
Yeah
- 59:45 – 1:01:28
NSFnet Commercial Ban
- DSDavid Senra
... the details there?
- MAMarc Andreessen
So the, the internet, as we know it today, um, in the 1980s, was called the NSFNet. Uh, NSF stands for National Science Foundation, which was a branch of the US government that funds research. Um, and, uh, the National Science Foundation funded, funded the internet. Um, the reason I was able to do the work I was able to do at Illinois is 'cause the N- NSF had actually dumped a ton of money into four, four universities ar- around the country to build what were called the supercomputer centers, and then those were also the main hubs for the NSFNet. And, and the, and the function of the NSFNet was fundamentally to connect the supercomputers to all the people who were gonna use them. And so it was th- it was this government research academic program, and it was like very exciting in the technical field, but there was no conception that like ordinary people are ever gonna use any of this. Like it was just not, not... Nobody ever thought that this was a thing that, that, that normies were gonna use. Um, and, and, and so, so N- NSF, it's, it's taxpayer funding. Uh, so the g- the government at least is not supposed to be funding businesses directly, although sometimes they do. Um, but, um, there was, there was, uh, there was, you know, formal legal restrictions on, on, on, on, on, on funding things with, with, with, with commercial applications. And so what, what there was is there was something called the AUP, the acceptable use policy. And the acceptable use policy said that, that basically the inter- the internet, the internet, the NSFNet turned internet, um, was for academic and research use, and commercial activities were strictly prohibited, like literally not allowed. And, and again, it's just like, oh, as a taxpayer, that makes total sense. Like I'm, I'm glad my tax money's not going to fund something, well, you know, like that. But like as a user, you're just like, "All right, that's nuts." Like, like that's clearly crazy, right? And, and, and if you, if you took the conceptual leap to say, to say, "No, this is gonna escape the lab, and this is gonna be something that normal people are going to use," um, then it just became obvious that it would have to have commercial activities. Yeah, and then A- AOL was one of the early pre-internet online services that wanted to connect to the internet. I think they famously connected to the internet in 1993.
- 1:01:28 – 1:03:11
Eternal September Shift
- MAMarc Andreessen
Do you know, you know about the concept of Eternal September?
- DSDavid Senra
No.
- MAMarc Andreessen
Oh, okay. So, [laughs] so-There are two internets. There are two internets. There is the internet that existed before 1993 and the internet that existed after 1993. People who were on the internet before 1993 often describe it in utopian terms, um, because it literally was like you take the whatever million smartest people in the world and you put them on a network together with, like, no commercial activity, no advertising, no nothing, just um, the million smartest people in the world, and you just, like, let them talk to each other. And it's just, like, amazing. It was, like, amazing. Like, the-- there was this... The old messaging system was called Usenet, and, like, the discussions on Usenet were just, like, absolutely spectacular. It's just like this... It was like-- It was amazing. It was like the most pure, clean, intellectual, like, vibrant space since like, I don't know, Athens in, you know, five hundred BC. It was just like this amazing phenomenon. And then AOL connected. Uh, AOL, AOL had, I don't know, whatever million or two million, uh, people at that point. They connected. They connected all the AOL users, which were just normal people, to the internet September of nineteen ninety-three. [laughs] And so, so that became Eternal September, uh, which is the-- That's the day the, the internet changed. And by the way, I'm, I'm, I'm pro that. I'm glad that happened. But, like, the, the pro and the con of that is that took the internet from this, like, ivory tower, you know, kind of thing to this basically mainstream consumer ordinary people thing, which of course is just a fundamentally different thing. It was, you know, obviously, right? The concept of Eternal September literally was it was like when, when every, uh, new wave of college graduates, like, graduated and got their first job a-and then went online. So, so September is when, September is when the new crop of, like, internet users showed up for a long time.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
So i-i-it... So the, the September effect didn't just happen once. It, like, happened over and over and over and over and over and over again. And every cycle of internet user would basically be like, "Oh my God, this is great, but, like, it's all gonna get ruined in September."
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Right? And, and so the internet that we live in today is, is the result of-
- DSDavid Senra
They could only see us now.
- MAMarc Andreessen
Thir-thir-thirty S- thir- thirty Septembers.
- 1:03:11 – 1:04:49
Spam and Web Controversy
- MAMarc Andreessen
Right. Uh, um, but yeah, the, the... And by the way, there, there was contro- there was controversy, there was controversy at the time about whether the internet, whether the acceptable use policy should be revoked. Um, there was controversy over whether n-normal people should, [laughs] should be on it or not. Um, there was controversy over whether the kind of content normal people wanted to be on it should be allowed to be on it. Um, there was controversy about whether there should be... Like, there was controversy. We got q-quite a bit of flak at the time for putting images into web pages under the theory that that would, like, fundamentally make everything worse because you'd have, like, normie content.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Um, that would be bad. Um, uh, and then, you know, so said about like e-commerce... By the way, advertising, um, I, I remember when, I remember when the, the f- there was actually a moment [laughs] that there was a guy, there was a guy, there was a guy named Sanford Wallace, and he became known as Spamford, Spamford Wallace. And, and he was literally... He sent out the first spam message on, on the internet in like nineteen ninety-two. And it was, like, literally, it was like the first internet ad, and it was like a spam for, I don't know, whatever, legal services or something. Um, and he just dropped it into Usenet. And it was like a thermonuclear explosion because it was like, you know, get this commercialized crap out of my, out of my, out of my news feed. Um, and so, so, so like all, all of, all of these things were like h-hot, like, controversial. Um, I, I, I was generally on the other side of all these arguments because I was like, "Look, th-this thing is great. Obviously, everybody should have access to this. Obviously, we need to connect everybody to this. Obviously, to do that, we need... These, these need to be businesses. There needs to be commerce. There needs to be advertising. Like, all these things obviously need to happen." Um, and I, and I-
- DSDavid Senra
So is that the discussions you and Jim were having where you're like, "Okay, we're gonna start an actual company-
- MAMarc Andreessen
Yeah.
- DSDavid Senra
-on this"?
- MAMarc Andreessen
So yeah, so, so that's how we got to the conversation Jim and I had, which was basically like, okay, th-th-th... 'Cause that was right at the pivot point. This was like in early ninety-four. So this is like the AUP had just been revoked, and it was just a... And AOL had just done the first September, and it was... The whole thing was just about to tip.
- 1:04:49 – 1:07:49
Mosaic Tech Support Flood
- MAMarc Andreessen
Um, and, and I, [laughs] and I knew that, I knew that because, um, I was tech support for the browser, uh, p-personally. [laughs]
- DSDavid Senra
[laughs] No, explain that.
- MAMarc Andreessen
Just me.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Uh, well, so if you... Mosaic at the time was the browser everybody used. And so if you used Mosaic, there was a, you know, submit a bug report or whatever. You have a question, submit it here, and that went to an email box, and that email box was me.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
And so I became tech support for the internet-
- DSDavid Senra
[laughs]
- MAMarc Andreessen
-for like, you know, three years. Um-
- DSDavid Senra
Wow.
- MAMarc Andreessen
I got all the emails. Um, uh-
- DSDavid Senra
How many emails were you getting?
- MAMarc Andreessen
Well, there were actually two. That, that was one e-email box, and the other email box was, uh, Mosaic was actually created under byte. It was also funded by the National Science Foundation. Um, so it was actually not le- The, the original license said it, it couldn't be used for commercial use. It was for academic and research and individual use. And so we had this thing. We, we did a deliberately ambiguous license, and we said, "If you want, uh, to use the browser commercially, you need to email us to, to arrange terms." Now, w-we had no concept at all of what those terms would be, but we just said we, we need to, you know, create this incoming flow. So I was getting bombarded with tech support requests. A-and by the way, tech support for the internet means you're tech support for everything.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
So it's like, you, you know, the old, old PCs had, um, you know, the, they had CD-ROM trays. You press the button, the CD-ROM tray comes out, you put the, put the disk in the thing. Uh, the problem is a lot of people thought that those were cup holders.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Right? So you press the button, the cup holder comes out, you put your cup of coffee down, and then, you know, ten seconds later, the cup holder retracts back into the PC, spills your coffee all over the place. You're like, "How the fuck do I keep the cup holder out?" Right? It's like, man-
- DSDavid Senra
Let me email Marc. [laughs]
- MAMarc Andreessen
Yeah, let me email Marc. You know, it's like, "Sir, that's a, that's the CD-ROM drive." Um, so there was a lot of that. [laughs] So, so one of the funnier things you can always do, uh, in politics, they call this focus groups, but you can... User testing. Y-y-you... And you see this over and over at tech companies. Take whatever amazing new thing you have and just put it in a, put it in a room with, like, normal people and let them try to use it, and you just, like, learn so much about how much of a bubble that you're in-
- DSDavid Senra
Yeah.
- MAMarc Andreessen
-about the kind of things that you're familiar with that, like, normal people are just like, "I don't know what the hell any of this stuff is." So there, there, there was a lot of that. But then I had this other email box, which was all the, all the commercial licensing requests. And so, so I saw the consumer take off on the one side, and then I basically... That-- I think that... The... And then the, the commercial requests, uh, hit like four hundred messages of people wanting to, like, pay money for this thing. And so I basically took those to Jim, and I was like-
- DSDavid Senra
There's a business.
- MAMarc Andreessen
Yeah, there... Yeah. This, this, this is going to happen. And then we actually went to my underwrite. My old, my old, um, my, my old boss I at, um, at NCSA actually had gone to, um... We actually went to Washington in, in ninety-three to try to get NSF funding to staff a support desk so that it wasn't me answering all, [laughs] answering all the emails. And the National Science Foundation people were very nice, and they were like, "Yes, the National Science Foundation is not in the business of funding customer support desks, uh, for your, for your software." And so I still have the, the denied NSF grant, um, that would have, uh, kept the whole thing, uh, um, uh, an academic project. Um, but yeah, so like, yeah, so at that point, it was like... Th-th-at least to Jim and me, it was just obvious that that was gonna be a business. By the way, again, v-very controversial, the original press coverage on Netscape for the first, like, year was that these people will never make money. Like, this is ridiculous. Like, everybody knows the internet's free.Like, everybody knows that none of this is
- 1:07:49 – 1:09:05
Netscape Business Model
- MAMarc Andreessen
gonna work, so you know, even, even, even-
- DSDavid Senra
What did you think the business model, though-
- MAMarc Andreessen
Even, even then it was controversial
- DSDavid Senra
... was just literally licensing it?
- MAMarc Andreessen
It was a combination of things. So it was, it was definitely software licensing, and, and we, we, we did this thing up front where the browser was free, but the server software cost money. And then we, and then we, out of the gate, started building all these, we called applications, server, server-side applications. So we built, like, the first publishing system. We, we built the first, like, publishing system for, like, running a newspaper or magazine online, you know, con- content management system. We built the first e-commerce system for selling... You know, this is pre-Amazon, so we built the first e-commerce system for selling things online. Um, so, so, so we, we, we, we built and sold a lot of that software. Um, and then, um, and then we, we owned, you know, the, the, the main website that the browser had as its default homepage, and so we built the, the original internet advertising business was, was basically... So Netscape was the largest internet advertising company until I think '97. Uh-
- DSDavid Senra
That's incredible. I didn't know that
- MAMarc Andreessen
... when Yahoo passed us, yeah. Um, and so yeah, so we, we invented a... People at the firm invented, at the company invented, I th- I, I don't know if we... I don't know exactly who gets credit, but, like, the original ad formats, uh, you know, were right around that time, and a lot of them rolled out on, uh, on our site, you know, first. And so it was, it was literally, it was advertising pre-Yahoo. It was, um, it was, uh, e-commerce pre-Amazon. Um, it was, uh, yeah, content pre... You know, we literally sold... I mean, we put The Wall Street Journal online. It was our, you know, that was our software that did that, um, and a lot, a lot of other newspapers, uh, magazines, all that, all that stuff. And so yeah, it was a lot of that, and then it was the, the, the web
- 1:09:05 – 1:11:15
Early Internet Skepticism
- MAMarc Andreessen
operation. Uh, and again, it was, again, it, it, it all looks obvious in retrospect, but, like, again, it was like, okay, when we started this, like, it... I don't know what the total number was in, like... So we started the company April '94. There couldn't have been more than two million people total online, right? Uh, and, and then almost everybody was coming in over dial-up. This is, like, pre-broadband, right? So everybody's coming in on like 14.4K modems, and we're, like, hoping that people are gonna upgrade to 56K modems, like, you know-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... that that would be, like, super helpful. Computers at that time did not come with TCP/IP installed. Um, so to get your PC actually on the internet, you needed to, you needed to buy a TCP/IP stack. Try explaining to a normal human being what a TCP/IP stack is.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Like, it makes no sense at all. Uh, so that-
- DSDavid Senra
They're gonna ask if they can put it next to their cup holder.
- MAMarc Andreessen
Ex- exactly, yeah, just, like, it was just like, it was just like talking to Martians, right? They're talking to us was like talking to Martians. And then, you know, monitors were, you know, like three feet deep and just, like, bathing you in radiation.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
You know, just you're kind of hoping that the radiation stays up here and not, you know, uh, everywhere else. In retrospect, it was, it was, like, super early, and it was all very... And, and then again, it was just like, okay, e-commerce, like, are people gonna buy things online? It's like, I don't know, maybe. But, like, the, the press at that time was just, like, wall to wall. Like, if you put your credit card number online, like, hackers are gonna steal it.
- DSDavid Senra
I was gonna say, if you read any books around this time-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... they're like, there's no way in hell anybody's-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... ever gonna put their credit card on the internet.
- MAMarc Andreessen
But by the way, the other thing you would never, ever, ever, ever do is put your real name online because it would be immediate identity theft. Your life would be ruined, so you would never, ever do that. Um, by the way, the other thing was right in the beginning you had all the panic around, you know, kids. You know, this is gonna destroy children. You know, this is a huge risk to children, so you had all that panic. Um, and then there was immed- you know, there was the beginning of the calls for censorship. You know, there's clearly all this stuff that you have to take down. The New York Times kept running stories talking about how the whole thing was fake anyway. They kept saying that, like, all the numbers were made up and, like, there actually wasn't anybody online. It was, like, a tiny little user base, and we were all, like, inflating the numbers and committing fraud. And so it was just this, it was just this... Uh, in, in retrospect, it's all, like, quaint and cute and sweet, but it was, like, the, it was the precursor. It was all-
- DSDavid Senra
The-
- MAMarc Andreessen
... all the, all the, all the moral panics around technology today.
- DSDavid Senra
Okay, but y- you-
- MAMarc Andreessen
You could see nascent versions of them back then
- DSDavid Senra
... you pick up on something that, 'cause me and you have read a, a bunch of the same books, where it's like humans' reaction to something new-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... is just consistent throughout history.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
And so I heard a, a podcast with you. I thought I was the only one that would tell the story in private about bicycle face.
- MAMarc Andreessen
Bicycle face. [laughs] Exactly.
- DSDavid Senra
Do you wanna say what bicycle face is?
- MAMarc Andreessen
Bicycle face. Bicycle
- 1:11:15 – 1:13:08
Moral Panic Pattern
- MAMarc Andreessen
face. Bicycle face, yes. So it basically turns out every new technology is greeted with a m- what they call a moral panic, right? So a- and a moral panic basically is whatever this new technology is or this new form of media is, it's gonna ruin everything. It's gonna ruin everything. It's gonna ruin, specifically it's gonna ruin society, it's gonna ruin morality, and then especially it's gonna ruin the children. Um, and, and then, and then back, this was, the bicycle was pre-feminism, so it also was, it's also gonna r- ruin the women, very specifically. It's gonna ruin the women. Which clearly cannot be... Because women clearly in 1880, you know, cannot be trusted to use a bicycle without getting into real trouble. I'll explain. I'll ex- I'll explain why. So this is this persistent theme, and, and basically you, you go all the way back and this is, like, you know, this is, like, this famous thing where Plato, uh, and Socrates thought that, like, the pr- you know, basically that they, they thought that written language was a big mistake, that, that all information transmission should be oral, and they had this, you know, whole thing back in 500 BC. And then it was just like every s- I, you j- you just have to, like, imagine. It's, I always, I always like to hypothesize, like, you know, the, the first guy who brought fire, you know, it's like down from the mountain.
- DSDavid Senra
They probably killed him.
- MAMarc Andreessen
Yeah. They're like, "What the fuck is..." You know? [laughs] Right, exactly. Like, you know, this thing is horrible. This thing could burn down the village. Like, this is awful. This is gonna destroy everything. Um, and so it's just been this, this consistent thing and, and you, you... There's this great website called Pessimists Archive where he, th- there's, th- these guys who go back and they find all these newspaper articles that are contemporaneous to these things. But it's, it's everything. And, you know, so when I was a kid and, you know, it's like heavy metal music, Dungeons & Dragons, you know, it is like all this stuff was awful. Uh, uh, I remember the moral panic around the Walkman, the very first cassette, portable cassette player with the headphones, 'cause it was gonna, it was gonna destroy society 'cause everybody's gonna just be listening to their own, you know, their own music. Uh, I remember the moral panic around the calculator was gonna destroy education 'cause kids were not gonna learn how to do math anymore. Um, and then you go back and it's like in the '50s it was, like, comic books, and it was, you know, uh, rock and roll music. Obviously it was gonna ruin everything. In the '20s, by the way, jazz music was gonna ruin everything. Playing cards were gonna ruin everything. Uh, what else? Uh, uh, novels. Uh, paperback novels, you know, were ta- taking k- kids, kids were gonna sit around and just read novels all day instead of doing any, any real work. So it's just over and over and over again. It's, it's this constant story.
- 1:13:08 – 1:14:48
Bicycle Face Story
- MAMarc Andreessen
So the, the bicycle one is the great one. So the bicycle rolls out in like 1870, 1880, and so the, the US still at that point was like, you know, thinly populated, you know, from today and, but the West had been settled, and so you had all these little towns and villages scattered all over the place and... But, you know, to get from one town to the next was like, you know, 5, 10, 15 miles, and so people didn't generally walk, walk that. Um, and so the bicycle comes out and all of a sudden it's easy to go five miles into the next town. And then, you know, young people discover the bicycle, and they discover that there are young people who they didn't grow up with who are in the next town over, and they're like, you know, they head out to do it. And, and so the specific-
- DSDavid Senra
To do it. [laughs]
- MAMarc Andreessen
To do... Well, to do it, yes.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
To do everything. To do whatever it is that young people do.They're gonna h- they're gonna h-head to the-- Yeah, gonna like, look, look, it's just the nature... You know, if you've known the same group of people since you were two, like you're, you're, you're gonna w-- Yeah, it's, it's-
- DSDavid Senra
What's over that hill?
- MAMarc Andreessen
What's over that hill?
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Yes, exactly. Right. Um, I grew up in a small town. I, I, I can iden-identify with that. Um, and so, um, so, so, and, and then specifically at that point, young, you know, young men obviously, but specifically young women started to do the bicycle. And so-- and this is a big threat. And so like, if you're like a guy in a town and like all the, you know, attractive young women are like heading over the hill to the next hill on this bicycle thing, like that's a big problem.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Um, and so the press at the time created this thing called bicycle face. Uh, and the idea of bicycle face [chuckles] was, it was a, it was a, it was part of the moral lecture that was given to young women in the press at the time, uh, which was basically young women should not use bicycles because if you go on a bicycle, you have to exert yourself, and if you exert yourself on the bicycle, you're gonna end up making like a, you know, an exertion, you know, you know, exertion face. Um, but the thing was, if you did that too much, your face would freeze into bicycle face. [laughs]
- DSDavid Senra
They literally thought it would stay that way permanently.
- MAMarc Andreessen
It would stay that, it would stay that way permanently, and then you would never find a husband.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Right. And so, so yeah. So that was that moral panic. Yeah. And so these, these things just like ripped through every... I mean, it's just, it's in- well,
- 1:14:48 – 1:18:12
Music Panic Examples
- MAMarc Andreessen
it's incredible. M-music is always a great one because it's like, you know, for, I don't, this is, it's over now, but like in the, in the, in the nineties, two thousands, you know, it was all this moral panic around hip hop.
- DSDavid Senra
Dude, Jimmy Iovine, who's your neighbor-
- MAMarc Andreessen
Yeah.
- DSDavid Senra
He was in here two weeks ago.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
And he had to deal with... They called him a, uh-
- MAMarc Andreessen
Yes
- DSDavid Senra
... like a, um, chemical gas or mustard gas. Like they, they compared him to literally like what he's doing is the same as genocide.
- MAMarc Andreessen
Yes, that's right.
- DSDavid Senra
Because he's funding hip hop music and white kids are starting to listen to hip hop music.
- MAMarc Andreessen
Hip hop music in the late eighties, early nineties. That's right.
- DSDavid Senra
In front of po- like congressional hearings on this.
- MAMarc Andreessen
That's right.
- DSDavid Senra
Like the media behind him.
- MAMarc Andreessen
That's right.
- DSDavid Senra
He was pu- uh, he was pushed out of a conglomerate.
- MAMarc Andreessen
Yes.
- DSDavid Senra
Like this wasn't a joke.
- MAMarc Andreessen
Yes, that's right. That's right. And, and it's actually funny 'cause like we, we, I'm, I'm not in the music business, but like, uh, hip hop has become so normalized that today it would just never even occur to you. Like, it just like feels like... In fact, hip hop is kind of, you know, as a cultural phenomenon is even ki- is even kind of fading today. But yeah, no, that was super intense, uh, at the time. And then rock and roll, that was like super intense in the fifties and sixties. And then the amazing thing is-
- DSDavid Senra
Remember Elvis Presley? They would-
- MAMarc Andreessen
No.
- DSDavid Senra
They wouldn't shoot him.
- MAMarc Andreessen
That's right.
- DSDavid Senra
They-- 'cause he would shake his hips. So they're like, "No, no, he can't... It's waist up on TV from now on."
- MAMarc Andreessen
That's right. That's right. But here's the one, here's the one I love. Jazz. They said all the same things about jazz in the nineteen twenties and nineteen thirties. It was jazz music is corrupting the, the, the ch... And, and it was the exact same thing. It's 'cause like kids are gonna get together and they're gonna dance to jazz, and then who knows what happens. And then it was like, there's a jazz musician that's like smoking pot, and that means all the kids are gonna start smoking. It was just-- So it's the same, it's the same story over and over and over and over again. Um, and, and, and I'll just say, by the way, in fairness, like it's not that society doesn't change. Like, it, it, you know, many of the technologies that we just described did, did cause society to change. Like th- you know, things are different pre and post the bicycle. They're different pre and post the car. Um, you know, they're different pre and post, you know, the creation of modern, modern culture, rock and roll or whatever. But like this, like the mo- again, this idea of the moral panic, this idea of just like outright panic, end of the world, is just like this repeated over and over and over again thing. And then, and then what's, what's, what's happened is like this, this is just, this is the obvious way to sell newspapers, right? Like th-th-th-this is like the meta story of the press, which is just like, whatever's happening is like horrible and awful and it's gonna kill everything. You know, you know, be sure, be sure to buy our newspaper tomorrow.
- DSDavid Senra
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- 1:18:12 – 1:19:36
Lessons from Jim Clark
- DSDavid Senra
I wanna go back to, to J- uh, Jim Clark real quick.
- MAMarc Andreessen
Mm-hmm.
- DSDavid Senra
Is there anything that you learned-- 'Cause Jim Clark was what, like two dec- probably twenty years older than you?
- MAMarc Andreessen
Yes, about that probably.
- DSDavid Senra
So like, is there anything that you learned work- what a fucking education you had to be able to work with that guy when you were in your early twenties.
- MAMarc Andreessen
Yeah, that's right.
- DSDavid Senra
So is there anything that you learned by working with him back then that you still use today?
- MAMarc Andreessen
Uh, I mean, yeah, a lot. Uh, you know, it's easy to say it was very formative for me, so, so a lot of it. But yeah, I mean, you, you mentioned that the, the sort of quote earlier about the world is a malleable place. Like Jim was like the ultra version of that. Um, and so yeah, he would just like, yeah, when he had an idea, and he was right, like his ideas were correct, um, almost all the time, uh, he, he would just like pound the world into [laughs] into adopting them, into believing them. Like he was, you know, like the, the idea of being like a complete force of nature.
- DSDavid Senra
One thing that was malleable was himself. He has this great quote in that book where he, he, he calls himself a self-described loser at thirty-eight years old. I mean, the guy had like two PhDs, he was a professor, but he just like, I think he'd been in his second or third divorce, and he just snapped one day, and he's just like, "I had-- woke up one day with the undeniable, uh, urge to achieve something." And that's when he goes from academic to founder-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... and just rips off company after company for like a few decades.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
So it's like, oh, he's, he, he realized that he is malleable too. He just reinvented himself over and over and over again.
- MAMarc Andreessen
Yeah. And of course, he does that not just by like starting a company, but like inventing interaction computer graphics [laughs] and like completely changing the field.You know, in- indirectly, like, completely changing Hollywood
- DSDavid Senra
But is there anything about recruiting or managing or any other way that he ran
- 1:19:36 – 1:21:22
Clark Versus Barksdale
- DSDavid Senra
his company?
- MAMarc Andreessen
No. So like my two mentors at that time, actually they were, they were in some ways polar opp... They always got along, but they were kind of polar opposites. They were both Jims, so Jim Clark and Jim Barksdale. So the Jim Clark side of my personality is like the, like will to power, like [chuckles] I'm just gonna bludgeon the world into doing what I want. Um, uh, you know, and then just, and then the idea of just like, you know, try to be a fountain of creativity. Like, just like the, the, there are many, there are many new ideas out there and like you, you just, you need to, you need to go find them. Um, um, and then, you know, I would say also, how to put this, like a, a sense of professional dissatisfaction. Like, okay, like what- whatever... Look, this is the other part of the story. Like a lot of founders would have had a success like selling, selling graphics, and that would've been it, and they would've spent the next, whatever. Whether they were totally happy with how it turned out or not, like they would've spent thirty years just coasting on that, right? And having a great time and taking credit for it and the whole thing.
- DSDavid Senra
Mm-hmm.
- MAMarc Andreessen
Um, but Jim, you know, was always, uh, you know, at least in, in that part of his life, you know, dissatisfied in the productive, positive sense of like, "Okay, no, there's something better, there's something bigger, um, you know, there's something new that we should do." So, you know, there's that side of it. And then Jim Barksdale was the other, um, uh, was the o- who I just literally was with yesterday, uh, in, in, uh, in, in Jackson, Mississippi. Um, uh, Jim Barksdale's the other side, which was, Jim Barksdale's like the, the manager of managers. So Clark is like the ultimate example of that bourgeois capitalist thing I mentioned, so the, the Henry Ford, Elon Musk type. And then Jim Barksdale's like the ultimate example of like the super, the super manager. And Jim had run, you know, big parts of IBM and AT&T and Federal Express, um, and you know, came, came in to run, you know, came in to run Netscape. And what was interesting was like th- that's kind of where I got a lot of this from and a lot of my skills from is I, I got trained by both of those guys and then kind of both of those guys at the same time and, and then was able to like very clearly observe one is just the difference between those mentalities, but then the other is of course how, how those concepts converge, right? Because, because just the fountain of creativity-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... it, you, you, you can't, you can't build, you can't build anything big just with that. Um, just the management, you don't, you, you don't do, you don't
- 1:21:22 – 1:23:00
Tesla Versus Edison
- MAMarc Andreessen
do new things.
- DSDavid Senra
Who's a great example of that from history? So like would it be like Nikola Tesla? Fountain of creativity-
- MAMarc Andreessen
Oh, that's right, yeah
- DSDavid Senra
... but he needed somebody, he needed like a George Westinghouse to commercialize his ideas.
- MAMarc Andreessen
Well, it's a Tesla versus Edison.
- DSDavid Senra
Okay.
- MAMarc Andreessen
Uh, yeah. So Tesla versus Ed- so Tesla versus Edison. So I'm an Edso- I'm an Edison guy. This is the thing. So El- Elon's a Tesla guy, uh, is a Tesla guy obviously. But, but Elon of course himself has now become like a, a really outstanding, I mean obviously become an outstanding manager like in his own, you know, in his own way. In fact, to the point where I think he's actually inventing an entirely new school of management, [chuckles] which we could talk about. But like-
- DSDavid Senra
Let's, let's go there next.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
Okay.
- MAMarc Andreessen
He's maybe the greatest manager of our era, despite the fact that nobody thinks of him that way. But, um, but y- so I actually think Elon's more like Edison than he is like Tesla. Um, a- a- and there was a big war. And it was kind of this thing 'cause it's, it's, every- everything kinda turns into these little morali- morali- morality plays and so kind of the, this, the, the basic story of Tesla and Edison was Tesla had all these ideas but could, couldn't fi- couldn't commercialize them, couldn't turn them into companies, ultimately, you know, couldn't, couldn't figure out how to make money on them, couldn't build like big, big, big companies, uh, you know, kinda based on them. And then Edison, you know, it basically, at least the way the legend goes, is he was more this grinder. He was less incandescently brilliant, and he was more of a grinder, and he's just like, "We're just gonna try a thousand things." You know, it's like when they invented the filament for the light bulb, they just tried like a thousand different combinations of things to get to the filament and, you know, sort of this brute force approach. But then he built General Electric, [laughs] right? Like, he built the like national electric grid, you know, and built these giant companies. Um, and then he, you know-
- DSDavid Senra
Funded by-
- MAMarc Andreessen
Funded, funded by-
- DSDavid Senra
JP-
- MAMarc Andreessen
Funded by JP Morgan.
- DSDavid Senra
There you go. [laughs]
- MAMarc Andreessen
As a, as a, uh, as a, as a venture capitalist in his spare time.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
Yes, exactly, a hundred percent. Um, and so, uh, and then, you know, Edison also invented the movie projector and then, and then literally spent year, y- years trying to enforce his patents, right? And so-
- DSDavid Senra
And the phonograph.
- MAMarc Andreessen
And invented the phonograph. The phonograph-
- DSDavid Senra
Which he, you tell the story, and I knew because-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... I read the book
- 1:23:00 – 1:23:13
Edison Digression Setup
- DSDavid Senra
too.
- MAMarc Andreessen
Yeah.
- DSDavid Senra
We should tell people what he thought the phonograph was gonna be used for. [laughs]
- MAMarc Andreessen
So this, this is a, a bit of a digression, but it gets to the personality type. So one of the things that people look for is just like, "Oh, what are the consequences of a new technology gonna be? Oh, let's go ask the people who invent them," 'cause obviously
- 1:23:13 – 1:23:43
AI Forecasting Myths
- MAMarc Andreessen
they know. And so this is what happens when like these A, when the AI guy, for example, the AI g- guys get, you know, the AI, uh, the pioneers of AI get interviewed in the press. It's like, "Well, tell us the future of AI." And it's like you get the, like the one I'll pick on is Geoffrey Hinton, who's like an actual self-declared socialist. Like he's an actual so, like he's an actual capital S socialist, and people ask him, "What's the future of AI?" And of course he says, "It's gonna be rampant unemployment, and we need to give UBI, UBI to everybody." It's like, what a coincidence, the answer from the socialist is communism. Like, l- l- like what an amazing coincidence. But people think 'cause he's one of the inventors of AI, that he must be the guy who
- 1:23:43 – 1:25:11
Edison Phonograph Lesson
- MAMarc Andreessen
knows.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
And so the story I always tell is the Edison story. Thomas Edison was like a p, he was like a very proper WASP. He was like a WASP, you know, so a WASPy, you know, personality type of that era.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Extremely proper gentleman, always like impeccably dressed, very, you know, kind of very e- ethical, uh, you know, upstanding, you know, kinda citizen of, of, of that time, um, and, um, and very religious, very religiously devout. And so for him, it's just obvious that the application of the record player was that everybody would buy a record player, and then everybody would buy a catal- a library of discs that would be the great sermons-
- DSDavid Senra
[laughs]
- MAMarc Andreessen
... uh, religious sermons from all the great preachers of the time. And then you get home at night after a long day of work, and you turn on the record player, and you would listen to a sermon, you know, with your, with your adoring, you know, wife and kids, you know, g- gathered, gathered around you. And of course, the record player drops, and immediately, of course, like it's just, it's music. It's just like obviously music. And it's like ragtime and then it's jazz and, and, you know, Edison's just like completely horrified.
- DSDavid Senra
He didn't know that if you put the phonograph in the window and you play good music, then you have all these girls on bicycles coming over. [laughs]
- MAMarc Andreessen
With bicycle face. Exactly. Exactly. And so this is what I always tell. This is always my thing. It's like i- if Edison didn't know what the phonograph was gonna get used for, the idea that-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... you know, I don't know, whatever, Joe, Joe AI entrepreneur is gonna be able to forecast the economic implica- like, no. No. Like, that's not gonna happen. And in fact, the people who invent the technology are often like the least qualified people to understand the long-term implications because they're just, they're too, they're too buried in the specifics of, of, of the here and now. And then, and then, and then all these other questions, you know, these are all big cultural, social, economic questions, you know. And, and by the way, I don't know if there's anybody that can predict big cultural or economic or social trends, but it's, it's certainly not somebody who's been in the lab for twenty years,
- 1:25:11 – 1:29:11
Netscape Two Jims
- MAMarc Andreessen
including myself.
- DSDavid Senra
So how this started, you think you greatly benefited from the two Jims, essentially like being polar opposites-
- MAMarc Andreessen
Yeah, basically, yeah
- DSDavid Senra
... and showing you-
- MAMarc Andreessen
But also working very closely together.
- DSDavid Senra
Did they get along?
- MAMarc Andreessen
I don't know if I've told this story publicly, so I should tell this story. So, um, they got along great, became very good friends. They, they, they both did great, and they're both, you know, very responsible for certainly everything that Netscape did and everything that I, that I've done. But, you know, it's, it's a, it's an or- it's different disciplines, different worldviews, you know. There's, so there's an oil and a water kinda aspect to that. And so, so, you know, Clark ran, Clark ran the company for the first like nine months, which at the time felt like, you know, just like this was internet time, it felt like much longer, but it was, it was like this highly compressed nine-month period. And, and, you know, and it was like we were like doing new, we were all these new things. We were doing all these new things. Like the, the company was just doing like a-A hundred new things. It was amazing. But like we, th- nothing was being systematized, right? Noth-- it was not, it was not gonna, by default, it was not gonna turn into like a, a large, a large company without the management part. And so Barksdale comes in, and he basically is like, "Wow, the inve-- th-this inventiveness is great, but we need to like actually start to have systems and like schedules and processes and, and actually like run this thing, run this thing like a business." And, and, and you know, as founders do, Clark, you know, he originally, you know, s-found that a little bit frustrating because it's like, you know, whatever is the latest idea is not the thing that we're just gonna turn the entire company, you know, to, you know, to pursue. And this is when Clark was still coming to Jim's, Barksdale's staff meetings. And so, um, uh, C-Clark got up, got up, s-got, got, um, uh, uh... H-he had a negative reaction to Barksdale saying, "No, we're not gonna do this new thing. We're gonna, we're gonna keep doing the thing that's already working." You know, it's one of those moments. And Barksdale's like, you know, "Can I talk to you outside?" And so they, you know, they went out back and, and um, and, and, uh, I heard this story from both of them later. And, you know, Clark's like, you know, "Look, this is the whole reason we're here is because we do these new things. Um, and you know, if we don't do these new things, we're gonna destroy the company." And, and Barksdale looks right at him and says, "Jim, I hear you. This is as serious as dick cancer." [laughing]
- DSDavid Senra
[laughing] What?
- MAMarc Andreessen
In, in the deep Mississippi drawl, right? And Clark stares him right in the face and bursts out laughing. [laughing] L- and they got along great ever since. Like, like, just like they just lo- they, they loved each other ever since. B-fi-first up basically saying, "Look, we, we can't... We, we, we're n- we're not gonna make these decisions in a state of kinda superheated passion."
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Like, we're not gonna do that. We need to have the full version of this conversation, but we're g- we're gonna have it in kinda this, this, this longer and, and maybe more dispassionate way.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Uh, but it was to, it was to p- it was to puncture the stress of the moment. And so th-th-- I, I will say I have used that one a few times.
- DSDavid Senra
[laughing]
- MAMarc Andreessen
Yes.
- DSDavid Senra
But I could see Clark-
- MAMarc Andreessen
And Clark thought it was hysterical. Like-
- DSDavid Senra
[laughs]
- MAMarc Andreessen
... I mean, nobody had ever talked to him that way before, so.
- DSDavid Senra
But I could see Clark like, "Oh, no, here we go. This is a replay of what happened at Silicon Graphics, so."
- MAMarc Andreessen
I think probably he was probably afraid of that to a certain extent. Um, but um, yeah, yeah. Uh, but... But, and, and I would say J- yeah. I, I don't wanna say anything negative about the SGI guy, but um, yeah. I mean, Clark w- like I said, Clark was just like... B-Barksdale was just like the, was the manager of managers. He was like so advanced on this. That story notwithstanding, Barksdale never took the position of like, no, th-it's time for the new, new ideas to stop. Like, but it, but it was always like, okay, we need to thread the new ideas into a business, whi-which, which is kinda the hybrid of the two.
- DSDavid Senra
So I just had this thought while sitting here listening to you speak. Is there something about your partnership with Ben-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... where like you, like he's more Barksdale-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... you're more Clark?
- MAMarc Andreessen
Yeah. Although we, we do mix it up a little bit more, um, 'cause he does have, he does have his own edge. Um, but um, yeah, there, there is some of that. Yeah. So like for example, like our firm, he runs the firm. Um, and then I, yeah, I will, I tend to come up with new i-- you know, he comes up with lots of new ideas, but I do tend to come up with new ideas, and then we, we do, we do have this kind of discussion, you know, frequently.
- DSDavid Senra
So if I was to follow you around without you knowing with a camera-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... what would your day look like then? [laughs] Are you just like a fount of ideas? Are you like this uncontrolled energy like a Jim Clark back in the day?
- 1:29:11 – 1:31:44
Bottling Innovation
- DSDavid Senra
When do you show the unedited side?
- MAMarc Andreessen
I, I, I don't tend to do it in the spur of the mo-- uh, again, I mean, this is the thing, and I, you know, Elon threads this incredibly well, uh, just incredibly well, as does Zuckerberg. Um, is like, it, it is this thing, and again, this goes back to like the Edison/Tesla thing, that when you're responsible for, when you're responsible for an organization, when, when you're responsible for a team of people that's more than five or ten, if you're gonna have an organization that's like a hundred or a thousand or ten thousand or a hundred thousand people, like it, you can't change the plan every day. Like you just can't. You'll just, you'll destroy every, you'll burn everybody out, you'll destroy everybody, there'll just be mass confusion, people will quit, it's just gonna be... Like you can't do that. There has to be some calibrated middle ground. There are a handful of examples of like great business successes where it's like one or two or three people, right? And so maybe it's like Bitcoin and Minecraft and WhatsApp and Instagram and, and then I start running out of examples. But like AI, there will probably be more. There will probably be more like single person companies-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... you know, from, from here on out. Or, or by the way, artists, you know, an, an, an, an, an artist, a novelist. Let me say, there's a difference between like a novelist and a movie maker. A novelist will say, "You can put whatever the fuck you want in your novel." But like if you're a director of a movie, you can't like change the entire plot like on Tuesday while you're shooting the movie, or you're like, there's three hundred people who are relying on you to like complete a movie. Like, so, so anyway, so point being is like i-i-in tech, if you're, if you're gonna have an organization, or, or by the way, in anything, in any, any field of activity, if you're gonna have an organization, you, you do need to have some calibration, titration process. Like change does need to happen, but it needs to happen in a measured way. Um, and so, a-and so you, you can't just like blow it up every day. Um, and so yeah. So, so either what you need in that case t-t-t-t-to get kind of the holy grail of the large scale organization that's still innovating, e-either you need two people involved who are able to balance each other. A-and by the way, you could say this is like Steve Jobs and, uh, Tim Cook-
- DSDavid Senra
Mm-hmm
- MAMarc Andreessen
... you know, would be a canonical example. Or by the way, early on, Zuckerberg and Sean Parker. Or early on, Bill Gates and, you know, Steve Ballmer. So you can have that kinda configuration. Or every once in a while, you can get that in a single person [laughs] right? Which is very rare, but like Jensen Huang would be a single person example of that. Uh, so you know, every now and then you get that. Um, and so I would say Ben and I have like a version of the yin and yang kind of aspect to it. But like I said, he's very creative on his own, and I have this, because I have the Barksdale training, I have this additional level of sort of, uh, most of the time, you know, sort of self, self-governance. Like I kinda, I, I get it. Like I'm notBut it's one of my big things. It's just like, look, if I'm gonna walk in, and I'm gonna like throw a fit, and I'm gonna like, "We have to change everything tomorrow," and Ben's gonna be like, "Fuck you," like, "This fucking sucks," I'm not... Like that leads nowhere good, right?
- DSDavid Senra
Yeah.
- MAMarc Andreessen
So that, that, that can't, that can't be the thing. And so I do, I, yeah, I, I, I do do a lot of, of self-editing.
- 1:31:44 – 1:32:24
Elon Management Code
- DSDavid Senra
You just said something. I think you said you believe Elon is inventing a new way to manage.
- MAMarc Andreessen
I think he may have figured out the best way to reconcile the two, the fountain of ideas with the systematic builder. I think he might have figured out a, a fun- Um, I don't know if it's a new way to do it, but I think he might have cracked the code on like how to do that for the next hundred years or something.
- DSDavid Senra
So break down what you've observed with the way that Elon's managing.
- MAMarc Andreessen
Yeah. So I'll just start by saying, look, I- Elon's method has been described by people, you know, before, and I, and I should say like I, I work with him, but from the outside. So I'm not working in one of his companies, so I, you know, have one layer of indirection. But I, you know, I, I work with him quite a bit now, and I study him, you know, very, very carefully. Um, it's this extreme focus on substance. It's this extreme focus on getting to the truth. So one of the things you notice in any organization with multiple layers is that basically there's compounding
- 1:32:24 – 1:37:12
IBM Big Gray Cloud
- MAMarc Andreessen
lies. Um, and, and, and I got this lesson early 'cause I worked for IBM at the, at the point of their kinda maximum size and, and importance in the world. And-
- DSDavid Senra
Can, can you explain? I don't think people understand-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... just how big and powerful and almost monopolistic IBM was.
- MAMarc Andreessen
Yeah. So I worked for IBM at the very height of their power, uh, right before they fell. [chuckles] Um, it was my first job, and, um, uh, when I was in college. And, um, they were in the mid-'80s, they were eighty percent of the market capitalization of the entire tech industry, right? And there's-
- DSDavid Senra
There's nothing even close to that today
- MAMarc Andreessen
... nothing even close, right? So this is like Google times ten or something. It's just like or times or Apple times, uh, ten. It's just like, um, um, uh, it's a level of scale and importance that just nobody had. And by the way, the, the TV show actually that does a great job of this is, uh, Halt and Catch Fire, um, in the first season has this thing th- th- this point where these guys are basically inventing the PC effectively, and it's the point where IBM shows up. And it gives you a sense of like... It's, it's like the CAA story you told earlier. It's like the, the phalanx. It's like twenty people in like blue suits who are just here to like completely crush you. Like it was just this overpowering, you know, kind of thing. And, and, you know, they invented like all kinds of stuff, and the industry wouldn't exist today without them, and they were an incredible company for a very long time. And the, and the whole thing, by the way, run by their founder for thirty years, run by the founder's son for thir- thirty years, um, you know, this incredible company. By then, you know, they're still, you know, they're, they're, they're not, they're not that anymore, but they're still a big and important company today, you know, whatever, nineteen forty, so tw- eighty years later. You know, it's like how many companies survive in tech, you know, eighty years? My fav- favorite IBM story is Thomas Watson Sr. had been convicted of antitrust, um, crimes, uh, before he started IBM.
- DSDavid Senra
Is this the cash register?
- MAMarc Andreessen
The cash register. [laughs]
- DSDavid Senra
Yeah. [laughs]
- MAMarc Andreessen
And so he had previously run a company called NCR, National Cash Register, and he had been convicted by the federal government of monopolizing the cash register business before he even started IBM.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
And then, and then, and then at IBM, he, he monopolized the mainframe business, and then they convicted him again.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
He's, he's, he's, he's a double dipper. He, he got very used to being, uh, being in antitrust court. So, um, he, he was incredible. By the way, um, there's a, uh, Kevin Maney, a, an old, old school tech reporter, wrote a book, a biography of Thomas Watson Sr. which you feel-
- DSDavid Senra
It's called The Machine and the Man or The Man and the Machine, right?
- MAMarc Andreessen
Some- it's one, it's one, I'm not sure if it's that one-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... but it's one of those. Uh, I think it might be that one, yeah. And he actually went back, and this is like, you know, this is, we're talking about like nineteen-forties, nineteen-fifties, nineteen-sixties. And he went back, and he got the... At the time, they, they had a, they had a secretary transcribing in real time all of the executive staff meetings, uh, every, every Monday morning. And he went back and he actually got the archives of the transcripts of the executive staff meetings, and it's just literally Thomas Watson just like cursing everybody out [laughs] and just like, just like a complete tyrannical psychopath just like screaming at people. [laughs] And it's all, it's all in the records. And so it's like, you know-
- DSDavid Senra
[laughs]
- MAMarc Andreessen
... so how much of this stuff ever changes, you know? It, it's like, you know, what- whatever, I don't know, whatever Elon gets accused of or whatever Steve Jobs, it's like, oh, no, that guy was-
- DSDavid Senra
Yeah
- MAMarc Andreessen
... whatever it is, it's a pale version of what that guy was doing. Um, but anyway, point being is like IBM, so by the time I got involved in IBM, it was like sixty years later, you know, anyway, yeah, six, fifty years later after that, and so they, they were kinda peaking in their power. But what happened was, I, I remember this 'cause I, I was there as intern, and I was trying to figure out whether I should, I should work, I should work there after college, and they had a, their internet was a mainframe, mainframe app, and you, one of the functions was a, um, it was a, was, was the org chart. And I, it calculated there were twelve layers of management between me and the CEO, which meant the following. It meant, it meant that my boss's boss's boss's boss's boss had a boss, boss, boss, boss, boss [laughs] before it got to the CEO. And then, and then really what happened, the story of the thing, really what happened was ba- and I saw that. I saw this happen. I saw this happen up close. Um, what I saw this happen was each layer of management was lying to the one above it, right? Uh, and, and 'cause ea- each, each layer wants to, wants to look good and wants to, you know, whatever, put a little spin on the ball. And like if, if one layer lies to the next layer above it, it's, I mean, maybe that's, that's okay. But it, but when that happens two or three times, the lies compound. If that happens six times, the lies really compound. If that happens twelve times, the CEO has no idea what's happening, like absolutely no clue what's going on in the company, which was the state of play that, that IBM had. They actually had a term. There's actually a term. They had a whole vocabulary. I mean, this company was like a nation state at the time. Um, you could like live your whole life like in Austin, Texas, and never meet anybody who didn't work for IBM. Like it was just like this, this incredibly, this incredible thing. They had this concept called the big gray cloud, and it was literally the cloud of men in gray business suits who followed the CEO around and prevented him from ever talking to anybody [laughs] who was ever actually doing the work. And so when he would come to visit, it was like a state visit. It was like a visit from the king, and it was like the, the king and the, and the traveling court.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
And so like in, it was a completely impervious bubble to get information through. And so, but I, I tell that story 'cause that's the polar opposite of the Elon approach, right? So, so, so... A- and by the way, being the CEO of IBM in nineteen eighty-nine was a great way to live, right? 'Cause it's just like, wow, everybody's bringing me good news all the time. Like, like I wake up in the morning, and like everything is great.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
And I'm like famous, and I am like rich, and I am successful, and like I've got a chauffeur, and I've got a jet, and I've got these eighty guys in gray suits who are like taking care of everything for me. And I don't have to ever talk to engineers, and like this is great, you know, until, you know, it's like the turkey on Thanksgiving, you know, un- until things change, and there's a problem, and then you have no idea what to do about it, which, which is what happened to them.
- 1:37:12 – 1:38:28
Engineer First Truth
- MAMarc Andreessen
The Elon approach is the polar opposite of that. And the polar opposite of the approach is literally like I'm only gonna talk to engineers, right? And so when there's an issue, I am going to go straight to the source of truth, and the source of truth is the engineer who actually knows what's going on. And so what Eli, Elon literally, and I've seen him do this, so he literally does, is he, he goes to whatever the... When, when, when there's an issue at one of his companies, he goes to whatever is the engineer who's working on that problem, and he sits down with the engineer, and they solve that problem.And like, and I can just tell you, like the number of CEOs in tech, even the great ones who do that, like, I mean, almost nobody ever does that. Why does nobody ever do that? Well, first of all, it's just like a giant pain in the ass because, like, your life consists of, like, having to actually solve all these problems. Like, the whole point of being, like, big and powerful and successful is you pay people to do that, and now you're doing it, and you're in there at like two in the morning doing it, right? Like it, it just... This sucks, right? And so, like, most people won't do it. Um, and then the other is you, you have to-- it means the CEO of the company has to have the skill set to be able to do that. So the, the CEO has to not just be a great CEO, they also have to be like a great technical technologist, and not just that they have memories of having been a programmer at one point or whatever, a chip designer, but where they can actually sit down with the chip designer, right, on Thursday night at two AM in Austin, and they can actually figure out, like, what's wrong with the chip and Elon... And, and, and Elon has that ability, and he's like encyclopedic on like every area of technology and is, is able to go hands-on with rocket designers and AI designers and everything in between, and al-almost no CEO has that. And so-- But
- 1:38:28 – 1:42:46
Bottlenecks and Speed
- MAMarc Andreessen
that's literally what he does. And then, and then the way that he thinks, the way that he thinks about it, I think, is basically, you know, he runs whatever, six comp- six companies at once or something, and it's like basically a-a-any given week, in any given week, he thinks about everything as a production, basically production line. You know, sort of produc-production process. It's like he's actually like an old school industrialist, um, so everything's like a production process. And, and then any given week, there's al- there's al- in any production process, there's always a bottleneck, so there's always a f- there's always the thing that is slowing down the process the most, and, and that's always one thing. So what he does for each of his companies is he identifies what the... He charts-- He literally maps out the production process, and I've, I've-- like he literally has these like monitors where he like has the whole thing laid out, um, and then he, he basically says, "Okay, this is the issue that's holding up production this week." And then he goes and he works with... And that's the thing that he goes to work with the engineer on, is he goes to fix that bottleneck, and he does that every week [chuckles] for every company, right? And so i-think about what that... This is why Tesla is smoking the-- is, is, is like, has been so much dramatically outperforming the rest of the auto industry is because Tesla, he's, he's fixing the critical production bottleneck at Tesla fifty-two times a year himself. [laughing]
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Like, I can tell you what the CEO of the legacy automakers are doing. Like, they're not doing that. That is not what's happening, right? And so i-as-- And in contrast, like a normal company, it might take six months to solve these problems, and Elon's like fixing it like right now, tomorrow. Like, let's go fix it right now. Um, and so he just like runs this, he runs this loop over and over again. Um, he, he's just, he's absolutely indef-defatigable. Um, I offered-- He famously for a while, he had sold all of his houses, um, and he was literally couch surfing, um, you know, as one of the most successful people on the planet.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Um, and so I... I have a vacation house, and I offered him, I said, "If you want to take a week and use the vacation house and whatever, take the kids, feel free." And he'd sat back five minutes later, it's like, you know, whatever, eleven o'clock at night. The for-for-for-forward response, "I don't take vacations." [both laughing] Right? Like... Which again, it's like there's no CEO like this.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Um, the whole point of being a CEO is you get to, you get to go jet around. Um, and so, so anyway, so he's doing that, and then, and then, you know, he, he... And then he r- he, he turns this into a routine. And so, you know, he, when he does like he'll, he'll... He does like a day a week at each of his companies, and he'll basically do like all day. He'll do like a twelve, fourteen-hour stretch where he'll do design reviews, um, uh, with, with... But, but, but the way that he does it, he does with five minutes per engineer, right? And so he does fi-five to sixty divided by five. Um, um, it's been way too long in this podcast. How much is that? Twelve? Twelve.
- DSDavid Senra
[laughs]
- MAMarc Andreessen
He can do twel-twelve design reviews an hour.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Uh, and then he does it for ten hours a day. So, so, so Elon will do a hundred and twenty design reviews in the course of a, uh, in the course of a day.
- DSDavid Senra
Are these one-on-one?
- MAMarc Andreessen
I have not actually sat in these.
- DSDavid Senra
Okay.
- MAMarc Andreessen
I, I suspect there are other people around-
- DSDavid Senra
Okay
- MAMarc Andreessen
... um, including peop- you know, work, work for him and, you know, probably some, some of the leaders of the companies are in-involved in different ways. Um, but um, it, it literally is, uh, the thing I know is it's literally a rotating cast. It, it, it's, it's the point engineer on each of the important things coming in and presenting for five minutes. And, and, and then the question is like, h-how's... If it's going great, that's great. If it's not going, what's the problem? And then how does that problem rank, right? Is, is that the, is that the production bottleneck? Um, and if it is the production bottleneck, then that's the thing that he then fixes, and then that's when he's there from whatever, eight o'clock till two AM working with that engineer to fix that problem. You know, one way to think about this is the vel- the, the velocity, like th-in, in military affairs, it's called maneuver warfare, right? The, um, so just the, the, the, the, the speed at which he operates is just... The, the cycle time is just so much faster than anybody running in a, in a traditional method. It, it's just... It's hard to even compare the different... It's like four hours versus six months. Like it's, it's just this inc-inc-incredible gap. And then, and then the other part of it is, uh, somebody that I know once went, went to work for SpaceX and, and, and they asked what it was like, and he said, "It's, it's like being dropped into a, into a, uh, zone of shocking, uh, competence." Um, like, it's like everybody is like ultra-competent. And the reason everybody's ultra-competent [chuckles] is because, number one, if, if they're not, Elon sniffs it out [both laughing] and fires them. But he knows 'cause he's, he's talking to the people actually doing the work, so he... And he, he, you know, at this point in his, you know, having done this for whatever, twenty-five years, he, he, he can, he can sniff this out really quickly now. And then the other is the best engineers in the world want to work for him 'cause he's, he's the one CEO like this who's able to work with them as a peer on whatever the technology is. And as an engineer, you're just like, this is, this... Like, what would be better as an engineer than being able to design a rocket engine with Elon Musk as your engineering partner, right? And so he just has this like incredible positive selection where like the smartest people in the world wanna work for him, and then anybody who can't cut it gets fired. The world sees this as like raw aggression, but it's beyond that, right? It's a very systematic way of optimizing these companies to be able to take on these like profound challenges and then being able to actually solve all the problems and do these things and at a speed that is just like completely
- 1:42:46 – 1:47:20
Milli Elon Metric
- MAMarc Andreessen
unmatched. The challenge of all of this is like, okay, that all works great if you've got Elon, right? And so, so one of my con- one of my concepts is, um, uh, I think we need a metric, um, uh, for, um, founders in Silicon Valley called the Milli Elon, right? [both laughing] And so are you... How many Milli Elons are you, right? Are you ten Milli Elons? That would be great. Are you a hundred Milli Elons? You know, that's ten percent of an Elon.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Like, that'd be fantastic. You know, you know, five hundred Milli Elons, like I'm gonna give you all the money, right? Most people are like one Milli Elon or point one [laughs] Milli Elon. The question that falls out of this, which is a question that, you know, bedevils us, is like, okay, like how... You know, you can't, can't clone him. You can't, you can't bottle the essence. S-so w-what out of that can be transplanted to like normal human beings?
- DSDavid Senra
And how much of it is predictable or knowable when he's much younger?
- MAMarc Andreessen
Mm-hmm.
- DSDavid Senra
Because like the, the famous example of this and, um, is
- DSDavid Senra
Michael Moritz passing made all his money in PayPal with Elon. Obviously, there was contention there. He got kicked out and everything else, but then Elon pitched him Tesla-
- MAMarc Andreessen
Yep
- DSDavid Senra
... and he passed 'cause he's like, "There's no way that you're ever gonna surpass Toyota." And then Moritz, to his credit, was just like, "I drastically underestimated the guy's determination and pain tolerance," [chuckles] I think is the term he used.
- MAMarc Andreessen
Well, I wasn't there for that, so I don't know about that. What I, I will say the idea of, the idea of being, having been a software entrepreneur, building a car company. Okay. Building a... When Tesla started building, there had been no new successful car companies in the United States for like-
- DSDavid Senra
For like a hundred years, right?
- MAMarc Andreessen
For like a hundred years.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
They were like-
- DSDavid Senra
There was like two thousand of them in-
- MAMarc Andreessen
That's right
- DSDavid Senra
... in nineteen oh f- founded from like nineteen hun- hundred to nineteen ten, and three that survived.
- MAMarc Andreessen
That's right. And the previous real attempt to start a car company in the US before Tesla in the, in the preceding decades was-
- DSDavid Senra
Tucker or something?
- MAMarc Andreessen
Tucker. Tucker Automotive.
- DSDavid Senra
Yeah, yeah, Tucker.
- MAMarc Andreessen
Which was such a disaster that they made a movie [laughs] called Tucker, which is about what a disaster it was. Um, and so like, this, th- obviously you don't do that. Obviously this is insane. And for a software guy to do this is insane. And oh, by the way, this is only one of the things he's doing. He also has the rocket company.
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Which is also insane, right? And so, yeah, so it, it's like the, the... And I wouldn't-- Like, by the way, I didn't see it. I, and I didn't, I, I was, you know, I'm a software guy and I just, I was like, "I don't know, whatever. He's gonna go, I guess he's gonna go do cars. I don't know anything about cars." Um, so it's not like I saw it, but I'm just saying like it, like the, the level of incredulity that he was greeted with at the time was, I think almost uniform. Um, and you know, there's that famous photo, the most famous Elon photo I think, or the, the most, the most powerful one is the one where he's, it's young Elon, probably two thousand and five or whatever, and he's in-
- DSDavid Senra
He's in the shorts-
- MAMarc Andreessen
He's in the sh-
- DSDavid Senra
... and the polo-
- MAMarc Andreessen
Yeah
- DSDavid Senra
... and all, and he's like crouched down, and there's nothing but the explosion remains of the third rocket, the second or third rocket.
- MAMarc Andreessen
[laughs] It's-
- 1:47:20 – 1:49:10
Starlink Side Project
- MAMarc Andreessen
is scaling. What is it? Starlink just hit, what was the number? Starlink just hit ten, was it ten million subscribers?
- DSDavid Senra
I'm one of them.
- MAMarc Andreessen
Something like... Yeah, exactly. Right? You've, you probably have read about, um, uh, Iridium and Teledesic.
- DSDavid Senra
No.
- MAMarc Andreessen
Oh, okay. Okay. So [chuckles] Elon's not the first guy who said, "We're gonna do satellite-based, like internet access."
- DSDavid Senra
Mm-hmm.
- MAMarc Andreessen
Um, there, there were, there was, there was, uh, there was, uh, Bill Gates, Craig McCaw, who when, when, so when Mic- when Microsoft's on top of the world and Mc-Craig McCaw basically built cell-cellular telephony in the US, built what's now AT&T Mobile. Um, uh, those guys teamed up in the early nineties and did this thing called Teledesic where they put up, you know, satellite based, uh, voice and then it was gonna be internet, internet access, complete catastrophe, total bankruptcy, complete disaster. And then Motorola, which used to make all the cell phones in the US, uh, had, uh, had another one, uh, system that actually still up called Iridium. And again, it's just like this classic business school case study of just complete disaster-
- DSDavid Senra
Mm-hmm
- MAMarc Andreessen
... capital destruction. And so Elon's like, "I know. I'm gonna do number three of those [laughs] with Starlink as a side project at the rocket ship company." [laughs]
- DSDavid Senra
Yeah.
- MAMarc Andreessen
Right? 'Cause he's like, "I'd... We're"-- And he, you know, in retrospect, it's total genius 'cause he's like, "We're gonna be putting up the... If the rockets are reusable, we're gonna be launching them all the time." And then the question becomes, what's gonna go in the rockets? And he's like, "I could wait for the customers to come to me with more stuff to put in the rockets, or I could just put up my own satellites." What would be the satellite to put up? Oh, it would be consumer grade, you know, consumer priced internet access. And it's just like, okay, anybody who knew anything about the history of like satellites knew that that was like the cra-- you know, that, that's the new craziest idea in the world. And of course, it's like this like, you know, giant success. And it's like the side, as like the side project. There's clearly method, it clearly incorporates invention, it clearly incorporates scale. It, it, it does a brilliant job at both of those. Um, it's, it's clearly in part the Henry Ford, whatever, um, Alexander the Great [chuckles] method, clearly, but there's also like real scale and heft to it. SpaceX now is building s-- you know, they got their own city, like, you know, down, down in Texas, right? Um, and so it, it, it's a formula that ca- that captures both sides of it, and it, it, it may be like the least studied and understood thing I know of in the world right now.
- 1:49:10 – 1:49:40
Closing
- DSDavid Senra
It's incredible. Marc, we're running out of time. When I started the show, you were at the top of my list for one of the guests I wanna talk to. Thank you so much for doing this. I hope you come back in a few months 'cause there's a million other things we need to talk about.
- MAMarc Andreessen
Good. Awesome. Fantastic. Thank you.
- DSDavid Senra
Thanks. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review, and make sure you listen to my other podcast, Founders. For almost a decade, I've obsessively read over four hundred biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.
Episode duration: 1:49:40
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