a16z Podcast - The Journey from 0 to 1, from Mosaic to Netscape

Episode Date: December 17, 2019

As part of a new series where we will share select a16z partner appearances on other podcasts with our audience here, this episode is cross-posted from the new show Starting Greatness -- featuring interviews with startup builders before they were successful -- hosted by Mike Maples junior.In the conversation, a16z co-founder Marc Andreessen shares some rare, behind-the-scenes details of his story from 0 to 1 -- from the University of Illinois and Mosaic to Netscape -- and along the journey, really, to product-market fit... 

Hi everyone, welcome to the A6 and Z podcast. Today we have one of our special guest-hosted episodes as part of a new series where we share select A6&Z partner appearances elsewhere here. This one is with A6&Z co-founder Mark Andresen. The episode is cross-posted from the new show Starting Greatness, hosted by Mike Maples Jr. In the show that follows, Mark shares some rare behind-the-scenes details on his journey to product market fit. From 0 to 1, from the University of Illinois and Mosaic to Netscape. So it was a strange time. There's an old William Gibson quote, the author of Neuromancer, all the great science fiction books.

He says the future's already here is just not evenly distributed. And so this was a great example of that. That's Mark Andresen, who's now a famous venture capitalist at Andresen Horowitz. At age 22, he founded Netscape, the company that kicked off the internet age. How did Netscape even happen? And what was it like when it was about to blow up? This is Mike Maples, Jr. of Floodgate, and it's go time with Mark Andreessen. Welcome to Starting Greatness, a podcast dedicated to ambitious founders who want to go from nothing to awesome, super fast.

When you're a startup founder, you have to channel your inner James Bond, you're McGiver, your Wonder Woman. I'm going to help you win by curating the lessons of the super performers, but before they were successful. So without further ado, ignition sequence start. Let's get started. I decided to do some things a little differently with this interview because I wanted to capture things about Mark's startup journey that most of likely not heard. I wanted to get a level deeper about how Netscape and the early web grew out of the Mosaic project. But I also wanted to help people see a side of Mark that few people see in public.

While you might see him share books he likes on Twitter, it's hard to connect this to what it's like to spend time with him. He's an incredibly avid reader in diverse areas like technology, science, art, literature, science fiction, history, politics, economics, psychology, and he can synthesize ideas and connect the dots in a blink of an eye. And that curiosity combined with his technical depth is definitely a superpower. If you've wondered about the origin stories of the web and what it was like to be in the middle of it, Mark goes into a depth that I haven't seen before. And he also reveals the three things he wishes Netscape had done differently that would have made the internet better today. I'm excited about how the conversation went and hope you enjoy it too. Let's talk to him. Mark Andreessen, welcome to the podcast. Hey, it's great to be here. So Mark, you've been involved with some pretty big wins. So why don't we

just start out by asking you, what's your advice to people who want to build something great? So the first piece of advice is don't do it. It's impossible. It's impossible. So it's so hard. John Parker has the best line on starting companies. Starting a company is like chewing glass. Eventually you start to like the taste of your own blood.

And so don't do it. And the reason that's the first piece of advice is because, number one, if you can be talked out of it, you definitely shouldn't do it. So if you listen to advice number one, you definitely shouldn't do it. If you ignore advice number one, you might have the personality type to be a founder. So that's the first gut check. And then you see this a lot, I'm sure, is there are a lot of people who would like to start a company. The goal is to start a company and then they kind of try to back into an idea.

We call this sort of synthetic, we call these sort of synthetic startups. It's like, I want to start a company and I am now going to apply myself. Market white space companies. Yeah, exactly. Boy, wouldn't it be great if X, right, where X is just something I, you know, read in a magazine that day or, you know, just a, you know, by the way, there have been some successful synthetic startups, like some have worked. The more common thing is an actual, honest to God, organic idea that is actually something that you are, like, deeply immersed in. Yeah.

Right. The odds is it's going to be, like, a flash of inspiration or very low. But, like, if it's a field that you've been working in for five or ten years and you know it inside out, and it's just, like, obvious to you that it should work a different way, you know, then maybe you've got something. But you got to, like, really deeply, like, you, number one, you have to deeply believe because you have to really be irrationally committed to it because it is so hard. But the other thing is, like, you have to actually validate your beliefs. Like, it has to actually, like, you have to be right. And gates and jobs were the same way in PCs. You're obsessed with a field for its own sake, and you start noticing things because you're down the rabbit hole.

Yeah, that's right. Yeah. And it's very hands-on. And, you know, both of Microsoft and Apple founding stories, both companies started very small and very humble because they were literally working. Like, you know, Apple, they were building the first computers by hand. Yeah. You know, there was no abstraction to it. Right.

There was no master plan. There was no theory. It was, can we build a hundred computers made out of wooden boxes and sell them at the trade fair? And it built out of that. But they right, to your point, like, they were living in that world. I would love to just know about just how you got to building mosaic. How did you get involved with the Internet in the first place? So it was a strange time.

There's an old William Gibson quote, the author of Neuromancer, all the great science fiction books. He says the future's already here is just not evenly distributed. And so this was a great example of that. And so what I sort of semi-realized, when I chose to go to Illinois, part of it was because they had a top flight engineering program, computer science program. But in particular, they were picked in the mid-80s to be one of four federally funded centers for supercomputing at the time. And this was a specific government program that basically had two parts.

One was to basically buy these, you know, $25 million supercomputers from companies at the time like Kray and thinking machines and basically put them in, you know, basically four locations in the U.S. And then, and then, you know, for scientists to be able to use for drug design and studying black holes and doing all kinds of stuff, a $25 million computer, you know, occupied a full room. And in fact, in those days, what they would do is actually build an entire building for the computer.

And then they would actually, they'd build the shell of the building. they build the walls, they leave the ceiling open, then they lower the computer down through the ceiling up, but using a crane to lower it in a place, and then they'd finish the building. So this was a big deal at the time. These things were super expensive, and so they only put them in four locations,

and they wanted other scientists and researchers all over the country to be able to use them, and so the part two of the program was this program called NSFNet, so it's National Science Foundation Network, which was the funding group that paid for this whole thing. So those programs were authorized in the mid-80s, and then I got to Illinois in 89, and so they basically had Ben rolled out at that point,

And so Illinois, in those days, it was like a fully broadband wired internet native campus. Wow. And it was one of exactly four of those. But just because you have the internet doesn't mean that it's actually all that's useful for anything, right? That there's, and, you know, like if you're a scientist, like, how exactly are you communicating with every, you know, with your colleagues on different campuses? How exactly are you, you know, storing and analyzing your research? How exactly are you going to share your research with the world? That stuff was all yet to be built.

And so the purpose of this group was to build, you know, basically to build the early systems that would let people collaborate. Right. So then you're building these early systems. Where does the idea for the Mosaic browser come from? So funny story there. So basically, so the project I ended, I got hired into work on was a project called Collage, which basically was sort of, I don't know, maybe Zoom's the current comp or something or Skype. So sort of general purpose real-time conferencing, right? So video, video, you know, audio and video, but also like what, you know, it's all the standard complement, whiteboard sharing, you know, document and collaborative document editing and Google. kind of thing. You know, this is like, what, in 1991, 1992, right? So they kind of had all those ideas back then. It's, it's one of those funny things. Like, it's, when we'll talk about this, but, like, the role of timing in this stuff is always so interesting. Because, like, that stuff's all happening now. Yeah. Right. Like, Zoom goes public. Now. Yeah. Right. It's like 30 years later. Right. So, you know, the lag on these things can, can be quite something. Okay. So you're trying to

help these ideas take some early baby steps. How did you think about what to work on? Well, there were a few things. So there were a few things. And so then you basically say, okay, real time isn't going to work. It was sort of internet variations on the bulletin board systems of the PC hobbyists in the mid-80s, right? And so it's sort of those ideas being transplanted to the internet, which is kind of what all of social networking has been doing for the last, you know, 30 years. There was that. And then there was this new thing called the web, which had been, you know, developed in Switzerland at CERN. But that was like super early.

And there were like, I don't know, two or three websites at the time. And, like, the software was like, you know, it was just very early. And so if you would read like an article about, you know, the internet. at that point. It would the article be like, well, why would anybody want to use the Internet? And then a lot of the articles just ended there. But if they would go on to describe why you might use the Internet, it's like, well, you can kind of do email.

And then there's this FTP thing. You can download files. And then if you really want to get weird, you can, like, be on Gofer and wait. You can, like, go to Gofer and view menus. You can go on ways. You can do searches, you know, kind of clay, clay to be molded. And so basically the original idea for Mosaic was, okay, how about the universal client, right?

How about, okay, because the problem is, like, all this stuff was like, these are all fragmented programs. They were hard to use. they were hard to install. Like most of this stuff was open source. It was like you had to be pretty sophisticated and install. By the way, it seems obvious that like everybody's going to have this stuff. It seems obvious that kids are going to want to keep using this stuff once they graduate from college.

It seems obvious that there's going to be, you know, software on servers and clients that's going to be used to share information. It's like, why wouldn't you be able to have a link? Well, number one, you don't have a text-based display because you don't want to be able to read stuff. Like most computer UIs up until that point were not text-based, right? They were like, you know, they were like buttons and switches and levers. Yep, right? Like old style nuclear control panels or something. And this software metaphor was like put everything in a document.

So that was new. But we thought that was obvious because you'd like to be able to read things. And then we thought, okay, hypertext is probably obvious. So there were a set of these things that we thought were obvious, but it's kind of like, okay, if they're so obvious, why haven't they happened? Yeah. And I remember, like, was it Vannevar Bush wrote something about he talked about this thing called the Memex, I think. And it hypertexts like in the 40s maybe even, like a long time ago. So I started to do a lot of research.

So luckily, Illinois has a big library. So I started to do read. And again, I was just stressed again. This is like pre-Google. Right. So this is like, go to the card catalog, right?

And try to figure out like, can I swear on this podcast? Yeah, it's okay with me. Okay, go to the card catalog and figure like, who the fuck wrote a book about this? Like,

please God, could somebody have written a book about this? So basically the history was there had basically tracing back in time, there had been Doug Engelbart, basically, who basically developed a lot of these ideas and demonstrated a lot of them

working in prototype form in the late 60s. And so there was like an intellectual heritage going back to Doug. Contemporaneous, but even before that was Ted Nelson. who had sort of invented the term hypertext. And so there was this idea of linking that kind of existed. But like Ted is the guy who kind of picked up those ideas and kind of put them in the idea that a computer should be able to do this.

And so there was kind of that heritage. And then there was, as you alluded to, there was this guy named Vannevar Bush who in 1945 that wrote a paper called As We May Think, which is one of those great old style, 1940 style titles for papers. And it basically outlined a hypothetical system. This is 1945. So, Vannevar Bush is an important guy. He was FDR's science advisor during the development of the nuclear bomb. And so he was, like, a very important guy. And he basically, he defined basically how the federal government would fund research for the next, like, basically 70 years.

So it was like a very important guy, pillar of the establishment. So he wrote this document, which the Atlantic at the time published back when they used to publish things like this. Today they'd publish a piece about how bad it is. But at the time, they just, like, published a piece describing it. It basically outlined a system called Memex, which was, which is funny because in 1945, so it's actually like, pre-digital computer. Like, digital computer was like a brand new idea. Yep.

And he didn't, but like these ideas go way back. Yeah. You know, they're fairly obvious, fairly quickly, right? You know, because it's like, okay, that would be a good idea. It'd be good idea to store a large amount of information, retrieve it, share it, transmit it over long distances, search it. Yeah. There we were sitting in like, 1992 being like, okay.

Yep. And so basically it's like, are we crazy, right? Is the rest of the world crazy or is it just the right time? Yeah. And it's funny because it's one, to me, you know, we both know this guy well, Balaji, Srinivasan, one of the things I really like is his notion of this idea maze. I think Chris Dixon talks about it too, right? It's, to me, it's a way better way to come at the question because a lot of the, like, all of it will happen someday, right? And so the question

is just what's the right time for it to happen? And the idea maze is kind of this technique for understanding all the attempts that have occurred in the past and kind of understanding why those ideas got blocked and now do they get unblocked all of a sudden. How do you decide what to build first and which ideas are worth pursuing. So what we needed to have is a network effect. We needed to have a flywheel kick in. We did the browser. We also did the web server at the same time. And then that web server actually now is Apache is the modern descendant of that web server over the last 25, 30 years.

What we needed was kind of a ping pong effect, right? Because what you want is the flywheel where like more people reading with the browser, at least more people wanting to publish with the server, the more people who publishes the server, the more incentive there is to read. And then you get the four wheel effect. And so what we needed for that, the advantage we had is, We basically had a hack. One of the things we say at our firm is if you're going to start a new network effects are like the best businesses in the world.

But to get a network effect going, to get through the bootstrap phase, you need some hack. You need some strategy to kind of get you through that initial phase to the flywheel catching. And so our hack actually was actually, it was the fact, well, the internet, it was sort of the NSF net. The other hack actually was at the time of internet news groups. And so we're actually the carrier. And so it just like, it turned out, and this is one of those kind of sort of. stroke of luck things. It just turned out there was like there was latent demand.

There were enough people on this thing. It kind of goes back to the last. They weren't online at the same time, but they were online. And so there were enough people online where you could, you know, there was a big incentive to be able to share, even to the number of small number of people who were there. And then there was a big incentive to consume if there was anything at all to read. Yep. And then this was like the prototypical early adopter crowd where they just like to, you know,

like to try new things. And so there were a set of internet news groups that were kind of actively debating discussing, you know, all these kinds of topics. And so we were basically able to, you know, just kind of use that as the carrier wave. One of the first blogs was a page I maintained. I wouldn't say it was the first one, not necessarily, but it was one of the first ones. So we had what was called the what's new page. And the what's new page later I would update it every, you know, you didn't get into work and updated every morning.

Or say, when I got into work late in the afternoon, as the case might be. Probably started out as just everything that's there. No, it's literally every new website. Right. And it was literally like, I would just get emailed. Like, okay, you know, I launched a new website that's got the, menu of my favorite Indian restaurant in, you know, Cardiff. I've got a new website that has, you know, lyrics for the R.E.M. songs, right?

It was just, like, random stuff like that. A lot of it was just people experimenting. And so it was literally, and, you know, it started out being like one a day. It was like, okay. And then it started being two a day. And then it started being three a day. And then it went to five and ten, 20, 30 a day. And so you could just, you could kind of, there were two ways to see the flywheel.

One was the incoming email. There were two incoming email boxes where you could see the flywheel kick in. One was entries for the what's new page. Because the what's new page was the main distribution. method. It was the main way people were finding out about new web pages, right? Because this is free Google and everything else for Yahoo. But the other email was customer support email for the browser, which was the thing that almost... The ones you didn't want to get. The thing that almost killed me. Okay. It was providing customer support for the entire internet. But that's

another part of the story later on. So basically, so literally what happened was, so we, this whole thing started taking off. The more and more people at Illinois started working on this. The team side started expand. We became more ambitious. And then we actually went, for the second round of NSF National Science Foundation funding. This is all, all this is happening. I mean, I was making minimum wage, $6.25 an hour. But that $6.25 an hour was being paid for by the National Science Foundation through a very generous, generous grant. And I'm grateful for that.

At least you didn't get diluted. No. It's hard to dilute $6. It's $25 an hour. In fairness. They say, keep your burn rate low. Yeah. That's a good way to do it.

Mission accomplished. So we actually went, we actually, so literally what was happening was we were just, it was working. And so we were the dog that caught the bus, you know, kind of thing where it's just like the, like, literally what happened was, you know, the number of customer support emails per day was like, you know, 100 and then 200 and then 300 and then 300. And then, you know, kind of up into the right. So we went to NSF for grant number two to basically like, you know, basically make this thing real, like and kind of fully build it out. And of course, they denied the grant. We don't want to pay money to take all these support emails. Yeah, exactly, which is literally.

And at the time, I was like, well, that's kind of, you know, they have a thing that's working and they're shutting off the money. Like, okay, that seems kind of dumb. And then I realized, actually, later on, I was like, oh, that was actually smart. Like, so specifically, like, it's a research, it's NSF, it's research. It's intended to fund scientific research. And so clearly, yeah, customer support emails are like, you know, the 14th version of the Mac client. Like, it's not. Yeah.

So maybe that's an initial sign of product market fit is when the university says, you know what, we're done with you using our resources here. You've outgrown this university. Yeah, exactly. That happened kind of with Google, too, I think, later on. Right. Right. At some point, Google would have taken over the entire computer.

size department, right, eating all the computers. And it was, yeah, you get kicked out of the nest. Yeah. So, so, so they were kind of pushing you out of the nest. So I think, so in retrospect, they did exactly the right thing. And they did exactly the right thing at exactly the right time. So did you decide, okay, I want to start a company or were you just like, well, that's a bummer. My grant money just went away. The second. Okay. So then, so like, now you're just answering customer support emails. No, I was like, shit. I have to get a job. Okay. So what year were you in college? I was graduating. Okay. So you're about to graduate. It coincided with graduation. Okay. Okay. I coincided right around that time.

And I was like, well, shit, I got to get a job. And so, like, and they were, you know, basically there's not, you know, very, there's very little actually in Champaign-Urbana. Okay. So now you got to get a job. No. Um, you're interviewing for jobs. Nope. No?

Well, I had a slight advantage in my job search. Okay. Which is I controlled mosaic. I controlled mosaic. And specifically, I controlled mosaic, which is like, I got to decide what people saw. Uh-huh. And so I made sure they saw my resume. Okay.

Yeah. Nice. Yeah. And so I, that's a growth hack. Yeah, yeah. It's a growth hack for your career. You just go in the browser and you add to the browser, yeah, a button to see your resume. And so in fairness, I didn't put it on the homepage, which I could have done, that was a step too far, but I put it in the about page.

Okay. And so I got a set of offers, some of the East Coast, some of the West Coast. I almost joined the Java team. No kidding. In 94. Yeah, 94 when I first came out here. But they offered me. It was called Oak.

It was called Oak at the time. It was Java pre-Java. And they, at the time, it was a spin-out from Sun, but it was only a partial spin out. And so they offer me something called phantom stock options. So, you know, but it's also funny because all of us were thinking about, okay, there's going to be this network centric future, but most people were framing it in yesterday's metaphor. They were talking about the digital superhighway. And so as a result, people thought the center of gravity is going to be like set top boxes and video game consoles. And I don't know if others had this reaction, but when I first

saw the mosaic browser, it was instant, like instant ignition. this is how it's going to play out, right? I just immediately knew the way we've been thinking about this is wrong. It's not going to happen on these set-top boxes. It may someday, but like the browser is going to happen right here, right now. Like there was just no doubt in my mind. Well, no, so what I would nominate on the point that you made, I think a point you made is an important point that we see all the time in our day job and we see it every all the time today, which is it's like it's, I nominate two kind of dynamics to that. So top down versus bottoms up. Yeah. And one way versus two way. Yep. Right. And these are still battles that are

playing out. I mean, this is, you know, the whole battle on cryptocurrency that's happening right now. Like, you see this all over the industry, all over the world, like this battle. And by the way, this is like many, many of global politics are based on this battle right now. And so top down versus bottom up, like the view at that time, right, it was the information superhighway. It was going to be, you know, sort of, it should be set top boxes, interactive television, but it was going to be provided by big companies. Yeah. Or should the government? Yeah. They built the regular highway. Should they build a digital super highway? And that'll help us against Japan, quote, quote. Exactly. That was the big thing. That was the thought process. The country

that was going to take everything at the time. So, but it's going to be top down. And so the magazines and newspapers, 100% of the coverage, 100% of the commentary, like all of the media coverage, it was all around. It was going to be, right, the government or it was going to be Time Warner in those days or AT&T or Verizon or, you know, the big cable company with the predecessor to Comcast. And so it's going to be these giant media telecom companies, right? And then Microsoft and Oracle, giant software companies were trying to kind of wedge their way in to kind be part of it, this top-down thing. But like, they would decide what it was going to be. And then, and then, and then, and then that goes to the second thing, uh, which is one way

versus two-way, which was it was going to be a, it was going to be a one, what, primarily video, but like a one-way push, right? And so this was, this is why the whole metaphor, the 500, like the whole thing was, oh, today, you've got like 14 TV channels in the future you'll have 500. That's the information. And it'll be interactive TV. Well, it'll be interactive. You'll be able to push a button or a pizza. You won't have a keyboard. Yeah. Right. Or a mouse. Yeah. Or anything unless you get in trouble. You'll just have a button that has a slice of pizza on it.

Yeah, exactly, exactly. Like, we really had those. Or, like, you know, American Idol would basically, I'll be like American Idol. It'll just be like, or you can vote for the person who's, you know, singing in the vest or something like that. But the idea, the idea that an individual user was going to be contributing into this environment, the idea that an individual user would be publishing a video, right, or making a post or anything like that was just like, you're setting up a website.

There was just, there was no incorporation of that kind of two-way idea at all. And so I think what put the whammy on people was if you were, if you came from the established power structure, if you came from the big companies or the press that was used to covering the big companies, it obviously had to be top down in one way. Yeah. Right?

And by the way, the press, the press was one way at that time. I mean, this was before the audience could talk back. And so if you were at Time magazine or NBC News or the New York Times, like you were used to... You controlled the conversation. Yeah, exactly.

And like, maybe you published the occasional letter to the editor, but like, you can strain that shit. Like, you don't let people carry it away. Yeah. And that's, you know, one 48th of the space on, you know, one page of the paper. And so there was that. And so all the people who thought that they were in a position to decide had this, had that view.

But then all the regular people, right, or at least especially the, let's just say the nerds, including ourselves, the regular people, the people who were just like, look, I just want to be able to do things. Yeah. Right. And by the way, do things. I want to be able to consume. But I also want to create and I want to contribute and I want to build. Yeah. And the thing that I've just seen time and again, it's like you think about it when you were at the University of Illinois, you're hanging out with this supercomputer.

and you're building a browser, it's almost like the world was thinking in Cartesian coordinates, and you were raised to only think in polar coordinates, right? And so, like, your mind was prepared to receive the insight because, like you said, you were living in the future. You may not have even known it at the time that you were living in the future. But it just, and like so much of entrepreneurship I've found is it's like noticing. You're living in the future and you notice something and you solve your own problem. And you're not necessarily trying to get rich at the time.

just like, I'm working on cool stuff. And to do more cool stuff, I got to build this thing. So, yeah. What I found with myself or I found with the other founders who are like, like what you're describing as, it's just obvious. Like it's, it's just like, oh, obviously this should be this way. But then there's like cognitive distance, which is like, if it's so obvious, why hasn't everybody figured this out yet?

Now, most of the time, when people come to that conclusion, they're just wrong. They're just wrong. Or insane. Yeah. Right? They have a vision, but it's like a hallucination vision. Exactly. Yeah, exactly.

But every once in a while, you've got somebody who really does decode something. And I think, to your point, on kind of the preconditions for it, some of it is you get to see the, you get to see the early kind of pings. I was talked about, like, there are pings from the future, is the other way they're, like, you can see these things actually running today. And so you get in a position where you can see something like that. So that's part of it. But the other thing that happens is just like you get to operate, it's the people who get to operate with the new assumptions. Right, right. Yeah.

And like when, when you're your age, starting Netscape, you don't have to translate, right? Like people who lived in Cartesian coordinates, they have to translate to go to polar, right? And so people who lived in the world of tops down one way digital super highway interactive TV, they had to like, they had to translate that to what you were already doing, but to you is just obvious, right? It's like there wasn't anything for you to unlearn. Yeah. And then on top of that, you know, I had no power, right? And so like, you know, I was not the CEO of AT&T.

Like I couldn't, you know, I couldn't do any of the stuff that all these fancy people could do. I didn't have any like that level of control. And so, like, anything that I was going to do was going to have to be bottoms up. Yeah. It was going to have to be two-way. Like, you know, kind of by definition. If it wasn't too-way, I'd be blocked out. So then speaking of powerful people, how did you find Jim Clark or how did you guys connect?

And this is where I got really lucky. So Jim Clark, kind of quick recap, Jim Clark at that time, Jim Clark had been the founder and the original CEO of Silicon Graphics, which was at the time, you know, the company as you said, you were there. It was the company at the time is probably most analogous today to, I don't know, some combination of, I don't know, Google and I mean, it was like it was the company. It was

the company that all the smart, it was like if you were a smart person in the computer industry, or the company you either worked for or wanted to work for. It was like the brain center of the industry. And this was when they really drove computer graphics to be what they are today. Yeah, a total g-wiz company, right? Best graphics engineers

in the world, best networking engineers in the world because you have to push the pixels over network. I mean, it was just an incredible place to be. Fortunately for me, Jim had a problem. And the problem was Jim had grown very dissatisfied with the state of affairs as Silicon Graphics at the time. He got frustrated by a number of things. He left the company. He decided to start his second company.

But he had a very specific problem, which was that he had a non-solicit at SGI. So he had spent the previous 15 years hiring all the smartest people he knew in the world into SGI. And now he couldn't take them with him. And so he literally had like a, he had a, what's that called a warm meat problem? As in he didn't have any bodies to, to, to work on, to work with them. And so he literally went out to a whole bunch of people in the industry who he knew, you know, who weren't at SGI.

And he talked to them about maybe, you know, you want to start something or work on something. And then he met me through a friend, a mutual, a guy, actually a guy he worked with this, who I didn't know, but who knew about me. He was actually one of the guys at SGI who actually was responsible for all the demos. Yeah. They were a famous demo company. Oh, yeah. That's how we sold our computers.

Yeah. And so the guy who ran the, I think it was designed the demos or built the demos for like the briefing center. basically was like up on all the leading edge stuff because he was the demo guy. And so he basically knew about all this stuff. And so he apparently happened to mention to Jim that like, A, that I existed and that B, B that I had just recently moved out here. And so like I get a random call from Jim Clark like one afternoon being like, hey. Did you know who he was?

Oh, yes. Yeah. No, it's like literally it's like, you know, Steve Jobs calls you or, you're like, this is hard. Mary Page calls you. Yeah. You know, hey, you know, this is Larry Page, which you like to talk about starting new companies. You know, you're like, oh, okay. You think?

All right. You know, gee, I don't know. Let me check my calendar, right? Yeah, yeah. So I'm like, yeah, you know, I'm basically, yeah, you know, sure name the time and place. And so did you guys get on pretty well in the early days? Yeah, so a couple things happened. So one is to my enormous shock, the other people he were talking to, the other people

he was talking to were too risk averse and they didn't. And I should also, this was during a very sort of down period in Silicon Valley. Yeah. This was not an exciting time. Yep. This was like 93, 94. So there had been a really big recession and a lot of companies had failed. And so there were a lot of people who just, like, wanted to

job. But he did not get as nearly positive response as I would have imagined from a lot of people who had like actual, you know, had had careers, let's say. And so through process of elimination in part, I think it came down to me. And then, and then he and I started brainstorming. And we actually, yeah, and then we started, we started working together on plans. So, so he's, he wasn't saying, I want Mark Andreessen because he invented the mosaic browser. It's like, I can't get any of these killer SGI engineers, he's maybe another new smart guy that I can get and not get sued. Yeah, I think that's part of it. And I think he's, you know, probably just channeling Jim. He probably, you know, at the very least, you know, he knows how to build something new.

Yeah. You know, which not everybody does. And so at least he's done it once before. But the reason why the Netscape ID was not obvious is because even after all of that, it still wasn't obvious that the internet would be a business, right? And part of that was it wasn't a business. Like nobody had made it into a business. Yeah. And so there was just, it was just this thing, which is, it goes to the top, down, bottoms up thing, which is just like, even after after all that, and I saw the adoption cycle and the whole thing, and I stayed on all the mailing list, and I saw everything.

It was just like, okay, like, I don't know, like, what are we going to, like, this is all open source, like, you know, there's no commercial transactions in the internet. It had been illegal to do commercial transactions on the internet until 1993, and this is only the spring of 1994, so there was no e-commerce, there's no Amazon, there was none of that stuff. Yep. There was literally nothing to buy. There was no money.

There was no nothing, right? And so it was just like, okay, there was not an obvious business to be built. And I remember for a couple years, right, upside magazine at the time and things like that would say, you know, when's the internet going to have a business model? Yeah, right. For about two years, people said nobody's going to have a business model. Yeah, this is absurd. Everybody knows this thing's right.

Even Yahoo, people said, well, great, but no business model. Yeah, of course, yeah. And Google had no business model, like all those things, yeah. None of these things have business models. Right, exactly. So, so, and then Jim had been enmeshed, you know, selling graphics had gotten enmeshed in two areas that were, goes back to the conversation we're having with Interactive TV.

So they were actually the provider of the technology for the Time Warner Interactive TV project, which was like the most viable, it was the most actually developed version of the top-down information Super Highway thing at the time in Orlando, Florida. This was written up in all the magazines and newspapers at the time. It was a really cool like system. It's kind of analogous to what you have today on a modern, you know, whatever Comcast or direct TV set top box or something or like Netflix kind of experience in 1994. It was impressive. It was just, it was like the capital cost per house was like, I don't know, $60,000. Yeah, it's crazy. We had some of our high-end gear, right, power those boxes. It was not. So there was no. So we basically set out plan number

one was to build the software layer for interactive TV, and then we basically realized, oh, shit, there's not going to be actually any interactive TV. Like, the economics actually don't work. And then the other decision was SGI was building the graphics chip for the new Nintendo, the time of Nintendo 64, the first game console with 3D graphics. And so the idea basically was to build what today you call like Xbox Live or PlayStation Live to build basically the network for Nintendo 64. The problem was Nintendo 64 was not going to ship for another two years. So literally we got to the point where we, they're like, okay, those two plans don't work. And then it was like, are we going to, like, what are we going to do?

Process of elimination. Okay. So if top-down interactive TV isn't going to work and interactive gaming at that point wasn't going to work, then what's left? Yeah. What's left is the internet. Right. And so it's like, okay, process of elimination, this thing that nobody's taking seriously, that nobody thinks can be a business that breaks all the rules, that's bottoms up, it's organic. By the way, messy and hackers and crime. And you probably don't even think it's a business yet. No. Yeah. Well, now I have no actual business experience at that point. So I have no basis to evaluate anything in business, but however, it seemed like a stretch. But like, if it's the only thing, then it's going to win. Right. Because the only thing is the thing.

Is the thing. Right. And so it's weird because Jim was like, oh, that makes total sense. And what Jim actually realized, I think, to his credit was he, he was so, he was so, SGI was so powerful at that point that he was able, he was, he was in that, he was in that top down world. And he, and so he, I think he would say, like, he was so fully in it and of it that he thought that that was how the world. was going to work, and he was doing his best to make it work that way when he did SGI. But then he's got such amazing, kind of mental flexibility, which is extraordinarily rare to have somebody who's this flexible in their thought process where he was just like, when he got into this new content, he was kind of just shedding assumptions, he was able to replant himself into a true

startup context and able to shed all the assumptions and say, okay, from a standing start, what would you do and come to a completely different set of conclusions? Yeah, so then you decide to start this thing. Right. And you raise, you raise money from, well, he seed funds it at first. He's probably already been seed funding just your little vision quest. No. No. No. Okay. So you're just on this vision quest. You, by process of elimination, next and weekends. It's like, okay, we're doing this. Yeah. What you, then you just go raise money from John Dorr, Kleiner Perkins, or? Say, we ran about six months with Jim. We ran about six months with Jim's money. And then he's like, you know, I'm rich, but I'm not that rich. And so, um, he was like, we're time to go raise

money. So Jim zeroed in a Kleiner Perkins because KP had actually backed, um, son. Yeah, which was SGI's big competitor. And he had always really, he told me he had always really respected how he had, both companies ended up being very successful, but Sun had a much faster takeoff rate out of the gate. And then he had always respected how John went about being a board member at Sun. Okay. So you, you raised some money for Netscape, not sure if it's a business yet, but hey, let's,

let's go for it. And this must be around the time when Mosaic has started to see even bigger lift, right? Because I seem to remember, like, the summer of the summer of the summer of, it was starting to really become a thing. So it was a snowball rolling down the hill, picking up speed. And it was starting to mainstream. And so you were starting to get the first signs of consumers actually coming on the thing, which is normal people, which is like a big deal at the time.

You're starting to have companies starting to start, you know, launch websites. So it was around that time, I think it was around that time that AT&T ran the first internet ad. Yep. On at the time, because Wired had created a website and they ran the first internet ad on the first, the reason we have all these banner ads is because the first ad was a banner ad for AT&T. the Wired.com. When did you switch from Mosaic to Netscape? Mosaic had been the name of the, it had been the, Mosaic had been the name of the project at, at Illinois. We didn't bring any of the code with us. It was, the code was open source, but copyright University of Illinois. So we decided, and we needed to rewrite anyway, because we needed a bunch of stuff in the code like security that we didn't have. So we wanted to do it, we wanted to do a clean, a clean rewrite with what we knew now. But we did figure, like, it's the name of the research project. I knew Sun, the name Sun was actually named after the research process. at Stanford, Spawn Sun was actually called the Sun Research Project. Stanford University Network.

Exactly, exactly. So it's like it's just, it's not a, it's not, it's just like, it's like, it's like, it's like a, it's like a, it's a, it's a, it's a, it's a, it's a, it's a, it's a, it's a, it's a, it's a, it's a thing most, it's a, it's a thing. So it's a lot of, and, um, and, um, and then University of Illinois then did a very, um, sort of clever thing I had not seen before, and I don't think I've seen sense, which is, they didn't sue us. Instead, instead they went, they sent lawyers to all of our potential customers and told them they were going to sue us. and so they frees us in our tracks. They basically blocked our ability to do business because then they alleged to basically a broad range of trademark and copyright violations.

The copyright violations weren't true because we didn't take any of the code, but they threatened us to us for that. And then we had this problem, which was we had this name, which there's some ambiguity as to whether there was a trademark on it or not. But there did seem to be a clear...

Hard to explain away. Yeah, yeah, yeah. Just like inconvenient fact, as they say. And so we actually ended up suing them for, I believe it's, what is it, restraint of trade and purchase. So are you feeling kind of pissed at them? Yes. Right about now?

Like thermonuclear or super pissed? Yeah. Right about now? Like today, sitting here? Even now. Very much so. Yes. Yes.

I'm still extremely angry. Thank you for, thank you for asking. How does that make you feel, Mark? Yeah. Exactly. We'll pick that up in part two, the psychotherapy section of the thing. So we actually ended up suing them. We actually ended up seeing them, and then we negotiated a settlement.

Okay. We paid them, and as part of the settlement, we changed the name. Okay. Yeah. And that was the last penny. So you changed it to net, you changed the name to Netscape. So then, so you do the Netscape browser, did it just immediately blow up? I mean, it was just everybody knew who you were.

Everybody knew that you were the voice of browsers. It just. Yeah. So like, what was a super fact? Well, it was, it was this thing of, it was basically continuation of mosaic phenomenon. Yeah. And we were the clear inheritors of that because we had built it. And so it was just one of these things where like, it was a cold start as a company.

but it was building directly in the momentum from the previous thing. And then we knew, what else do we knew? We knew Illinois was not going to continue the Mosaic Project because we knew they didn't want to do it. Right, exactly. And so we kind of knew that it had to be picked up. And then look, the other thing was like there were just a set of things that you just, you needed, like it was time.

It was time to be able to, like, do financial transactions, right? So it was time we need a secure needed encryption, which the original browser didn't have. So then, so was there any sort of palpable moment where you're just like, holy crap this is blowing up or had it kind of already blown up even before Netscape really got started like was there was there any moment where you're inside a Netscape and you're just like holy shit well the big moment was the night of the original release of the browser where you know you we hooked up one of the computers to the stereo

system and had the Canon fire sound effect for every time somebody downloaded it and the cannon started to go off okay before long the cannon was going off continuously like how long how oh that was like in a couple that was a few hours okay but I mean that was that was but again It was feeding on this moment. It was just like everybody, yeah. Yeah, we knew everybody who was using Mosaic. We knew how to get to them.

We just said, hey, there's this new thing. It was much better. I mean, it was built correctly. Yeah. It was our second implementation. And so we just, we knew it was better. Okay. And so now it's probably what, the, the, this is probably late 94?

Yeah. Okay. And so, and if I remember, you went public like in early 95, with no profits. August. Did you have any revenue yet? Yeah, yeah. So we had revenue. We doubled revenue every quarter.

that year. So the revenue that year was, my quarter was $5 million, $10 million, $20 million, and $40 million. Uh-huh. And we went cash flow positive, like, I think right around the time we were, we went public. And I think we were, if I remember correctly, we were cash flow continuously all the way to when we sold the company. So one of the legends that, one of the legends myths have built up around the company is that it was this early precursor for these unprofitable companies. Really? And actually, we were actually proud of ourselves at the time of like delivering cash flow. So basically through the whole thing. So was the decision to go public pretty obvious then at the time? It was just like your revenues are exploding.

People want the product. It was obvious to Jim. So, so, like, what's it like? So you're just barely out of college and all this stuff's happening around you. Like, what's that like?

You know, it was just, I mean, it was literally we were so heads down. It was just like, you know, go work somewhere. It was one of those things.

There was so much to do. There was so much to do. I mean, it's like, it's building a company, which is incredibly hard. But on the top of that, like the whole thing started to work.

And then there's just like you have like a thousand ideas. Yeah. Yep. Well, and a few more customer support calls on all that. Yeah, all this, all this other infrastructure to build. And, you know, and look, I'm learning business. I'm learning like basically all the business on the fly, right? I'm basically learning like, you know, I don't know, whatever is in an MBA plus another 10 years of operating experience. Yep. You know, and like, as fast as I possibly can. Right. So I'm either like, I'm either at work or I'm like at home reading business books. Like, those were the only two things that I did. And would, so you, now you know about the theories of product market fit and all that stuff. Like, how do you reconcile what happened at Detscape with the number. ship product market fit like yeah so how do you reckon because it just seems like one of these rare cases where it's just like lightning just struck and it was like huge right away i think for b-to-b there's like there are deterministic ways to try to get to product market fit for consumer stuff it's less clear to me even still yeah we actually use the term lightning strike like it may just be

well here's one of the questions is like there are these companies there are quite a few companies that have had lightning strike consumer hits in the last 20 years and that that led to the creation of like very interesting companies. There's probably, I don't know, in the U.S. alone, 50 or 100 or 150 of those, right? How many of those, how many of those ever had another one? Yeah, very few. In the same company that they didn't have to go acquire from outside. Yeah.

And I think it's Apple, maybe zero. Now people talk about the Internet as being easy for hackers to get to fundamentally insecure as an architecture or needs to be rethought in some ways. Knowing what you know now, are there things that you think you could have done or that Netscape could have done that may have made it play out a little differently. Yeah, so there's three big things. There's three big things that we should have done

would have made a big difference early on. And one of them we, well, there was one thing we did that mattered a lot. I'll talk about that. There's one thing we tried to do and couldn't get there, which remains a hot topic today. And there's a third thing that didn't even occur to us,

which I kicked myself. We didn't think about this, but I'll explain why we didn't think about it. So the thing that we did do is we got encryption in there. That's huge. And that was a fight then. By the way, it looks like it's going to be a fight again now.

The various Western governments are once again pushing to try to restrict the use of strong encryption. And for people don't know the history of that, like we fought that battle. And Netscape was Netscape Navigator was the first commercial implementation of encryption that became widely used. There had been other products before, but we were the first one that millions of people used. And so we, at the time, we developed Netscape to have strong encryption and the browser

meant that the browser was classified under U.S. federal law with criminal penalties as ammunition. It was classified in the same export control category as Tomahawk missiles. And so we were not allowed to export the version with strong encryption. We could sell it in the U.S. We couldn't export it. We had to export it weakened version. So our sales pitch to a user in, you know, France or Australia or something is like, hey, congratulations. You get the one that's easy to crack. Okay. Yeah. You know. U.S. government can have their way with it. I hope you like it. Right. Exactly. Yeah. And NSA has it pre-wired effectively because they can just

crack it easily. And so we fought really hard in the 90s. So encryption wars at the time. And ultimately, the government actually backed down. And as of, like, what was it, 97 or whatever, they actually changed policy. And they actually legalized, eventually legalized strong encryption globally for U.S. companies to be able to build products globally. That battle keeps getting re-fought. And it has come, and probably, in my view, it's come back to life. I think it's just an absurd thing to be. It's just like, do you want secure systems or not? Like, could somebody please decide. Right. Do you want secure? If you don't want to, if you don't, want secure systems fine. I guess we'll stop trying to build them. I guess they'll get built

in other countries and the U.S. tech industry will not be relevant anymore. So that's an option. But like if you want us, if you want American companies to win at tech, like maybe we should be able to build secure systems. And if you want us to be able to protect and defend the United States against cyber terrorism and criminals and all this stuff, you know, presumably that's a good idea. But anyway, we got that one in there. The one that we tried to do was integrated financial transactions. So payments, obviously, was something that you would want. And we tried to build that in. We tried hard there. The problem there is, you know, obviously money, payments, transactions that have been historically highly regulated. Right. And so we made arguably the

mistake in that case of asking for permission, which is we went to the banks and the credit car companies. You should have the pirates go crazy. Probably. The problem was we didn't have the technology yet. We didn't have Bitcoin. We didn't have cryptocurrency. This was pre-cryptocurrency. And so had we let the pirates go crazy, we would have had to just implement a system that just let you transfer money with like no permission. Yeah. And probably we would have gotten nuked for that. Yeah, that would have even been worse than the encryption. Yeah, like PayPal figured out a way to bootstrap a system, you know, a few years later, but, you know, they almost died. Like, they came close to dying. Yeah. They almost got regulated out of existence. They just barely

got through it. And so that, that was the big, that was the big one that like we should have had and we missed. But we did try. And that's one of the reasons why I'm so strong now, so positive on cryptocurrency and blockchain and Bitcoin and Ethereum and all these things today. It's just like internet scale, money and trust needs to happen. It was a huge problem that we didn't have it early. Had we had internet scale money and trust wired in early, like the internet economy today would not be based on advertising. Right? It would not be based any of the privacy stuff that people are worried about today. It would be based on money and trust. Yeah. And it would be a fundamentally better, stronger system. And so, and so with, our view is like with cryptocurrency, we have a

chance to go back and kind of redo that. Yeah. Now, of course, they're trying to, in various forms, keep that from happening as well. Yeah. They. But we're going to try. And then the one that I wish we had had, but we just, it didn't even occur to us as real names. Okay. Real identities. Oh, interesting. Which is the other part of have, of trust, right? Which is like, okay, who are you dealing with?

Yep. Right. And so all the issues, you know, spam and fraud and, like, all these issues, abuse and harassment and all that stuff. Like, it's basically, you can't solve any of that stuff if you don't have real names. And so, I mean, it's hard enough to solve those problems when you have real names. Yeah. It's impossible to do it if you don't have real names, I think.

Okay. Well, thanks, Mark. Good. Thank you, Mike. Great talking to you. Thanks for listening to Starting Greatness. You could follow me on Twitter at M2JR, and please shoot me an email with any comments or questions

to greatness at Floodgate.com. I hope you'll subscribe on Apple, Spotify, or wherever you get your podcast. And if you like this show, I'd be grateful if you could leave us a review on Apple Podcasts. Never let go of your inner power to do great things in whatever matters to you. And until we meet again, remember,

greatness is a decision. Thank you.