Marc Andreessen on The Future of Venture Capital | Ep. 12

Marc Andreessen 0:00 Here's what I encourage, I'm gonna break the fourth wall.

Jack Altman 0:02 Yes. [chuckles]

Marc Andreessen 0:03 [chuckles] Here's what I would encourage people to do. Here's the thought experiment to do: just write down two of these, in the middle of the night with nobody around, door's locked.

Jack Altman 0:09 Write it down on a piece of paper, and let's pull it out in ten years?

Marc Andreessen 0:11 Write down on a piece of paper two lists. What are the things that I believe that I can't say?

Jack Altman 0:15 Mm-hmm.

Marc Andreessen 0:15 And then what are the things that I don't believe that I must say?

Jack Altman 0:18 Hmm. [upbeat music] All right, I am so excited to be here with Marc Andreessen. Marc, thank you so much for doing this with me today.

Marc Andreessen 0:26 Jack, it, it's a pleasure.

Jack Altman 0:27 So what I wanted to start with was the topic of small funds, big funds. We had Josh Kopelman on the podcast, and he made a point that resonated around fund size, the outcomes in venture, and sort of just, like, looking at the math of all of it. And I think as venture funds have grown, it sort of spoke to a lot of people about, like, kinda what the plan is a- and sort of how tech is gonna go. And so I guess to start, I'd be curious to hear your thoughts around that whole dynamic. Obviously, you know, s- you've got a big venture firm, and so I just want to hear kinda your perspective on this whole topic to start.

Marc Andreessen 0:58 So, so start by saying, like, Jo- Josh is a longtime friend, and I, I think is a, he's a hero of the industry. Uh, and I say that because, you know, he started First Round Ventures back in the very dark days. Uh, I forget the exact year, but, you know, back, back during the dark days of, uh... after the 2000 crash. Um, and in fact, you know, there was a period of time back there when, you know, the total number of angel investors or seed investors operating in tech was, you know, maybe eight total. [chuckles] And, and, you know, f- uh, actually, Ben and I were two of them. But, you know, this was sort of the heyday of, you know, Ron Conway and, and, um, you know, kind of a, uh, you know, Reid Hoffman and a, a very small group of people who were kind of brave enough to invest in new companies at a point in time when, you know, basically everybody believed the internet was over, like the whole thing was, was, was done. And so he, like, I just think, like, that was an incredibly heroic, brave act. It obviously worked really well. It, you know, turns out buy low [chuckles] sell high actually is a good strategy.

Jack Altman 1:44 It is very good.

Marc Andreessen 1:45 Um, it's, it's very nerve-wracking when you're trying to do it, but it does work, and he, he, he had brilliant timing for when he started, and, you know, the companies that he's supported have gone on to become incredibly successful, and we've, we've worked with him a lot. Um, so, you know, we're a big fan, uh, of his. And then second is, I would say I didn't actually... I heard, I heard there was a discussion.

Jack Altman 2:00 Yeah.

Marc Andreessen 2:00 I d- I, I never as a rule-

Jack Altman 2:01 Yeah

Marc Andreessen 2:01 ... I never, I never read or watch anything-

Jack Altman 2:02 Yeah

Marc Andreessen 2:02 ... I'm involved in.

Jack Altman 2:03 That's good.

Marc Andreessen 2:03 So I, I totally-

Jack Altman 2:03 Well, it wasn't about, you know, and he-

Marc Andreessen 2:04 I to- I totally missed it.

Jack Altman 2:05 And to summarize-

Marc Andreessen 2:06 Yeah

Jack Altman 2:06 ... basically, what he was saying is, he coined this, like, venture arrogance score idea. But basically, the idea is, you know, if you're gonna own 10% of a company at exit and you wanna have a three X fund, and you're probably gonna have a power law of outcomes, you basically need your big outcome to be, like, really big. And so, like, how's the math shake out? And basically, you know, the question he was sort of posing broadly is: Are the outcomes gonna be much bigger? Are you gonna own a lot more? Are you gonna hit a lot more winners? But it w- it was sort of like that math question.

Marc Andreessen 2:30 So I'd say a couple things. So one is, look, th- venture is a c- is, is actually a customer service business [chuckles] in our, in our view, so start with this. So, uh, it's actually a customer service business. There are two customers. There are the LPs, and there are the founders. Um, and we, we think of them both, both customers. And so, you know, at the end of the day, the market's gonna figure this out, and the, the LP money's gonna flow to where, obviously, they think the opportunities are, and the, you know, like, the, the founders are cer- You know, the, as you know, the best founders definitely pick who their investors are. It's actually very unusual, right, asset class. It's the only asset class in which the, the recipient of the capital picks the-

Jack Altman 2:58 Yeah

Marc Andreessen 2:58 ... you know, picks the, the, uh, actually cares where the money comes from and picks, picks, picks it. So the market will figure this out. Um, I, I, I think the big thing, uh, uh, to responding to your general point, I think the big thing is the world has really changed. Um, and so, you know, modern venture capital, uh, in the form that we understand it, is basically, um... You know, there, there were examples of venture capital going back to, like, the 15th century or something, with like, you know, Queen, Queen Isabella and Christopher Columbus and whalers off the coast of Maine in the 1600s and so forth. But modern venture capital was basically a product of the '50s and '60s. Originally, this guy Jock Whitney from the Whitney family sort of created the model. George Doriot, who's a MIT professor, created a version of it. And then, you know, and then the great, you know, the great heyday of the 1960s VCs, Arthur Rock and those guys, um, and everybody that followed, Don Valentine and Pierre Lamond and Tom Perkins and, and so forth, Gene Kleiner. You know, all those guys. Ba- basically, it, uh, basically, from that period, it's about the 1960s, through, call it 2010, there, there was, like, there was just, there was a venture playbook, and it became a very well-established playbook. And it, it sort of consisted in two parts. One was a sense of what the companies were going to be like, right? And then the other was what the venture firm should be like. And so the, the, the playbook was, the companies are basically tool companies, right? Basically, all successful technology companies that were venture-funded in that 50-year stretch were, were basically tool companies, right? Pick-and-shovel companies. So, uh, mainframe computers, d- desktop computers, smartphones, laptops, um, internet access, software, SaaS, databases, routers, switches, um, you know, disk drives, [chuckles] all these things, word processors, uh, tools, right? And so, you know, you, you buy the tool, you, you, the customer buys the tool, they use the tool, but it's, it's a general-purpose technology sold, sold to lots of people. Basically, it, around 2010, I think the industry permanently changed, and, and, and the, the, the change was the, the big winners in tech, more and more, um, are companies that go directly into an incumbent industry.

Jack Altman 4:42 Hmm.

Marc Andreessen 4:42 Right, like insert directly. And, and, and I think the big turning point on this was, like, Uber and Airbnb, right? Where Uber could have been... Like, Uber in 2000 would have been special- specialist software for taxi dispatch-

Jack Altman 4:52 Hmm

Marc Andreessen 4:53 ... that you sell to taxi cab operators. Uber in 2010 was, "Screw it, we're doing the whole thing."

Jack Altman 4:57 Hmm.

Marc Andreessen 4:57 Airbnb in 2000 would have been booking software for bed and breakfasts.

Jack Altman 5:01 Yep.

Marc Andreessen 5:01 Right? Running on a Windows PC. Um, uh, right, a- and, and then Airbnb is just like, "S- screw it, we're doing, we're, we're doing the whole thing." And so, and, you know, Chris Dixon came up with this sort of term, the full stack startup-

Jack Altman 5:11 Mm-hmm

Marc Andreessen 5:11 ... uh, which he kind of meant. But the other way to think about that is just you're, you're, you're actually, the, the, the company is delivering the entire-

Jack Altman 5:17 Right

Marc Andreessen 5:17 ... basically promise of the technology all the way through to the, to, to the actual customer.

Jack Altman 5:20 Which is basically quicker to get there. Also, I suppose you get more margin capture when you do it that way, and you just get the technology seeped in rather than having to sell it through. Is that the idea?

Marc Andreessen 5:28 Prior to 2010, there were two kinds of tool companies: consumer tool companies and, and, and business tool companies, right? So, you know, B2C, B2B-

Jack Altman 5:34 Mm-hmm

Marc Andreessen 5:34 ... right, as we called them in those days. And, you know, the consumer side was great, but like, you know, consumer, you know, it's just like selling, you know, video games and-

Jack Altman 5:41 Yeah

Marc Andreessen 5:41 ... consumer software. It, it was great, you know, flying toaster, screensavers. It was great, but there was only so far, you know, that was going to go. And then, and then the B2B side, for things like taxi dispatch or for air, you know, bed-and-breakfast bookings, the problem is that you're, you're selling advanced technology into incumbents that are not themselves technology companies, right? And so are they actually going to take those-... those tools and then actually build the thing that the technologist knows should actually get built. More modern version of that is what you see now happening with cars, right? So who's going to build the self-driving electric car, right? Is it going to be a incumbent who's able to adjust, who's buying, you know, good components to be able to do that? Or, you know, is it going to be a Tesla or a Waymo-

Jack Altman 6:18 Yep.

Marc Andreessen 6:19 Right, who's gonna do that? And-

Jack Altman 6:19 Same with SpaceX and NASA, I suppose.

Marc Andreessen 6:21 Exactly, yeah. Uh, you, you could-- There, there are many companies that sell technological components that go into rockets, but was any of that going to lead to the existing rocket companies making the rocket that's going to land on its butt-

Jack Altman 6:32 Yeah, yeah

Marc Andreessen 6:32 ... and then, you know, be relaunched within twenty-four hours, right? And, and so, and so, and so-- And by the way, same thing, Airbnb, or so, so Uber. Had, had you sold a, the Uber, Uber-ized version of taxi dispatch software to the taxi operators-

Jack Altman 6:43 Wouldn't have been very good, yeah

Marc Andreessen 6:44 ... would, would it have resulted in the Uber customer experience?

Jack Altman 6:46 Yeah.

Marc Andreessen 6:46 And so I think basically what happened was, and, and there was sort of, you know, these, these-- as Peter says, "These things are overdetermined." So it's a bunch of things that happened, but it was sort of the, it was sort of the smartphone completed the diffusion kind of challenge for getting computers in everybody's hands, and then mobile broadband completed internet access in everybody's hands. And then the minute you had that, there was just no longer... Y- you just had this ability to get directly to people in a way that you, you just never had. You didn't have to, like, have a giant marketing campaign. You didn't have to, you know, have a giant established, you know, consumer brand. And so there, there was a way to, to kind of get to market that didn't previously exist. And then, you know, and then, look, also, consumers just evolved. And, you know, people especially, you know, kind of Gen X and then millennials, were just much more comfortable with technology than, than the boomers were.

Jack Altman 7:23 Yeah.

Marc Andreessen 7:23 And they, you know, the sort of Gen X was entering, you know, and boomers... and, or millennials were kind of entering their consumer prime at the, at the time this happened. And then you started having these big successes, and so you, you started lining up Uber, Airbnb, and Lyft, and SpaceX, and Tesla, and, you know, you kind of, you, you start stacking these up.

Jack Altman 7:35 Yeah.

Marc Andreessen 7:35 And at some point you're like: All right, [chuckles] there's a pattern here, right? There, there's, there's a thing that's happening. And, and that's what's happened, and we're fifteen years into that. And what's happened now is basically that idea now has blown out basically across every industry, right?

Jack Altman 7:47 Mm-hmm.

Marc Andreessen 7:47 And so, so, so the tech industry used to be a relatively narrow tools, picks, and shovels business. Today, it's a much larger, and broader, and more complicated, uh, basically process of applying technology into basically every area of, of, of business activity.

Jack Altman 8:00 The result of that is that the companies are much bigger.

Marc Andreessen 8:02 Yeah.

Jack Altman 8:02 Like, when you're the whole co-- when you're both the picks and the shovels to yourself, of the whole company, you're much bigger-

Marc Andreessen 8:07 Yeah

Jack Altman 8:07 ... and that changes venture math.

Marc Andreessen 8:08 Yeah, you eat the market, right? And so, and so Tesla ends up being worth more... Like, th- there have been points in time in the last five years when Tesla has alone been more valuable than the entirety of the entire auto industry put together.

Jack Altman 8:18 Yeah.

Marc Andreessen 8:18 Right? And Spa- SpaceX is, you know, like, y-

Jack Altman 8:21 Yeah

Marc Andreessen 8:21 ... you, you go through this. And Uber is worth far more than the totality of every black cab operator-

Jack Altman 8:25 Yep

Marc Andreessen 8:25 ... and taxi cab company that ever existed.

Jack Altman 8:27 Right.

Marc Andreessen 8:27 Airbnb is worth far more than the bed and breakfast industry ever was. So, and, and by the way, it, it turns out some of these markets just turn out to be much larger than people think, right? When we do a retrospective on our analysis over fifteen years, like, one of the things that's been hardest for us to do is to do market sizing. And, and, and, and sometimes we overestimate market size, but it's-

Jack Altman 8:41 More often it's the other way.

Marc Andreessen 8:42 More often... Well, for, let's phrase, for the winners- [chuckles]

Jack Altman 8:44 Yeah, yeah, yeah

Marc Andreessen 8:45 ... more, more often it's the other way.

Jack Altman 8:46 Yeah. I guess the, uh, the net blend is that you underestimate it.

Marc Andreessen 8:49 Yeah. For, for, with the, with, and this, this goes to venture economics, you'll, you'll talk about it. So the, the, the core thing on venture, the core thing on venture bets, right, is because, because venture doesn't run on leverage-

Jack Altman 8:58 Yep

Marc Andreessen 8:58 ... right? Because nobody will bank. [chuckles]

Jack Altman 8:59 Yeah, right.

Marc Andreessen 9:00 Nobody will, will bank a, a start-up or a venture firm-

Jack Altman 9:02 Yeah

Marc Andreessen 9:02 ... for leverage because there's no assets when these things start.

Jack Altman 9:04 Yeah.

Marc Andreessen 9:04 It's asymmetric. You can only lose one X.

Jack Altman 9:06 Yeah.

Marc Andreessen 9:07 Um, but you can potentially make a thousand X.

Jack Altman 9:09 Yeah.

Marc Andreessen 9:09 And so th- that means, right, then there's two errors in venture. There's the error of, of, of, of commission, where you invest in the thing that fails, and then the, the area of omission, where you don't invest in the thing that succeeds. And of course, over... just in the math, overwhelmingly, the error, the error that matters is the error of omission. And, and so if you run an analysis that's... And, and by the way, lots of people did this.

Jack Altman 9:27 Mm-hmm.

Marc Andreessen 9:27 You run an analysis that says ridesharing is only ever gonna be as big as taxi cabs-

Jack Altman 9:31 Yep

Marc Andreessen 9:31 ... that leads you to the error of omission and not making the bet, and, and, and, and therefore the difficulty with market sizing.

Jack Altman 9:36 In your view, is this only, is-- does that only apply up to a certain size? Or, you know, when you look at some of the rounds that now happen at huge valuations in companies that would otherwise, you know, be a large IPO. Like, let's say somebody's raising ten billion at a hundred billion or something like that, does the power law still apply up there? Like, how do you think about that type of round, or do you see venture capital sort of turning into private equity at some level, at the higher end of things?

Marc Andreessen 10:01 Yeah. So the, I think there's two questions kind of embedded in there. One is, why aren't these companies public? [chuckles]

Jack Altman 10:06 [chuckles] Yeah.

Marc Andreessen 10:07 Right? That's one question.

Jack Altman 10:08 Yes.

Marc Andreessen 10:08 And then, and then the second question is, like, even whether they're public or not, like-

Jack Altman 10:11 Right

Marc Andreessen 10:11 ... can they actually-

Jack Altman 10:12 Is it still the lose twenty, type of dynamic?

Marc Andreessen 10:15 Yeah. Yeah, so I think there's a bunch of ways to look at that. So, like, the smartest public investors I've met with basically have the view that the public market actually works just like the private market with respect to this dispersion of returns.

Jack Altman 10:23 Mm, mm.

Marc Andreessen 10:23 Uh, the, the, the extreme case, uh, case I'll make sometimes is, um, it may be that there's no such thing as a stock. It may be that there's only an option or a bond.... [chuckles] right? Like, so, so for, so and the, and the reason is because there's, there's fundamentally two ways to run a company. One is to try to shoot the moon, one is to try to build for the future, and then the other way is to try to harvest the legacy, right? And if you're shooting for the moon, the big risk, the big, the, then you're- the, the big risk of that is, you know, and you might fail, right? You might- it, it might not work, but if it works, you have this telescoping effect in the public market just as much as you have in the private market.

Jack Altman 10:50 Yeah.

Marc Andreessen 10:50 And, and, historically, the returns in the public market have been driven by a very small number of the big winners in exactly the same way that but they've been driven by that in the private market. In fact, you see that playing out right now in the S&P 500. So one, one of the things I've been saying for years now is the S&P 500 is not... Is, is no longer the S&P 500. It's like the S&P 492 and the S&P 8. So there's, like, 492 companies in the S&P that have no desire at all, right, as, uh, just, like, watching their behavior to, like, really charge hard at the future.

Jack Altman 11:15 Yeah.

Marc Andreessen 11:15 Like, they, they, they don't wanna do it. They won't do it. They're not doing it.

Jack Altman 11:18 And then eight are betting everything.

Marc Andreessen 11:20 Eight, eight are all in, right? And, and you... And, and then I always say, say, you know, "Who are the eight?" And everybody always knows who the eight are.

Jack Altman 11:24 Yeah, of course.

Marc Andreessen 11:24 It's completely obvious-

Jack Altman 11:26 Yeah

Marc Andreessen 11:26 ... who the eight are, 'cause they're the ones that are building all the new things. And then it, and then, and then again, if you, if you disaggregate, like, public market returns over the last ten years, you see the... It's just you see this just dramatic, you know, explosion of value among the eight, and, and you see a, you know, relatively modest, you know, growth of the, of the 492. So even the S&P 500 is like having a portfolio of, like, bonds and options.

Jack Altman 11:45 Yeah.

Marc Andreessen 11:46 And it's, it's like, it's, like, incredibly barbellled. And, and so I, I just, I think... And then, and then people, people get cynical on this, and they say: "Well, you know, if not for the eight, you know, the, the, the stock market-

Jack Altman 11:54 You're like: "Yeah, but that's the whole point."

Marc Andreessen 11:55 That's the whole point. [chuckles]

Jack Altman 11:56 Yeah.

Marc Andreessen 11:56 Right? If, if you have a healthy, functioning capitalist economy, the whole point is some number of these things are gonna go non-linear.

Jack Altman 12:01 This is like when someone says: "Ah, they're not a very good investor, but they invested in... Name that hundred-billion-dollar company, so they got lucky." Well, you're like, "Okay, yeah."

Marc Andreessen 12:08 That's the point. Like, that, that's the job. [chuckles] That's the desired outcome. That's the thing, you know. Any of us who... You know, this is like a, you know, kind of classic joke, like [chuckles] joke in venture. Like, "Isn't there just a way to invest in the good companies and not the bad companies?"

Jack Altman 12:19 That's good.

Marc Andreessen 12:20 It's like, yeah.

Jack Altman 12:20 Like, yeah.

Marc Andreessen 12:21 Okay, for sixty years, we've been trying to figure that out.

Jack Altman 12:23 Yeah.

Marc Andreessen 12:23 Here, here's a fun fact in, in, you find in the analysis. Over the last sixty years, every one of the really great venture firms through that period missed most of the great companies while they were, while, while they were investing.

Jack Altman 12:32 Yeah.

Marc Andreessen 12:33 They, they... [huffs] The, the best firms in the world, whether it's, you know, Kleiner Perkins in the '90s or Benchmark in the 2000s or Sequoia in the 2010s or whatever, like, they just, like, flat-out missed most of the winners-

Jack Altman 12:42 Mm-hmm

Marc Andreessen 12:42 ... in each cohort.

Jack Altman 12:43 Mm.

Marc Andreessen 12:43 Right, on the one hand, you're just kinda like: "Wow, I can't... Can't you do better than that?" But you've had these super geniuses for a very long time trying to do better than that. And, you know, we could have a se- whole separate conversation about why this, this is so difficult.

Jack Altman 12:53 The thing you said about companies building, you know, their... the whole stack. Rollups are super popular. Should I-- Is it fair to take from what you said that you're bullish on that strategy or not necessarily? And basically just, you know, to, to walk out what I mean, you know, instead of, you know, building accounting software and selling it to the accounting firms, just buy an accounting firm, become an accounting firm, AI-ify yourself, which I think is becoming, like, a more popular strategy. Do you like that, or is there a nuance why it's different to buy something rather than build it yourself from the beginning? What do you think of this whole rollup thing?

Marc Andreessen 13:21 Yeah. Let's, let's come back to the venture question-

Jack Altman 13:22 Yes

Marc Andreessen 13:22 ... 'cause I-

Jack Altman 13:23 Def... Yeah, yeah, yeah, for sure

Marc Andreessen 13:23 I was still, I was still winding up into that.

Jack Altman 13:25 Yeah.

Marc Andreessen 13:25 But however, well, uh, this is actually also relevant to that. So yeah, so there are a bunch of h- great, really good firms that are trying to do this rollup thing. I, you know, the... I mean, the opportunity with it is kind of very obvious. Um, the, the, the challenge with it is just cultural change of an incumbent is just, or a legacy company, is just really difficult.

Jack Altman 13:39 Yeah.

Marc Andreessen 13:40 Uh, Charlie Munger was once asked, you know, a few years ago, uh, he said, uh, you know, "G- GE," I think was the company, was going through a big issue at the time, and he was asked at a shareholder meeting: "How would you fix the culture at GE?" And he's like: "I have no idea.

Jack Altman 13:50 Mm-hmm.

Marc Andreessen 13:50 I don't even know how you would change the culture at a restaurant."

Jack Altman 13:52 Yeah, that's funny.

Marc Andreessen 13:53 Right?

Jack Altman 13:53 Yeah.

Marc Andreessen 13:53 Like, how do you do that?

Jack Altman 13:54 It's really hard.

Marc Andreessen 13:55 Right?

Jack Altman 13:55 Yeah.

Marc Andreessen 13:55 It's really hard.

Jack Altman 13:56 Yeah.

Marc Andreessen 13:56 Um, and so, you know, you have to have a theory on that. I mean, people... They, they do have, people doing it do have theories.

Jack Altman 14:01 Yeah.

Marc Andreessen 14:01 Um, I, I think we're much more oriented towards just trying to back-

Jack Altman 14:04 Well, I think it gets a little into this, like, private equity mind. It's, uh-

Marc Andreessen 14:07 That's it

Jack Altman 14:07 ... it's a little bit of the, the venture-private equity blend I see happening is related, not even just in dollar size, but in the mindset here.

Marc Andreessen 14:12 Well, this is where I go back to my bonds versus options thing.

Jack Altman 14:14 Yeah.

Marc Andreessen 14:14 Like, f- fundamental... Uh, the, the way I'd always describe venture is, like, fundamentally, we're, we are, we are buying long-dated, out-of-the-money call options-

Jack Altman 14:20 Yes

Marc Andreessen 14:21 ... w- which, like, seems completely insane, except when they pay off, they pay off, like, spectacularly well.

Jack Altman 14:24 Yeah, yeah.

Marc Andreessen 14:24 But, like, a lot of them expire out of the money, and like, you know-

Jack Altman 14:26 Yeah

Marc Andreessen 14:27 ... we have, you know, statistically, top-end venture capital has a-

Jack Altman 14:29 Yeah

Marc Andreessen 14:29 ... fifty-plus percent.

Jack Altman 14:30 Yeah, yeah, yeah.

Marc Andreessen 14:30 You know?

Jack Altman 14:30 Okay, yeah, I just want to hear how to ta- I, I really wanted to hear about this, but, yeah, we can go back to the venture math thing 'cause I think there's a lot more in there.

Marc Andreessen 14:35 Okay, good. So, so look, so, so, so anyway, so what's happened is the world has changed. The, the, the, the nu- the number of companies that, that are, that are being founded, that are gonna be important, it keeps expanding. The number of categories that those companies are in-

Jack Altman 14:47 Mm-hmm

Marc Andreessen 14:47 ... uh, keeps expanding. Those companies are more complicated now-

Jack Altman 14:49 Yeah

Marc Andreessen 14:50 ... because they're, they're, they're full stack. They're, they're in these incumbent industries. Um, and then the winners are getting bigger, right?

Jack Altman 14:55 Yeah.

Marc Andreessen 14:55 And you... And again, you just look at that in the market. I mean, look, we have, you know, of, of the, of the S&P eight, they're like- they're all venture-backed, right? Every single one of them is venture-backed.

Jack Altman 15:02 Yeah.

Marc Andreessen 15:03 Th- they are, on any given day, any one of them is bigger than the entire national stock market of countries like Germany and Japan-

Jack Altman 15:09 Crazy

Marc Andreessen 15:09 ... and the UK.

Jack Altman 15:10 Yeah.

Marc Andreessen 15:10 Right? And so the, the telescoping effect, I mean-

Jack Altman 15:12 The numbers are just absurd.

Marc Andreessen 15:13 The telescoping effect of, of victory is, is, is, is just incredible.

Jack Altman 15:17 Yeah.

Marc Andreessen 15:17 Um, right. And so, so what Ben and I did is we, we looked at it, and we kind of, we started our firm kind of as this was happening, and we looked at it, and we said, "All right, like, this is different." This, this is... You, you could-

Jack Altman 15:25 Yeah

Marc Andreessen 15:25 ... you could, you could sit here and do things the old-fashioned way, but the world is moving on. And then this goes back to the customer service aspect. The founders who are starting these kinds of companies need something different.

Jack Altman 15:33 Yeah.

Marc Andreessen 15:33 It's, it's not sufficient anymore to just, you know, to have inv- let's say, to have investors who are operating the way that they were investing, you know, for the previous fifty years. That, that, that, that, that's not the value proposition that they need. That's not the, the, that's not the, the, the help that they need, and so there's a different way to do it. And so I, I think what's happened is, like, the, the, the industry, the, the venture industry, it, it, it had to restructure-

Jack Altman 15:52 Mm-hmm

Marc Andreessen 15:52 ... in order to basically accommodate

Marc Andreessen 15:54 the, the change in the market. Now, having said that, I don't think that's an argument that it's just therefore big, big firms win everything. That's definitely not my, not, not my thesis, and by the way, that's also not how I'm deploying my own money, which, which I wanna talk about because I'm, I'm, I'm living what I'm about to say.

Jack Altman 16:06 Yeah.

Marc Andreessen 16:07 Um, which is, I think what happens is what Nassim Taleb calls the barbell. And the way to think about the barbell is basically, you, you, you, you basically draw... You basically, you have a continuum, and on the one side of the continuum, you have high scale, and on the other side, you have high specialisation. And what you see in industries that mature and develop in this way, including many industries in the last hundred years, basically what happens is, as they, as they mature and enter their kind of full state, as they kind of flower, what happens is-... is they often start with generalists that are neither subscale nor particularly specialized. Um, and then, uh, o- over the fullness of time, what happens is th- they get disintermediated, and then there are scale players on the one side, and there are specialist players on the other side. The most obvious example of this in everybody's lives is retail. Um, when I was a kid, there were these things called department stores. Pretty good selection and pretty good price, but not a great selection and not a great price, right? And then sitting here today, those are all out of business. Like, they're just gone.

Jack Altman 16:55 Then it gets crushed by Amazon on one end, and then, like, amazing retail on the other end.

Marc Andreessen 16:59 Exactly. Exactly, right? And so... And, and why do you go to Amazon or, or Wal- or Walmart or, you know, what, the, the big... And by the way, there were even these big box guys, you know, Toys "R" Us and so forth. And then-

Jack Altman 17:07 Yeah

Marc Andreessen 17:07 ... over time, like Amazon and, and, and Walmart even, even ate, they, ate, ate that. 'Cause when you go to Amazon or Walmart, what you get is just, like, an unbelievable selection of basically anything that's a commodity, right? Um, that, that you just buy a- at, at, like, super low prices, and it's basically impossible to compete with that if you're subscale-

Jack Altman 17:21 Yeah

Marc Andreessen 17:21 ... on the one hand. And then to your point, and then the specialist retail experience is, like, the Gucci store or the Apple store.

Jack Altman 17:26 Yeah.

Marc Andreessen 17:27 Y- you know, the, the $15 candle store.

Jack Altman 17:28 They give you some Perrier when you walk in.

Marc Andreessen 17:30 Oh, they love you.

Jack Altman 17:30 Yeah.

Marc Andreessen 17:30 Like, they're so happy to see you.

Jack Altman 17:32 Show you, yeah.

Marc Andreessen 17:32 Exactly, right. You know, they'll, they'll do private showings for you-

Jack Altman 17:34 Yeah

Marc Andreessen 17:34 ... and, you know, they'll pour-

Jack Altman 17:35 It's an experience, yeah

Marc Andreessen 17:35 ... pour the champagne, and it's like-

Jack Altman 17:36 Yeah

Marc Andreessen 17:36 ... it's like, it's like an entire experience.

Jack Altman 17:38 Yeah.

Marc Andreessen 17:38 And, and so what's happening is, and, and you just, again, you see this in, like, the return. You just look down this return standpoint, like, this is what's happened. This is where this is, th- this is how the value is. And then, then what happens is that just, like, gaps way out, and it never comes back together again.

Jack Altman 17:49 Yeah.

Marc Andreessen 17:50 And then what the consumer does is they build a portfolio of, of, of their experiences, and so they, they, they buy things at unbelievably cheap prices at Walmart and Amazon, and then that gives them more spending money to be able to spend on the boutique.

Jack Altman 17:59 So, so this middle, the, uh, the, the bar that's in the middle, that's kind of screwed.

Marc Andreessen 18:04 Yes.

Jack Altman 18:04 What is the mechanic by which they're in trouble? Is it because-

Marc Andreessen 18:08 The customers go away

Jack Altman 18:08 ... the, the, the founder customers go away?

Marc Andreessen 18:11 Yeah.

Jack Altman 18:11 Yeah.

Marc Andreessen 18:11 Yeah, the founder customers go away, and then the obvious-

Jack Altman 18:12 Who are neither getting sort of, like, the size and scale value, nor are they getting, like, a special focus, of sort.

Marc Andreessen 18:17 Correct. Exactly.

Jack Altman 18:17 Can you do focus? Can you be a specialist with a $2 billion fund, let's say?

Marc Andreessen 18:22 So obviously, we're at scale, but we, we do have a specialist approach inside the scale.

Jack Altman 18:26 Yeah.

Marc Andreessen 18:26 And so we have, we have investment verticals. They're discrete teams. They have, in some cases, discrete funds. And by the way, they have, like, trigger pull, trigger puller, trigger puller- [chuckles]

Jack Altman 18:34 Yeah

Marc Andreessen 18:34 ... authority. They can make investment decisions. Like, we don't run the firm where Ben and I sit and decide, is this a good investment or a bad investment? Like, our specialists who make those decisions.

Jack Altman 18:41 And you basically determine that by, this is the size we think you can function... This is the biggest you can function as a specialist in a highly successful way, and then we're just going to put a bunch of those together. Is that, like, what defines the size?

Marc Andreessen 18:53 Yeah. Well, so it's sort of, it's two, it's two- Yes, yes, but it's two parts. One is, what's the, what's the... The external view is what, what's the size of the market opportunity?

Jack Altman 19:00 Mm-hmm.

Marc Andreessen 19:00 Just how, what, what, how much money does this, does this strategy, does, does this vertical need? How many companies are gonna be? How, how many different, you know, kind of how com- how complex is it? And then the other is the internal dynamic, which is like, you know, you want every- Like, if you're gonna have a, a team, you need everybody around the table being able to have a single discussion, and that puts natural limits on how big that can get.

Jack Altman 19:17 What's your limiting reagent to building an even bigger firm? Is it number of productive partners that can do this then, like-

Marc Andreessen 19:24 Con- conflicts.

Jack Altman 19:25 Yeah.

Marc Andreessen 19:25 Conflict policy.

Jack Altman 19:26 Conflicts?

Marc Andreessen 19:26 Conflict policy.

Jack Altman 19:27 That's the, that's the problem?

Marc Andreessen 19:28 The single biggest issue by far.

Jack Altman 19:29 Really? So if you had fifty kill... If you had all the great GPs all wanted to work here, and you had pl- like, that would still be the issue?

Marc Andreessen 19:36 Yeah. The, the, so there, there would be issues, there will- there would be issues for sure-

Jack Altman 19:40 Yeah

Marc Andreessen 19:40 ... to your point, that would come with-

Jack Altman 19:41 So what's the conflicts thing?

Marc Andreessen 19:42 The conflicts thing. So the conflicts thing is the, the mainline venture firms forever, meaning, meaning the, the firms that do Series A, Series B, Series Cs-

Jack Altman 19:49 Yeah

Marc Andreessen 19:49 ... especially Series As and Bs.

Jack Altman 19:50 Yeah.

Marc Andreessen 19:50 The relationship with the founder is just so-

Jack Altman 19:52 It's too deep

Marc Andreessen 19:52 ... So, it is too deep.

Jack Altman 19:54 Yeah.

Marc Andreessen 19:54 And if you, as a venture firm, invest in a direct competitor, it's, it's just- it's a giant issue. The, the founder you're already invested in will be extremely upset with you.

Jack Altman 20:00 By the way, do you think that's practical? Do you think it's all emotions? Like, do you think it's correct that f- firms shouldn't do conflicts?

Marc Andreessen 20:06 I would say when we were startup founders, we felt this very deeply. It's just, it's, it's... Okay, so when you're a startup founder, and I'll channel the other s- the other side, when you're a startup founder, the, the whole thing is so tenuous, right? It's just like, "Is this thing gonna work?"

Jack Altman 20:17 Yeah.

Marc Andreessen 20:17 There's, like, eighteen thousand things that can go wrong.

Jack Altman 20:19 Yeah.

Marc Andreessen 20:19 People are telling you "no" every day. "No, I'm not gonna come work for you. No, I'm not gonna invest in you. No, I'm not gonna..."

Jack Altman 20:23 And then your board member invest in a competitor, and you're like, dagger to the heart.

Marc Andreessen 20:27 Dagger to the heart. And then you literally, what happens is, the founder is you have to go to the all-hands meeting and explain why your investor has given up on you.

Jack Altman 20:33 Yes.

Marc Andreessen 20:33 Right? And, and you go in there, and you do some song and dance about da-da-da-

Jack Altman 20:35 For sure

Marc Andreessen 20:36 ... da-da-da. And they're just- and the employ- your employees are just like... Your employ- basically, your employees look at you, and they're just like, "You, the founder, are so weak and lame."

Jack Altman 20:41 Yeah.

Marc Andreessen 20:42 Right?

Jack Altman 20:42 Right, you can't even get your board member to not invest in a competitor.

Marc Andreessen 20:45 Exactly.

Jack Altman 20:45 What about the marginal stuff, though?

Marc Andreessen 20:47 Yeah.

Jack Altman 20:47 'Cause, like, you know, all these companies are near each other. They blend. They evolve over time. So, like, how does this, how does this play out on a practical level for firms?

Marc Andreessen 20:55 It almost never plays out the way that the founders think it's going to play out. [chuckles] And I say that in two dimensions.

Jack Altman 20:59 [chuckles]

Marc Andreessen 20:59 Number one, the company, it... This historically, what we've seen is that-

Jack Altman 21:02 That's funny

Marc Andreessen 21:02 ... the, the founders who think that they're directly competing with each other generally end up not doing so. B- because one or the other of them changes strategies, and then they, they, they diverge. Which, which by the way, is natural 'cause it's like specie, it's specialization.

Jack Altman 21:12 Mm-hmm.

Marc Andreessen 21:12 The, the companies specialize, they end up not competing. But the other thing that happens is two companies that were not competing, uh, that you're already invested in, pivot into each other.

Jack Altman 21:19 Yeah, and then they're mad at you.

Marc Andreessen 21:20 And then they're m- yes, and then they're very upset.

Jack Altman 21:21 Yeah.

Marc Andreessen 21:22 And you have to remind them that, like, that, you know, you didn't know that that was going to happen, and it's not your fault. [chuckles] And then they're still upset. Um, and so, so I would say the, the, the founders are not... The founders, and, and also we have very low predictability of, of terms of where the conflicts are going to be, but that doesn't ameliorate any of the emotion at the time.

Jack Altman 21:39 Mm-hmm.

Marc Andreessen 21:39 And so it, it does- it doesn't actually help. It doesn't help for us to explain to the founder, "Oh, don't worry about this guy who you think is directly competitive, 'cause he won't be in a year."

Jack Altman 21:46 Yeah.

Marc Andreessen 21:46 'Cause you can't prove that. And, and, and the issue is, the issue is in the moment.

Jack Altman 21:49 What does that leave your s- H- how does that impact your strategy? Meaning like, um, if you know conflicts are this huge issue, and you've got, you know, a big aggregate fund, and so it's very important to catch winners, and then you invested in, you know, Blue Origin, which is really good, but SpaceX is, you know, bigger or whatever happens-

Marc Andreessen 22:08 Yeah.

Jack Altman 22:09 What does that imply for your strategy when it comes to, like, should we... You know, doing seeds and As and things like that-

Marc Andreessen 22:15 Correct

Jack Altman 22:15 ... versus, like, say, "You know what? Let's just wait till, like, the D."

Marc Andreessen 22:18 Correct.

Jack Altman 22:18 "Let's have D be our early stage."

Marc Andreessen 22:20 That's right. So the most obvious thing you do is you're just like, "Oh, we just need to wait, because we need, we need to wait for clarity."

Jack Altman 22:24 Just don't deal with this whole issue.

Marc Andreessen 22:25 Right. Just wait, just wait. Keep, just keep, keep delaying and keep delaying until it's obvious what the, what the, what the answer is and who the-

Jack Altman 22:29 If it's big, it's gonna-... really big, so we can buy later.

Marc Andreessen 22:31 But then the problem with that is, all right, now you're out of the venture business.

Jack Altman 22:34 Mm-hmm.

Marc Andreessen 22:34 Right? 'Cause now you're doing, as you're getting, as you said, now you're basically doing Series Ds. Now you're a pure growth investor. And, and by the way, there are very good pure growth investors, um, but, like, our determination is to stay a top-end venture investor-

Jack Altman 22:43 Yeah

Marc Andreessen 22:44 ... 'cause we think that that's kind of the whole point.

Jack Altman 22:45 Why is it so important? Is it just because it's what you like, or is there a strategic reason that it's important to stay doing early?

Marc Andreessen 22:51 So we've always wanted... I mean, uh, that's the way we've always thought about it, is we've always wanted to kind of be the founder's best partner, [chuckles] um, and, and like to be, to be the one who's, like, the closest in, the one that can really be relied upon, the one that's gonna be around for the longest amount of time, the one who they can really trust, and-

Jack Altman 23:03 And it only happens early.

Marc Andreessen 23:04 Yeah.

Jack Altman 23:04 Yeah.

Marc Andreessen 23:04 Like, it's... Yeah, it's your, it's your early guys.

Jack Altman 23:06 Yeah.

Marc Andreessen 23:06 And so it's hard to insert after that.

Jack Altman 23:08 Yeah.

Marc Andreessen 23:08 Uh, and then, look, the other thing is, like, there are great growth firms that do invest later and have done very well, but I- we just think there's so much information at the early stage. L- like, so for example, when we, when we make a growth investment, be- because we have the active venture business that we have, by the time we make a growth investment, uh, you know, we've either invested in the company for several years, or at the very least, we've met with them repeatedly-

Jack Altman 23:26 Yeah

Marc Andreessen 23:26 ... over time. And so we, we just, we end up with just, like, enormous amounts of, uh, of information. And then the other thing, by the way, is, you know, there's, there's, there's t- kind of time, time arbitrage-

Jack Altman 23:33 Yeah

Marc Andreessen 23:33 ... which is, you know, sometimes the right in- the right answer is just, like, "Okay, just invest in SpaceX or whatever later on." But sometimes the answer is, "No, there's actually a new thing," you know?

Jack Altman 23:41 Totally.

Marc Andreessen 23:41 Do you invest in the MySpace growth round or the f- you know, the Facebook, or the Facebook seed round? Like, and, and if, if, if you're not in the early stage, you, you won't know that 'cause you won't see the... You won't see the early things.

Jack Altman 23:50 Yeah.

Marc Andreessen 23:50 Um, and, and then by the way, the other, the other thing I'd just say is financially, one of, one of the, one of the things people say that is inaccurate is they say if you're running a big fund, you're not gonna have the time to spend on the early-stage opportunities 'cause you can't justify it before you're putting the money. That's actually not true in venture, because the aggregate dollar return opportunity on early stage is just as high as any growth investment, right? 'Cause if you get the right venture investment and you can make $10 billion on the upside case, it's definitely worth my time-

Jack Altman 24:12 Yeah

Marc Andreessen 24:12 ... to spend with the early- so I spend as much time as I can with the early-stage founders, you know, for that reason.

Jack Altman 24:17 So the barbell.

Marc Andreessen 24:17 Yeah.

Jack Altman 24:18 There's, you know, there's big on one end, there's something sorta like me on the other end. Selfishly, I would love to know, like, you know, I would assume you think it's better to be the big version, but, you know, if you were conditioned on needing to be me, um, at the small end of the barbell, like, how would you approach it, and-

Marc Andreessen 24:32 Nope

Jack Altman 24:32 ... what's the strategy?

Marc Andreessen 24:32 They're both good. They're both good. This is the thing, is they're both good. They're both good. And if, if I were for some reason not doing this, I would immediately do what you're doing. Right, so-

Jack Altman 24:38 Okay, that's good to hear.

Marc Andreessen 24:39 Yes, 100%. And then, and I, and then I would say I, I actually invest this way. So my liquid assets are basically tied up in either a16z funds on the one side, or it... I run a very aggressive personal invest- investment programme in early, early, basically angel and, and early-stage seed funds.

Jack Altman 24:52 Mm.

Marc Andreessen 24:52 And, and it's because I, I believe in the barbell. I, I believe in the barbell so much. And so, but, uh, the, the conflict thing I wanted, I wanted to explain, because that, that's the issue. So w- the, the, the big firm, like, we do seed investing, it's just we have this problem every single time-

Jack Altman 25:04 Yeah

Marc Andreessen 25:04 ... we're looking at a seed investment, which is, like, are we really fully convicted that this is gonna be the winner in this space?

Jack Altman 25:08 Even at seed it creates a conflict?

Marc Andreessen 25:09 Well, so-

Jack Altman 25:10 Before a board seat?

Marc Andreessen 25:10 ... there's debates. There's, there's always debates on this, is, like, you know, do the seed ones care as much? Do the growth ones care as much?

Jack Altman 25:15 Yeah.

Marc Andreessen 25:15 Do the crypto ones care as much? What I'd tell you is it's not a logical question, it's an emotional question, and we're just very sympathetic to the founder that needs to be able to-

Jack Altman 25:22 Yes

Marc Andreessen 25:23 ... justify their, you know, authority.

Jack Altman 25:24 You also definitely can't ask while you're ma- like, if somebody asked me while they were making an investment, "Hey, is it okay if we invest in a conflict in a couple of years?" I'd be like: What are you talking about?

Marc Andreessen 25:31 You know, and we've done these things. We've tried to... We used to have this thing, we used to have this separate branded thing called a16z Seed.

Jack Altman 25:36 Yeah.

Marc Andreessen 25:36 And we were like: Well, we have a different conflict policy on this, and it's, it's a great in theory, but it's like-

Jack Altman 25:39 Yeah, it doesn't work

Marc Andreessen 25:39 ... nope, it's a16z. And so the way I think about it basically is, like, the more successful you are as a, as a, as a venture firm, the bigger the issue this is gonna be, 'cause the more the people that you are investing in are going to care.

Jack Altman 25:49 Yeah.

Marc Andreessen 25:50 And so it's just, it's just, it's like the downside of success, but, like, success... I, you know, right.

Jack Altman 25:54 For sure.

Marc Andreessen 25:54 Right. The only people who d- like, the only investors who don't care [chuckles] whether the investment is, if they, they, if literally if you don't care what they think about anything, right? If they, if they just don't matter at all, and everybody knows that they don't matter at all. So, so, so, so there's that. So, so, so therefore, it can be simultaneously both of these things are true. Number one is we still, we, we definitely do lots of early-stage investing, and we will do, we will do- we do make seed bets. But it's just also true that we can't structurally for, for this re- we cannot do all of the seed investments that we would like to do. In fact, we can't even do a tiny fraction of them.

Jack Altman 26:21 Mm.

Marc Andreessen 26:21 It's just like, it's strategically, we just... Structurally, we just, we just can't do it.

Jack Altman 26:24 Yeah.

Marc Andreessen 26:24 Um, and so, and, and again, this goes back to the barbell. So, so that means structurally... It's the same reason why Amazon can't give you the champagne, you know, experience, right? It's, it's the same thing. They can't... They're not set up for it. They can't do it. It's not a scale strategy.

Jack Altman 26:35 Yeah.

Marc Andreessen 26:35 Uh, and so what has to happen is there has to be the other side of the barbell. There has to be the specialisation and intense focus and deep relationship-

Jack Altman 26:42 Yeah

Marc Andreessen 26:43 ... um, uh, right, um, uh, thing. And, and that's, and that's the role of the angel investor and the, and the, and the seed investor. And that's... And, of course, in startups, that's incredibly important because that's the most formative, right, fraught [chuckles] time in the life of these companies, is when they're first getting started, right? And as, as you know, right, the... Half the time, these are people who haven't, you know, they haven't started a company before, they haven't run a company before. Some of them haven't had a job before.

Jack Altman 27:04 Yeah.

Marc Andreessen 27:04 And so, like, they, they need to learn a lot, and they need people to work with them on being able to do this, and they need to figure out how to actually, you know, do these things. And so there, there have to be, and there are, like, incredibly high-quality seed investors, angel investors, um, o- on that side of the barbell. Um, the, the, the big firms, presumably, you know, if, if we succeed, we succeed by generating large numbers of aggregate dollars and a very good, you know, percentage return. The seed investors have, has, have this perpetual opportunity to just absolutely shoot the lights out-

Jack Altman 27:29 Yeah

Marc Andreessen 27:29 ... right on, on upside. And, and you can ha- you know, you, you know, there are seed funds that generate, like, 200X, 300X returns.

Jack Altman 27:34 Totally.

Marc Andreessen 27:34 Right?

Jack Altman 27:35 Yeah, yeah.

Marc Andreessen 27:35 And so these are both good strategies. They're both adapted to the current reality-

Jack Altman 27:39 Yeah

Marc Andreessen 27:39 ... of the market. There's just two things that fall out of that. One is the death of the middle, which is, it just doesn't make sense to have the old-fashioned, you know-

Jack Altman 27:46 Yeah

Marc Andreessen 27:46 ... Series A, Series B, six GPs, $300 million funds sitting on Sand Hill Road, waiting for people to walk in the door.

Jack Altman 27:51 Yeah.

Marc Andreessen 27:51 Like, those days are over, and those funds are, you know, those funds are shutting down. Like, that, that model is going away. And then the other thing that happens that causes some of the tension is this-... what does a successful seed investor do, right? He raises more money and wants to become a venture investor.

Jack Altman 28:03 Right.

Marc Andreessen 28:04 Right. But then he, he goes e- but then you're, you're, you're going from one side of the barbell back to the middle, and you're creating that same problem again, and I think that's where the tension is coming from.

Jack Altman 28:12 I also feel like the mechanic that happens a lot of times is when you grow the fund, the only you, you know, you, you raise a huge fund, and then you start deploying it into things just because you've got to deploy at some pace, and so the threshold for, "I've got to deploy four hundred million this year, and I only see seven hundred million dollars worth of investable things, I'm gonna do four-sevenths of them."

Marc Andreessen 28:32 Right.

Jack Altman 28:32 Versus, you know, presumably, if you only had to do one-seventh of it, you would, you know, you'd pick better, hopefully.

Marc Andreessen 28:37 Yeah.

Jack Altman 28:37 Which I think is a huge mechanic to it.

Marc Andreessen 28:38 So I think that's part of it, but I think the related thing is your competitive set has changed.

Jack Altman 28:41 Yeah.

Marc Andreessen 28:42 And, and, and what we, what we find with seed investors who migrate up and then regret it later, what we find is what they didn't realize was their competitive, so-

Jack Altman 28:47 Right, 'cause now they're going for bigger, more competitive rounds against-

Marc Andreessen 28:49 Sequoia

Jack Altman 28:50 ... you and Sequoia.

Marc Andreessen 28:50 Yeah.

Jack Altman 28:51 Yeah.

Marc Andreessen 28:51 All of a sudden, okay, now-

Jack Altman 28:51 Yeah

Marc Andreessen 28:51 ... you're competing for series-

Jack Altman 28:52 Fifty million dollar, be good luck.

Marc Andreessen 28:53 Uh, uh, r- right, right, exactly. And so it's just like... And, and look, like, again, I'm a market fundamentalist, if you have a better value proposition than Sequoia, you should go, you should-

Jack Altman 29:00 Right

Marc Andreessen 29:00 ... you should go after that.

Jack Altman 29:01 Right.

Marc Andreessen 29:01 But I just, I would not, I would not accidentally end up competing with Sequoia for series A. Like, I would just say that's a bad way to live.

Jack Altman 29:06 Yeah.

Marc Andreessen 29:06 And I think that's what ha- that, what... That is what has happened to a bunch of the seed

Marc Andreessen 29:10 funds that have gotten larger.

Jack Altman 29:11 Why is it so rare for somebody to break through and get... I mean, you did it, and that's one that happened in the last 15 years. Maybe there's a couple others, maybe, but why is it as rare as it is? It seems, like, almost more rare than a new big company-

Marc Andreessen 29:24 Yeah

Jack Altman 29:24 ... in a way.

Marc Andreessen 29:24 Yeah. That, that's true. In fact, our analysis, actually, when we started, was there actually hadn't been... I think there had been two firms, Andy Rachleff, actually-

Jack Altman 29:32 I mean, Thrive also.

Marc Andreessen 29:33 Well, so Thrive was act- uh, yeah-

Jack Altman 29:34 Yeah

Marc Andreessen 29:34 ... they were after us.

Jack Altman 29:34 Yeah, yeah, yeah.

Marc Andreessen 29:35 Uh, I mean, they've, they've been great.

Jack Altman 29:36 Yeah.

Marc Andreessen 29:36 But, um, but before, before us, in the, in the 30 years before us, we think that there were only two new VCs that actually punched through to become top tier. Um, in, in, in other words, VCs that were not either firms that were built in the '60s and '70s or firms that weren't derivations of those firms.

Jack Altman 29:50 Founders Fund?

Marc Andreessen 29:50 No, no, no, no, no, no.

Jack Altman 29:51 Oh.

Marc Andreessen 29:51 The Founders Fund started at actually, uh, around the same time we did.

Jack Altman 29:54 Okay.

Marc Andreessen 29:54 Um, the, the, they were a little bit earlier-

Jack Altman 29:56 Yeah

Marc Andreessen 29:56 ... but around the same time.

Jack Altman 29:56 Yeah.

Marc Andreessen 29:56 But I mean, over the preceding, like, 50 years.

Jack Altman 29:58 Okay.

Marc Andreessen 29:58 Sevin Rosen. You won't even re-

Jack Altman 30:00 No.

Marc Andreessen 30:00 This is sort of the thing, you won't even recognize these names, so-

Jack Altman 30:02 Geez, I need to read a book or something.

Marc Andreessen 30:03 So Sevin Rosen was the venture firm that famously funded Compaq Computer-

Jack Altman 30:06 Okay

Marc Andreessen 30:06 ... which was the big, the big, the big winner, and then they went on to become a successful firm, this guy Ben Rosen.

Jack Altman 30:09 Yeah.

Marc Andreessen 30:09 Early, early leader in the space. And then there was a firm called Hummer Winblad, uh, which was a software specialist firm in the late '80s, early '90s.

Jack Altman 30:15 Yeah.

Marc Andreessen 30:15 Um, those are the only two that punched into the, the, the top end while they were operating.

Jack Altman 30:19 Wow!

Marc Andreessen 30:19 Neither one of them, you know, sustained it, but they-

Jack Altman 30:21 But they got there.

Marc Andreessen 30:22 They, they got there for a bit. But that was, like, the success case, right?

Jack Altman 30:24 Yeah.

Marc Andreessen 30:24 So this is a little bit like Elon looking at the history of the car industry and saying-

Jack Altman 30:27 Yeah

Marc Andreessen 30:27 ... you know, Tucker Automotive-

Jack Altman 30:28 Yeah

Marc Andreessen 30:29 ... i- in the 1950s.

Jack Altman 30:29 So it's so rare.

Marc Andreessen 30:30 It's very, very rare.

Jack Altman 30:31 So why, why is it that rare?

Marc Andreessen 30:32 Okay, so two, two reasons I think it's rare. So number one, um, the, the, there's the, uh, so the intimate reason for it, and then a sort of macro reason for it. Intimate reason for it is just, it, it, like, y- you're gonna have this incredible... As the founder, you're gonna have this incredibly intimate experience, you know, very close trust relationship, uh, with whoever you're working with. And it's like, you know, can you reference them? You know, do, do they have a history of, and track record of the kinds of behavior, um, that you need and the kinds of insight, you know, that you need? And it's just, like, it's very hard to do that from sc- It's very easy for an existing firm that has a long track record of success to prove that. It's very hard if you don't. So that's, that's, like, the close-in reason. But then the other reason goes back to the way the world is changing, is th- we always believe the thing that you want from your venture firm is power. [chuckles] Um-

Jack Altman 31:11 Mm. Mm

Marc Andreessen 31:11 ... so the thing as a startup that you want is you want them to, like, fill in all the missing pieces that you don't yet have when you're starting a company that you need, you need to succeed. A- and so you need power, and so you need power. That means, like, you need the ability to be able to, like, actually go meet customers and have them take you seriously. Uh, you need the ability to go get publicity in, like, you know, in major, you know, channels. You know, it used to be media, now it's podcasts. Um, and be able to, like, get taken seriously. You need to be able to be taken seriously by recruits, right? Because there's thousands of startups recruiting for engineers. What makes yours stand out? I, I sometimes describe it as venture firm as providing a bridge loan of a brand.

Jack Altman 31:42 I was gonna say, until you have your own brand that's big or bigger re- you know, for your own space than the VC, you're borrowing your VC's brand.

Marc Andreessen 31:48 Exactly. And, and that has been very effective for a long time. Th- and that was how we looked at it when we were founders.

Jack Altman 31:52 That's why you did media from the beginning?

Marc Andreessen 31:53 Yeah. Oh, yeah, that's one of the re- yeah, one of the... It's one of the reasons, yes, but a very, but a very, very powerful one.

Jack Altman 31:57 Yeah.

Marc Andreessen 31:58 Uh, very, very major one.

Jack Altman 31:59 Yeah.

Marc Andreessen 31:59 And then, by the way, you also need ability to raise downstream money, right? You're, you're, you're gonna have to need to raise money again, and-

Jack Altman 32:04 So they either need a lot of money, or they need to be connected to a lot of money.

Marc Andreessen 32:06 Yeah, exactly. Right. Exactly. And so you, you just-

Jack Altman 32:08 Better if they just have it.

Marc Andreessen 32:09 Yeah, and then-

Jack Altman 32:09 It's like being full stack.

Marc Andreessen 32:10 Well, then, by the way, now you're getting... Also, like, again, you, you think, like, tools companies just never got into, like, for example, politics, right? Uh, or just, let's just say global affairs, glo- global events. Like, what's happening with Te- you know, T- uh, like, what's happening with T- how do you navigate the world, right? How do you navigate Washington? [chuckles] You know, when, when the regulators show up, and they want to kill you, like, how do you navigate that? Or you're, like, get- get in some, you know, giant fight with the EU or what... Like, so, so the, especially these full-stack companies, they're, they're, they're getting involved in, like, very complicated macro, political, geopolitical situations, like, much more early. And they have to, like, in some cases, they have to, like, escalate up to, like, you know, senior government officials-

Jack Altman 32:45 Yeah

Marc Andreessen 32:45 ... heads of state. Um, you know, major heads of sovereign wealth funds, they need to get to, you know, the, the, the CEOs of major companies. You know, how do you get to the CEOs? You know, you're, you're a new AI, you're a new AI company, and you're trying to redefine, you know, visual production for movies. How do you get to the studio heads?

Jack Altman 32:58 Yeah. Right.

Marc Andreessen 32:59 The studio heads just don't have time to meet with a thousand startups, so why are they gonna meet with you? Right, so, so basically, it's, it's projection of power.

Jack Altman 33:05 Mm-hmm. Mm-hmm.

Marc Andreessen 33:06 Um, and, and this has been one of our, one of our theories, how we built our firm, is you optimize for maximum amount of power in order to be able to give the startups access to it, right? Both the startups that are already in your portfolio, and but also the startups that don't even exist yet, right? And, and, and again, and, and this goes to why the scale thing matters so much. It's just like, all right, there's just, there's a scale aspect to power. It- there's a big difference between being able to get to everybody who matters and not.

Jack Altman 33:26 Why is it rare for people to be able to accumulate power, even if they were... Like, let's say everybody was trying to do it. It's not like everybody could do it. What, what's the cause of the rarity to be able to build enough power in that sense?

Marc Andreessen 33:37 Well, to start with, you have to want to.

Jack Altman 33:39 Mm-hmm.

Marc Andreessen 33:39 Um, and so we met with the... We, we met with all the GPs of all the top firms, basically, when we were starting out because we wanted to, you know, see who we could be friends with, and-

Jack Altman 33:46 Yeah

Marc Andreessen 33:46 ... it worked, worked very well in some cases and not, not well in other cases. But, uh-... uh, one of them told us, this is a GP at a top firm in 2009, and he said, "Yeah, the venture business is like going to the, uh, sushi boat restaurant," uh, right? And so the sushi boat restaurant is a sushi restaurant where they've got the boats.

Jack Altman 34:00 Yeah.

Marc Andreessen 34:00 Right? It's got like a- they've got like a water track.

Jack Altman 34:01 Like a conveyor belt.

Marc Andreessen 34:02 Conveyor belt.

Jack Altman 34:03 Yeah.

Marc Andreessen 34:03 Right? And the little sushi boat comes by-

Jack Altman 34:04 Like a lot of them.

Marc Andreessen 34:05 And there's a tuna roll, and there's a, you know, a shrimp roll, and there's this or that. And you... And, and he said, basically, you just sit on Sand Hill Road.

Jack Altman 34:10 And you're like, "We're gonna crush these guys."

Marc Andreessen 34:12 Yeah, and, and the, the startups are gonna come in. And he said, "You know, if you miss one, it doesn't matter, 'cause there's another sushi boat coming up right behind it."

Jack Altman 34:17 Uh-huh.

Marc Andreessen 34:17 And he's just like, "You just sit and watch the sushi go by, and every once in a while, you reach into the, into the thing and you pluck out a piece of sushi." [laughing] And we walked out of that saying, like, "What the hell?"

Jack Altman 34:25 That's funny.

Marc Andreessen 34:25 Like, in what industry is-

Jack Altman 34:28 2009 or something?

Marc Andreessen 34:29 It's 2009, yeah.

Jack Altman 34:30 Yeah.

Marc Andreessen 34:30 Like, that was a very common... Th- this, again, is the mid... This was the mid-size venture. One of the reasons it... When I, when when I ca- like, look, in 1994, when it was-

Jack Altman 34:37 I mean, it might have kind of been like that at that time.

Marc Andreessen 34:38 It was.

Jack Altman 34:38 Yeah.

Marc Andreessen 34:38 It was. When I came to Silicon Valley in 1994, I had never heard the term venture capital.

Jack Altman 34:41 Right.

Marc Andreessen 34:42 I didn't even know the thing existed. And then, as my business partner, Jim Clark, explained it to me, and I was like: There are guys, like, they're just sitting there waiting to give you money? And it's like-

Jack Altman 34:47 But you see this, and you're like, "This is gonna get seasoned alive."

Marc Andreessen 34:50 Of course.

Jack Altman 34:51 Yeah.

Marc Andreessen 34:51 This is absurd. Like, the minute anybody takes this seriously, it's not gonna change.

Jack Altman 34:53 Yeah.

Marc Andreessen 34:53 Right?

Jack Altman 34:54 Yeah.

Marc Andreessen 34:54 Um, and so it was this very clubby cartel, you know, basically, kind of thing. And again, it was, it was fine as long as the ambitions of the industry were constrained. And then, and but then again, look, the, the, the tools companies, they didn't need all the po- they didn't- they needed some of the power, right? But they didn't need all the power. You know, they weren't dealing with, like, governments-

Jack Altman 35:07 Mm

Marc Andreessen 35:07 ... right? Or, or, you know, these sort of big macro issues.

Jack Altman 35:09 Mm-hmm.

Marc Andreessen 35:10 Um, you know, at least, you know, in the early years. Well, okay, so here's another thing that's happened, is just the world is globalised. Like, a... So startups th- 30 years ago, you would spend your first decade just in the US, and then you would start to think about Europe and global expansion. And, and now you just, you have to think about being a global company up front, 'cause you're gonna... If you don't, like, you're, other people are gonna do it.

Jack Altman 35:28 Yeah.

Marc Andreessen 35:29 Right. Um, and so you, you just, you have to chin up. Like, as an entrepreneur, like, the expectations

Marc Andreessen 35:33 are much higher than they used to be.

Jack Altman 35:34 Maybe one final question on this topic of fund size, and then I wanna go to, to AI. Um, what do you think... And I know you've thought about this a lot. What do you think is the limiting factor for the creation of a lot more really big companies?

Marc Andreessen 35:49 Yep.

Jack Altman 35:49 Do you think it's founders? Do you think it's capital? Do you think it's market maturity? Do you think it's underlying tech stuff? Like, if you had to pinpoint the one or two things that you think would allow for there to be way more big companies, like, what is it?

Marc Andreessen 36:02 So there's sort of the holy trinity of venture, uh, startups, which is, uh, you know, p- uh, people, market, and technology. Um, and I think the answer is sort of all three, and the way I would describe it is, there is some limiting issue with just market si- uh, just how many markets are there, how big are they, how, how ready is the market to take something new?

Jack Altman 36:17 Mm-hmm, mm-hmm.

Marc Andreessen 36:17 Then there's the technology question, which is, you know, when is the technology actually... The, the, like, from the venture perspective, technology moves in stairsteps, right? And so things become possible in the world of smartphones that just weren't possible. You know, you couldn't do Uber with- when everybody had a laptop, you had to wait until they had phones.

Jack Altman 36:32 Yeah.

Marc Andreessen 36:32 Right? Um, and so technology moves in a stairstep. You get these par- you know, paradigm shifts, platform shifts, and, and those just, they come when they come.

Jack Altman 36:38 Yeah.

Marc Andreessen 36:38 And until they come, you, you can't do it. And then, and then the people side, you know, and this is the one that, you know, I say, you know, vexes me the most, which is like, okay, like, how do you just get more great f- great founders?

Jack Altman 36:48 Yeah.

Marc Andreessen 36:49 Right? Um, and I think part of that is, you know, you... I, I think there is definitely a training thing that is real, and getting people into the right scene in the right way, and, like, the thing that, like, Y Combinator does, or the thing that Thiel Fellows do, like, th- those are real things. Um, and those help a lot. But also, I, you know, there is an inherent... You know, there are just certain- th- there's, there, there are not infinite number of people running around who have the-

Jack Altman 37:09 You probably figure there's a lot of people who could have built big companies who haven't, though, and hopefully is-

Marc Andreessen 37:13 Well, a lot-

Jack Altman 37:14 Yeah

Marc Andreessen 37:14 ... or a few.

Jack Altman 37:14 Yeah, I don't know.

Marc Andreessen 37:15 Some. [chuckles]

Jack Altman 37:15 Yeah, some, some, I don't know, some number. But there must be people who are just, like, in academia or government or educa-

Marc Andreessen 37:21 Yeah

Jack Altman 37:21 ... who are just doing something completely different, who, if they were attracted to startups, would have built a big company.

Marc Andreessen 37:25 So yes, but then the other question is, like, well, okay, then why didn't they? Why, why didn't they do the things required to get themselves in that position?

Jack Altman 37:29 Well, it could have been then, like, 2001, it was just like, too many people were too scared to do it or didn't know about it or whatever.

Marc Andreessen 37:36 But what does that tell you about the people who didn't do it?

Jack Altman 37:37 Yeah.

Marc Andreessen 37:38 Is they, they were heard... I can tell you who didn't listen to that, right? It was Mark Zuckerberg.

Jack Altman 37:42 Are there more good, um-

Marc Andreessen 37:43 But, but l- let's just press this point harder for a moment-

Jack Altman 37:46 Yeah

Marc Andreessen 37:46 ... which is, like, it, I always describe this as like, uh, I always call this the test with capital T-

Jack Altman 37:49 Yeah

Marc Andreessen 37:49 ... which is like-

Jack Altman 37:49 Yeah, yeah, yeah

Marc Andreessen 37:50 ... okay, y- like, if you're not in a position to do the thing, it's the fact that you're not in a position to do the thing meant that you flunked the te- you've already flunked the test.

Jack Altman 37:55 Well, I guess the question would be, are, are, do, is there a subset of people who could build Facebook, who, other than being too scared to do it, would have had all the other ingredients, and so when everybody's not scared, you get more Facebooks?

Marc Andreessen 38:08 You know, there's a line in the mo... I, I actually never saw the movie, but there's a line in the movie, "If you could have built Facebook, you would have built Facebook," right? Like [chuckles]

Jack Altman 38:13 Yeah, yeah, there is a line that...

Marc Andreessen 38:14 Yeah. [chuckles]

Jack Altman 38:14 Yeah, yeah, yeah. That's right. That's a good line.

Marc Andreessen 38:16 Right? And so, it, this is the thing, it's like, uh, you know, uh, y-

Jack Altman 38:20 Are there more great founders today than when you were, let's say, in n- like, do you think there are more now than there were 20 years ago?

Marc Andreessen 38:25 I believe there are, but, like, I... Maybe there's, uh, uh, how many more are there, right?

Jack Altman 38:29 Is it five times more, or is it, like, 50% more, or is it-

Marc Andreessen 38:32 Well, so, like, the nu- the number of wins is increasing, right? So the, so the, we, we used to talk about the 15, 15 year that matter. It's... That up number's probably, if you do the analytics, probably up, like, 10X.

Jack Altman 38:41 You mean there's, like, 150 companies a year?

Marc Andreessen 38:42 Like, 150 companies a year that, like, really matter. And the reason is because there's so many more sectors now, right? Uh, so there's, there, you get the industry maturation. And so kind of by inference, there kind of have to be, like-

Jack Altman 38:49 You're saying the markets are better more than you're saying the founders are better.

Marc Andreessen 38:52 Well, uh, maybe a little bit of both. Also, look, also, I think the founders are getting better. Part of the founders getting better is they have their-

Jack Altman 38:56 Better training

Marc Andreessen 38:57 ... they're all in the... Well, to start with, they're just all online.

Jack Altman 38:59 Yeah.

Marc Andreessen 38:59 So, so w- wh- when I showed up here in 1994, like, literally, there was, like, three books in the bookstore-

Jack Altman 39:03 Right

Marc Andreessen 39:04 ... none of which were that great.

Jack Altman 39:04 Yeah, it's not that the DNA is better, it's that they're, now the ecosystem has matured to teach people better.

Marc Andreessen 39:08 Yeah, and, like, people come in, and they've watched every video. You know, they've watched every episode of, you know, your podcast-

Jack Altman 39:12 Hopefully

Marc Andreessen 39:12 ... and like, right. A- and, and they, they just walk in knowing all this stuff. Um, and then, yeah, look, and then look, the, the Y Combinator didn't exist, and, you know, that definitely helps. And, and, you know, Thiel Fellows didn't exist, and that definitely helps. Um, there's, you know, Brian Eno has this great term, scenius.

Jack Altman 39:24 Mm-hmm.

Marc Andreessen 39:25 Scene, you know, scene plus genius.

Jack Altman 39:26 Mm, mm.

Marc Andreessen 39:26 Right? And so it's just like, you know, the individual genius on his own is always, it's always, you know, it, it's hard-

Jack Altman 39:31 Yeah

Marc Andreessen 39:31 ... just to get, get things done.

Jack Altman 39:32 Yeah.

Marc Andreessen 39:33 Some people do, but it's difficult. It's more often, more often in a profession where you're seeing creativity happen-

Jack Altman 39:37 Yeah

Marc Andreessen 39:37 ... there's almost always a scene. You know, there's, you know, Silicon Valley is definitely a scene in that way. People, people come here, and they just, they, they kind of get, uh, I don't know, they just get better. They just, you know, they meet more people who are like them.

Jack Altman 39:47 Yeah.

Marc Andreessen 39:47 They're able to aggregate together.

Jack Altman 39:48 Yeah.

Marc Andreessen 39:48 They learn from each other. So yeah, so look, the founders are getting better. There's more of them. But is, is there... Does that mean there's now 10,000 as opposed to 1,000?

Jack Altman 39:56 Yeah. Yeah.

Marc Andreessen 39:56 I don't know. There's... And there's eight billion people on planet Earth. Why are we, why are we debating whether it's 1,000 or 10,000?

Jack Altman 40:01 Yeah.

Marc Andreessen 40:02 Right, and so and I just, I, I... That I don't know.

Jack Altman 40:04 Yeah.

Marc Andreessen 40:05 I would hope over the next, you know, years and decades, we'll all figure out a way to go make sure we get everybody who can do it-

Jack Altman 40:10 Yeah

Marc Andreessen 40:10 ... and get them to do it.

Jack Altman 40:11 That's a good segue into AI. Do you feel that we're now at the beginning of what is, like, the new next important-... you know, paradigm? Like, is this cloud, but on steroids?

Marc Andreessen 40:21 Oh, but yeah, much, uh, I think much, I think much larger-

Jack Altman 40:23 Yeah.

Marc Andreessen 40:23 And I'll, I'll-

Jack Altman 40:24 Yeah

Marc Andreessen 40:24 ... explain why. So, um, yeah, so, so I described, you know, I described earli- I described before, right, you know, the, the, the, the triangle people technology market. The, the technology is, ul- ultimately the driver is the technol- the tech- the technological... For venture, the technological step function changes drive, drive the industry, uh, and they always have, right? And so if you talk to the LPs, you can see this. It's like when, when there is a giant new technology platform, it's an opportunity to reinvent a huge number of companies and products that, you know, now have become obsolete and create a whole new generation of companies, often, and, you know, generally end up being bigger than the ones that they, they replaced. And so, so, so, and the venture returns map this, and so it, it get, it, they come in waves-

Jack Altman 40:56 Mm.

Marc Andreessen 40:56 -and the LPs will tell you, it's just like, yeah, there was the PC wave, the internet wave, the mobile wave, the cloud wave. Like, that was the thing. And then, by the way, when in venture, when you get stuck between waves, it's actually very hard, right? 'Cause u- you've seen this for the last, like, five years. Like, for the last five years, it's like, how many more SaaS companies are there to found?

Jack Altman 41:11 Yeah.

Marc Andreessen 41:11 Like, just we're j- we're just out of ideas-

Jack Altman 41:13 Yeah

Marc Andreessen 41:13 ... we're just out of, out of categories.

Jack Altman 41:14 Yeah, yeah, yeah.

Marc Andreessen 41:14 All been done.

Jack Altman 41:15 Yeah.

Marc Andreessen 41:15 Right? And so it's when you have a fundamental technology paradigm shift, that gives you an opportunity to kind of rethink the entire industry.

Jack Altman 41:21 It would've been very sad, by the way, if the AI breakthrough didn't happen. Like, uh, the state of venture would be sad, I think.

Marc Andreessen 41:25 Three years ago, this was... I mean, so when we were talking to our LPs three years ago, we're just, like, basically, like, you know, we're in, you know, we're... Uh, so, uh, Chris Dixon has this, uh, uh, framing he uses. He calls it your, in venture, you're either in, uh, uh, search mode or hill-climbing mode. And in search mode, you're looking for the hill.

Jack Altman 41:38 And it was search mode. [chuckles]

Marc Andreessen 41:40 Uh, uh, right. A- a- and, and three years ago, we were all in search mode, and that's how we described it to everybody, which is like, "We're in search mode, and there's all these candidates for what the things could be." And AI was one of the candidates, right? It was like a known thing, but it hadn't broken out yet-

Jack Altman 41:49 Yeah

Marc Andreessen 41:49 ... in, in the way that it has now. And so we were in search mode. Now, we're in hill-climbing mode. [chuckles]

Jack Altman 41:53 Thank goodness, yeah.

Marc Andreessen 41:54 Big time.

Jack Altman 41:54 Yeah.

Marc Andreessen 41:54 Yeah, and then, and then, you know, look, like I, I, as I say, on the technology breakthrough itself, I think a year ago, you could've made the argument that, like: I don't know if this is really gonna work, 'cause LLMs, re- you know, hallucinations. Can... You know, it's great that they can write Shakespearean poetry and hip-hop lyrics. Can they actually do math?

Jack Altman 42:08 Mm-hmm.

Marc Andreessen 42:09 You know, can they do, can they write code?

Jack Altman 42:10 And now, obviously, yes.

Marc Andreessen 42:11 And now, now they obviously can.

Jack Altman 42:12 Yeah.

Marc Andreessen 42:13 And this, this, I, I think for me, the turning point mo- the moment for certainty for me was the release of o1. Uh, uh, so o1 from OpenAI, the Reason Air, and then, and then DeepSeek R1. The, the minute I... The, the, the, when then those happened kind of back to back, and the minute those popped out, you saw what's happening with that, um, and the scaling model that was around that, you're just like: All right, this is gonna work, 'cause re- reasoning is gonna work. And, and in fact, that is what's happening. Like, it's, it's, it, you know... And, and I would say, just like every day, I'm seeing product capabilities. Yeah, you know, I'm seeing new, new technologies I never thought I would live to see, like, really profound. Um, I actually think the analogy isn't to the cloud or to the internet. I think the analogy is to the invention of the microprocessor.

Jack Altman 42:44 Mm.

Marc Andreessen 42:44 I think this is a, a new kind of computer.

Jack Altman 42:46 Mm-hmm.

Marc Andreessen 42:46 And being a new kind of computer means that essentially everything that computers do can get rebuilt, I think. So, so we're, we're investing against the thesis that basically all incumbents are gonna get nuked-

Jack Altman 42:56 Yeah

Marc Andreessen 42:56 ... uh, and everything is gonna get rebuilt-

Jack Altman 42:57 Just across the board

Marc Andreessen 42:58 ... from scratch

Jack Altman 42:59 The whole thing.

Marc Andreessen 42:59 Just across the board.

Jack Altman 42:59 Yeah.

Marc Andreessen 42:59 Now, we'll be wrong in a bunch of those cases-

Jack Altman 43:01 Yeah, yeah, yeah

Marc Andreessen 43:01 ... 'cause some incumbents will adapt.

Jack Altman 43:02 But power law, the things that are right will be super right.

Marc Andreessen 43:04 W- will be super right, exactly. And then, look, the, the AI makes things possible that were not possible before. Um, and so there's gonna be entirely new categories.

Jack Altman 43:11 By the way, is your mindset there that you should just bet on... Like, obviously, incumbents are gonna win some percentage, and startups are gonna win some, but is basically the dominant strategy as a venture capitalist to just plan to bet that startups are gonna win it all and go for the power law?

Marc Andreessen 43:24 Yeah, that's right, that's right. Well, and, and, and again, the reason is, you've gotta remember two, two customer sets. The way the LPs think of us, uh, the way the LPs think of us is as complementary to all their other investments.

Jack Altman 43:32 Yeah.

Marc Andreessen 43:33 And so our LPs all have, like, major public market stock exposure. Like, they don't need us to bet on-

Jack Altman 43:38 Yeah

Marc Andreessen 43:38 ... incumbent healthcare, you know, whatever company, right? [chuckles] They, they, they need us to fit a role in their portfolio, which is, you know, uh, to try to maximize alpha, uh, based on, uh, you know, based on disruption.

Jack Altman 43:47 Yeah.

Marc Andreessen 43:48 Um, and, and, and then, and then again, and then just, uh, again, the basic math of venture, which is you can only lose 1X, you can make 1000X, and you just, like, slam that forward as, as, as hard as you can.

Jack Altman 43:56 So when you have a moment-in-time worldview like this, do you, you know, as a firm leader, do you give a directive that's basically like: "Hey, everybody, we need to deploy in this kind of way right now?" Or do you just build a system that's always picking birds out of the flock from, like, the bottoms up, and you're just like, "Well, they're smart. They're gonna see that every opportunity is good"? Like, how much is it, like, a top-down guidance versus, you know, the market's just obviously good all around?

Marc Andreessen 44:21 Yeah, so we don't do-- like I said, we don't do top-down investment decision-making.

Jack Altman 44:24 Mm-hmm.

Marc Andreessen 44:25 And so Ben and I aren't sitting saying, you know, "We need to invest in Category X-

Jack Altman 44:28 Yeah

Marc Andreessen 44:28 ... or we need to invest in this company versus that company." And we, we don't run... We run, we have a legal investment committee, but we don't run a process where they come to us to get approval.

Jack Altman 44:35 Because you're letting the leader of each group sort of make those decisions.

Marc Andreessen 44:37 Yeah, and, and, and, and, and often in those groups, it's actually delegated further, further, it's delegated to the individual-

Jack Altman 44:41 Yeah

Marc Andreessen 44:42 ... individual GP or check writer. And, and the reason for that is we just think that the knowledge of knowing what's going on and which one's likely to win is gonna be focused in the mind of the person who's closest to the specific thing.

Jack Altman 44:50 But do you have, like, a risk slider? Are you like: "Hey, guys-

Marc Andreessen 44:52 Yeah

Jack Altman 44:52 ... let's be at a nine right now?"

Marc Andreessen 44:53 So this, this, this is the funny thing. So venture is the only asset class in which the leaders of the firm are in the position of trying to get the firm to take more risk, not less risk, on a regular basis.

Jack Altman 45:02 Exactly.

Marc Andreessen 45:02 'Cause, right, 'cause the, the, the natural orientation towards any kind of... K- a- anybody who's in an existing business, there's a natural organizational incentive to try to reduce risk, 'cause you want, you just wanna, like, hold on to what you have and not-

Jack Altman 45:12 Yeah

Marc Andreessen 45:12 ... upset the apple cart.

Jack Altman 45:13 Yeah.

Marc Andreessen 45:13 And so Ben and I are generally on the side of, like, take, take more risk.

Jack Altman 45:16 Mm-hmm.

Marc Andreessen 45:17 Um, uh, one of the, one of the, one of the applications of this is the, the old Sequoia adage, which is, they, they say, "When in doubt, lean in." Like, so, so for example, so where- you, you see this, I'm sure when you do it, is it's just like, okay, there's this thing, there's this company that is, like, potentially very interesting, but, like, there are these issues, right? And it's just like, it's too early, and this and that, and weird, guy's got a weird background, and this, that, that, and he's in a, you know, whatever. I don't know.... the issues and, you know, there's a hair.

Jack Altman 45:39 Yeah.

Marc Andreessen 45:39 You know, there's hair on the deal. There's no hair on the GP.

Jack Altman 45:41 That's funny. That's good.

Marc Andreessen 45:42 But there's hair, there's hair on the deal. The founders tend to have, have, have really good hair. They share the deal, and it's just like, all right, like, what do you, what do you- how do you calibrate that, right? And, and, and the his- and again, the history of venture is when you see something that's very promising and there's a lot of hair on it, [chuckles] sometimes when you invest, it's gonna go to zero-

Jack Altman 45:57 Yeah

Marc Andreessen 45:57 ... 'cause the hair is gonna kill it. And then sometimes when you invest, it's gonna be the next big thing.

Jack Altman 46:00 But it's like something where you're like, "I love that, I hate that" -

Marc Andreessen 46:03 Yeah

Jack Altman 46:03 ... is much better than, "Yeah, everything's fine."

Marc Andreessen 46:05 One hundred percent. And, and this is the way, the way we describe this is invest in strength, not in lack of weakness. Uh, or another way to think about it is, it's not good versus great, it's very good versus great.

Jack Altman 46:14 Mm-hmm.

Marc Andreessen 46:15 The, the, the d- differentiating good from great is very straightforward. Differentiating very good from great is actually very hard. [chuckles]

Jack Altman 46:21 Mm-hmm.

Marc Andreessen 46:22 And, and again, the, the risk-reducing way to try to do that is, as you kind of alluded to, would be kind of the checkbox thing, which is like, "Mm, very good team, very good market, very good this, very good that." And then you have this other one where it's like they've got six great things-

Jack Altman 46:33 Yeah

Marc Andreessen 46:33 ... and nine like horrible things, uh, right?

Jack Altman 46:35 Yeah.

Marc Andreessen 46:35 Okay, which is the better bet?

Jack Altman 46:37 Totally.

Marc Andreessen 46:37 Usually. [chuckles]

Jack Altman 46:38 Yeah.

Marc Andreessen 46:39 Usually, it's the, it's the thing with, with the greater strengths. Um, statistically, by the way, this shows up in the return data from the LPs, which is the top decile firms have a higher loss rate, um, than, than, than everybody else. Um, which is, which is called in, in baseball, called the Babe Ruth effect, which is the home run hitters strike out more often.

Jack Altman 46:53 Yeah.

Marc Andreessen 46:53 So the top-performing venture firms statistically tend to have a higher loss rate than the mediocre firms.

Jack Altman 46:58 Right.

Marc Andreessen 46:58 And, and it's for this reason, they're willing to invest in the thing that is just looks like completely nuts, um, but has that magic something.

Jack Altman 47:05 Yeah.

Marc Andreessen 47:05 Um, and so, so when, when Ben and I think about trying to get the, the team to take more risk, it's almost always... Well, it's basically either that kind of thing, which is like, look... And it's what, and what you're doing is you're telling the person closest to it, "Go with your gut."

Jack Altman 47:15 Yeah.

Marc Andreessen 47:15 "If your gut tells you there's something magical here, like, go ahead. It's okay, 'cause we're gonna have some losses, so it's okay to make the bet. If it, if it, if it b- if it breaks 'cause of the hair, that's fine." Uh, and, but then, then, then the other form of risk we try to do, and I, I do this a lot, is just, uh, you know, I am trying to push the firm constantly, is like, "Go earlier."

Jack Altman 47:30 Yeah.

Marc Andreessen 47:31 Right? 'Cause again, that for... as we discussed earlier, the natural inclination is to wait, right? Um, and it's like, "No, no, no, go earlier." Like, we do actually wanna make these, these, these... You know, we, we wanna make some C bets, but we definitely wanna make, like, a lot of A, A bets.

Jack Altman 47:42 Yeah.

Marc Andreessen 47:42 And again, we're gonna lose a bunch of those. Like, we're gonna screw those up and miss the winner or whatever, but, like, we, we have to do that 'cause we have to get into some of these things early. We have to, you know, get, get the level of percentage you get in the A-

Jack Altman 47:51 Yeah

Marc Andreessen 47:51 ... build that kind of relationship.

Jack Altman 47:52 Yeah, and I guess there's risk that's of the flavor of, like, do things that are more asymmetric, where there's hair, but also brilliance.

Marc Andreessen 47:58 Correct.

Jack Altman 47:59 There's also the flavor that's just like... Well, sometime- something I struggle with is the deals where I just barely said yes and just barely passed. I'm like, "I don't actually have that much confidence that I can tell the difference between those."

Marc Andreessen 48:11 Yeah.

Jack Altman 48:11 There's another flavor of sort of be more aggressive, which would just say, like, "Just do a higher percentage of those ones where you're, like, right on the line."

Marc Andreessen 48:18 Yeah.

Jack Altman 48:18 Do you give that kind of guidance? Like, do you think like that too, where you're like, it's not just do the more out-there things and we're swinging for the fences, but it's also like, let's just do a little bit more right now in general?

Marc Andreessen 48:27 Yeah. So we used to run this process we called the anti-portfolio, um, uh, the shadow portfolio.

Jack Altman 48:31 Mm-hmm.

Marc Andreessen 48:32 Um, and so the shadow portfolio was... W- we used to track this statistically for, like, the first five years exactly on this point, which is every time we do an A-- every time we do a, pull the trigger on an A round, let's put in the shadow portfolio the other company we were looking at at around the same time that we didn't end up pulling the trigger on.

Jack Altman 48:45 Yeah.

Marc Andreessen 48:46 And then let's build up representative port- like, build up the alt, you know, the Earth Two portfolio-

Jack Altman 48:50 I'm so curious

Marc Andreessen 48:50 ... had we- Well, so, and, and the good news is it turns out, generally, the, the main portfolio did better than the shadow portfolio.

Jack Altman 48:55 Well, that's good.

Marc Andreessen 48:55 But the shadow portfolio-

Jack Altman 48:56 But it was close. It was a good book

Marc Andreessen 48:57 ... did really well.

Jack Altman 48:58 Yeah, yeah.

Marc Andreessen 48:58 Right? E- exactly the point. And so, and then you... A-a-and okay, so then you're just like, okay, you know, that's smart. But you're just like, okay, obviously, what does that mean? It means do them both. Right? A-a-and again, this goes to the thesis of, like, how big should these firms get? It's just like, well, if you had the opportunity to do both the portfolio and the shadow portfolio, you should do them both. What's the constraint on that? As we discussed, it's conflicts.

Jack Altman 49:14 Yeah.

Marc Andreessen 49:15 Um, but generally speaking, you should try to do both.

Jack Altman 49:17 Yeah.

Marc Andreessen 49:17 A-and, and by the way, this is the, this is the, um... I don't know if it was Josh or the other, the other podcast that they were talking about this, but, you know, at least I, I saw a reference to, like, a statistical analysis of, like, win rate or whatever, return, percentage returns or whatever-

Jack Altman 49:28 Mm-hmm

Marc Andreessen 49:28 ... or percentage of wins. It's just like it doesn't... In venture math-

Jack Altman 49:31 It doesn't matter

Marc Andreessen 49:32 ... it doesn't matter. Uh, the, the, the thing that matters is, were you in the next big thing as early as you could get in and buy as much as you did? Like, that's the only thing that matters because if you don't do that, you miss out on the thousand X gain. The one X losses don't matter. They, they wash right out.

Jack Altman 49:45 Yeah.

Marc Andreessen 49:46 Um, and so this idea that somehow there's some, like, virtue to being like a, you know, small, you know, we only make a few bets, we have a higher percentage, [chuckles] it does... Yeah.

Jack Altman 49:56 How much is the-

Marc Andreessen 49:57 I'm glad people think that that's a... I would like to encourage people to, uh, to think that that's a, a virtue that they should shoot

Marc Andreessen 50:02 for.

Jack Altman 50:02 It seems like it's very hard to assemble lots of, you know, very good, productive GPs into the same firm. It's just objectively rare.

Marc Andreessen 50:09 Yeah, that's right.

Jack Altman 50:10 You've done it, but it's like, doesn't happen very often.

Marc Andreessen 50:12 Yeah.

Jack Altman 50:12 Do you... I guess my first question on this is, do you think of-... just finding greatness, and then you can't really teach it much? You know, so you're basically just gonna, like, hire people and see how it goes, or do you think that it's about creating the system and conditions in which people do great work, and you can actually create good investors?

Marc Andreessen 50:31 Yeah. So I think it only works if there's a point, like, if, if there's a reason why you would have a, a aggregation of GPs in the first place, and our, our answer to that is power, right? The, the, the, our, our pitch to GPs as to why they should join us as opposed to go to a smaller firm or start their own thing is, "If you come here, you just, like, plug into this engine that's just, like, massively powerful, and so everything that you do, the, the effects of it are gonna just be, like, blown-

Jack Altman 50:51 Yeah

Marc Andreessen 50:51 ... completely out. Y- therefore, you're gonna have a much higher win rate on the deals you, you want to do-

Jack Altman 50:54 Yeah

Marc Andreessen 50:54 ... which is much more satisfying, and you're gonna be able to actually help the companies a lot more."

Jack Altman 50:57 And you'll probably see more companies anyway.

Marc Andreessen 50:59 Yeah.

Jack Altman 50:59 So everything probably gets better.

Marc Andreessen 51:00 Yeah, that's right, that's right. And, and by the way, you, you know, some people wanna have colleagues. Some people don't [chuckles] want to have colleagues, but some people do wanna have colleagues, and you'll be working with people you like, and, you know, who care about the same things you do. So... But there, there has to be a p- there has to be a point to it, and of course, it's, you know, it's on us to keep proving that, right? 'Cause, uh, you know, the, the, the devil's in the details of whether they'll actually, you know, buy that, but so far, so far, a lot, a lot of really good, great people have. And then, yeah, and then the second part of the question is, like, okay, who, who do you, who do you put in those roles? Um, historically, we had a, h- his- our old model was basically we only hire GPs. Uh, we don't... We, we were not developing, and we could go through why that was the case. We changed that, like, eight years ago. We, we now develop our own GPs, um, that we've, we've evolved to where I think that's-

Jack Altman 51:34 Mm

Marc Andreessen 51:34 ... that's working quite well. Um, I think the answer to your question is, it's a two-part question, is there's some level of just objective, you know, are they, are they, are they, are they good, uh, are they good at doing the job?

Jack Altman 51:45 Yeah.

Marc Andreessen 51:45 Uh, uh, here's a big thing we focus on when we evaluate them, which is, um, y- you know, it's fine to invest in a category, like, five years early or, like, whatever, something goes wrong, like, that's fine. What's not fine is y- you invest in the wrong company, and you could have invested in the right company.

Jack Altman 51:59 Yeah.

Marc Andreessen 51:59 Like, at the moment you made the investment, you could... Y- you, you made the wrong decision in that moment of which one you should invest in, and you-

Jack Altman 52:04 Yeah

Marc Andreessen 52:04 ... you could have known. And so it's like, did you do the work to fully-

Jack Altman 52:07 What's-

Marc Andreessen 52:07 ... address the market?

Jack Altman 52:08 How do you handle the fact that, like, you don't know that until-

Marc Andreessen 52:10 Yeah

Jack Altman 52:10 ... like, six years later, and now you're going back, and you're like, "Hey, you made this mistake six years ago. This isn't gonna work out now?"

Marc Andreessen 52:15 So it's generally, uh, y- so c- that is a giant problem. Um, and, uh, uh, say the, uh, when we started, actually, when we talked to our, our friends in the business, what they said basically was, they said, "Number one, you, you don't know if somebody's a good GP for 10 years 'cause you don't have the return data." And then they said, "Number two, is nobody ever wants to admit that they made a mistake, and so they never actually fire anybody."

Jack Altman 52:30 Yeah.

Marc Andreessen 52:31 Uh, so what they do is they just keep them on the masthead, and they just kind of gently, like, you know, retire them out.

Jack Altman 52:35 Mm-hmm.

Marc Andreessen 52:35 But they, they sit and pollute. Uh, uh, one of the guys running one of the big firms 20, 15 years ago told me his... He said they hired a partner, he said they hired a partner, this older firm, so they hired a partner in 1984-

Jack Altman 52:43 Mm

Marc Andreessen 52:43 ... um, who was, like, a big deal at the time in the industry, and, you know, the LPs were very fired up about it. And he said he then proceeded to just, like, nearly ruin the firm over the next 20 years.

Jack Altman 52:51 That's crazy.

Marc Andreessen 52:52 'Cause he said he wanted... He said all of his investments were bad, but then it was even worse that he talked them out of all the other good investments they could have made.

Jack Altman 52:57 Oh!

Marc Andreessen 52:57 And he said, "We couldn't get him out."

Jack Altman 52:59 Yeah.

Marc Andreessen 52:59 "You know, the reputational damage was too great." So, so this is a long run- and then, by the way, a lot of these firms are, are partnerships-

Jack Altman 53:04 Yeah

Marc Andreessen 53:05 ... and the problem with the partnership is, a partnership sounds good.

Jack Altman 53:08 Yeah.

Marc Andreessen 53:08 The problem is, you, you end up with lots of internal dissension, and then you, you can't make decisions.

Jack Altman 53:11 Yeah.

Marc Andreessen 53:12 So this is a big issue. Um, I, I guess what I would say is, like, for example, the thing I talked about, it's just like, it's, it's, it's not a, it's, it's a pro... It's a, the, what I just described as a process issue, not an outcome issue, right? Which is like, are, are you doing the work?

Jack Altman 53:23 Yeah.

Marc Andreessen 53:24 Right, like, it, it's an actual job. [chuckles] Like, you're... Are you doing the work? If you're not doing the work, it's relatively clear you're not doing the work, and you're probably not doing the work, not just on one thing, you're probably not doing the work-

Jack Altman 53:32 So you do try to really look at the inputs?

Marc Andreessen 53:33 Oh, yeah, very much so.

Jack Altman 53:34 Yeah.

Marc Andreessen 53:34 We evaluate the inputs just as much as the outputs.

Jack Altman 53:36 What, what, what do you do with an investor, I'm sure you've had this at some point-

Marc Andreessen 53:39 Yeah

Jack Altman 53:39 ... where the inputs are not particularly good?

Marc Andreessen 53:42 Yeah.

Jack Altman 53:42 They hit this one outlier thing.

Marc Andreessen 53:44 Yeah.

Jack Altman 53:44 The outputs are objectively now good.

Marc Andreessen 53:46 Yeah.

Jack Altman 53:46 And so you're looking at that situation, or the inverse?

Marc Andreessen 53:48 So this is the other side, so this is the other part of it. The other part of it is, I think there's just a subjective criteria for a venture, which is just-

Jack Altman 53:54 Yeah

Marc Andreessen 53:54 ... are you good at it?

Jack Altman 53:55 Yeah.

Marc Andreessen 53:55 Uh, and, like, y- d- do you have taste?

Jack Altman 53:58 Yeah.

Marc Andreessen 53:59 Which is unquantifiable.

Jack Altman 54:00 Isn't that one of the nice things about your model, too, where, like, you, somebody gets to make a call versus in these partnerships-

Marc Andreessen 54:04 Yes

Jack Altman 54:04 ... I think it would be very hard when nobody gets to make calls like this.

Marc Andreessen 54:08 Yeah.

Jack Altman 54:08 'Cause at some point, someone has to just, like, make a determination on this stuff.

Marc Andreessen 54:10 Yeah, that's right. And then even, you know, and, and even who even made the call, you know, gets, gets lost. Um, yeah, so, so, so I think there's a taste thing, and then, look, I think there's also just, like, a net- there's, like, a network cohort branding thing, which is these startups come in waves, and it's not just new technology, it's also new people. Um, and they, you know, there, uh, new, these new scenes form, and, like, are you in the scene or not, right? And if you're not in the scene, like [chuckles] -

Jack Altman 54:32 Yeah

Marc Andreessen 54:32 ... I can't fix that for you.

Jack Altman 54:34 There's also a ton of path dependence, it seems like, where, like, you make an investment that gets you in the scene. Now other founders wanna work with you 'cause you invested in this really cool company.

Marc Andreessen 54:41 Right.

Jack Altman 54:42 And then it just snowballs, and you're like, "Well, I can't go back and, you know, change history and get you into the snowball."

Marc Andreessen 54:47 Yeah.

Jack Altman 54:47 Yeah.

Marc Andreessen 54:47 Like, and, and again, this is what I, again, I call this, this is the Test with a capital T.

Jack Altman 54:50 Yeah.

Marc Andreessen 54:50 So there, there's just different versions of the complaint, right? So you, you, you, you wrote off the one of the founder who's like, "Well, I could have done this, but I was in a position to do it."

Jack Altman 54:56 Yeah.

Marc Andreessen 54:56 All right, that's your own fault.

Jack Altman 54:57 Yeah.

Marc Andreessen 54:58 Um, there's another version of it, which is that this is sort of the anti-VC narrative is, "These VCs are so arrogant, they don't see my unique genius."

Jack Altman 55:03 Uh-huh.

Marc Andreessen 55:04 Right? [chuckles] Right, you know, the, you know, the VCs are only as a critique they apply against Paul Graham is, you know, he wrote this post on pattern matching, and he always gets attacked. It's like, you know, he pattern matches. He's not looking for quality, he's just looking for pattern matching, and like, you know, it's like, and the founders don't match the pattern. It's like, uh, the, the, the thing, at least, raising is very important for, for founders to understand. Raising money from venture capitalists is the easiest thing you will ever do as a startup founder. We are sitting here with checkbooks waiting to write checks.

Jack Altman 55:28 Yeah.

Marc Andreessen 55:29 We are dying for the next person to walk in the door and be so great that they convince us to write the check. We don't care where they come from. We don't care what country they're from. We don't care what... Like, it doesn't, none of it matters. It's just like, do they know what they're doing?

Jack Altman 55:41 Yeah.

Marc Andreessen 55:41 Are they gonna be able to do it? We're just dying for that. Everybody else they're ever gonna deal with, candidates and customers and downstream investors and everybody else, is gonna be much harder to deal with than we are. And so if they can't pass the test of raising money-

Jack Altman 55:54 Yeah

Marc Andreessen 55:54 ... uh, like, they're not gonna be able to do it. And, and it's this, and, uh, uh, it's the same thing with a GP.

Jack Altman 55:59 Yeah.

Marc Andreessen 55:59 Like, if you can't network your way in and make good investments, that's the job. [chuckles]

Jack Altman 56:04 Yes, totally. Okay, on that point-

Marc Andreessen 56:06 Right

Jack Altman 56:06 ... 'cause there's gonna be a lot... I completely agree with what you just said about how it's, you know, the easiest part of building a company. There's gonna be a lot of, you know, frustrated founders hearing that who are like, "God, why can't I raise?..." You know-

Marc Andreessen 56:15 Yeah

Jack Altman 56:15 ... "What's going on here?"... One of the things that I'm really, you know, you've done this for enough time now, when founders pa- uh, you know, get a pass note, um, it's usually about something that's related to the market or the product or whatever. And a lot of times it's what you just said, which is that, like, "I just want the founder to be great."

Marc Andreessen 56:33 Yeah, right. [chuckles]

Jack Altman 56:35 But nobody says that to them.

Marc Andreessen 56:36 Nobody says that, yeah.

Jack Altman 56:36 And so they don't get the actual feedback.

Marc Andreessen 56:38 Yeah.

Jack Altman 56:38 And so I guess this whole dynamic of, like, people aren't giving it, 'cause it's... You know, what they're saying is not, "You're not great," but it's, "I didn't perceive you as great," or something like that. Is there, is there some way for there to be a more honest, useful back and forth around this? Or is it just one of the impossible structural things, and founders just have to go around frustrated that people are saying the market's too small or it's too big or whatever, and really what it is, is they're just not landing as great?

Marc Andreessen 57:02 I mean, it's like, yeah. I mean, I think, oh, you think your baby's beautiful, but I think he's really ugly, right? [chuckles]

Jack Altman 57:06 Yeah. Yeah, yeah.

Marc Andreessen 57:08 [chuckles]

Jack Altman 57:08 Yeah.

Marc Andreessen 57:08 You know, this kid's gonna have a really hard time-

Jack Altman 57:09 Yeah

Marc Andreessen 57:09 ... in life, man.

Jack Altman 57:09 Yeah.

Marc Andreessen 57:09 He's really, he's really unattractive.

Jack Altman 57:11 And-

Marc Andreessen 57:12 It's really hard. It's really difficult, and, and by the way, you, you embedded two things in there. One is, like, uh, uh, you know, one is, do they come across as good? Which in theory is fixable, but the other is, like-

Jack Altman 57:20 Yeah

Marc Andreessen 57:20 ... some people are better than other people at doing this.

Jack Altman 57:22 Definitely.

Marc Andreessen 57:22 And some people should not be start- some people should-

Jack Altman 57:24 Yeah

Marc Andreessen 57:24 ... should actually just, like-

Jack Altman 57:25 Yes

Marc Andreessen 57:25 ... be on a team.

Jack Altman 57:26 Yeah, sometimes it's a correct assessment, sometimes it's an incorrect-

Marc Andreessen 57:28 Yeah, that's right.

Jack Altman 57:28 But there are some people who in the early days can't ra- you know, there's a lot of great people who now we all know are really great, but they couldn't raise a lot of money, so they must have shown up in 60 VC meetings as not great or whatever.

Marc Andreessen 57:36 And look, VCs ma- and, uh, a- and again, yeah, exactly. It's like we don't, we don't know.

Jack Altman 57:39 Yeah.

Marc Andreessen 57:40 And we, and, as i- we make lots of mistakes of omission, you know, so we, we... And, and like I said, most, even the great VCs, most of the time are screwing up. Um, and so, and so that's all true. The, the thing I always tell founders is the, it's the... Steve Martin was asked this question about becoming a great stand-up comic, and he wrote this whole book, a great book called, uh, Standing Up, which he talks about this. And he says, "The, the, the secret to being a great..." Uh, he said, uh, "The secret is, um, be so great they can't ignore you."

Jack Altman 58:00 Mm.

Marc Andreessen 58:01 Right?

Jack Altman 58:01 Yeah. If your business gets good enough and you prove-

Marc Andreessen 58:03 Yeah

Jack Altman 58:03 ... that you're really good, you don't have to show up in the one hour with a VC-

Marc Andreessen 58:06 Yeah

Jack Altman 58:06 ... and be impressive. You just proved it on the field.

Marc Andreessen 58:08 We're dying for people to come in-

Jack Altman 58:09 Yeah

Marc Andreessen 58:09 ... and just be like, "Wow!"

Jack Altman 58:10 Yeah.

Marc Andreessen 58:11 Right? And just be like: I cannot believe how good this is, I can't believe how good this product is, I can't believe how much the customers-

Jack Altman 58:15 Yeah

Marc Andreessen 58:15 ... love it. I can't believe how much this person has gotten done on a very small amount of money. So it's just the exact same thing if I'm a talent, and I'm just dying for the k- for the young comedian to get up on stage and make me laugh.

Jack Altman 58:22 I also think the founders who, like, really struggled to, like, raise a round or two, and then the business got working, I think there's, like, a, there's a real strength that comes out of that.

Marc Andreessen 58:29 Yeah.

Jack Altman 58:30 So it's not the worst thing that ever happened.

Marc Andreessen 58:31 Yeah. No, no, no, look, having said that, look, there, there, there's breakage along the way. Like, there, there are-

Jack Altman 58:34 Yeah. And also it sucks, it's, like, really unpleasant.

Marc Andreessen 58:36 It's really hard.

Jack Altman 58:36 Like, I had... Yeah, I had it happen. It sucks.

Marc Andreessen 58:38 Yes.

Jack Altman 58:38 Yeah.

Marc Andreessen 58:39 So I, uh, but look, and it, it... You know, look, I would just say, like, I, you know, having been a founder, like, it's an, it's an incredible privilege to be in a, in a, in a, in an industry and in a world [chuckles] and in a country at a time when you can actually do this.

Jack Altman 58:50 Yeah.

Marc Andreessen 58:50 Like, so, you know, in most of history and most places, you, you, you just, this kind of thing can't happen.

Jack Altman 58:53 Yeah.

Marc Andreessen 58:54 And then, you know, we, we are genuinely trying to find the anomalies, right? Like, it, it, our, our business is defined by anomalies.

Jack Altman 58:59 It is true, the thing you said about it's like an audience that wants to laugh-

Marc Andreessen 59:02 Oh

Jack Altman 59:02 ... it's totally true.

Marc Andreessen 59:03 So desperate. [chuckles]

Jack Altman 59:04 Yeah. [chuckles]

Marc Andreessen 59:05 I can't wait for somebody

Marc Andreessen 59:06 to finally tell a good joke.

Jack Altman 59:07 So on AI, I wanna talk about not just the startup side, but maybe, like, um, just some of your takes on, like, the broader lens of AI. I guess my first question is around AI going wrong, and I know this is, like, a very hard thing, but I'm just sort of, for fun, really curious what you think. You know, the downside case that people are very afraid of would be something like AI embodies humanoid robots, and now we have a Terminator situation on our hand. It gets agency, we have a big problem.

Marc Andreessen 59:31 Right.

Jack Altman 59:31 You know, that's one end of the spectrum. The happy path is that it's just, like, the sickest software that anybody's ever seen, and, like, it's a tool that humans use, and everything's great. Do you think about this? If so, do you have any opinion on it, or are you just like, "It's gonna be what it's gonna be?"

Marc Andreessen 59:45 Just to start by saying, it's a, it's an important new technology. Any important new technology is what they call dual use. Um, it can be used for good things, it can be used for bad things. Um, the shovel, [chuckles] it can dig a well and save your life. You can bash somebody over the head with it and kill them.

Jack Altman 59:58 Yeah.

Marc Andreessen 59:58 Fire, you know, the computer, um, airplane.

Jack Altman 1:00:01 Yeah.

Marc Andreessen 1:00:01 You know, the airplane can take you on a most marvelous vacation with your new spouse. It can also bomb, you know, Dresden. Um, right, and so it's just, a- atom, atom, I mean, atomic power was the big one, 'cause atomic power could be unlimited clean energy for the entire world, or it could be nuclear bombs, right? Um, as it turns out, [chuckles] there we just got the bombs, we didn't get the unlimited clean energy. And so, um, uh, like, that, that's just, like, generally true. These, these thing, these things are double-edged swords. The question is, like, all right, like, y- what are you gonna do about that? Um, and are you gonna, like, somehow put it back in the box, or are you gonna somehow, like, try to constrain it and control it? Um, the, the nuclear example is really interesting, um, because the, um, you know, there was a v- you know, very big concern around, obviously, nuclear weapons and then, and then nuclear... There was a kind of big moral panic that developed around nuclear power.

Jack Altman 1:00:40 I mean, we kind of messed up with that-

Marc Andreessen 1:00:41 Meltdowns. We very badly messed up with it. And, and what happened was the, the, the green movement in the '60s and '70s created something called the precautionary principle, which is now there, which, which the same kinds of people are now trying to apply to AI, which basically says, unless you can prove that any technology is definitely going to be harmless, you should not deploy it. And of course, that literally rules out everything, right? That's just, like, no fire, no shovels, no cars, no planes, no nothing, no electricity. And so, and, and that is what happened to civilian nuclear power, which is they just, they, they, they, they killed it. The story I tell on that is President Nixon in 1971, the year I was born, he declared... He saw the oil crisis coming in the Middle East. Uh, he declared something called Project Independence. He said the Ameri- America needs to build 1,000 nuclear power- civilian nuclear power plants by the year 2000 and go completely gr- clean, carbon, carbon zero, completely electric. Cut the entire, you know, car- cut-- you know, they had electric cars 100 years ago, so it's just obvious you just cut over to electric cars at some point. And, and, and, and basically, we need to do that, and then, and then we're, we're not entangled in the Middle East, and we don't need to go, you know, do, do all this stuff, uh, there. He then created the EPA and the Nuclear Regulatory Commission, which then prevented that from happening. [chuckles] It absolutely killed the nuclear industry in the US, right?

Jack Altman 1:01:43 Yeah.

Marc Andreessen 1:01:43 Um, and then the Ger- the Germans are going through the new version of that in, with Ukraine, which is they keep shutting... You know, Europe, ex-France, keeps shutting down their nuclear plants, which just makes them more dependent on Russian oil, and so they end up funding the Russian war machine, which invades Ukraine, and then, you know, they, they're always, they're worried now it's gonna invade Russia.

Jack Altman 1:01:58 Mm.

Marc Andreessen 1:01:58 And so y- y- y- y- the, the social engineering, I would, I would say the moral panic and then the social engineering that comes out of this, uh, the history of it is, it's been, uh, quite bad, like, in terms of its thinking-

Jack Altman 1:02:08 Mm

Marc Andreessen 1:02:08 ... and then in terms of its practical results.

Jack Altman 1:02:10 Yeah.

Marc Andreessen 1:02:10 Um, I think it would be a very, very, very big mistake to do that-

Jack Altman 1:02:13 Yeah

Marc Andreessen 1:02:13 ... you know, in AI. Um, and then-

Jack Altman 1:02:15 To, like, regulate early.

Marc Andreessen 1:02:16 Yeah, yeah, yeah, absolutely, 100%. Um, to try to offset the risks in order to, like... And, and then, and then cut off the benefits. So let's start with that as number one. Number two, I'd just say, look, we're, we, we're not alone in the, in the world, and we, we knew that before, but especially after DeepSeek, we really know that. Um, and so there is a two-horse race. Um, th- this is shaping up to be the equivalent of what the Cold War was, um, in the, in the, uh, against the Soviet Union-

Jack Altman 1:02:37 Yeah

Marc Andreessen 1:02:37 ... in the last century. It is shaping up to be like that. China does have ambitions to basically imprint the world on their, on their, their ideas of how society should be organized and how the world should be run, and they obviously intend to fully proliferate their technology, which they're doing in many areas.

Jack Altman 1:02:50 Yeah.

Marc Andreessen 1:02:51 Um, and the world, you know, 50 years from now, is gonna be running on... You know, 20 years from now, is gonna be running on Chinese AI or American AI. Like, those are your choices.

Jack Altman 1:02:57 You think that's how it'll basically play out?

Marc Andreessen 1:02:59 Yeah.

Jack Altman 1:02:59 Yeah.

Marc Andreessen 1:02:59 Yeah, it's gonna run on one or the other.

Jack Altman 1:03:01 How will that play out?... like, let's say it's one or the other, like-

Marc Andreessen 1:03:03 So AI is gonna be the control layer for everything. So the, w- my, so my view is AI is gonna be how you interface with the education system, with the healthcare system, with transportation, with employment-

Jack Altman 1:03:12 Yeah

Marc Andreessen 1:03:12 ... with, um, the government, with law, right? It's gonna be AI lawyers, AI doctors-

Jack Altman 1:03:17 Mm-hmm

Marc Andreessen 1:03:17 ... AI teachers.

Jack Altman 1:03:17 Mm-hmm.

Marc Andreessen 1:03:18 Okay, [chuckles] do you want your AI teacher... You want your kids to be taught by a Chinese AI? Really?

Jack Altman 1:03:23 Yeah.

Marc Andreessen 1:03:24 Like, you, you- Marxism, like, they're really good at teaching you Marxism-

Jack Altman 1:03:26 Right

Marc Andreessen 1:03:26 ... and Xi Jinping Thought.

Jack Altman 1:03:27 Yeah.

Marc Andreessen 1:03:27 Like, it's, you know... Like, the cult- there's another way to put it, is the culture's in the weights.

Jack Altman 1:03:31 Yeah.

Marc Andreessen 1:03:31 Right, and so, like, how these things are trained-

Jack Altman 1:03:33 Yeah

Marc Andreessen 1:03:33 ... and, like, who they're trained by, like, really, really deeply matters.

Jack Altman 1:03:35 Mm-hmm.

Marc Andreessen 1:03:36 Um, and so... And, and by the way, this is already an issue in lots of countries, 'cause they're like, number one, they may not want Chinese AI, but number two, do they want, you know, super woke Northern California AI?

Jack Altman 1:03:44 Right.

Marc Andreessen 1:03:44 It's another open, open question, right?

Jack Altman 1:03:45 Yeah.

Marc Andreessen 1:03:45 So there, there, there are big questions on this. And so I, I just think, like, there's no question, like, if, if you had a choice between AI with American values versus the Chinese Communist Party values, I mean, for me, it's just crystal clear where you, where you'd wanna go.

Jack Altman 1:03:55 Yeah.

Marc Andreessen 1:03:56 By the way, there's also gonna be direct military- there's a direct military version of, national security version of this-

Jack Altman 1:04:01 Yeah

Marc Andreessen 1:04:01 ... which is, okay, do you wanna live in a world of all CCP-controlled robots and drones and airplanes and cars?

Jack Altman 1:04:06 Yeah. I mean, is, is, is warfare-

Marc Andreessen 1:04:08 Is that really what you want?

Jack Altman 1:04:09 ... warfare and defense, I guess, just is gonna fully go AI-

Marc Andreessen 1:04:11 Yeah

Jack Altman 1:04:11 ... over the next 20 years or something like that?

Marc Andreessen 1:04:13 I, I think that's very much true, and I think this, you know-

Jack Altman 1:04:15 Robots plus AI, basically.

Marc Andreessen 1:04:16 There's these signal- well, there's this signal, and you probably saw the, the Ukrainian attack on the, on the Russian airplanes. You know, so th- those are not auto- those are autonomous drones, and then they were doing AI targeting of structural, the right structural points to be able to attack the planes and destroy the planes.

Jack Altman 1:04:27 Yeah.

Marc Andreessen 1:04:27 Right, and so yeah, 100% that's happening. Um, you know, this is a major issue with our defense doctrine with respect, for example, to, you know, potential invasion of Taiwan. You know, can, can... i-i-air, if an aircraft... Uh, Ukraine has been fielding, uh, AI-piloted, um, uh, jet skis. Uh, so they take a jet ski, take a jet ski, put an autonomous pilot on it, um, and they strap it with explosives. And, you know, you could send out 10,000 of those-

Jack Altman 1:04:47 Yeah

Marc Andreessen 1:04:47 ... against an aircraft carrier. Right, and by the way, and you could just keep sending them, [chuckles] right? 'Cause there's no, there's no loss of life. You just keep sending them until you get through. And so, yeah, so the, the entire, I, I think the entire co- the entire supply chain, the entire defense industrial base, all of the doctrine of warfare all changes. You know, the idea of human beings in planes or on submarines just doesn't make any sense. It's all gonna change. The, the, and then the, the symmetry or asymmetry between defense and attack is gonna change.

Jack Altman 1:05:11 You used the word dual-use.

Marc Andreessen 1:05:13 Yeah.

Jack Altman 1:05:13 Um, and obviously, with, like, previous technologies, you know, they got, got used. At some point, I'm wondering, does it blend from getting used to being the user? Like, if... Like, in a business e- a benign business example would be if you could tell an AI, "Hey, I want you to, you know... Hey, prompt, I want you to build me a software company. You know, make it roughly do this, serve these users, and run that for the next five years, and just wire me the money to this bank account. Go." And if, you know, if that worked, at some point, you know, in the middle of those five years, like, you know, what's ha- is it doing its own thing? Are you telling it what to do?

Marc Andreessen 1:05:50 Yeah.

Jack Altman 1:05:51 Does that also happen, you know, in, like, a, a warfare scale? And I guess that's maybe, like, the thrust of, to me, where, you know, where it turns into something scarier, particularly when you get into, you know, the embodied version in warfare, where it's just like, you know, the prompt is like, "Hey, just, you know, fight this, fight this war for the next year" or something like that.

Marc Andreessen 1:06:08 Yeah, that's right.

Jack Altman 1:06:08 Yeah.

Marc Andreessen 1:06:08 That's right. So, so the good news, the, the, the domestic version of it is, is straightforward, I think, which is we, we, we have, k- uh, you know, you know, US law, Western law has a concept of, of, of responsibility, accountability. If you use a machine to do something illegally, it's, it's your fault. It's, it's your... That's, that's your problem. But by the way, if the, if the machine goes wrong for reasons having to do with not with you, then it's a manufacturing, it's a product liability issue.

Jack Altman 1:06:28 Mm-hmm.

Marc Andreessen 1:06:28 The manufacturer is liable. But if you use it, you know, if I buy a shovel and I bash you over the head with it, right, it's my, you know... Yeah, the shovel killed you, but, like, I, I'm to blame. And so I think that your, your example of the autonomous corporation, I th- I think legal, legally, the legal system is perfectly prepared to deal with that, um, which is, yeah, you, that was, it was your, your bot. You set the whole thing up. It's your fault.

Jack Altman 1:06:46 Yeah.

Marc Andreessen 1:06:46 And so there's, there's a natural con- there's a natural constraint. Uh, there, I think there's a natural constraint on that. Um, the mil- the most obvious version of the military version of the question is autonomous targeting and, uh, trigger pulling, [chuckles] um, right? And so, and, and this has been a, this has been an issue in drone warfare for the last, like, 15 years, which is, uh, is there a human in the loop on pulling the trigger, right? So predator's flying overhead, da, da, da, da, da, sees a bad guy. Okay, uh, w- how is the decision made for the predator to launch the missile on the bad guy?

Jack Altman 1:07:10 Yeah.

Marc Andreessen 1:07:10 And, and by the way, the way that worked for a very long time was, uh, it a- actually had to be an Air Force, uh, uh, uh, combat, uh, pilot who would actually pull the trigger on the drone-

Jack Altman 1:07:18 Mm

Marc Andreessen 1:07:19 ... um, very specifically.

Jack Altman 1:07:19 Mm.

Marc Andreessen 1:07:20 Even if he wasn't otherwise responsible for, like, operations of the drone, you'd still get somebody whose job it was to make those decisions in the loop. There are a lot of people in the defense field who are like, "It's absolutely mandatory that in all cases, it is required for the human being to make the kill decision."

Jack Altman 1:07:32 Yeah.

Marc Andreessen 1:07:33 And, and, and that, and maybe that is the, maybe that is the correct answer. There's, there's a very powerful argument as to why that should be the case, 'cause it's the biggest decision that any human- that anybody can make. And e- even if you don't believe in, like, the Skynet scenarios, just the idea of a human being not being responsible for that decision-

Jack Altman 1:07:46 Yeah

Marc Andreessen 1:07:47 ... sounds ethically, morally, very scary. There is a counterargument, [chuckles] which is human beings are really, really bad at making those decisions.

Jack Altman 1:07:53 Yep.

Marc Andreessen 1:07:54 Right, and so any-

Jack Altman 1:07:54 Back to self-driving cars thing. If it's safer than a human driver, then, like, who's... You know? Yeah, there will be accidents, but there's fewer.

Marc Andreessen 1:08:00 Correct. And so every post-analysis of any combat situation that you read or any war later on, you discover all these shocking things. So one is, uh, friendly fire. Like, there's just huge amounts of deaths caused by friendly fire, people shooting at their own troops.

Jack Altman 1:08:13 Mm.

Marc Andreessen 1:08:13 Just 'cause they're confused. Number two is, uh, you know, fog of war. It's just like, it turns out the commanders have very little idea what's going on. They, they had some battle plan. It immediately goes sideways. They don't know what's... They literally don't know what's going on. They're not making dec- they don't have the information to be able to make decisions. Everything's confusing. Number three, the physiological impact of stress, adrenaline. It's like one, like, it's one thing to be on a shooting range making these decisions. It's another thing to be like, you know, have, like, a severe leg wound coupled with, you know, um, uh, adrenaline, you know, overload, coupled with two hours of sleep the night before, and, like, is the human... Is, is even the highly trained person making the decision right?

Jack Altman 1:08:44 Yeah.

Marc Andreessen 1:08:45 Um, and then there's just, like, a more basic thing, which I think this is, like, a World War II retrospective. It's something like in a lot of combat situations, it was estimated only, like, 25% of the soldiers even fired their rifles.

Jack Altman 1:08:53 Wow.

Marc Andreessen 1:08:53 Like, just generally, a lot of people just, like, don't act, uh, right? And so anyway, so you, you, you, the more you look at this, you're just like: Wow, the human being [chuckles] is actually really bad at this.

Jack Altman 1:09:01 Yeah.

Marc Andreessen 1:09:01 Uh, and then you- and then all these other issues around collateral damage, you know, and they sh- you know, accidentally shoot the civilian. And so, so yeah, you're back in the self-driving car situation, which is like, all right, if, if you had... If you're, if you could, if you knew you could get better outcomes by having the machine make the decision, better, safer, less loss of life, less cr- collateral damage. And so I... And I would say I don't believe I have an answer to this-

Jack Altman 1:09:18 Yeah

Marc Andreessen 1:09:18 ... but I think that is a very fundamental

Marc Andreessen 1:09:20 question.

Jack Altman 1:09:20 I guess this kind of actually feeds into the, the next topic, which to me is, um, I think, like-... tech has now gotten to a place where with the government and politics, like, it's sort of now undeniable. It used to kinda be an underdog, but now for reasons like this and a bunch of others, it's just, like, too important to, like, not be in the mix at, like, the national stage now, which I think has really, like, changed the dynamic even insularly for Silicon Valley. 'Cause now, you know, people are, you know, looking at what people are doing, not just, like, in tech, but pretty broadly now.

Marc Andreessen 1:09:51 Yeah, that's right. Yeah, so I would say I deeply agree with that. Um, I believe it is mostly our fault. [chuckles] Um, like, the, the current situation is mostly our fault i- in tech, which is... There, there's an old Russian, an old Soviet joke, which is, "You may not be interested in politics, but politics is interested in you." [chuckles]

Jack Altman 1:10:04 Yeah.

Marc Andreessen 1:10:04 And so I think we, we, we, and I would include myself in this, I think we all got complacent, or a lot of us got complacent between, like, 1960 and 2010, that basically just said, "We can just sit out here. We can do our thing. We can talk about how important it all is, but, like, it's never gonna... You know, th- these are never gonna be big social or, uh, you know, cultural or political issues-

Jack Altman 1:10:22 Yeah

Marc Andreessen 1:10:22 ... um, and we can just kinda get away with not being engaged." And then I, and, and for all the reasons we've discussed-

Jack Altman 1:10:26 You're saying, and then once it was undeniable, we weren't prepared?

Marc Andreessen 1:10:28 And then we weren't prepared. We weren't even, I would say, remotely prepared, and then, and then there, use the metaphor, the dog that caught the bus, a- and the, the dog is being dragged behind the bus-

Jack Altman 1:10:35 Yeah

Marc Andreessen 1:10:35 ... the ta- tailpipe in its mouth-

Jack Altman 1:10:37 Yeah

Marc Andreessen 1:10:37 ... it doesn't know what to do with the bus.

Jack Altman 1:10:38 Yeah.

Marc Andreessen 1:10:39 And, and look, you know, geography, I think, has a lot to do with this. We're 3,000 miles away. You know, it's just hard to get there. They don't come here very often. Um, and, and yeah, so I, I guess I would say, like, like, w- it worked. Like, we, we actually... We always wanted to build important things.

Jack Altman 1:10:51 Yeah.

Marc Andreessen 1:10:51 We actually are building important things. There are obvious political, cultural, social consequences to them. Um, if we don't engage, nobody's going to.

Jack Altman 1:10:58 Yeah.

Marc Andreessen 1:10:59 And then, by the way, the other thing I'll say is, you know, it's not like there's unanimity even in the industry on a lot of these issues, right? Um, and so there's, you know, I would say, two giant divisions right now-

Jack Altman 1:11:07 Mm

Marc Andreessen 1:11:07 ... uh, big companies versus small companies.

Jack Altman 1:11:09 Yeah.

Marc Andreessen 1:11:09 You know, there's, th- they often do not have aligned incentives right now, uh, and aligned agendas. And then the other is, um, you know, like, just on AI, obviously, there's a big dispersion of views even in the industry.

Jack Altman 1:11:18 I guess this probably goes to why it's, um, important for, to some extent, at least some VCs to have relationships with the government because big tech has the resources to do it themselves, small tech can't. And so if this is the state of the world, we actually, as an industry, need somebody to be doing it on behalf of little tech.

Marc Andreessen 1:11:36 Yeah, that's exactly right. That's why we're doing what we're doing.

Jack Altman 1:11:39 Yeah. On media, in particular-

Marc Andreessen 1:11:41 Sure

Jack Altman 1:11:42 ... um, I thought it was really interesting. I can't remember how many years ago, but Balaji, many years ago, started talking about, like, some fracturing, about, you know, the, the sort of relationship between tech and the media was going downhill. I think this was mostly talking about media and inside tech, but I think probably also with the major publications and at, sort of a larger scale. From my read as often, you know, y- I think this was right, and my- from where I sit, it seems like it did kind of continue to degrade the relationship. What's interesting to me recently is I've seen a little bit of life, you know, in the sort of tech publication stuff, but it's actually been from the inside.

Marc Andreessen 1:12:18 Yeah.

Jack Altman 1:12:19 And so, like, Eric, who you just brought on as GP, is awesome, and he's been really good at doing this. TBPM's really cool, and I don't think I've seen something like that pop up maybe ever inside tech. What's your read, I guess, within our bubble of, like, the sort of tech-media relationship and, and where it's been?

Marc Andreessen 1:12:35 So my background in this is I, I've, you know, I have a weird kinda history, um, uh, 'cause of what happened in the '90s. But, you know, I started dealing with the national press and the tech press, business press in 1993, 1994. Um, and I did an annual press tour to the East Coast, you know, probably a week, out of each year, usually in the spring. And you know what that means is you kinda go around, and you meet with all the publishers, editors, and reporters, um, you know, cover everything. And I would say the, basically, the, the stretch from '94 to 2016 was generally... Like, I thought it was, like, a quite healthy, normal, productive relationship. You know, like, they would run... You know, they, they would do investigative reporting, and they would run stories I don't like-

Jack Altman 1:13:09 Mm

Marc Andreessen 1:13:09 ... but generally they, you know, the, the, the major publications in each of those categories were trying to understand what was going on and were trying to kind of be, you know, hon- honest brokers and trying to, you know, kind of represent what was happening. And so then, so, so to me, it's, like, super interesting. They always wanted to learn. They always had tons of questions. They were super curious about everything that was happening. [chuckles] So that was great until 2016. It was the spring of 2017 that I went on the press tour, and it was like somebody had flipped a light switch. Um, and they were, like, across the board, like, unbelievably hostile-

Jack Altman 1:13:36 Mm.

Marc Andreessen 1:13:36 ... like, unbelievably, like, completely, a- and across the board, like, 100% sweep.

Jack Altman 1:13:40 Do you know why?

Marc Andreessen 1:13:40 Absolute hostility. I, I think the obvious answer is, uh, Trump. Uh, T- Trump, Trump got nominated, and then he got elected, and then they blamed tech for, for, for bo- for both of those.

Jack Altman 1:13:48 Mm-hmm.

Marc Andreessen 1:13:49 Uh, and now, uh, by the way, there's, there are a bunch of other factors, including that, that was when the, the... That was when the... It's actually the, the, the there's a business side to it, which is there was the fear that the internet was gonna eat the news business in the '90s. It actually didn't happen. And actually, 2015, I think, was the best year in history for, like, revenues to, like, newspapers.

Jack Altman 1:14:04 Yeah.

Marc Andreessen 1:14:05 Um, and then it was really after 2015, social networking went big, and then the, their, their businesses started to collapse. And, you know, they started having lots of layoffs-

Jack Altman 1:14:12 Mm

Marc Andreessen 1:14:12 ... and so that didn't help.

Jack Altman 1:14:13 Yeah.

Marc Andreessen 1:14:13 And then, you know, look, they would say, look, that was also... You know, they would say, "Hey, smart guy, that's also when you started doing all these things that actually matter more," right?

Jack Altman 1:14:19 Sure.

Marc Andreessen 1:14:19 Um, and so, you know, the, the, the, what, everything we've been discussing, like y- the tech industry changed, and so, you know, you're gonna get a different level of scrutiny 'cause you deserve it-

Jack Altman 1:14:26 Yeah

Marc Andreessen 1:14:26 ... 'cause you're doing different things now. The political thing was just a giant swamping factor, and they... And, you know, this is a big-

Jack Altman 1:14:32 Yeah.

Marc Andreessen 1:14:32 You know, I don't wanna get into the politics per se, but if you just... You know, it's, it's, it's, this whole thing ran in parallel with everything that's, like, in Jake Tapper's book about, you know, uh, [panting] like... So it's just like they, they just, they, they got locked in on a mode of, of interaction. Um-

Jack Altman 1:14:44 Yeah

Marc Andreessen 1:14:44 ... it just became very polarized.

Jack Altman 1:14:46 Yeah.

Marc Andreessen 1:14:46 Um, and very polarized and very lockstep. And, you know, from the outside, you just, you, you, you read it, and you're just like: Wow, these people, they're, they're all, like, really wrapping themselves around an axle.

Jack Altman 1:14:54 Well, I think one of the other hard things is, as, um, the truth has become more accessible by other people-

Marc Andreessen 1:15:00 Right

Jack Altman 1:15:00 ... you more often see something in the news that you know about, and you're like, "Wait, that's super backwards." And then somebody posts about how backwards it is, and now, you know, you see a clip of, you know, some major publication, and, you know, here's the truth, and everybody can tell. And it's like, "Okay, so should we just believe the rest of it or not?"... I think the truth fact-checking went way up, too, with social media.

Marc Andreessen 1:15:19 That's right, and I would say there, you know, the cliche has been, and there's some truth to the cliche, that social media is where lies spread. And there, there is some truth to that.

Jack Altman 1:15:25 Yeah.

Marc Andreessen 1:15:25 There's lots of lies that spread on social media.

Jack Altman 1:15:27 Yeah.

Marc Andreessen 1:15:27 But the other side of it is what you're saying, which I think is right, which is the truth spreads-

Jack Altman 1:15:30 Yeah

Marc Andreessen 1:15:30 ... on social media. And, and so the way I describe it is, the social media is an X-ray machine. And exactly to your point, like, anytime there's a... And you s- you see this in any domain of activity right now, is anytime there's a thing, then, and there's just, like, evidence that it's just not the way it's being portrayed, it is gonna show up. People are going to see it.

Jack Altman 1:15:45 Yeah.

Marc Andreessen 1:15:45 And that is... There, there was this guy, Martin Gurri, who wrote this book called, uh, Revolt of the Public in 2015, and he was a CIA analyst who did what's called open-source analysis for 30 years, which was studying basically what was in newspapers and magazines for the purpose of political forecasting. And his prediction in 2015 in his book, um, was that basically social media was going to completely destroy the authority of all incumbent institutions.

Jack Altman 1:16:04 Mm.

Marc Andreessen 1:16:04 And the way that it was going to do that was it was going to reveal, through this X-ray effect, that basically none of them deserve the credibility.

Jack Altman 1:16:09 Do you think that kind of happened?

Marc Andreessen 1:16:10 And I think that's exactly what's happening.

Jack Altman 1:16:12 Yeah.

Marc Andreessen 1:16:12 And I think there's statistical evidence that's happening. Gallup polls, um, they, they do an annual poll now for 50 years on, um, trust in institutions of every different kind of major institution, including the press, and all the, all the numbers are collapsing.

Jack Altman 1:16:24 In light of widespread social media, what would be the correct sort of function or role of, like, journalism?

Marc Andreessen 1:16:32 I mean, look, I'm a believer in, like, the original... I, I like the original idea, right? Like, I'm, I'm... I don't know, I'm a romantic. I, I like, I like what [chuckles] I like what journalism says that it is. I would like it to be like that. I like what the universities say that they are. I would like it to be like that. I like what the government [chuckles] says that it is. I would like it to be like that.

Jack Altman 1:16:47 Which should be just to, like, name it.

Marc Andreessen 1:16:49 Yeah. Well, for journalism, it's just like, all right, number one, like, tell us correctly and accurately what's happening. Uh, uh, well, actually, there's a, there's a conflict at the heart of the journalism question, which is that journalists say two different things. Because one is they say, you know, basically, be fair and objective.

Jack Altman 1:16:59 Mm-hmm.

Marc Andreessen 1:16:59 Right? And then, then the other thing they say is, like, they say, like, "Hold power to account."

Jack Altman 1:17:02 Mm-hmm.

Marc Andreessen 1:17:03 Or they'll sometimes say, they have this phrase, they'll say, uh, uh, uh, "Comfort the afflicted and afflict the comfortable."

Jack Altman 1:17:08 Mm-hmm.

Marc Andreessen 1:17:08 And like, uh, there's, there's an inherent te- like, are, are, are you, are you a, are you an objective truth-teller?

Jack Altman 1:17:13 Well, yeah, I was gonna say that has nothing to do with the truth. It's just unrelated to the truth.

Marc Andreessen 1:17:16 Exactly. So there, there was already a conflict at the heart of the industry. And there's, and there's a, there's a selection process where the people who go into journalism tend to be critical by nature, right? They tend to want to be on the outside looking in, to be critical, because if they didn't, they wouldn't be journalists. They would... Right? And so, so there, there is an issue there. But look, like, do we need people to tell us the truth? Yes. [chuckles]

Jack Altman 1:17:31 Yeah, we do.

Marc Andreessen 1:17:32 Do we need people to hold the powerful to account? Yes, we do. Like, I would like them to do that.

Jack Altman 1:17:36 Do you think they can be, like, for-profit corporations and it work? 'Cause, I mean, I think another problem is they're getting all their distribution on social media. Eyeballs are what drives the revenue. People wanna, you know, stay employ- you know, so that also is unrelated to the truth. In fact, it's antithetical to the truth a lot of times.

Marc Andreessen 1:17:54 Yeah. So there, there's two, two, two mentalities come out of that. One is, yeah, the profit incentive warps it, and you want it to not have a profit incentive, so it could be true to itself. The other argument is, if you don't like for-profits, you're really not gonna like nonprofits.

Jack Altman 1:18:04 Yeah.

Marc Andreessen 1:18:04 Because at least for-profits have, like... At, at least for-profits have, like, a market test.

Jack Altman 1:18:08 Yeah.

Marc Andreessen 1:18:08 Like, at, at least there's, like, some discipline.

Jack Altman 1:18:10 Nonprofit just becomes somebody's sort of like, "This is my agenda. I'm gonna do what I feel like now."

Marc Andreessen 1:18:14 They go arbitrarily crazy.

Jack Altman 1:18:16 Yeah.

Marc Andreessen 1:18:16 They can go arbitrarily nuts.

Jack Altman 1:18:17 It does sound worse.

Marc Andreessen 1:18:18 It... Yes.

Jack Altman 1:18:19 Yeah.

Marc Andreessen 1:18:19 And they're completely unaccountable. They're completely unaccountable, right? They're, they're... In fact, in fact, it's the opposite, it's the opposite of accountability because the ta- because of the tax break-

Jack Altman 1:18:26 Yeah

Marc Andreessen 1:18:26 ... y- you, you are actually paid-

Jack Altman 1:18:28 Yeah

Marc Andreessen 1:18:28 ... as a donor to invest in the things that are the most unaccountable.

Jack Altman 1:18:30 Interesting.

Marc Andreessen 1:18:31 Right?

Jack Altman 1:18:31 Yeah.

Marc Andreessen 1:18:31 And so, and then they can spin into, like, crazy land.

Jack Altman 1:18:34 Yeah.

Marc Andreessen 1:18:34 And they, and they, and they, and they don't come back. I don't... Like, they don't come back.

Jack Altman 1:18:37 Yeah. [chuckles]

Marc Andreessen 1:18:37 There's a history here.

Jack Altman 1:18:38 Yeah.

Marc Andreessen 1:18:38 They don't come back. And so, I-

Jack Altman 1:18:40 It's weird because, like, the citizen journalism thing is, like, a helpful fact check. It's, like, good to have, and sometimes it... But it does feel like it's not quite sufficient to tell the full story on everything all the time. So I do think that there's an important role. I just feel like it's... it still feels like it's very in limbo right now.

Marc Andreessen 1:18:56 So here is a theory that would be a reason for optimism, um, which is the last eight years were basically, it was basically the human animal adapting to the existence of social media. It was, like, it was basically the assembly of the group brain, and you slam eight billion people into a chat room together and, like, it's just like, we're not used to it, we weren't wired for it, we're not evolved for it, and just like, "Oh, my God, everything goes bananas."

Jack Altman 1:19:16 Yeah.

Marc Andreessen 1:19:16 Uh, Marshall McLuhan, actually, the great media theorist, he talked about this. He had this term called the global village. It's what happens when everybody gets networked together. And actually, what people miss about it is he, he didn't mean in a good way. Because the nature of a village is basically gossip and innuendo, and-

Jack Altman 1:19:28 Yeah

Marc Andreessen 1:19:29 ... infighting, and reputational destruction-

Jack Altman 1:19:30 Right [chuckles]

Marc Andreessen 1:19:31 ... and, you know, civil war.

Jack Altman 1:19:32 Yeah.

Marc Andreessen 1:19:32 Like, that's what happens in a village.

Jack Altman 1:19:33 Yeah.

Marc Andreessen 1:19:33 Right? Um, and so-

Jack Altman 1:19:35 Which actually functions at a certain size.

Marc Andreessen 1:19:37 Yeah, like up to 150 people, you can kind of deal with that.

Jack Altman 1:19:39 Yeah.

Marc Andreessen 1:19:39 You know, at, at, at the size of, like, New York City, it actually gets quite complicated.

Jack Altman 1:19:43 Yeah.

Marc Andreessen 1:19:43 At the, at the scale of the world, it's like a disaster.

Jack Altman 1:19:45 It's a disaster.

Marc Andreessen 1:19:45 It's a disaster, right?

Jack Altman 1:19:46 Yeah.

Marc Andreessen 1:19:46 But you could say, look, like, we went through this eight-year period where, like, everybody went... Just say everybody went nuts. Everybody went nuts in, like, a thousand different ways. And then, but maybe that was just we had to get used to it, right? Maybe we just had to adapt to it. And, uh, like, if you talk to s- I don't know, if you talk to, like, young zoomers now, you know, a lot of the time what they'll tell you is, "Yeah, we don't take any of that stuff seriously."

Jack Altman 1:20:01 Yeah.

Marc Andreessen 1:20:02 Like, I just... Of course, you don't believe what you see on, you know, whatever, TikTok or-

Jack Altman 1:20:04 Yeah, which is wild.

Marc Andreessen 1:20:05 It's just all ops. Like, of course, it's all ops, like, whatever, right?

Jack Altman 1:20:07 Yeah.

Marc Andreessen 1:20:07 They just have, like, a... They're, they're adapted-

Jack Altman 1:20:08 And I'm glad people know.

Marc Andreessen 1:20:09 Yeah.

Jack Altman 1:20:09 It's just like, that's a crazy state of the world.

Marc Andreessen 1:20:11 Yeah.

Jack Altman 1:20:12 Yeah.

Marc Andreessen 1:20:12 Great. Yeah, exactly. So-

Jack Altman 1:20:13 Is that probably how people feel about, like, the news, too?

Marc Andreessen 1:20:15 Well, so this is the thing on the news. So then this is the other thing on the news, which is, was the news ever as we were told that it was? And so the, my, my favorite example of this is people always cite Walter Cronkite, um, as being the great truth-teller, and the thing that they cite... For, for you young people, he used to be on TV, uh [chuckles] -

Jack Altman 1:20:29 I've heard, I've heard of him. I have not-

Marc Andreessen 1:20:30 He was this guy-

Jack Altman 1:20:31 Yeah

Marc Andreessen 1:20:31 ... where he would show up on TV-

Jack Altman 1:20:32 [chuckles]

Marc Andreessen 1:20:32 ... everybody would say: "Oh, my God, he's gonna tell you the truth."

Jack Altman 1:20:34 Yeah.

Marc Andreessen 1:20:34 Like, he was like, he was like the voice of the truth. And, and the, the way that he built that reputation is because he, he went negative on the Vietnam War in 1968.

Jack Altman 1:20:40 Mm.

Marc Andreessen 1:20:41 In 1968, he came out and he said, "The Vietnam War is unwinnable, and we need to pull out of this." And he, they, they aired all these reports that showed that that was happening. Everybody said he's the guy who told the truth, hold power to account, tell, you know, tell the truth. Well, it's just like, the problem with that is h- he went negative. The fact that he went negative on the war in 1968, right, he was positive on it before that.

Jack Altman 1:20:56 Right. Exactly.

Marc Andreessen 1:20:57 Right.

Jack Altman 1:20:57 So what did he know the day before he said that, that he wasn't sharing?

Marc Andreessen 1:21:00 Yeah, and like, oh, and then by the way, what else happened in 1968? Uh, which is the White House went from a Democrat to a Republican. So the Vietnam War was created by Kennedy and Johnson, and then it was inherited by Nixon in 1968.

Jack Altman 1:21:10 Mm-hmm.

Marc Andreessen 1:21:10 And isn't it convenient and interesting that he went negative on it when it became Nixon's war-

Jack Altman 1:21:14 Yeah

Marc Andreessen 1:21:14 ... as opposed to being Kennedy's, Kennedy's and Johnson's war? And so then it's like, all right, like, what was actually going on there? What was happening in the preceding five years? Uh, and is, was he actually outside the whole time? And then there's just the reality of it, which is I grew up in rural Wisconsin, we always thought the press was out to get us.

Jack Altman 1:21:27 Yeah.

Marc Andreessen 1:21:27 Like, we always thought the press was like the coasts basically passing sneering judgment on the center of the country. Like, we never believed, like, the stuff to start with. Um, and we were always, like, bare- people where I grew up, people are, like, super resentful of the stuff in the media and how it portrays them. And so I think there's also, like, a more fundamental underlying issue here, which is, you know, objective truth is a hot-... like, objective truth is-

Jack Altman 1:21:45 Yeah

Marc Andreessen 1:21:45 ... a high bar.

Jack Altman 1:21:46 Yes.

Marc Andreessen 1:21:46 People have agendas.

Jack Altman 1:21:47 Yes.

Marc Andreessen 1:21:47 Like, maybe we just need to get all this out on the table.

Jack Altman 1:21:49 Particularly in politics, objective truth is not really how a lot of-- Like, people are like, "Oh, that's a lie." I'm like: Well, it's not a lie, it's just like an interpretation of a situation that, like, I wouldn't characterize, but, like, sure.

Marc Andreessen 1:22:00 These are-

Jack Altman 1:22:00 It's something like that

Marc Andreessen 1:22:00 ... compli-- and these are complicated topic. You know-

Jack Altman 1:22:02 Yeah

Marc Andreessen 1:22:02 ... the ordering a society is a complicated topic.

Jack Altman 1:22:04 Yeah.

Marc Andreessen 1:22:05 Right? And the functioning economy is a complicated topic, and it's just not so easy to understand. And so, and so I, I, I think part of it might, the optim- the optimistic view would be h- humanity adapting to being in the global village is basically just taking on a little bit of a more humble attitude, basically saying, "All right, look, there's not gonna be... We're not gonna have a lot of objective truth tellers running around. We're not gonna have..." But also, at the same time, we don't wanna be in a complete panic about everything all the time, and we need to kinda be able to, you know, take a deep breath, [chuckles] touch grass, be a little bit more skeptical, be a little bit more open, be a little bit more understanding. Right. And so, and so maybe we're start-- And I, and I, by the way, I think that's happening. I, um, uh, I, I mentioned that Jake Tap- without getting into partisan politics, but the Jake Tapper book, I went, I went, happened to went to a, a, an event that he did, he did this weekend, uh, out here. And, like, uh, it's a, like, uh, the, the, the that book and the reaction to the book, and, and if you watch the interviews on YouTube and the, the, the crowd response to that book, like, it, it, it feels like people are just like: Oh, like, if, if we just take a step back for a moment from, like, all the intense partisanship of it all, like, there's actually some-

Jack Altman 1:22:58 Yeah

Marc Andreessen 1:22:58 ... like, maybe we can get back a little bit more. I, I, I thought it was, that book is a very positive step forward-

Jack Altman 1:23:03 Yeah

Marc Andreessen 1:23:03 ... towards just a little bit of a calmer approach on these things. And then, by the way, the other book I'd promote on that is, uh, the Ezra Klein book on, uh, on Abundance.

Jack Altman 1:23:09 Yeah.

Marc Andreessen 1:23:10 Which I think is, I, I think is a, you know, somebody who supported a lot of Democrats for a long time, I, I think it's, like, the most positive, you know, kind of manifesto that's come out, uh, basically saying, "You know, no, like, we n- we need, you know, whether you're on the right or the left, like, we need to actually build things," and I think that's also a healthy

Marc Andreessen 1:23:22 moment, so.

Jack Altman 1:23:22 Sort of related to this topic, a little bit adjacent, but I saw you talking about preference falsification recently, and I think this is, like, a super interesting topic in general, but particularly in the last, I don't know, call it five-ish years, I think a lot of preference falsification became made apparent. Um, so I'd be curious first to hear a little bit about what you think happened over the last some number of years where these changes happened. Uh, maybe we can start there, and then I've got a follow-up on it.

Marc Andreessen 1:23:48 Yeah, so preference falsification, just a, a sketch and outline, it's, it's when people, um... It's actually there's two different definite- there's two different elements of it. Um, it's when people are required to say something in public that they don't actually believe, or they are prohibited from saying something in public that they do believe.

Jack Altman 1:24:02 Mm-hmm.

Marc Andreessen 1:24:02 Right, so again, so, uh, uh, commission, omission-

Jack Altman 1:24:04 Mm-hmm

Marc Andreessen 1:24:05 ... uh, uh, issues. And then the, the, the theory of it, there's this great book, uh, by Timur Kuran on it. The, the theory of it basically is, it, it, it's easy to think about what this happens in the case of a single person, which is, are you telling the truth? Uh, or is, are your public statements mirroring what you actually think or not? The thing that gets complicated is when that happens across a group or across a society, and the thing that happens is, if there's widespread f- preference falsification of society, you not only have people lying about what they actually think or, or hiding it, but you also l- everybody loses the ability to actually know what the distribution of views are.

Jack Altman 1:24:32 Yeah.

Marc Andreessen 1:24:32 Right? And, and he al- and he says, basically, if you look at the history of political revolutions, a political revolution happens when, uh, a, a majority of the country realizes that a majority of the country actually agrees with them, and then, and then, and they, and they didn't realize it.

Jack Altman 1:24:43 Mm-hmm.

Marc Andreessen 1:24:43 Right? So that whatever system they were in had convinced them that they were in a very small minority, and then you get a c- at, at some point, there's, you know, the boy who points out-

Jack Altman 1:24:50 It's like a catalyst

Marc Andreessen 1:24:51 ... there's a catalyst, catalytic moment. And, and then I, and then basically there's a pr- what's called a preference cascade.

Jack Altman 1:24:55 Right.

Marc Andreessen 1:24:55 Um, and then, um, and then all of a sudden-

Jack Altman 1:24:57 It's like the correct prisoner's dilemma's box to live in, all of a sudden flips, everybody realizes it at once.

Marc Andreessen 1:25:01 Yes, exactly. And, and he said you can see this in, um, you can see this, like, in a crowd of, of, like, a speaker, controversial speaker, where basically, like, you'll have a controversial speaker, and then there'll be silence in the crowd, and then one brave person will start clapping.

Jack Altman 1:25:12 Uh-huh.

Marc Andreessen 1:25:13 And that person is, like, at severe peril, 'cause if they're the only asshole standing up clapping-

Jack Altman 1:25:17 Yeah

Marc Andreessen 1:25:17 ... that's it, they might get killed.

Jack Altman 1:25:18 Yeah.

Marc Andreessen 1:25:19 But then i- if, if the, if it cascades, then a second person starts clapping-

Jack Altman 1:25:22 Right

Marc Andreessen 1:25:22 ... and then a third, and a fourth, and a fifth, and then you get the snowballing effect, and then the entire auditorium is clapping. And then it, and then that's everybody realizing that they actually are on the side of the majority, which they didn't realize-

Jack Altman 1:25:31 Yeah

Marc Andreessen 1:25:31 ... before. Uh, by the way, this is what comedy, this is actually why, why comedy's so much-- This is what comedy does well.

Jack Altman 1:25:35 Hmm.

Marc Andreessen 1:25:35 'Cause people can't control the involuntary response thereafter.

Jack Altman 1:25:37 Right. Yeah, exactly.

Marc Andreessen 1:25:38 And so, when you get an entire group of people in a room laughing out loud at something that individually they will all swear-

Jack Altman 1:25:43 They can't help it

Marc Andreessen 1:25:43 ... they think is not funny, they can't help it.

Jack Altman 1:25:44 That's a great point.

Marc Andreessen 1:25:45 And then, and then the, the stress relief from that, because they all know that they're part of a c- they've rebonded the community, right?

Jack Altman 1:25:50 Yeah.

Marc Andreessen 1:25:50 You're, you're, you're actually back and being a part of a community, and it's just such an incredibly-

Jack Altman 1:25:53 I never thought about that

Marc Andreessen 1:25:54 ... powerful, powerful feeling.

Jack Altman 1:25:55 Yeah.

Marc Andreessen 1:25:55 Yeah. Okay, so, [chuckles] so it's very easy to apply this theory to, like, the Soviet Union, right? Or like the, you know, the, the, the, the, the, you know, the Eastern Europe-

Jack Altman 1:26:03 Yeah

Marc Andreessen 1:26:03 ... you know, um, uh, in the, in the Cold War or, or whatever.

Jack Altman 1:26:06 Yeah.

Marc Andreessen 1:26:07 Um, you know, Maoist China.

Jack Altman 1:26:08 Yes.

Marc Andreessen 1:26:08 It's, it's a lot, you know, trickier to apply this theory to, you know, your current society. I believe that, you know, we've lived in an era of, like, intense preference falsification. I think the last five years-

Jack Altman 1:26:16 Yeah

Marc Andreessen 1:26:17 ... probably the last 10 years, were, like, way more intense preference falsification than the preceding-

Jack Altman 1:26:20 Yeah

Marc Andreessen 1:26:20 ... 40 at least. Um, you know, probably going back to, I don't even know. I, you have to go for sure back to the '60s, if not, like, the 1920s or something-

Jack Altman 1:26:28 Yeah

Marc Andreessen 1:26:28 ... to find a, a, an analogous period. I think this period was characterized both by people who were saying things they didn't believe, but critically not saying things they didn't believe.

Jack Altman 1:26:35 Yeah.

Marc Andreessen 1:26:35 I, I think there are many reasons this happened. Um, and, and look, this has happened many times in history, and so a lot of people wanna say this is caused by social media.

Jack Altman 1:26:42 Right. Well, when you phrase it the way that you said, w- it actually makes a lot of sense when it's just if people are gonna be in a part of this prisoner's dilemma matrix, it actually just gets caused by nothing other than itself. Like, it doesn't really need an outside catalyst for people to get into the wrong box.

Marc Andreessen 1:26:58 That's true, although there needs... Uh, that's a good question. Or does there need to be some kind of oppression? Does there need to be some kind of motivation for, for the, for the cascade to have started where people end up in that box? Uh, uh, it's, it's social pressure, so-

Jack Altman 1:27:08 Yeah.

Marc Andreessen 1:27:09 ... specifically, I think the thing that happened in the last five years was-

Jack Altman 1:27:12 I guess it needs to be a high-stakes enough issue-

Marc Andreessen 1:27:14 Yeah

Jack Altman 1:27:14 ... for it to matter.

Marc Andreessen 1:27:15 Yeah.

Jack Altman 1:27:15 Otherwise, it's just like, who cares whether you think, like, the clouds are pretty or not?

Marc Andreessen 1:27:18 Yeah, that's right.

Jack Altman 1:27:19 So at least it has to be that.

Marc Andreessen 1:27:20 Yeah, and and the, the way I think Ke- Tim McRenan described it is, it needs to have, like, political, social, cultural salience.

Jack Altman 1:27:25 Yeah.

Marc Andreessen 1:27:26 Like, it, it needs to get to something fundamental about how the community's organized. You know, we, we call, we call that politics, but, you know, this, this predates even the concept of politics, right? And so, um... A- and by the way, look, like, y- you, you don't even necessarily wanna say that all preference falsification is bad. 'Cause like, I, you know, I don't know that you want everybody out telling the truth about everything.

Jack Altman 1:27:41 I don't think you do. I think at least in, like a, like, social, like, a lot of social graces come from people saying, "It's great to meet you," when I don't feel like saying, "It was great to meet you."

Marc Andreessen 1:27:48 Yeah, your baby, I, I believe your baby is very attractive.

Jack Altman 1:27:50 Yeah, exactly. So some of it's good.

Marc Andreessen 1:27:50 Right?

Jack Altman 1:27:51 Yeah.

Marc Andreessen 1:27:52 [chuckles] Um, so-

Jack Altman 1:27:53 Yeah

Marc Andreessen 1:27:53 ... so, um, yeah, but, but, but, but yeah, you, you as you're pointing, you get wedged in this box. And so I, I think the specific thing that happened... And so the good news is, preference falsification in a lot of totalitarian societies was administered at the point of a gun. You say the wrong thing, they shoot you.

Jack Altman 1:28:05 Yes.

Marc Andreessen 1:28:05 Um, that, for the most part, is not what happens in our society. What happens in our society is the, the sort of non-violent version, which is ostracized-

Jack Altman 1:28:11 Yeah

Marc Andreessen 1:28:12 ... ca- canceled, ostracized, reputation is ruined, fired, become unhirable, lose all your friends, lose all your family, can't ever work again.

Jack Altman 1:28:18 Still really bad.

Marc Andreessen 1:28:19 Still really bad. [laughing]

Jack Altman 1:28:21 Yeah. [chuckles] The way you said it sounds pretty bad.

Marc Andreessen 1:28:22 Very bad.

Jack Altman 1:28:23 Yeah.

Marc Andreessen 1:28:23 And so, and it, and it just turned out, I think part of, you know, the op- the optimistic view would be part of adapting to the existence of social media, was social media just turned out to be, among other things, a very effective, uh, channel to destroy people reputationally.

Jack Altman 1:28:33 Mm-hmm.

Marc Andreessen 1:28:34 Right? With... And this is the, the, the, the social media mobbing effect, right? Um, that we're, we're now all familiar with it.

Jack Altman 1:28:38 And you think that helped create basically more false preferences?

Marc Andreessen 1:28:41 Yeah.

Jack Altman 1:28:41 Yeah.

Marc Andreessen 1:28:42 Big time. Big time.

Jack Altman 1:28:42 Do you think it also unwound them?

Marc Andreessen 1:28:43 Well, so this is, this, this is the thing, and this is maybe the thing that happened in the 2024 election, right? Which is just like: Oh, okay, like we don't have to live this way anymore.

Jack Altman 1:28:50 Mm-hmm.

Marc Andreessen 1:28:50 Um, you know, certain, certain views become safer to say out loud. This, also the censorship regime, like we, we lived under a-

Jack Altman 1:28:55 Yeah, I mean-

Marc Andreessen 1:28:55 ... specific censorship regime.

Jack Altman 1:28:56 Even in tech, for 2024 election versus 2020-

Marc Andreessen 1:28:59 Yeah

Jack Altman 1:28:59 ... you know, 2016-

Marc Andreessen 1:29:00 Yeah

Jack Altman 1:29:01 ... regardless of what you think, you know, who you wanted, at least everybody can agree that it was taboo to support Trump in '16, and it was not taboo to support Trump in 2024 in tech, and so something changed there.

Marc Andreessen 1:29:11 Something changed. Peter had this great line in 2016. He said, uh, 'cause he was one of the only people, you know, like maybe the only person in tech, who was actually pro-Trump in 2016, and he said, he said, "This is so strange." He says, "This is the least controversial contrarian thing I've ever done." He's like: Half the country agrees with me.

Jack Altman 1:29:23 Yeah.

Marc Andreessen 1:29:24 He's like: I've never had a point of view on anything else in my entire life where half the country agrees with me.

Jack Altman 1:29:27 Yeah.

Marc Andreessen 1:29:28 And yet, somehow, this is such a heresy that I'm, like, the only one.

Jack Altman 1:29:31 Yeah.

Marc Andreessen 1:29:31 Right? And so, yeah, so, so, so there was that. That, that definitely changed. And then I just think, in general, like I said, I think there, optimistically, you could just say there's a process of adaptation, right? Where it's just like, all right, we're just... Like, if, if we all just decide that we're just not gonna, like, live life by mobbing, and scapegoating, and personal destruction, and just because somebody's offended by something, doesn't mean it's gonna destroy- you know, if somebody says one thing, it's gonna destroy their lives. Like, we, we don't ha- you know, you don't have to do that.

Jack Altman 1:29:56 Do you think it's basically been unwound now, or do you think there are still a lot of falsified preferences?

Marc Andreessen 1:30:01 I would say it's radically different than it was two years ago. Um, I would say there's st- still a lot of falsified preferences. I would... But, but again, I would say, I think probably in any healthy society, there's lots of falsified preferences, so-

Jack Altman 1:30:12 Do you have any guesses for something that is currently falsified that will become unfalsified, or it's too hard to call?

Marc Andreessen 1:30:18 Sure.

Jack Altman 1:30:18 Yeah.

Marc Andreessen 1:30:18 Sure.

Jack Altman 1:30:19 Okay, great.

Marc Andreessen 1:30:19 Well, but it's far too dangerous to say, right? [chuckles]

Jack Altman 1:30:21 All right, fine. We'll move on. Yeah. Dang! Gosh.

Marc Andreessen 1:30:24 But again, uh, uh, when you ask that, that is a very key question. Here, here's what I encourage... I'm gonna break the fourth wall.

Jack Altman 1:30:28 Yeah. [chuckles]

Marc Andreessen 1:30:30 Here's what I would encourage people to do. Here's the thought experiment to do. Just write down two of these, in the middle of the night, with nobody around, door's locked.

Jack Altman 1:30:35 Write it down on a piece of paper, and let's pull it out in 10 years?

Marc Andreessen 1:30:37 Well, write down on a piece of paper two lists: What are the things that I believe that I can't say?

Jack Altman 1:30:41 Mm-hmm.

Marc Andreessen 1:30:41 And then, what are the things that I don't believe that I must say?

Jack Altman 1:30:44 Hmm.

Marc Andreessen 1:30:46 And just write them down.

Jack Altman 1:30:47 Yeah.

Marc Andreessen 1:30:47 And I bet, you know, if, if you're a reasonably introspective person, you know, the, the quote-unquote "NPCs" can't do this-

Jack Altman 1:30:52 Yeah

Marc Andreessen 1:30:52 ... but, like, if you're a reasonably introspective person-

Jack Altman 1:30:54 Yeah

Marc Andreessen 1:30:55 ... um, you know, most of us probably have 10, 20, 30 things on both sides of that ledger, right? And, and again, most of those are things where you've gotta, you know... I don't know, like, you don't want anybody to ever see that piece of paper.

Jack Altman 1:31:04 Maybe five or 10 years from now, we'll be back, and everybody can reopen their papers, and we'll see, and it'll be safe to say whatever people wrote down at that

Jack Altman 1:31:10 point.

Marc Andreessen 1:31:10 Exactly.

Jack Altman 1:31:11 Okay, um, a few final topics I wanted to ask you about. Um, one is, you're probably in a spot to be giving just sort of life or career advice to young people a lot now, both in general, but also maybe specifically with, like, AI and, like, the current set of tech, you know, changes right now. What do you most often find yourself repeating to a really smart, you know, recent grad about, you know, if they're like, "What should I be doing with my career?" If they get the chance to ask you that.

Marc Andreessen 1:31:38 To start with, I, I never took any advice, so [laughing]

Jack Altman 1:31:41 Advice is... Yeah, there's something there.

Marc Andreessen 1:31:43 [chuckles]

Jack Altman 1:31:43 But a lot of people do.

Marc Andreessen 1:31:44 So may- maybe, maybe-

Jack Altman 1:31:45 Yeah, okay, fair enough.

Marc Andreessen 1:31:46 Like-

Jack Altman 1:31:46 That's like the Zuck, "You know, if you could have built Facebook" thing.

Marc Andreessen 1:31:48 Maybe, yeah, maybe-

Jack Altman 1:31:49 Or some of that

Marc Andreessen 1:31:49 ... maybe the best people probably shouldn't take any advice.

Jack Altman 1:31:51 Okay, well, then, the rest of us.

Marc Andreessen 1:31:52 But, um, I would just say in gen- so especially for young people, I, I, you know, and again, I, I say this, like, people are very different. Like, I, I, I, I believe very deeply. You know, some people, some people are very happy being in the middle of chaos.

Jack Altman 1:32:02 Mm-hmm.

Marc Andreessen 1:32:03 Some people are very unhappy [chuckles] being... Let's say, some people are very unhappy being in the middle of chaos, and they will actually, uh, get themselves out of a chaotic situation as fast as they can.

Jack Altman 1:32:10 Mm-hmm.

Marc Andreessen 1:32:10 Other people love chaos so much that if they don't have any, they will create it, right? And so, like, you, you have to, you know-

Jack Altman 1:32:14 That's true

Marc Andreessen 1:32:14 ... there's a level of understanding here, where you, where, where, you know, like, not everybody should be in, like, a high-growth, high-risk tech company, 'cause it might just be too nuts.

Jack Altman 1:32:21 Yeah.

Marc Andreessen 1:32:21 So I, I don't think there's a one, one-size-fits-all, you know, kind of thing-

Jack Altman 1:32:24 Yeah

Marc Andreessen 1:32:24 ... um, uh, at, at all. Having said that, let's narrow it. So a young, a young person who wants to kind of be i- in tech, I, I think a big part of it is, I think it's, it's, I would say, at least, it's like run to the heat, like, y- or, or the, the, the, the seed thing we were talking about. Like, w- where, where are the interesting things happening? And that's a conceptual question, and it's also, like, a place question, and a community question, network question.

Jack Altman 1:32:43 Yep.

Marc Andreessen 1:32:43 Um, and so, you know, run to that as fast as you can. And it doesn't mean, you know, running to the fads, but it means-

Jack Altman 1:32:48 Yeah

Marc Andreessen 1:32:48 ... trying to identify-

Jack Altman 1:32:49 Trying to get into those, those-... hot network or ideas or projects, basically.

Marc Andreessen 1:32:53 Yeah. Yeah, yeah, exactly. Um, and look, there's a geographic component to that, and I think we all kinda wish it wasn't the case, but there really is.

Jack Altman 1:32:58 Yeah.

Marc Andreessen 1:32:58 Um, and, and, and, and, and AI, AI I think has very successfully unwound the dis- geographic dispersion of what was happening in tech.

Jack Altman 1:33:05 In a huge way, yeah.

Marc Andreessen 1:33:06 In a huge way. It's kind of slammed everything back into northern California. I, I don't think that's good, really, um, for a lot of reasons, but I think it just is the case. And so I would say, like, if, you know, if you're gonna, like, do AI, get here. Yeah, and then, look, uh, the, and then the other thing is, it, it's the Steve Martin thing: be so good they can't ignore you. Like, time spent on the margin getting better at what you do is almost certainly better than most of the other, uh, uses of time.

Jack Altman 1:33:26 Mm-hmm.

Marc Andreessen 1:33:26 The, the old adage of, "You are the average of the five people you spend the most time with," is also true. Uh, you wanna do that. Uh, so you wanna, you know, pick, pick, pick that carefully. And then I guess what I would say is, uh, when I... When I talk to, you know, people about, like, what kind of company to go to, um, there are certain people who should only be in a raw startup, and there are certain people who should only be in a big company. I think the general advice is the... It's, it's the high growth companies. It's the companies that we would describe as between, like, being between, like, Series C and Series E probably or something.

Jack Altman 1:33:50 Yes.

Marc Andreessen 1:33:50 Where it's like they've hit product market fit, they've hit the knee in the curve, and they're on the way up. On average, that's gonna be the best-

Jack Altman 1:33:55 That's where to go

Marc Andreessen 1:33:55 ... place to go because you're not gonna have the downside risk of a complete wipeout usually.

Jack Altman 1:33:59 Yeah.

Marc Andreessen 1:34:00 Um, and then people who get into that position, like at those high-growth companies, if you're talented, you can pick up new responsibility very quickly.

Jack Altman 1:34:07 Yeah. Yeah. Okay, next is, um, your Andrew Huberman thing that I see on Twitter. Like, what's... I, I actually can't completely parse what it is. What's going on with that?

Marc Andreessen 1:34:14 So we have a completely fake beef. We're, we're good friends. We're very good friends. Um, and we're actually neighbors, neighbors in Malibu, and, um, I've been on his podcast, and, like, we're, we're very good friends. Um, but, um-

Jack Altman 1:34:23 But you don't follow his protocols.

Marc Andreessen 1:34:24 I don't do anything that he says. I, I don't do a single thing that he says. Um, I... With one, one exception, we'll, we'll talk about. But yeah, I don't, I don't, I don't do any of it. You know, he says maintain a regular sleep schedule. I... There's no way.

Jack Altman 1:34:33 You're all over the place on sleep?

Marc Andreessen 1:34:34 I'm all over the place.

Jack Altman 1:34:35 Mm.

Marc Andreessen 1:34:35 He says always get up, you know, f- i- see, uh, get up, you know, see sunlight as you, as you can. I'm like, "No, [chuckles] I don't want... It's to see sun- last thing I wanna do when I wake up, to see sunlight." Don't drink caffeine for the first two hours of the day. It's like NFW. It sounds like torture. It sounds like being in a North Korean concentration camp.

Jack Altman 1:34:46 That, that sounds bad.

Marc Andreessen 1:34:47 Like, I can't even imagine what-

Jack Altman 1:34:48 You drink a lot of coffee?

Marc Andreessen 1:34:49 A lot of coffee. Hot plunge, cold plunge thing, I'm not-

Jack Altman 1:34:52 The cold plunge is miserable.

Marc Andreessen 1:34:53 I'm not doing any of that shit.

Jack Altman 1:34:54 Yeah.

Marc Andreessen 1:34:55 Um-

Jack Altman 1:34:55 You think it's good for you, though, all this?

Marc Andreessen 1:34:56 Oh, I'm sure it's, I'm sure it's good for you. I'm just not, I'm not gonna do any of it. It all sounds just completely miserable.

Jack Altman 1:35:00 [chuckles] It's good.

Marc Andreessen 1:35:00 Um, the one thing that, um, he says that I, I do is, uh, stop drinking alcohol.

Jack Altman 1:35:06 Mm-hmm.

Marc Andreessen 1:35:06 Um, and I would say I am, uh, I am physically much better off as a result, and I am, but I'm very bitter and resentful-

Jack Altman 1:35:11 It is poor-

Marc Andreessen 1:35:11 ... towards him specifically.

Jack Altman 1:35:13 Why'd you do, why'd you do that one?

Marc Andreessen 1:35:14 'Cause it's much better for you physically.

Jack Altman 1:35:15 Yeah.

Marc Andreessen 1:35:15 Like, it, it, it really is.

Jack Altman 1:35:17 Yeah.

Marc Andreessen 1:35:17 Like, it fixes sleep and energy problems.

Jack Altman 1:35:19 So it's the most tolerable of all these, and you're like, "Fine, I'll do one"?

Marc Andreessen 1:35:21 Well, no, it's completely intolerable. It's horrible.

Jack Altman 1:35:23 Okay. [chuckles]

Marc Andreessen 1:35:23 I don't recommend it. Look, I think it's a horrible way to live.

Jack Altman 1:35:26 Yeah.

Marc Andreessen 1:35:26 Like, I'd much rather be drinking alcohol.

Jack Altman 1:35:27 Does he think even, like, a glass of wine at night's bad?

Marc Andreessen 1:35:29 He does, yeah.

Jack Altman 1:35:30 Just all of it.

Marc Andreessen 1:35:30 He did one of the great... Uh, he's actually had a, I think, big influence on the culture, and this is very... In seriousness-

Jack Altman 1:35:35 Yeah

Marc Andreessen 1:35:35 ... this is very positive-

Jack Altman 1:35:36 Yeah

Marc Andreessen 1:35:36 ... I think, um, at least for health. Um, so he did this big, big thing on... There's all these alco- so what happened is there's all these alcohol s- there's all these fake alcohol studies, basically. Um, th- th- you know, this is like red wine, and then it's like all, you know, heart protective and all this stuff. And it basically, it basically turned out that really sick people either drink a lot or nothing, and then, [chuckles] and then healthy people tend to drink a little.

Jack Altman 1:35:54 Yeah.

Marc Andreessen 1:35:54 Right?

Jack Altman 1:35:55 Yeah.

Marc Andreessen 1:35:55 So, so, so one is healthy people tend to be very well disciplined.

Jack Altman 1:35:57 Right, and then I guess is that correlation or causation? Is that the issue?

Marc Andreessen 1:35:59 It is, it's all in the sample set. So, so, so it turns out there's no health benefits to alcohol.

Jack Altman 1:36:03 Uh-huh.

Marc Andreessen 1:36:03 Th- that was all completely fake.

Jack Altman 1:36:04 Uh-huh.

Marc Andreessen 1:36:05 In, in other words, just because-

Jack Altman 1:36:07 I see

Marc Andreessen 1:36:07 ... healthier people drink a moderate amount of alcohol, does not mean that drinking a moderate amount of alcohol makes you healthy.

Jack Altman 1:36:13 I see.

Marc Andreessen 1:36:14 Michael Crichton called this, uh, "wet streets cause rain."

Jack Altman 1:36:16 Yeah, yeah, yeah.

Marc Andreessen 1:36:16 Okay? Wet streets, rain.

Jack Altman 1:36:17 Yes.

Marc Andreessen 1:36:18 Right?

Jack Altman 1:36:18 So for some reason, unhealthy people stop drinking alcohol.

Marc Andreessen 1:36:20 Unhealthy people stop drinking 'cause they're, they're, like, in the hospital.

Jack Altman 1:36:22 They, like, can't handle this. Yeah.

Marc Andreessen 1:36:23 They, their doctor says, "If you keep drinking-

Jack Altman 1:36:25 Yeah

Marc Andreessen 1:36:25 ... you're gonna die."

Jack Altman 1:36:25 Yep.

Marc Andreessen 1:36:26 Or, by the way, they drink a lot, right? 'Cause they're, they... Right, and then there's this, there's this fundamental thing, which is healthy people tend to be very disciplined. Uh, but, but discipline is not... Discipline is, there's, like, a big inherent component to it.

Jack Altman 1:36:36 Yeah.

Marc Andreessen 1:36:36 Right, and so people who are disci- people who are disciplined, who drink moderate amounts of alcohol, also do moderate amounts of exercise, also experience moderate amounts of stre- of stress. Also, uh, you know, you go to the doctor on a regular basis. They t- they take the medication they're prescribed. They live all aspects of their, their health in it.

Jack Altman 1:36:49 I guess it'll take a while to see, but it feels like it should be a good thing that Andrew and other people have gotten so many more people interested in health.

Marc Andreessen 1:36:56 It's good for... It's good physically. Um-

Jack Altman 1:36:58 Right, yeah.

Marc Andreessen 1:36:59 I- m- uh-

Jack Altman 1:36:59 Might not be good mentally?

Marc Andreessen 1:37:00 No, I'll, I'll, I'll try... I'll be funny again. It's, it's, it's catas- [chuckles] it's catastrophic emotionally.

Jack Altman 1:37:04 Yeah.

Marc Andreessen 1:37:04 It's, it's made me a much less happy person.

Jack Altman 1:37:06 You think, uh, are you actually you think that?

Marc Andreessen 1:37:08 Well, so I really... So the, the, it's the, it's the... Alcohol is a time- thousands of years people have been using it, number one, to fundamentally-

Jack Altman 1:37:16 Yeah

Marc Andreessen 1:37:16 ... like, relax.

Jack Altman 1:37:16 Yep.

Marc Andreessen 1:37:17 Um, and then, and then there's a very important social lubricant component to it.

Jack Altman 1:37:20 Yeah.

Marc Andreessen 1:37:20 Um, you know, it's like, um, w- w-

Jack Altman 1:37:22 And the de-stressing could be healthy, so it's-

Marc Andreessen 1:37:24 Well, let's just say, maybe, maybe it's not an accident that the birth rate is crashing, right?

Jack Altman 1:37:26 That's-

Marc Andreessen 1:37:27 At the same time that all that's happening

Jack Altman 1:37:28 ... doing something to it.

Marc Andreessen 1:37:29 I don't think Andrew would argue you should not live your life purely maximizing for just physical health. That'd be a miserable way to live. I mean, it's like, what are you gonna do? Just, like, never leave the house-

Jack Altman 1:37:36 Yeah

Marc Andreessen 1:37:36 ... never take the risk crossing the street. Um, and so, you know, he certainly doesn't judge people for drinking moderate amounts of alcohol. He just says, "Look, scientifically, you have to understand it is a poison."

Jack Altman 1:37:44 Yeah.

Marc Andreessen 1:37:45 Now, having said that, as you know, um, speaking of scenes, um, as you know, the, the, the displacement thing that's happening is people are s- in, in, like, our world, they're not drinking alcohol. Instead, they're, like, doing hallucinogens.

Jack Altman 1:37:55 Why is that again? [chuckles]

Marc Andreessen 1:37:55 It's not necessarily an improvement.

Jack Altman 1:37:57 As you, Jack, know very well.

Marc Andreessen 1:37:58 Yes, J- uh, yes.

Jack Altman 1:37:59 [chuckles]

Marc Andreessen 1:37:59 Yes, tell us about your latest ayahuasca trip.

Jack Altman 1:38:01 [chuckles] Yeah, exactly. Um-

Marc Andreessen 1:38:02 Um, your, your first... You were so much different than you were last time I saw you.

Jack Altman 1:38:04 That's right. I, I'm in a whole new place.

Marc Andreessen 1:38:05 Your personality has clearly completely changed.

Jack Altman 1:38:07 Yeah, I do feel different.

Marc Andreessen 1:38:08 So, so the other theory would be there's a law of, like, con- conservation of drug use, which is every society is gonna pick some drug-

Jack Altman 1:38:13 Probably right

Marc Andreessen 1:38:14 ... and abuse it, and apparently in our case, it's gonna be, like, LSD and mushrooms, which-

Jack Altman 1:38:17 It's, like, a good one.

Marc Andreessen 1:38:18 Uh.

Jack Altman 1:38:18 Yeah, uh, okay.

Marc Andreessen 1:38:20 Yeah.

Jack Altman 1:38:20 Um, other...

Jack Altman 1:38:21 Okay, my last question: when I tweeted out a request for questions, I got almost ratioed by one question, so I'm gonna ask this one, like, nearly verbatim. It was by an anon, uh, named Signal. "If you were frozen for 100 years and you woke back up and you looked around, what would be the piece of data that you'd wanna know that would tell you whether or not your dominant worldview turned out to be correct in the fullness of time?"

Marc Andreessen 1:38:47 Yeah, so I will pick a very unfashionable answer to this, and I would say United States, uh, GDP, just, like, straight out US GDP.

Jack Altman 1:38:54 Okay.

Marc Andreessen 1:38:54 'Cause I would say embedded in that is the question of technological progress, which is, if you have rapid technological progress, you'll have rapid productivity growth, which means you'll have very rapid GDP growth. If you don't, you won't have rapid GDP growth, so you'll see that in the GDP numbers immediately. You know, number two is, you know, well, uh, number two would be just, like, our markets a great way to organize.

Jack Altman 1:39:11 Yeah.

Marc Andreessen 1:39:11 Um, and the US is the best market, and so, you know, is that, is that gonna keep working? And then third is, is, does, is the US a gonna be a great country?

Jack Altman 1:39:18 And you are along all of this?

Marc Andreessen 1:39:19 I am very along all three of those.

Jack Altman 1:39:20 Yeah.

Marc Andreessen 1:39:21 I am very convicted on all three of those, but, you know-

Jack Altman 1:39:23 Yeah

Marc Andreessen 1:39:23 ... if I'm wrong about something big, it's, it's, it's gonna be something in there, and it will show up in that number.

Jack Altman 1:39:27 Marc, this was amazing. Thank you so much again.

Marc Andreessen 1:39:29 Good. Awesome. Thank you, Jack. [upbeat music]