The a16z Show - Raghu Raghuram: AI, Robotics, and the Rebirth of Infrastructure

Episode Date: October 27, 2025

From Netscape to VMware, Raghu Raghuram has been at the center of nearly every major inflection point in enterprise technology.In this episode, Raghu joins Ben Horowitz, Martin Casado and David George to reflect on the early internet wars with Microsoft, how Netscape’s browser battles shaped a generation of founders, and the inside story of one of the most successful tech acquisitions in history, VMware’s $1.3B purchase of Nicira, which redefined modern networking and grew into a multi-billion-dollar business.They discuss how VMware scaled from tens of millions to over $13 billion in revenue, what it took to outlast the cloud revolution, and why AI is now triggering the biggest infrastructure reset since virtualization. Raghu shares his vision for the next decade — from data-center robotics and energy-aware compute to how AI is reshaping both startups and giants alike. Resources:Follow Raghu on X: https://x.com/RaghuRaghuramFollow Ben on X: https://x.com/bhorowitzFollow Martin on X: https://x.com/martin_casadoFollow David on X: https://x.com/DavidGeorge83 Stay Updated: If you enjoyed this episode, be sure to like, subscribe, and share with your friends!Find a16z on X: https://x.com/a16zFind a16z on LinkedIn: https://www.linkedin.com/company/a16zListen to the a16z Podcast on Spotify: https://open.spotify.com/show/5bC65RDvs3oxnLyqqvkUYXListen to the a16z Podcast on Apple Podcasts: https://podcasts.apple.com/us/podcast/a16z-podcast/id842818711Follow our host: https://x.com/eriktorenbergPlease note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures Stay Updated:Find a16z on YouTube: YouTubeFind a16z on XFind a16z on LinkedInListen to the a16z Show on SpotifyListen to the a16z Show on Apple PodcastsFollow our host: https://twitter.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

We had an offer from Cisco, and it was to, like, basically put a hole in the backyard and bury the company. And so, like, I took the long walk up to Ragu. Do you remember this meeting? Yeah, yeah, I don't want for the meeting. And I'm like, listen, we have this offer from Cisco. We would love to be in the hypervisor. And you know what, Ragu said? No.

You understood leverage at the time. Yeah, I'm not a super genius, but I'm not done. If you want to understand how enterprise software really gets built and scaled through multiple platform shifts, There's no better person to learn from than Ragu Raghuram, A16Z's newest managing director and general partner. In this episode, A16Z co-founder Ben Horowitz and general partners Martine Casado and David George sit down with Ragu to talk about what it really takes to build and reinvent great companies across generations of technology. We go deep on the lessons from Netscape and VMware, the strategy behind one of the most successful acquisitions in tech history, and how AI and robotics are transforming infrastructure all over again.

Let's get into it. Ragu at Netscape, you met Ben and Mark for the first time. Indeed. So what was that like? And what did you think of them at the time? And how are they now compared to them? Wow, loaded question. It's a good thing.

Ben, I don't think you're rescind offers, do you? By the way, Mark's not on the pod, too. Yeah, Mark's on the pod. You're a lot more mellow now than before. There was some circumstances. That is also true, him as a board member. Yes. You told me that.

His bedside manner has improved. Yes, as improved. In my defense, I would just say that. We were in this very weird situation where we came out with the browser, and it was like the biggest kind of software hit ever at the time. I put everybody on the Internet. And then Microsoft, who had 97% market chair on the desktop.

So basically, a complete monopoly. Max weren't a thing or anything else. And they decided their whole mission was to put us out of business. And we were selling the browser for money at that time. It's $50 a browser. And they did things that, like, I really haven't seen since. So they would put bugs and windows to break our client or browser, so it wouldn't work. They set their download thing on their downloader that,

It had a bug in it between like 13 megabytes and 13.3 megabytes, and our download was like 13.1 megabytes. It did stuff like that. The craziest was when we kind of deal with Compact, which was the biggest PC vendor to kind of bundle Netscape with all the compact PCs, and we did a big announcement with them was front page of the Wall Street Journal above the fold, the whole thing, which was a big deal in those days. and the next day,

Compact called us and said, you have to let us out of the deal. And we're like, why do we have to let you out of the deal? It's like a great deal for everybody. And they said, Microsoft is withholding Windows 95 from us unless we break the deal. Well, go out of business.

Like that type of tactic. Wow. So we were under a lot of pressure, just long to say. And so then the strategy at Netscape that I hired Ragu into was basically to replace all the browser revenue with server revenue. But the problem is we really didn't have

any server products. And the browser was, you know, when it peaked at like 250 million a year. And so it was a lot of revenue to replace in a very, very short order because it went from 250 to zero over a two-year period. And so anyway, so poor Ragu gets hired in by me, who was feeling very urgent at the time, I would just say. And you got, and you came in Right out of grad school, right? You were straight out of grad school. Yeah. Okay.

Yeah, but I didn't have time for a lot of that slow training type of stuff. It was all like very like military style training. It goes wartime all the time. Yeah, what are some of the stories of the war that you were? No, I mean, I think if I think back, Ben was on top of everything like you wouldn't believe. They're like, you couldn't miss a comma in your data sheet on Ben would catch it, right? It's crazy. People used to dread going into reviews with this guy.

But the second thing, though, in his defense, because we had no server products, I think you hired, what, six or seven product managers at the same time. None of us knew any product management. Some people are like one or two years in the industry. Some people are like me. So remember there was this paper floating around on the Internet

for a long time. Still is good PM, bad PM? Yeah. Didn't Ben? Of course, Ben, that's yours, right? Ben wrote that, no? You know, hey, brother, for those six guys. Yeah.

It wasn't meant to be published. That was for you. It was your training document? It was a training document. Congratulations, you were your training. So that is actually the second thing to say about Ben is even, I mean, systematizing organizational behavior. I think that's true of him then and true of him now.

Obviously, now he's written books about it. All right. So I want to fast forward a bunch here. So obviously we have Martin, Ben, Ragu. We got to talk about Nysira. So Martin, obviously, you're the co-founder and the inventor of SDIN. Ben was the investor and board member. And obviously Ragu was the champion of the acquisition at VMware.

So I'd love to hear the dynamic across the three of you. I mean, listen, the short version is that Ben saved my company from going out of business by investing in it and then helped run it. And then because we love Ragout so much, we gave him a big discount on a great company. It was a premium. I love that it's positioned as a big discount because it was like the highest-priced acquisition of its time. Yeah, I think we had it. It was, but if you look at the revenue numbers, that thing did after the fact, Ragu got it very cheap.

Yeah, that's right. Very cheap. But it was weird because, yeah, we only had, I mean, I don't know, we didn't really have, I don't want to say what a record. revenue was because I don't know if it was really even revenue. We had some checks. Yeah, yeah. And by the way, so part of the story is we had an acquisition offer from Cisco.

And we didn't want to sell. And so I thought if we don't get into the hypervisor, what we sold is we sold networking that would go in the hypervisor. But like the entire hypervisor market was VMware. Yeah. And so I'm like, well, if we don't get in the hypervisor, we kind of don't have a market. I'm like, there's one person that controlled the hypervisor, one person, and that was Ragu. So I took the lonely trip up to see Ragu. Hold on. This is when you had an offer from

Cisco, though. We had an offer from Cisco, and it was to, like, basically put a hole in the backyard and bury the company. And so, and we knew that because it was threatening hardware. And so, like, I took the long walk up to Ragu. Do you remember this meeting? Yeah, yeah, I don't remember the meeting. And I'm like, listen, we have this offer from Cisco. We would love to be in the hypervisor. And you know what Ragu said? No. You understood leverage at the time. Yeah, of course. genius, but I'm not done. It wasn't a nuance.

It was no. That's at the time. I thought we were basically done. We'd have to sell the Cisco. So then how did it progress from no to ask? Ask Ragu. By the time I got, by the time I'd gotten home, Shicker had called me. So there must have been some internal conversation.

No, so part of saying no was because we wanted acquires a company as well. Yeah, it was no to the BD deal. Yeah. You have to understand. So it was kind of, hey, we can gang up and compete with Cisco. And Raghu is, no, not gang up like that. Gang up like I will swallow you.

Yeah. Yeah. I'm buying the cow, not the milk. Yeah. But I was, I mean, there was no scenario in the world that it made sense for me to have a big market from our team. An independent. Yeah, of course.

Yeah. But more positively, we knew we had to get the next product that was going to sort of rule the enterprise like the hypervisor did. And this clearly was it. And Pat Gelsinger, to his credit, he was the CEO of the time, my boss. He was as equally convinced about it as I was. And so was Joe Tucci, who's CEO of EMC, which was held 80% of VMware. And so there was no hesitation from that point of view.

Yeah, I was very good. We got it done for a weekend, actually. Yeah. Yeah, yeah, it was some of the fastest corp-dev work. Yeah. Because I think also the VMware team and Ragu realized that if Cisco actually realized what was going on, they would buy it at any price because it was the only actual threat to Cisco. And speed, I mean, that's a lesson that carries through, especially against bigger companies, carp dev and acquisition in Twan. Speed matters a lot.

Speed matters a lot. Yeah, getting a deal done over the course of the weekend at that side. the highest price paid ever. Yeah. It's very fast. I will say, I mean, Regu has so many strengths as a leader, which many people know, product, et cetera.

But it's hard to overstate how complex the integration was because the reality was that the VMware had an internal team that was doing work just as good. Like literally, they were just a talented, just as good. Some areas they were stronger, some areas we were stronger. Now, what we had that they didn't have is we had all the Linux stuff just because we were doing this open source stuff. But we were a smaller team,

We're a team that actually got this big acquisition. And so Ragu is in charge of integrating this smaller team with a large payout, with a larger team. Both teams had done this great work in having that work out. And listen, we managed to do it. Yeah, we managed to do it. Yeah. So how did you actually do it? I mean, it took a lot of great leadership from the MISER team as well, right?

And the VMVIR team that was in there to get to work together. That's one. And then overall, it turned out to the value proposition that mattered to the customer had elements of what VMware it built and what Martinez built. So once you realize that,

then it became easier. The tricky part was whose base product do you use? And that was the hardest part of it. But once we solved that, then the rest became possible. I will say, when we were selling, I put in a call to Diane Green, who was the CEO before,

And I said, like, okay, I would love some guidance. Like, is there anything you can, you know, point me to? And she said, keep your sales team. That was it. That was kind of the guidance. And I didn't appreciate that until after we landed, which is if, and by the way, Viamore is phenomenal. Like Ragu and Pat were phenomenal.

They kind of allowed us, you know, to do our thing for the first few years, pretty much unencumbered, right? And then over time you have to integrate kind of more seriously. So the thing is, when you have your own sales team, can actually lead your product team much better just because they're directly doing the enablement, they directly see the customer pull, they directly have access to customers. So it's much easier to unify a team from the market on end if you actually control that market. So I honestly think one of the keys, in addition to the leadership, in addition to, you know,

the hands-off approach was just we were able to keep and grow out our independent sales team. And then over time, of course, we roll that back in. And let's face it, the category was not built out. the product suddenly was not built out. So without an independent sales team, we would not have been able to build a product. Yeah, we would have gone in the vine. Yeah.

Yeah. Okay, so then brag a little bit because this is one of the most successful integrations and, you know, financially acquisitions, probably in the history of technology. So what happened in the coming years afterwards? Yeah, I mean, I think there were two dimensions of value to VMware. One is the independent revenue from this.

I mean, this cut to about $2 billion in revenue. And this was, by the way, license. And you sold it for a billion, three? Two billion. This is why it was at discount, right? Yeah, get your mind around a less than one-time's revenue multiple. Yeah, so I was just going to say.

The second is the multiplier effect on the VMware core franchise. Yeah, sure. Because it made the, I mean, Microsoft's product was slowly getting better. Open source was getting better. Yeah. And now we were able to redefine the core virtualization stack in the enterprise to say, you've got to have this and you've got to have networking. Right.

And so just purely on a multiple of revenue point of view, it paid for 10 times. Massively. I will also say there was a portion of time when we were like just the BU that was the, you know, part of the mystery acquisition was a significant portion of VMware growth. Yeah. Right. So not only was it just like the revenue alone. It was actually, if you looked at the overall company.

Aggregate revenue added. Yeah. Yeah. Like, basically the growth was cutting from the BIA. It was a meaningful contributor to the growth. I forgot the numbers. It was 46%. There you go.

I remember. I remember. Just something around there. To defend the sales price, though, I remember when we had the meeting with the bankers, the dot for our multiple was like literally off the chart. Like of all the deals that had been sold, nobody had that like it just didn't even fit on the chart

how much revenue was it there was one other dot that we beat which was yammer oh yeah yeah yeah yeah yeah yeah but they had like 20 million slightly less successful integration yeah yeah yeah yeah god bless David Sachs for getting that deal done

yeah yeah okay huge success story okay so uh you know that's nicer into VMware obviously you were at VMware and then became the CEO ultimately. So talk about your experience building the company. At the time when we bought Nysair, we were on a product expansion path. So obviously, I mean, Sarah wrote a great piece on the platform,

yeah, what it takes to be a platform. It was as though she was at VMware, right, because it literally follows the playbook. And so once you get to a certain level of saturation in your core market, you got to build out the adjacent markets, right? And that's what we were up to. We built management, and we put Nassira for networking. We did our own thing on storage and then security.

So we were progressively building that out. So that was our task for the following seven, eight years. What that did is it vastly expanded the on-prem franchise. Because even though cloud was coming, we were continuing to dominate on-prem. And as you well know in the enterprise, things never go fast. always take their time. They don't really go away. New stuff comes on, but yes.

Yeah, exactly. So I think, so that was one big part of the mission. The second is, we initially tried a variant of the cloud, called we add our own cloud thing, which does not work. And then we decoines the industry

around what we call the hybrid cloud, because most of these enterprises, they had some and were some stuff on AWS and stuff on us. So we said, let's go partner. And that was another radical move. Yeah. Because people thought this was going to be a blood fire path between the two.

Yeah, of course. So I was doing that, right? And then we had to get the developer franchise, so we went and acquired pivotal. Yes. So it was basically building out the product portfolio. First, as a GM for all these data center businesses, and then as a CEO.

It's also crazy about it. It's like the amount of lessons that you, you saw in infrastructure software successful. Like, you know, under Palmeritz is trying to go to the application stack, which is very tough to like skip parts of the stack. Then you went back to doing adjacencies. You did organic product buildout like VSAN, which became billion-dollar product lines you did.

Inorganic acquisitions became billion-dollar product line. So I feel like, you know, like the broad scope of business strategy was embodied at VMware at some point. I think more than any other company. Like you can see it in hardware companies like Cisco, but very other, a few other companies had to play that. many games. In reality, if you're going to be around for more than 15, 20 years, you've got to play all those things. Yeah, that's true. Fair enough. Yeah, yeah. Because the market's changing you so fast. So, but yeah, I think if you have a consistent theme around how to do it, then

it's quite possible. Yeah, and actually, VMware, interestingly, was born before the cloud. Yeah. So although it was kind of a cloud technology, it was like a very, it was almost like not even first generation. It was like pre-first-generation cloud technology. So the cloud immediately put pressure on the business. This is very difficult product cycle circumstance. That's a business model too. Sorry? Yeah, even like most people's first experience with VMware that were around at the time was actually as a consumer product. Yes. Like it was literally like it was like, it was really like the first time I used was like the late 90s and I was like I'm running red hat on my Windows machine.

That was it. So, like, you go from like a consumer product to like this certain. And then, of course, you know, you did server consolidation. Then it became like, you know, Deep Enterprise product. And then, of course, there's all the OEM stuff that happened early on. It was a very, very complex business. Yeah, it was a complex business. And by the way, that's where the founder vision comes to play.

Diane and Mendel, right from day one, knew that they had to get to the server. Yeah. And they actually charted their path. They said, hey, we're going to get known with a desktop product, which, by the way, is going to work out all the bugs in the system. And then we're going to go into the server. into the server and then into the data center. So you've got to give them a lot of credit for that.

Yeah, for sure. Yeah. Yeah. So at exit, at exit, how large was the company? How much revenue? How many people? So we were 13.5 billion in revenue. And...

How big it was it when you joined, roughly? I think it was 10 to 15, about 40 a quarter, something like that. 40 a year, something like that. 40 million? 40 million a year. Or something like that. To 13 billion? Yeah.

What a rhyme. That's incredible. Yeah, again, with the cloud in your face, like, that's the most incredible part of it was. And Microsoft. Well, Microsoft. And Microsoft, yeah, of course. VMware was sitting on top of Windows, right?

I mean, like, you know, Netscape. Yeah, what was the name of Microsoft's crap? Hyper V. Hyper V. Hyper V. Hyper V. Hyper V. Yeah, yeah. No, I mean, I think after the round of Netscape's,

the thing that gave me most satisfaction was beating back Hyper V. Yeah, of course. I was going to say it. Yeah. I was going to face the same. I'm like, you're not going to get. Give me a second time. Yeah.

Give me a second time. I love that. Yeah. So, yeah, so $30.5 billion, about 37,000 people. Incredible. And $69 billion in Enterprise value. Yeah, a million. Wow.

Yeah. What a run. Okay, so I now want to shift topics. You have this incredible set of experiences. You know compute, network storage, maybe better than anyone, experience-wise. what are you going to do with Sarah? Yeah, I mean, I think I would say fundamentally two or three areas where I'm super excited by.

One is like we were talking about the other week, everything from the foundation model down all the way to the power station is going to get reinvented. Yeah, of course, yeah. Right? There is just no other way you can supply all the compute that AI is going to need, right? And that opens up all the opportunity in the world.

For the last 15 years, you really did not have opportunity as a hardware vendor because everything was being done in-house by the hyperscalers. Now there's neoclouds and the world is moving so fast, even too fast for the hypers, opening AI is going to build a lot of things on their own, Oracle, et cetera, et cetera. So now there's a legitimate infrastructure market that's opened up for innovators. So I think I'm super excited by that. I think that's going to be a significant area for both early-stage companies as well as late-stage companies.

Yeah, and helping late-stage companies navigate that market as well. Yeah, well, there's going to be new types of service providers, etc. Yeah. I think that's one. The second one, and this is more in partnership with you on the growth side, the enterprise transformation will happen, right, through AI. I think that's going to open up a lot of opportunities. And the third is adjacent areas to the data center, like robotics applied to the data center, generally robotics as a whole.

Those are all areas that are going to be physical AI, in other words, significant areas that I think are going to be a lot of exciting things, a lot of fun to go study and work on. So one thing that really occurred to me, you know, as Raghu was talking to us about joining, is where there's this very unique point in history where even very small companies, have the problems that would draw on the breath of someone like Raghu. Think about someone like Curse, right? You know, like the ecosystem includes like kind of incumbents at scale. You know, the company is at scale. How do you manage platforms? How do you manage the clouds?

All of these things are at the sophistication that you would actually see a VMware, right? And it's just because AI is growing so fast. And so one thing that I mean, I've said this, you know, many times. is Riggu is the best techno strategist in the industry. And I strongly believe that. But also, he has this wealth of experience when it comes to partnerships, you know, OEM deals, dealing with incumbents, you know, dealing with competitors,

dealing with talent, dealing with stuff, like the whole thing. So it's like if you can distill all that down. International expansion. International expansion. Yeah, exactly. Literally it applies to the companies in the portfolio that aren't that. Yeah. So, like, you would think like, oh, this is some, you know, this is only going to be growth-stage stuff.

And it's absolutely not the case is a situation. Well, it's not. That's the dynamic. They are early-stage companies that reach the problems of big companies so fast because they grow so fast. Totally. And so this is the magic of organic demand and, like, the market pool that they're all seen. In fact, as, you know, Regu was coming on board, I mean, probably every night, I would call him asking for some help with, you know, a 10-person company. I'm like, Ragu, can you help with this intro?

Can you talk to this, you know, about whatever? And so, and this is the reality of what we're living in. Everything's being changed all at once. The problems are the problems that you would face. as a very serious senior CEO. And so it's great to actually have that kind of experience and talent around the table. Yeah, early-stage companies are having large company questions being posed to them.

Well, it used to be like year 10 or 15 when you're facing things like, how do I be multi-channel, multi-product international. And now it's like year one and a half. No, you see the companies. All you see you see, M&A, like, these small companies, they're working very well, these very large cloud partners. I mean, we have companies that will, like, raise money and then broker a $100 million GPU deal, right?

I mean, this happens all the time. With tiny companies, like very small companies. And then you're relying on these, I mean, all of these things that you have to manage, you know, so. Yeah, yeah, yeah. Well, and the thing that's still true is none of the founders, you know, a year into running the company or two years in, have any of those skills.

Right, of course. Yeah. And so it's just such a boost to have somebody to take. talk to. I mean, it's just it's transformational because the number of mistakes that you will make right there and blow yourself to bits is just insane. Well, and

we have to change too, right? Like we the way you build a company is different. The technology stack is different. The type of people you hire are different. And so we also have to be different. And so one of the things that for me is great about having

ragu here is there's a lot to do on that front. you know, to kind of prove on every dimension there. So I need help too. Yeah. Yeah, exactly. It's both the combination of the companies growing really big, really fast and facing big company problems really fast.

At the same time, that companies stay private so much longer now. So, like, we have to evolve to that, you know, dynamic as well. And so one of the areas, Regue, that you mentioned, that you are intrigued by, and you have obviously great experience in as robotics. I'd love to hear your state of the world of robotics right now and what gets you excited over the next few years. Yeah, I mean, I started looking into the data center construction and all that, right? And server construction.

And you find that number one, all those industries are highly manual today, believe it or not, right? These AI servers that people are building is like 70% of labor or 80% of labor, right? Wow. And if you look at the bazillions of GPUs that have to turn into usable infrastructure and all the power that has to get converted, the only way that's going to happen is there's going to be a lot of robotics, right?

And then you look at that and you say, turn out, say, what are the generalizable elements from a robotic buildout of data centers? I think that applies to pretty much the robotic buildout of a lot of manufacturing things. I mean, humanoid is obviously the most exciting concept, but the pathways to getting humanized to work itself is very valuable because of all the ways you can use everything that comes along the way.

That's the really interesting thing. There is horizontal infrastructure that's needed, like the data infrastructure that's needed. And if you want to get the right training, you get the sensors from various different places that has to get synchronized. So there's a lot of new infrastructure that needs to get built. So I think robotics is so verticalized. that, you know, it's more defined by the market it goes after than something pure horizontal,

which is why I'm very happy Regu was focused on it, because when it comes to things like, you know, infrastructure creation and servers and data centers, like, we can become real experts in that and he's got a lot of background in that. And I just think, you know, it's kind of funny because, you know, we wrote this piece on like where China is, you know, ahead of the United States.

And a lot of people are like, okay, well, that means you're investing in humanoid. I'm like, listen, humanoid's are very interesting. Maybe somebody at Andreessen and Horowitz is investing in humanized. I know nothing about this. But I do know a lot about like the manufacturing of chips, for example, right? And so I think, you know, listen, we need to take a systemic approach to understanding in this market. There's a tremendous amount of opportunity. We're going to do a broad set of research.

But, you know, we will definitely focus on the areas that we understand. Yeah, absolutely. Yeah, and I think the important point that you're making is there's going to be a ton of productive use cases that happen that lead up to that point where, you have humanoid walking around and doing personalized tasks. Yeah, yeah. And the history of infrastructures, infrastructure is actually a second-order thing. Yeah.

Yeah. First, you come up with some solution, and then the infrastructure falls out of it, almost. And I think that's what has to happen in robotics, too. So you have a vertical solution, and then you get the infrastructure. That's right. I mean, I remember, like, you know,

we actually invested a lot in the drone wave. If you actually looked at those businesses at the time, and we had experience with a lot of them, like, you'd kind of evaluate, you know, at first we'd evaluate it, tech company. It's like, oh, this is a drone company. You look at the tech and you look at the team. But then you find, like, if you're selling into insurance,

you kind of have to become an insurance company. They're actually buying, you know, like whatever. It's either you're buying it from a human or you're buying it from a drone. And if you're in construction, you're a construction company. If you're an ag company. And so I think from that we've learned that you have to really be a specialist in this basically going to do it. So you can't just be kind of a garden variety infrastructure investor.

That said, sometimes you get these aggregation points where to build the robotics, you need, you know, there are horizontal tools you can use. So, for example, in the AV industry, it turns out you needed high-definition mappings and you needed a simulation. Yep, right? And so, like, you could create a company like applied intuition, which allows you to kind to kind of do software. So there are opportunities to do these kind of horizontal investments.

Sometimes there's software, sometimes they're hardware. But I think the closer you get to the actual robot, the more you have to verticalize into the industry. Yeah, absolutely. Once you solve the vertical problem, the horizontal pieces come out naturally. Yeah, absolutely. and there's commonalities that you identify. Absolutely.

That's exactly right. That's right. Cool. We're so lucky to have Ragu with this. No, no, no. I'm so lucky to be here. Come on. Yeah, this is awesome.

And the other great thing about him is he fits right in. Yeah, of course. I can't say how valuable that is. Oh, yeah. Perfect culture fit. Friday night, slacking at 9 o'clock with thoughts on markets and stuff. It helps if you're interesting. Yeah, exactly.

Exactly. Oh, we love it. Awesome. Thanks. Great, welcome. Yeah. Thanks. All right, guys.

Thanks for doing this. Thanks. Thanks for listening to this episode of the A16Z podcast. If you like this episode, be sure to like, comment, subscribe, leave us a rating or review, and share it with your friends and family. For more episodes, go to YouTube, Apple Podcasts, and Spotify. Follow us on X at A16Z and subscribe to our substack at A16Z.com. Thanks again for listening, and I'll see you in the next episode. As a reminder, the content here is for informational purposes only. should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security,

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