Stanford CS153 Frontier Systems | Ben Horowitz from a16z on Venture Capital Systems, Network Effects

1. 0:09 – 5:04

   Quincy Jones, “Leave Your Ego at the Door,” and leadership as a systems skill

   1. AMAnjney Midha0:09

      Please join me in welcoming Ben Horowitz. [clapping]

   2. BHBen Horowitz0:13

      Thank you.

   3. AMAnjney Midha0:17

      So how many of you heard the song that was playing right before? Does anyone know the name of that song?

   4. BHBen Horowitz0:24

      Yeah.

   5. AMAnjney Midha0:24

      "We Are the World." Yes, that, that's correct. "We Are the World" is a 1985 single by a supergroup of musicians that all came together to raise... It's a, it was a charity single that, um, was produced to help raise funds for the famine in Ethiopia, I believe, in 1985.

   6. BHBen Horowitz0:48

      Yeah, Lionel Richie made a good documentary on it [laughs] if you're interested.

   7. AMAnjney Midha0:52

      Correct.

   8. BHBen Horowitz0:52

      Yeah.

   9. AMAnjney Midha0:53

      The, the reason I'm bringing it up is because, um, Ben is known for many things. He's the founder of Andreessen Horowitz, co-founder of Andreessen Horowitz. I'm very lucky to have called him my boss for a few years.

   10. BHBen Horowitz1:05

       Yeah.

   11. AMAnjney Midha1:06

       Um, he's also been a founder, CEO. He's built several technology companies. He's behind one of the reasons venture capital still exists today, after many moments when it... There were times when it got threatened, including the SVB financial crisis. But the thing I've learned most about Ben is from a documentary that Ben told me to watch about a year and a half ago.

   12. BHBen Horowitz1:28

       Yeah, yeah, yeah. Triple OG, yeah, yeah.

   13. AMAnjney Midha1:30

       It's called The Greatest Night in Pop, and I would really recommend, uh, folks who haven't read it, uh, sorry, watched it, to go watch it. We're gonna put it in the, in the reading assignment for this class. It's on Netflix. Anyone can go watch it. But it is the documentary about the making of that song you just heard, "We Are the World." And there's somebody in the documentary that come, that, that you'll, you'll observe if you watch it, by the name of Quincy Jones. How many people have heard of Quincy Jones? Okay. About 30%, so we need to, we need to school the kids a little bit on it. Um-

   14. BHBen Horowitz2:06

       Yeah, he, he, he was, um, he was the greatest.

   15. AMAnjney Midha2:11

       And I didn't-

   16. BHBen Horowitz2:12

       A great, great human being.

   17. AMAnjney Midha2:13

       Great human being, and more importantly, a great leader.

   18. BHBen Horowitz2:18

       Yeah. Well, that, that, that was a thing he could do.

   19. AMAnjney Midha2:20

       Right.

   20. BHBen Horowitz2:20

       He, he was the best at handling super talented, difficult-to-handle people of all times. No question.

   21. AMAnjney Midha2:29

       Yep.

   22. BHBen Horowitz2:29

       And you can see it in the doc.

   23. AMAnjney Midha2:30

       Yep. There, there's a moment in the documentary where the camera's following Quincy around, and he's walking to the studio where the, the musicians all are, and he points to the top of the door. And he says, "Read that." And there's a sign above the ro- door that he's scrawled, uh, on a piece of paper, and he's stuck up there. This is at, like, around midnight when the, before the stu- the recording session's supposed to start. And it says, "Check your ego at the door." Or I think it says, "Leave your ego at the door."

   24. BHBen Horowitz3:03

       Yeah, yeah.

   25. AMAnjney Midha3:03

       "Leave your ego at the door," sorry.

   26. BHBen Horowitz3:05

       Yeah, yeah.

   27. AMAnjney Midha3:06

       And, uh, if I had to summarize Ben Horowitz in sort of one line, I would say he's the Quincy Jones of technology.

   28. BHBen Horowitz3:14

       That's a lot. [laughs]

   29. AMAnjney Midha3:16

       High bar. [laughs]

   30. BHBen Horowitz3:17

       Yeah, yeah. G- that's hard to take that credit.
2. 5:04 – 7:37

   Founding a16z (2009): fixing venture capital’s “product” for entrepreneurs

   1. BHBen Horowitz5:04

      Yeah. So, uh, you know, we started the firm back in 2009, and at that time there, there, there were a couple of ideas about venture capital that I, I, I would say, uh, we thought were dated. Um, one was, like, it was mostly an investment idea. So the product for investors, LPs, was really good in that they had very high returns. But the product for entrepreneurs I thought was, like, pretty bad in that they didn't do much for you other than, uh, give you money. So that was kind of idea one, that we thought we could just build a better product for entrepreneurs. And then the other idea that was very, very kind of prevalent in venture capital was this idea that, you know, in any given year, uh, there would be... And the, the historical data really supported this. There would only be 15 technology companies that would ever get to $100 million in revenue. So the wholeIndustry was just about getting invested in, you know, as many of those 15 as you could. And that kinda just limited the size of the whole industry and, and the capital in the, in the game. And we really thought that was gonna change because, um, you know, like at that time, we thought if software was gonna eat the world, and every company that was gonna be interesting, every new company was gonna be a technology company, and therefore, there were gonna be more like 200 companies a year that would hit that bar, not, not 15. And so we decided, or, you know, the, one of the things that, um, I did as a, as kind of the CEO of the operation was to say, "Okay, um, how do you scale this?" Because venture capital firm, firms kinda notoriously, uh, didn't scale 'cause they didn't have to. Um, you know, it was... I remember Dave Swensen, who was the most famous LP, said, "Yeah, a good venture capital firm is, like, the size of a basketball team," [chuckles] you know. You know, five, five guys and then a sixth man or something like that. And, and you know, that, that was not gonna be enough to have a great product for entrepreneurs and then also invest in, you know, such a large number of companies. And so, y- you know, to get to scale, there, there was a couple of ideas that we had that, y- you know, are, sound very, very simple, but ended up being important. The first was, um, in normally in venture capital, uh, it's

3. 7:37 – 8:37

   Scaling a VC firm: centralize control, share economics, enable constant reorgs

   1. BHBen Horowitz7:37

      a partnership, and the partners share economics and control. Uh, and the problem with that idea, and you, you, you experienced this in your career at, uh, at other venture capital firms, is if you share control, um, then, uh, things get y- it, it becomes very, very difficult to change the organization because everybody's got to agree. And if you know anything about, like, uh, running an organization, the one thing about a reorg is some people are gonna hate it because it's a redistribution of power. And it's not necessarily the people who aren't good. It's just, like, some people are just gonna hate it 'cause nobody likes to lose power. And if people get a vote, [chuckles] then there's no way to, like, effectively reorg, uh, uh, you know, reorg a business. And so you... our idea was, like, you can't share control. We'll share economics, but we'll centralize control. And that ended up enabling us to

4. 8:37 – 10:25

   Truth-seeking investment decisions: why small groups beat big committees

   1. BHBen Horowitz8:37

      reorganize and enabling us to get into many, many more kind of categories like American dynamism or crypto or bio or these kinds of things because we could change the organization and scale it and so forth. And, you know, that ended up being, like, a, an important kinda systems idea. And then we also kind of decan- because investing is always a conversation, and you need a very, very high-fidelity conversation to get to the truth, um, you never want more people in the room than can have a conversation.

   2. AMAnjney Midha9:13

      Hmm.

   3. BHBen Horowitz9:14

      And so you can't have a conversation with 30 people. It's not possible. That's a presentation. [chuckles]

   4. AMAnjney Midha9:19

      What, what is the optimal, um... Over the years, what do you think is the optimal construct of a truth-seeking conversation when you're trying to understand the future of a technology that's super complex?

   5. BHBen Horowitz9:27

      Yeah, I think that, like, if you have really good chemistry and rapport, it can be, like, seven. Um, but if you, if you don't, [chuckles] then, then, then even that gets problematic. But yeah, you, you just can't do it with a large group. And so you, you, you... What we ended up doing is we just kept kind of splitting the firm into smaller and smaller groups over time. Uh, a- and each group would address a certain part of the market. Uh, and that, you know, that ended up being very effective.

   6. AMAnjney Midha9:58

      And, um, to con- contextualize for folks, so when you started the firm, the first fund was about 300-something million, 320?

   7. BHBen Horowitz10:05

      300 million.

   8. AMAnjney Midha10:06

      300 million. And you had all these sort of institutional folks like David Swensen and so on-

   9. BHBen Horowitz10:10

      Yeah

   10. AMAnjney Midha10:10

       ... who had these, like, sort of long-held, for whatever reason-

   11. BHBen Horowitz10:13

       Yeah

   12. AMAnjney Midha10:13

       ... priors and assumptions.

   13. BHBen Horowitz10:14

       Yeah.

   14. AMAnjney Midha10:15

       What did you find was the most effective way to realign them or get them to revisit those assumptions in order... or update those priors-

   15. BHBen Horowitz10:22

       [chuckles]

   16. AMAnjney Midha10:22

       ... in, in a way that was aligned with your mission?

5. 10:25 – 12:29

   Updating LP priors through results: the Skype buyout “insane” bet

   1. BHBen Horowitz10:25

      Well, succeed. [chuckles] I mean, like, like, that's all it is. Like, I think one thing. You think another thing. Um, we're gonna find out if I'm right. So the, the first thing that that happened with was we invested, like, a quarter of that $300 million fund into, um, the Skype buyout, which everybody thought was insane. Uh, but, um, like, we, we knew [chuckles] th- th- there was a bunch of things we knew that other people didn't know. So the first thing, uh, that made it insane was, like, the deal itself, um, when it spun out of eBay, eBay didn't own the IP on... They owned the company, but not the IP, which-

   2. AMAnjney Midha11:05

      Yeah

   3. BHBen Horowitz11:05

      ... how they ended up there is, like, a crazy, dumb story. But by the way, never do that. Never buy the company without buying the IP. So the founders kind of had this hold on them where they could have sued them and shut down the service. Uh, and so everybody was like, "Oh, that's an unbuyable asset." But, like, we knew the founders, uh, Janus and Niklas, and we knew, like, the one thing they had in life that defined them was Skype.

   4. AMAnjney Midha11:31

      Hmm.

   5. BHBen Horowitz11:32

      [chuckles] So they weren't gonna shut that thing down. It was just a matter of, like, how much money did they want? How... Did they wanna be on the board? Like, that kind of thing.

   6. AMAnjney Midha11:38

      The IP at the time was basically the Skype client and the user base?

   7. BHBen Horowitz11:41

      It wasn't the client. It was the underlying kind of library that controlled the protocol.

   8. AMAnjney Midha11:45

      Oh, sure. Okay.

   9. BHBen Horowitz11:46

      Yeah. Um-

   10. AMAnjney Midha11:47

       The communications protocol.

   11. BHBen Horowitz11:48

       Yeah, which was, you know, very hard to replace and all that kind of thing. Uh, so, so anyway, we bought it, and everybody goes-

   12. AMAnjney Midha11:55

       And-

   13. BHBen Horowitz11:55

       ... "Okay, well, even though we thought you were nuts, like, maybe you're not completely insane."

   14. AMAnjney Midha11:59

       Um, there are so many interesting parallels to that era and now, but, um, you know, one... property of that era was the explosion of networks.

   15. BHBen Horowitz12:09

       Mm-hmm. Yeah.

   16. AMAnjney Midha12:10

       You know, the idea of network effects became legible for the first time as a systems concept. So can you talk a little-- Take us back. You know, I think it's hard for people now to-- We just take these for granted, but at the time, can you talk about w-why was it novel, why were people resistant to it, and what were the insights that then led to the architecture of the firm being a network-effect-driven firm?

6. 12:29 – 16:10

   Network effects become legible: from the internet to social networks to VC as a network

   1. BHBen Horowitz12:29

      Yeah, I mean, I think that, I think people just didn't understand network effects as well. So the big era of networking kinda started with the internet, and then people thought the internet itself was just, uh, like a unique network. And it, and it was weird, it was different, um, because nobody-- Like, people got value from things built on the internet, but the internet was not owned by anybody.

   2. AMAnjney Midha12:51

      Right.

   3. BHBen Horowitz12:51

      It was like the kinda first real decentralized network. And so people didn't know what to make of kinda networks that, like, I mean, Facebook early on had g- you know, there, there weren't, like, a ton of people giving them money for the first round. That's why Peter Thiel was able to do it-

   4. AMAnjney Midha13:10

      Right

   5. BHBen Horowitz13:11

      ... you know, at a, at a really good price. Um, and then, you know, s- kind of the same thing w-with Twitter and so forth. Like, people just didn't know, uh, that basically [chuckles] they-- how invincible those things got when you, you kind of got them up to strength, so that the bigger... You know, it's basically like an n squared value, so every node you add kind of, um, increases the value by, you know, uh, kinda n-n squared. So, like, if you have five people on the network, [chuckles] you know, that's 25, but if you have six, that's, uh, 36, and so forth. Uh, and the value, you know, if you get up to internet size, is just invincible.

   6. AMAnjney Midha13:51

      Right.

   7. BHBen Horowitz13:51

      Like, nobody's gonna ever build a rival to the internet, or, or very unlikely. Um, and so, uh, you know, at that point, you know, us being involved in the internet and Twitter and Facebook and so forth, we, we had a, like, a really good understanding of that. Um, and so, you know, we th-always, uh, thought of the firm as a network.

   8. AMAnjney Midha14:13

      Right.

   9. BHBen Horowitz14:13

      And so, you know, from the very beginning, we thought, okay, the more relationships that we have, um, the stronger our network effect. And so we ended up doing things that other firms didn't do, like we, um, tried to build relationships with, like, every engineer in Silicon Valley and, you know, uh, every executive and every everything. Um, and that, and then every corporation that bought technology and so forth. And we were, in our minds, creating kind of this network effect that would just make us the best place to raise money from because we were, like, an automatic. You could tap into that network and become extremely powerful, like, right off the rip. Uh, and, you know, I think a lot of people, um, didn't understand, like, how hard that was to do, and then the bootstrapping of any network is always the most difficult thing.

   10. AMAnjney Midha15:05

       Yep.

   11. BHBen Horowitz15:06

       So, like, w- yes, if you have a network with a billion people on it, it's gonna be very valuable, but, like, you know, how did, uh, [chuckles] Alexander Graham Bell sell the first telephone when there was nobody to talk to? Like, that, that part is actually really hard. And so figuring that out and how to bootstrap the network effect, you know, kinda coming from behind in venture capital was, was the idea.

   12. AMAnjney Midha15:27

       Well, I mean, could you say a little bit about how you bootstrapped it? What were the things that may be now lost to the annals of history, whether they were individuals or asymme-- You know, one, one of the things we talked about in the first class is-

   13. BHBen Horowitz15:37

       Yeah

   14. AMAnjney Midha15:37

       ... um, you know, often the students get excited about the speakers like you up here, but we reminded them that one of the most valuable assets they have is the people sitting next to them, right?

   15. BHBen Horowitz15:45

       Yeah.

   16. AMAnjney Midha15:45

       It's, it's the relationships they build. When you were bootstrapping-

   17. BHBen Horowitz15:48

       [chuckles] That's getting more important, by the way, with AI.

   18. AMAnjney Midha15:49

       More-- Exactly.

   19. BHBen Horowitz15:50

       Yeah, yeah.

   20. AMAnjney Midha15:50

       If there's anything that's going up, it's that value, right?

   21. BHBen Horowitz15:52

       Yeah.

   22. AMAnjney Midha15:52

       So but if you zoom back, when you were starting that bootstrapping and you didn't, you didn't have the largest firm in the Valley, you didn't have the most capital, you didn't have the l- you had no track record as a venture capitalist-

   23. BHBen Horowitz16:00

       Yeah

   24. AMAnjney Midha16:00

       ... other than your angel investments. How did you boot-- What were the moments where, that may not be legible to folks here, that you used something that was asymmetric that allowed you to bootstrap the network effect?

7. 16:10 – 18:28

   Bootstrapping the a16z network: reinvesting fees and the HP Briefing Center hack

   1. BHBen Horowitz16:10

      Well, the really simple idea was we knew, like, venture capitalists made a lot of money, right? So they would take the fee money, and then they'd pay themselves big salaries. And so we were like, "Well, what if we didn't pay ourselves anything, um, and we just took all the money, and we, uh, basically spent it on building this network?"

   2. AMAnjney Midha16:27

      Right.

   3. BHBen Horowitz16:27

      So we would hire people to [chuckles] like bring people in. Um, we, you know, with our kinda... You know, how do you get relationships with every big corporation, FedEx and this and that and the other? And the, the, the trick that we had there was we had, um, sold, uh, the previous company to Hewlett-Packard, and so we knew the people in their enterprise briefing center. And so we would call them [chuckles] every week and say, "Who's coming to the briefing center this week? Um, and can we get their numbers?" And we would call those companies, and we would have them come to our briefing center, [chuckles] uh, and we'd just show them all the startups. So it would be like... You know, and we'd have everything they like, all the donuts and all that stuff, you know. So it was, like, very un-venture capital-like. Um, but you know, the c- the corporations loved it. So all of a sudden, we knew more big companies than VCs who had been around 50 years because we had this hack [chuckles] through the HP Enterprise Briefing Center.

   4. AMAnjney Midha17:21

      I think it's very poetic that we're sitting in Hewlett 200, by the way.

   5. BHBen Horowitz17:23

      Yeah.

   6. AMAnjney Midha17:23

      This is the name of the auditorium.

   7. BHBen Horowitz17:24

      Yeah, yeah.

   8. AMAnjney Midha17:25

      Uh, it all comes back full circle. So, um, you know, when you started doing that, usually when somebody new shows up on the block with an insight-

   9. BHBen Horowitz17:33

      Mm-hmm

   10. AMAnjney Midha17:33

       ... like that, I, my-- from a systems perspective, what, what we've observed is often the antibodies come out.

   11. BHBen Horowitz17:40

       Yeah.

   12. AMAnjney Midha17:40

       Right?

   13. BHBen Horowitz17:40

       Yeah, yeah.

   14. AMAnjney Midha17:40

       The immune re- the immune response of the-

   15. BHBen Horowitz17:42

       Yeah

   16. AMAnjney Midha17:42

       ... existing incumbent system comes out.

   17. BHBen Horowitz17:44

       Yeah.

   18. AMAnjney Midha17:45

       At the time, I was across the street with Mike, actually, at Kleiner.

   19. BHBen Horowitz17:47

       Yeah.

   20. AMAnjney Midha17:47

       And I remember, you know, there was a s- s-- you know, a16z was in the headlines all the time, and, like, our CMO at the time-

   21. BHBen Horowitz17:55

       Yeah

   22. AMAnjney Midha17:55

       ... great, great lady, but I, you know, I remember taking one of the headlines to her and saying, like, "You know, we should do this too." And she said... on this executive briefing center. Oh, that's just marketing.

   23. BHBen Horowitz18:05

       [laughs] Yeah.

   24. AMAnjney Midha18:06

       And I said, "Yeah, that's your job. [laughs] This is working."

   25. BHBen Horowitz18:10

       Yeah. Yeah.

   26. AMAnjney Midha18:11

       And, and I've been consistently shocked by the number of times a16z d- has done something from a product insight, deliver that to the entrepreneur, and then everybody else just says, "Oh, that's just marketing." Is that... Am I, am I being overly facetious, or is that true? And, and what were the immune responses like that that you were experiencing, and how did you deal with them?

8. 18:28 – 20:19

   Incumbent ‘immune response’ and why competitors dismissed a16z as “just marketing”

   1. BHBen Horowitz18:28

      Yeah. Well, it was funny 'cause, um, in e- every time we'd meet with our investors, our LPs, they would say, "Every time we meet with another venture capital firm, all they wanna do is talk about you and, and say mean things." And I'm like, "Well, that's fantastic." [laughs]

   2. AMAnjney Midha18:44

      That's great. The best form of flattery.

   3. BHBen Horowitz18:46

      That's good. They used to call us AHO. Um, that was their nickname, the other VCs. You know, they, they hated us. Uh, some of it was my fault, though. Y- you know, like, 'cause when we started, I was coming from enterprise software, which was, like, a very competitive bare-knuckle kind of... There is no such thing as co-opetition in enterprise software. It's just, like, kill or be killed. So I did a, [laughs] um, uh, I did a, like... I, I wrote this blog post called "Four Things That VCs Do That I Don't Like" that where I just, like, attacked them all. And then I, um, I did this big... There was this, uh, Sarah Lacy had this big, big, uh, event, and she interviewed me on it. And she's like, "Well, you know, you seem like kind of you don't like other VCs." And I, I quoted Lil Wayne. [laughs] I said, um, "When I see another VC coming at me with a peace sign, all I see is the trigger and the middle finger," you know. [laughs] And everybody hated me for that, so-

   4. AMAnjney Midha19:41

      Oh

   5. BHBen Horowitz19:41

      ... you know.

   6. AMAnjney Midha19:41

      I'd, I'd agree with that.

   7. BHBen Horowitz19:42

      No, but, but it kinda worked because, because they hated me so much, they weren't willing to copy what we were doing, even though what we were doing was working. So, uh, it kinda backfired. I don't know if I would've been that anti- antagonistic [laughs] again. Uh-

   8. AMAnjney Midha19:55

      Yeah

   9. BHBen Horowitz19:55

      ... but, you know, it worked, so you can't argue with it.

   10. AMAnjney Midha19:58

       Well, I, I, I... Okay. Well, I think we should-

   11. BHBen Horowitz20:00

       Yeah

   12. AMAnjney Midha20:00

       ... come back to that later-

   13. BHBen Horowitz20:01

       Yeah

   14. AMAnjney Midha20:01

       ... on what you do differently. But-

   15. BHBen Horowitz20:03

       Yeah

   16. AMAnjney Midha20:03

       ... so great, you bootstrapped the network effect. That allows capital deployment to start scaling into-

   17. BHBen Horowitz20:09

       Yeah

   18. AMAnjney Midha20:09

       ... a bunch of startups. Now, it really does feel like a back to the future moment a little bit, right?

   19. BHBen Horowitz20:15

       Yeah. Yeah.

   20. AMAnjney Midha20:16

       What's going through your mind right now?

9. 20:19 – 23:58

   AI changes the venture game: capital becomes a weapon and traditional moats erode

   1. BHBen Horowitz20:19

      Yeah, I mean, I think... So, so the big, the big thing that's changed, um, is that... Or, or the kinda most fundamental thing that's changed from a VC standpoint in my mind is it used to be... I mean, for my entire career, the one thing that you knew about technology companies is you couldn't throw money at the problem. So if somebody had a two-year lead on you, you could not hire 1,000 engineers and catch them. That, like, was never gonna work because, um, you know, nine women can't have a baby in a month. Like, there were just things you could not parallelize, and then the communication overhead would kill you. And my favorite joke used to be, you know, what's a man year? It's, like, 700 IBMers before lunch, right? Like that... Y- you know, it's nothing. Uh, you can't, you can't catch that that way. With AI, that's really changed, [laughs] um, that you can throw money at the problem. Because if you have enough GPUs and enough data, you can basically solve most problems right now. Like, that, that just is what it is. And so now, um, you know, the capital race becomes a real thing, and you have to think through, [inhales] okay, code is not really a moat, uh, the way it was in the past, and, like, user interface isn't really a moat. And, [laughs] and so, like, what is, like, your barrier to entry? Like, what is the thing that differentiates you over time? Um, these have become, like, really, really different. And it's happening at the same time that, you know, demand, uh, for the technology is unlimited because the products work so much better than anything we've built before. Like these AI, I mean, s- uh, many of you are too young to remember the products of old, but, like, none of them worked this well before. Like, this is, like, wild how well this stuff works.

   2. AMAnjney Midha22:07

      Oh, you mean companies didn't always go from 9 to 30 billion in run rate in, like, six weeks?

   3. BHBen Horowitz22:11

      Well, none of it, but the reason they go that fast is, like, you use them and you go, "Wow, this works perfectly." [laughs]

   4. AMAnjney Midha22:17

      Right.

   5. BHBen Horowitz22:17

      Um, you know, I w- how can I do more with it? Uh, whereas in the old data, like, if you bought Siebel system software-

   6. AMAnjney Midha22:25

      Right

   7. BHBen Horowitz22:25

      ... it took two years to deploy the thing-

   8. AMAnjney Midha22:27

      Right

   9. BHBen Horowitz22:27

      ... and a million dollars or at minimum. And, like, so that's gonna limit demand. Uh, there is no limit on demand when s- technology works this well.

   10. AMAnjney Midha22:37

       So, so you would say, Anj, that the technology is working-

   11. BHBen Horowitz22:40

       Yeah

   12. AMAnjney Midha22:40

       ... at, at, um, in a way that collapses the, the sort of gap that existing incumbents might have as a result of their human capital investments over the last, whatever, decade of software. There's willingness to pay at levels that-

   13. BHBen Horowitz22:56

       Yeah

   14. AMAnjney Midha22:57

       ... are extraordinary.

   15. BHBen Horowitz22:57

       I mean, the return is crazy, right? Like-

   16. AMAnjney Midha22:58

       Right

   17. BHBen Horowitz22:58

       ... so, I mean, if you make an engineer 20 times as productive-

   18. AMAnjney Midha23:01

       Right

   19. BHBen Horowitz23:01

       ... and y- you're paying that engineer... Well, if you're Zuck, you're paying that engineer a billion dollars. [laughs] Uh, but, you know, like, if y- y- you're, you're paying, uh, whatever, it's gonna be at least several hundred thousand dollars a year. Um, that's a hell of a return.

   20. AMAnjney Midha23:15

       Right. So w- that creates this... So, you know, the, the final project for the class, for the students is the one person frontier lab.

   21. BHBen Horowitz23:23

       Mm-hmm.

   22. AMAnjney Midha23:23

       Well, 'cause what we're trying to get everybody to realize is there's actually an extraordinary amount they can accomplish with the right tools.

   23. BHBen Horowitz23:28

       Yeah.

   24. AMAnjney Midha23:28

       Right? But-

   25. BHBen Horowitz23:30

       And we have an entrepreneur like that right now building a, uh, global VPN [laughs] by himself.

   26. AMAnjney Midha23:35

       By him- there... Yeah.

   27. BHBen Horowitz23:36

       [laughs]

   28. AMAnjney Midha23:36

       Yeah, and this, this-

   29. BHBen Horowitz23:36

       Yeah

   30. AMAnjney Midha23:36

       ... started to become more common, I would say, on-
10. 23:58 – 25:58

    Opportunity for young builders: ‘unlimited money for good ideas’ and the coming job/company reset

    1. BHBen Horowitz23:58

       Well, I, I mean, I think saying, um, uh... I'd just be careful, a little careful with, like, people don't have access.

    2. AMAnjney Midha24:04

       Okay.

    3. BHBen Horowitz24:04

       Like-Anybody with a great idea these days has ac- like, trust me, [chuckles] you have access, uh, in that, um, w- there, there's, like, unlimited money for good ideas currently. Um, you know, maybe that changes over time, but, like, it's definitely there. And I, I, I would just say this. You kn- y- you know, the world is changing, and y- you can just think of it as, like, the jobs we had before the Industrial Revolution are all gone, and then the... And we've been kind of living with the post-Industrial Revolution and then the post-computer-age jobs, um, since then. And we're gonna get to, like, a whole 'nother class of jobs and a whole 'nother class of companies over the next 10 years, um, that replace most of what we have now. And so if you're young, like, that's the best thing possible, uh, for your career and for your life because in the opposite scenario, where it's all the same companies, then you gotta start at the bottom [chuckles] and work 30 years to get yourself to be a mid-level manager, you know, and you've got to politic, and then, you know, the old people who aren't as smart as you, like, get all the money and, like, that sucks. Um, but in this world, it's the old people who have the challenge 'cause they know how to do the old thing. They don't know how to do the new thing, and you can walk in and learn anything. I, I, I think that, y- you know, the main thing is just, like, understand the future, and then the future is yours is the way I would, I, I would think about it if I was, you know, 19 or 20 years old right now.

    4. AMAnjney Midha25:44

       Well, you, you said something, uh, pretty important there, which is, uh, for the right ideas-

    5. BHBen Horowitz25:48

       Yeah

    6. AMAnjney Midha25:48

       ... there's unlimited capital, right? C- could you talk a little bit about what do you think is the shape of good ideas today that, that's emerging in your mind?

11. 25:58 – 29:57

    What counts as a ‘good idea’ now: building what must exist and reimagining workflows, not cloning SaaS

    1. BHBen Horowitz25:58

       Well, look, I mean, I think that y- you know, it always comes down to, like, can you build something, um, a product, uh, an organization, a culture, uh, uh, an offering that people want?

    2. AMAnjney Midha26:11

       Mm-hmm.

    3. BHBen Horowitz26:12

       Um, and then if you don't build it, i- is it getting built by somebody else, or do, do they need you to do that? Does the world need you to do that f- or, or it doesn't exist is always the best entrepreneurial idea. And so anything that needs to exist that doesn't otherwise exist is a good idea.

    4. AMAnjney Midha26:32

       Hmm.

    5. BHBen Horowitz26:33

       Uh, and then, look, that was the whole story with a venture capital firm. Now, did the world need another venture capital firm? Generically, no. Did it need a different kind of venture capital firm? Absolutely, it did. Um, and so that's what we built. Now, uh, I think that's kind of true for, uh, I mean, if you look at OpenAI, they weren't the only ones trying to do AI, right? Like, Google, like, was... It was assumed, like, Google was just gonna own AI. Um, uh, and it was panicking everybody, and that's why [chuckles] Elon, uh, by the way, co-founded it with Sam. Um, and Elon's still mad about, like, what Sam did with it, but that's a different, longer story. Uh, but, you know, it was one of those things where we need a, an AI. We need an altern- the world needs this alternative to Google, and, you know, that becomes a, a really, really good idea.

    6. AMAnjney Midha27:23

       Hmm.

    7. BHBen Horowitz27:24

       Uh, so anything... And, like, the world, the world is changing so fast that the needs are going to, the new needs are gonna multiply. There's gonna be many, many, many things that need to be done. I mean, if you l- look at, um... I think y- you know, kind of the old n- nobody r- uh, the, the one thing that's interesting about the SaaSocalypse is it's definitely true that, like, the barrier to entry on, like, building software and user interfaces is, is getting much smaller. But by the same token, like, kind of the most boring thing in the world is to just, like, rebuild Salesforce. Like-

    8. AMAnjney Midha28:00

       Hmm

    9. BHBen Horowitz28:00

       ... you, you know, [chuckles] y- no, uh, like, Salesforce at a half the cost or a quarter of the cost isn't nearly as interesting as, like, what do you really want for your sales organization?

    10. AMAnjney Midha28:11

        Hmm.

    11. BHBen Horowitz28:11

        'Cause it's not that. I mean, I don't think. You know, and then the question is, can you build it before they can? But, um, do you really want your salespeople, like, entering data into, like, a crap user interface, and, and then, you know, most of the things that they work on aren't captured in the system and this and that and the other? Like, so, you know, going to the future, figuring out what, like, in a world of AI, like, what, what does that look like? Yeah.

    12. AMAnjney Midha28:36

        You know, f- uh, o- one of the traps that, um, that students often fall into-

    13. BHBen Horowitz28:42

        Yeah

    14. AMAnjney Midha28:42

        ... is, I, I call it the, uh, the dorm room problem, right? Which is y- y- you, you've got sort of direct visibility into problems-

    15. BHBen Horowitz28:52

        Yeah

    16. AMAnjney Midha28:52

        ... that are in your kind of sort of cone of, the light cone, so to speak, of, of your visibility-

    17. BHBen Horowitz28:57

        Yeah

    18. AMAnjney Midha28:57

        ... which is quite narrow when you're still a student, right?

    19. BHBen Horowitz29:00

        Yeah, and sometimes, you know, like, when your friends are high in the dorm room and you have that conversation that sounds really good, it's not actually that good. [chuckles]

    20. AMAnjney Midha29:06

        You should at least sleep for one night.

    21. BHBen Horowitz29:07

        Yeah, I've seen a lot of those over the years. Yeah.

    22. AMAnjney Midha29:09

        Um-

    23. BHBen Horowitz29:10

        [chuckles] Yeah, yeah. Make sure it's, it sinks in and you still think it's a good idea.

    24. AMAnjney Midha29:13

        At least one night of sleep.

    25. BHBen Horowitz29:14

        Yeah, yeah, yeah, yeah.

    26. AMAnjney Midha29:15

        Um, but, you know, there's the, the, the, as you know, there's, th- this, just because you're a student in a dorm doesn't mean you don't wanna have an impact on big problems and, and, and, and, and work on things that-

    27. BHBen Horowitz29:27

        Yeah

    28. AMAnjney Midha29:27

        ... have an impact at scale, right? And sometimes these things are mission-critical things.

    29. BHBen Horowitz29:30

        Yeah.

    30. AMAnjney Midha29:30

        Healthcare, financial services, the economy, enterprise, the, accelerating the enterprise. But these things are not directly in your sort of line of sight, right, when you're very young. Um, and, and how would you advise folks to, in, in particular as to bring it back to these AI systems, you know, the context feedback loop we've-
12. 29:57 – 35:12

    Escaping the ‘dorm room problem’: solve a real problem first, then discover bigger ones

    1. BHBen Horowitz29:57

       Yeah, look, I think the, the main thing is to just solve a problem. And, and what tends to happen is when you go to solve a problem, particularly if it's a hard problem-You find some other problem that's more important. I mean, and it, this is well-known in scientific discovery, right? Like penicillin was like an accident. [laughs]

    2. AMAnjney Midha30:15

       Right.

    3. BHBen Horowitz30:15

       I mean, they, they weren't trying to solve that one. It just kind of rolled off of the side. And then by the way, like, um, Meta was an accident.

    4. AMAnjney Midha30:23

       Right.

    5. BHBen Horowitz30:24

       Or he, he was building Hot or Not, and [laughs] you know, he just kind of stumbled into like this much bigger idea. Uh, and the, you know, my friend Drew at, uh, Dropbox, um, you know, he was like literally tired of having USB where he'd have to move his presentation to, from one thing to another. Um, he was just solving a problem for himself. So I think the best way to come on a good, a really important idea is to go try and solve something. Not necessarily build a company, just try and solve a problem. Um, and then in that problem, if it's like a problem that you have, then that means it's probably real. And then in solving it, you'll probably or you'll likely find something much bigger. Uh, and then that may like kind of force you to build a company. And those are the things that work the best that we've seen are, are, are these big things. So I mean, it's really hard to, um... And even like Elon Musk didn't start his career trying to build Tesla, right? Like he, he was solving a much smaller problem. Uh, and you know, that's, that, that's generally how you, how you build up to that.

    6. AMAnjney Midha31:32

       I think it was a good try.

    7. BHBen Horowitz31:32

       I, I think trying to swallow the earth from the beginning with no experience is, uh, m- doesn't usually work. It's good for your pitch deck, but it's, it's not good for your company.

    8. AMAnjney Midha31:43

       Uh, I think Elon's first attempt was like a classif- Yellow Pages competitor or something like that.

    9. BHBen Horowitz31:46

       Yeah, yeah, yeah, yeah. Exactly.

    10. AMAnjney Midha31:47

        A little bit more mundane than satellites.

    11. BHBen Horowitz31:47

        Yeah, Yellow Pages and then PayPal and then, you know, Tesla and-

    12. AMAnjney Midha31:52

        Right

    13. BHBen Horowitz31:52

        ... SpaceX. [laughs]

    14. AMAnjney Midha31:54

        Well, so on that point, you know, the h- the time horizon on which sometimes you find entrepreneurs, um, sort of may have an impact on humanity is that it's quite long, right? They bootstrap sort of the impact. Uh, the old-

    15. BHBen Horowitz32:07

        Yeah.

    16. AMAnjney Midha32:07

        I would say... Well, let me put it this way. One of the old ways we've seen the generation of entrepreneurs of, that belong to Elon's generation is that they feel like they have to start, you know, somewhat with a narrow scope-

    17. BHBen Horowitz32:17

        Yeah

    18. AMAnjney Midha32:18

        ... and then bootstrap like bigger and bigger scope with-

    19. BHBen Horowitz32:20

        Yeah

    20. AMAnjney Midha32:20

        ... every successive project. But just a few minutes earlier you said actually, you know, things are going through a lot of change.

    21. BHBen Horowitz32:26

        Yeah.

    22. AMAnjney Midha32:26

        You can have a lot of impact very quickly relative to incumbents who may have had to be a little bit more measured in their approaches, right?

    23. BHBen Horowitz32:34

        Yeah. I, I-

    24. AMAnjney Midha32:34

        How do you resolve these two?

    25. BHBen Horowitz32:35

        I, I think it's, uh, I think thinking of it like how big a thing am I gonna do is the wrong way to think about it.

    26. AMAnjney Midha32:42

        Hmm.

    27. BHBen Horowitz32:43

        You have to start with like, "What problem can I solve?" Um, and then you solve... If you can solve that problem, um, that's where to start. Like you have to size it to you. Not everybody is the same. Um, like different people have different capabilities. You, you become kind of your full like, uh, most effective self at a different age. Like some people are really good when they're... By the way, like Zuck is way different now than he was when he was 20 years old. Like I know when, when he was 20 years old, like he was... It, it's a miracle if he didn't have a network-effect business like that wouldn't have worked at all.

    28. AMAnjney Midha33:19

        Hmm.

    29. BHBen Horowitz33:19

        He just wasn't very good. Um, you know, but he developed that like entirely over the year, and because he had that kind of business that had a vertical takeoff, he could develop into that. Uh, and like so i- if he d- didn't have that, like he might've been better off, you know, finishing Harvard-

    30. AMAnjney Midha33:37

        Mm-hmm
13. 35:12 – 43:23

    Culture as actions + leadership that breaks ties: avoiding team breakdowns in frontier labs

    1. BHBen Horowitz35:12

       Yeah. So, so, so I think there's a few things. Like s- f- first of all, building a company is hard. Um, and n- no matter what era or whatever, like the press always makes it seem easy, uh, 'cause they hate entrepreneurs, but it's not easy. It's always extremely hard, so some are gonna fail. Like I, I just say that upfront. Um, but in terms of like the, the team and the dynamic and so forth, yeah, it's a combination of leadership and culture, and culture is a, a very kind of amorphous thing. Um, but it ends up being very important. So basically the way to think about it is it's not like... People think of culture as like, you know, corporate values or some bull- um, but it's not that. Uh, y- you know, it's not, "We have integrity. Um, we have each other's backs," or like, like some of these like, uh, whatever platitudes, uh, people say. It's like-How do we behave exactly? Like, what are the behaviors? Um, the Samurai have a great kind of line which is, "A culture is not a set of beliefs, it's a set of actions." And so what do we mean by behaviors? Well, like, do we come to the office or not? Do we, like, do we go home at 5:00 or do we s- stay longer? Do we... If somebody asks me a question, do I get back to them, like, instantly or in a week? Um, you know, like all those kinds of things end up mattering. Like, do we believe the best idea wins, or does it, like, matter who was the founder? Um, you know, all, all that stuff you kind of have to agree on as a team, and, like, very specifically, not like just, like, some highfalutin idea, and then you have to live by it.

    2. AMAnjney Midha37:10

       Hmm.

    3. BHBen Horowitz37:11

       And then if you have that, if you have a standard, if you have a cultural standard, then if somebody's not living up to that standard, then it's a simple thing. If you have no standard, uh, and people aren't living up to the way you want them to, then you're pissed, and then, but then that just starts infighting, then it gets political, right? 'Cause it's like, "Well, why the fuck is he going home?" "Well, we never said he needed to be here. We never agreed on that. Like, he, you know, has a date or whatever, um, or, like, you know, he's got a family. He's gotta go home. Like, we never, like, said what that was." Uh, and then, you know, people stop liking each other, and then you f- hit the first hard issue, and it's like, you know, "F it, I'm out. OpenAI's gonna pay me a lot of money. Screw you guys. Screw you guys, I'm going home," as Cartman would say. Uh, so-

    4. AMAnjney Midha38:01

       But, but what, but what happens-

    5. BHBen Horowitz38:02

       Yeah

    6. AMAnjney Midha38:02

       ... if you, you started by standardizing on some set of beliefs-

    7. BHBen Horowitz38:06

       Yeah

    8. AMAnjney Midha38:06

       ... set of actions-

    9. BHBen Horowitz38:07

       Yeah

    10. AMAnjney Midha38:08

        ... and then the world changes, right?

    11. BHBen Horowitz38:10

        Yeah.

    12. AMAnjney Midha38:10

        And what you thought was gonna be the right standard six months ago, in a world where stuff changes so fast, needs to be updated.

    13. BHBen Horowitz38:18

        Yeah, yeah. Look, cultures can evolve, like, um, but you know, you kind of have to evolve together. And, and you need a leader. You, you need, [chuckles] uh, like having... This is why I hate the idea of, like, co-CEOs or, like, we're all equal or, like, we're gonna run a communist organization. It, it doesn't actually work in a company, um, because you need somebody who's gonna break the tie. "Okay, yeah, you want it to be that way. You want it to be that way. We're going this way. If you don't like it, get out." Like that's, that's how you have to run an organization in order for it to succeed. And, um, I think people are, uh, you know, we culturally got away from that idea in Silicon Valley a little bit, um, you know, in the end of the fat, happy network effect era, but, like, it's back now, so o- I think-

    14. AMAnjney Midha39:05

        Could you say more? What do you mean by that?

    15. BHBen Horowitz39:07

        Well, you know, every- everybody wanted, like, a vote on what the company's-

    16. AMAnjney Midha39:11

        Right. Ah, I see

    17. BHBen Horowitz39:11

        ... values were-

    18. AMAnjney Midha39:12

        I see. I see

    19. BHBen Horowitz39:12

        ... and this and that, and, you know, the, and then, like, CEOs caved to that, and that, that ended up not working well for any, any of us. Yeah, so-

    20. AMAnjney Midha39:20

        Right, right. Comp- companies are not democracies. They are, they are cultures.

    21. BHBen Horowitz39:23

        Yeah. Well, I think a, a dictatorship always beats a democracy in a competitive battle, and so because it takes a long time to des- to decide things in a democracy. Now look, for a country it's different. [laughs] Uh, you know, there, there, there are things when you have to last several hundred years that, you know, when, um, no matter how good the, the, uh, the monarch is, um, if they die and a worse monarch comes into play, that could be an issue.

    22. AMAnjney Midha39:52

        Well, I'm gonna push a little bit on this assumption-

    23. BHBen Horowitz39:54

        Yeah

    24. AMAnjney Midha39:54

        ... that it's different for countries versus companies because something I've learned from you is the way you approach, you know, the most exciting-- The businesses I look up to the most-

    25. BHBen Horowitz40:03

        Yeah

    26. AMAnjney Midha40:03

        ... especially the ones in the a16 portfolio, are often with leaders who are thinking so long term. The way they talk about the, their impact on humanity is not that different from the timescale sometimes of political leaders. In fact, arguably some of the entrepreneurs you, are, are thinking longer term than political leaders these days.

    27. BHBen Horowitz40:22

        W- well, it is longer term, but, um, so, like if you have a king-- Let's say you had a king running the United States.

    28. AMAnjney Midha40:28

        Right.

    29. BHBen Horowitz40:29

        If it's a great king who was, um, not interested in their own, like, enrichment or their family or their friends and so forth, that works like-

    30. AMAnjney Midha40:41

        Who cared about the public benefit, basically
14. 43:23 – 45:29

    VC priors to update: new bottlenecks (capital, electricity), private-market scale, and missing market functions

    1. BHBen Horowitz43:23

       Well, I mean, like I said, I, I, I think, uh, well, one, th- I mean, th- there's so many things that are changing, but, you know, and I, I, I talked about, like, you can throw money at the problem. That's a massive change. Um, I think that, uh, you know, the bottlenecks have moved. So, you know, we used to have a bottleneck on software engineers. I think, like, you know, we've got bottlenecks on, like, things like electricity now. So I think that-

    2. AMAnjney Midha43:49

       Ah, right

    3. BHBen Horowitz43:49

       ... that changes how we think about investment. And then, you know, companies are so big in the private markets that, um, they now require things that venture capital firms didn't, you know, previously provide. Like, so when you get up to, you know, a billion dollars in revenue, then you have to be, like, multi-country, multi-channel, multi-product. You, you know, these capabilities, uh, m- most VCs just have never had.

    4. AMAnjney Midha44:19

       Right.

    5. BHBen Horowitz44:20

       Um, but I think now we have to have them. And then I think the, you know, the private capital markets aren't quite... don't have all the functions of the, of the public markets, so, you know, that needs to be addressed. So there's a lot of things that, that are changing.

    6. AMAnjney Midha44:33

       This is definitely not a new question. It's a follow-up to that, which is you said culture is a set of actions, right?

    7. BHBen Horowitz44:38

       Yes.

    8. AMAnjney Midha44:38

       Th- this was, by the way, this is, uh, on the wall at a16z, and I, every day I would go to, you know, the office in San Francisco, and I'd rent one of these... We could, we could all book our own offices, and the one that was my favorite was in the back corner, near closest to the bathroom, 'cause I could dash to the bathroom between meetings. But, uh, but in that corner it says, you know, from the Bushido, you know, "Culture is a set of actions, not just beliefs."

    9. BHBen Horowitz45:00

       Yeah, and look, I tell people when they come in, like, "I don't care what you think. I don't care how you feel. I don't care what's in your heart. I just care what you do, and, like, what you do matters." And that, uh, and that's the way you have to run an organization, or, like, you get into this-

    10. AMAnjney Midha45:12

        So, so I mean, that's my follow-up is-

    11. BHBen Horowitz45:13

        Yeah

    12. AMAnjney Midha45:14

        ... a culture is often also what you don't do.

    13. BHBen Horowitz45:17

        Yeah.

    14. AMAnjney Midha45:17

        What you say no to, right?

    15. BHBen Horowitz45:18

        Yeah.

    16. AMAnjney Midha45:18

        What are the things that you've had to say no to because you're like, "Well, that's just not... That, that, that could be an interesting opportunity. It might even help an f- an entrepreneur out, but that's just not in our mission. That's not, that's not us."

15. 45:29 – 48:30

    Culture is also what you refuse: saying no to LBOs despite AI-driven ‘spreadsheet moment’ incentives

    1. BHBen Horowitz45:29

       Yeah. Well, so I'll just give you one example. So the biggest one that, um, got proposed to me, like, 18 times was, well, with AI, AI is like, um, is very much like when the spreadsheet happened, that kind of launched private equity, right? Because all of a sudden you could go in and make all these big companies-

    2. AMAnjney Midha45:50

       Hmm

    3. BHBen Horowitz45:50

       ... much more efficient by, like, having them adopt this new technology, and A- AI even more so, right? You can go in and you can go into an old company, and you can make it much more efficient with AI. Um, and there's, like, many, uh, VCs who are kind of going with that idea. And for me, like, there's, uh, I would say two big reasons I didn't wanna do it. One is it's culturally the opposite of venture capital. So, um-

    4. AMAnjney Midha46:19

       You're talking about, like, leveraged buyouts, basically.

    5. BHBen Horowitz46:21

       Yeah, LBOs.

    6. AMAnjney Midha46:21

       Yeah.

    7. BHBen Horowitz46:21

       So, like, look, venture capital is about investing in entrepreneurs with new ideas and focusing on how they can grow fast. Um, leveraged buyouts are about, you know, entry price, making it more efficient, firing people. Um, and I, I don't really wanna grow it. I just want to make more money out of what it is. Uh-

    8. AMAnjney Midha46:47

       Hmm

    9. BHBen Horowitz46:47

       ... and so, like, if you're in the [chuckles] venture capital mindset, you're looking for the great entrepreneur to, um, go build something amazing. If you're in the leveraged buyout market, you're caring about, like, okay, I'm gonna bring in a professional. I'm gonna have them run this more efficiently, and so forth. So it's the opposite motion. And so for, for me, I was like, well, I don't wanna split the culture that way. Like, I think that's, uh, you know, not gonna be a good idea. And then the other thing is, like, I don't wanna do that with my life. Like, I have the opportunity to fund, like, the greatest new ideas that are gonna push humanity forward, uh, or like that. Like, I'm not... It's not stupid. I think it's a good business, um, but it's not a business for me.

    10. AMAnjney Midha47:26

        So sometimes you're saying it's okay to impose-

    11. BHBen Horowitz47:28

        Yeah

    12. AMAnjney Midha47:28

        ... bottlenecks on your own growth because that's just not what you're trying.

    13. BHBen Horowitz47:31

        Yeah, you don't ha- yeah, like, you don't have to be in every business, um, just 'cause there's money there. Um, you know, you... Look, I, I, I believe in, like, y- you build a company to kind of do something larger than yourself and make the world a better place, and then if you do that, you will make money. Um, but if you are in business just for making money, um, like, that's not for me. Like, that's, uh, there are a lot of people who think that way. Well, I like... and I'll let them do that. But, like, I think that great companies don't think like that. To, to me, like, companies that you would wanna be part of, that I would wanna be part of don't work that way.

    14. AMAnjney Midha48:11

        Right.

    15. BHBen Horowitz48:11

        And so, um, I'm not gonna build that thing just 'cause, like, oh, there's money over there. Let's go run to the money.

    16. AMAnjney Midha48:20

        We're gonna switch to questions.

    17. BHBen Horowitz48:21

        Yeah.

    18. AMAnjney Midha48:21

        So the way it's gonna work is-

    19. BHBen Horowitz48:22

        All right

    20. AMAnjney Midha48:22

        ... they've been putting their questions in Discord.

    21. BHBen Horowitz48:24

        All right.

    22. AMAnjney Midha48:24

        And they're all voting on each other's questions.

    23. BHBen Horowitz48:26

        Mm-hmm.

    24. AMAnjney Midha48:26

        And the top ones that get voted by each other, they get-- They-- We, we'll go through them one by one.

16. 48:30 – 1:06:13

    Student Q&A lightning round: AI skills, dropping out, politics/policy, pitches, and the SaaS narrative cycle

    1. BHBen Horowitz48:30

       Mm-hmm. First question. The question is, if I was a college s-student, where would I, uh, put my energy and effort, and what do I think about encouraging people to drop out of college? Um, so l-like I think that if I was, um, in college now, I would put a tremendous amount of-- I, I would view AI as like a very powerful tool set. So th- uh, almost think of it like, I think the best analog is electricity. So like, okay, if you knew electricity was coming, um, and you wanted to do something interesting in life, and you were in the pre-electricity world, right? Like, you know, where like it's 6:00, we gotta be at home 'cause it's gonna get dark. We're not going anywhere. [chuckles] Like that world.

    2. AMAnjney Midha49:16

       Sounds like San Francisco. [laughs]

    3. BHBen Horowitz49:17

       [laughs] Yeah. Well, yes. Um, you know, so, so then, okay, this whole new world is coming. Let me really understand this technology and then like what is interesting to me in the world, and that could be biology, it could be material science, it could be, you know, rocketry, it could be anything. But like you wanna have those tools in your bag, um, when you go do that. Or it could be, you know, like by the way, it could be in the creative field. So y-you know, people, uh, I think misunderstand what's about to happen in, in the creative world. But like somebody who used to be l-like who in my era would've been like a pretty good guitar player can now make a sci-fi motion picture, score it and everything by himself.

    4. AMAnjney Midha50:07

       Mm-hmm.

    5. BHBen Horowitz50:07

       And like, like, so, so like the world is really, really different. So I, I would definitely kind of figure out what I'm interested and then master this new tool set and kind of apply it together. I think that's, that, that's probably the, the, you know, the thing that's definitely gonna work. In terms of dropping out of school, like I, I, I think that this is very individual based, so, um, like y-you mature at, at different points in life. You know? Like I, I think that, uh, I finished college myself and that was good for me. Like I think, you know, it was good for Zuck to drop out given the idea he had, um, and given the kinda company he was able to build. And, you know, so I think that with career advice, uh, let me just say this, that nobody can give you good career advice. They can give them good career advice.

    6. AMAnjney Midha51:06

       Mm.

    7. BHBen Horowitz51:06

       So I can give you good advice for me. I can't give you good advice for you, and particularly your friends are gonna give you good advice for them, not for you. Uh, and so don't listen to your friends, uh, and, you know, figure out who you are and, you know, what the best path for you is, I would just say on that. Yeah, so by the way, so just on political donations, I also donated, uh, $5 million to the Kamala Harris campaign. Um-

    8. AMAnjney Midha51:32

       Important fact.

    9. BHBen Horowitz51:33

       Yeah. [laughs] Just, just-

    10. AMAnjney Midha51:33

        Often not reported on

    11. BHBen Horowitz51:34

        ... just, just, just so-- Well, it is reported on, on Twitter every time the MAGA people get mad at me. Um, look, on politics, our-- Let me kinda just tell you where that came from and how I'm thinking about it, uh, in general. Um, tech had like very little voice in Washington, D.C., and that had extremely severe negative consequences for tech. Um, and, uh, specifically, so I can go s-through a few things in the Biden administration. One is they, uh, basically almost ended the crypto industry by, uh, enforcing things that weren't even in the law, um, to shut down companies. And then, uh, they were like the same thing was happening with AI. So the last Biden administration executive order, um, was, uh, to require for all sales of GPUs worldwide that they, any time you sold one, you'd first need government approval, U.S. government approval. So that would've basically taken us out of the AI race entirely, and the issue behind that was, um, was basically, uh, that we had no voice. Like the, the whole industry had no voice in Washington. So we kind of launched a very, very big effort to have a voice in, in Washington, and I would say that, um, it's worked very well. Like, so we have much better AI policy, much better energy policy, and much better, um, crypto policy now than we did before we got involved. So I'd say I'm like very happy about that, and then all the kind of money and conversations have been about that. Look, I mean, the other thing is, like I said, I gave money to Kamala 'cause I know her. I'd known her for 15 years. She's been to my house 17 times. My wife sat next to her in church the whole time. So I knew her, so I knew I could talk to her. Biden, like we never, uh, could get a meeting with Biden for the whole time he was in office, and if you speak to Tim Cook or Sundar Pichai or Dave Ricks, who runs Eli Lilly, none of them got a meeting with him in four years. Now, we all know why now, [chuckles] but at the time we didn't know, and the result of that was like tech had no voice in Washington for those times. So I guess the answer is yes, I'm happy with that.

    12. AMAnjney Midha54:00

        [laughs] Oh, here we go, man.

    13. BHBen Horowitz54:09

        That's a good question.

    14. AMAnjney Midha54:09

        [laughs]

    15. BHBen Horowitz54:09

        So the, the, the question, to, to repeat the question for the podcast is, um, uh, how do I think, uh, being in a rap group in college kind of affected me, and then can I rap for us now? Um, so the story of that was, uh-You know, I, I had a friend who, uh, who got shot in the face and, and became blind, and so we started a... And he was very, very depressed, so I, I would send him rap music. And, and those days rap had just kinda gotten started, um, and that kinda cheered him up over time. So we started a rap group called the Blind and Deaf Krew, DEF. Uh-

    16. AMAnjney Midha54:47

        [laughs]

    17. BHBen Horowitz54:48

        And, uh, and we became a group, and I wrote some rhymes. Um, so like, uh, one of the rhymes was, "The Blind Deaf Krew you know where fly. Three of us, but we got four eyes." No, 'cause he got his eyes-

    18. AMAnjney Midha55:01

        All right. [clapping]

    19. SPSpeaker55:03

        [clapping]

    20. AMAnjney Midha55:03

        Thank you, Ben.

    21. BHBen Horowitz55:05

        [laughs] The- there are so many very memorable and intriguing pitches. Um, well, one of the most memorable was actually Databricks 'cause it was so bad. Um, so the, the pitch was, uh, the, Jan Stojke, who was a professor at Berkeley, presented the company. And the slides he made [laughs] it was like going to like a computer science lecture that you couldn't understand, um, in, in college. That, that's what it, the Databricks, uh, pitch felt like. So that was very memor- it was memorable because of that, and then it was memorable, uh, because of what it turned into. Um, but, uh-

    22. AMAnjney Midha55:47

        Well, why'd you invest if you-

    23. BHBen Horowitz55:48

        ... there were so many

    24. AMAnjney Midha55:48

        ... if you couldn't make sense of it, why'd you invest?

    25. BHBen Horowitz55:51

        Well, the, the whole reason I had him come into pitch is 'cause Scott Shenker, who was another professor at Berkeley who I knew, had called me [laughs] and said, "Ben, I have the best distributed systems guy that we've seen in the last 10 years in academia. Um, his name is Matei Zaharias. Um, you know, do you wanna meet him?"

    26. AMAnjney Midha56:11

        Yeah.

    27. BHBen Horowitz56:11

        And I knew as soon as he said that to me I was gonna invest in the company.

    28. AMAnjney Midha56:15

        It was done.

    29. BHBen Horowitz56:15

        Yeah, yeah. [laughs] But that, that pitch kinda scared my partners. [laughs]

    30. AMAnjney Midha56:20

        Oh, thank God they didn't talk you out of it.

Episode duration: 1:06:17