The a16z Show - 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...  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.

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 and Z partner appearances elsewhere here. This one is with A6 and 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 zero to one, 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 Noreomancer, 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. them. 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. Yep. We call this sort of synthetic, is there, we call these sort of synthetic startups. Yep. 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 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, 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 cray and thinking machines and basically put them in, you know, basically four locations in the U.S. 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'd build the walls. They'd leave the ceiling open. Then they'd lower the computer down through the ceiling up, but you were using a crane to 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 are authorized in the mid-80s, and then I got to Illinois in 89, and so they basically had been 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. So then you're building these early systems. Where does the idea from 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, you know, Skype.

So sort of, but sort of general purpose real-time conferencing, right? So video, you know, video, you know, audio and video, but also like, you know, it's all the standard complement, whiteboard sharing, you know, document and collaborative document editing and Google Docs 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 one of those funny things. Like, it's, it's, when we will talk about this, but like, the role of timing in the 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 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. 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 into 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 while you might use the internet, it's like, well, you can kind of do email, and then there's this hefty thing. You can download files. And then if you really want to get weird,

you can be on go for and wait. You can like go to go for 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 were 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. Yeah. 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, 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? He talked about this thing called the Memex, I think, and hypertext 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 free Google. Right. So this is like go to the card catalog. and try to figure out, like, can I swear on this podcast? It's okay with me. Okay, go to the card catalog. If you're 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 a 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 it's 1945. So it's actually like pre-digital computer. Like digital computer was like a brand new idea. 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 be able to store large amounts of information, retrieve it, share it, transmit it over long distances, search it. There we were sitting in like 1992 being like, okay. Yeah. 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. Bologi, Sri Navasson. 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 was 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, where, because what you want is the flywheel where 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 floor wheel effect.

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 the, you know, sort of the NSF net. The other hack actually was at the time, internet news groups.

And so we're actually the carrier. Yep. And so it just like, it turned out, and this is one of those kind 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 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, 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, 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 and, you know, Cardiff.

I've got a new website that has, you know, lyrics for the REM 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 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. Yeah. It was the main way people were finding out about new way. pages, right? Because this is pre-Google and everything else for Yahoo. But the other email

was customer support email for the browser, which was the thing that almost, 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's side started expand. We became more ambitious. And then we went, 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 and $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 had the, we were the dog that caught the butt. 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 uh 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 we don't want to pay money to take all these support emails yeah exactly which is literally and what I at the time I was like well that's kind of you're it'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. That happened kind of with Google, too, I think, later on. Right. Right. At some point, Google would have taken over the entire computer science department. Yeah. Right. Eating all the computers. And it was, yeah, you get kicked out of the nest. Yeah. 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 basically there's not, you know, there's very, there's very little actually in Champaign-Urbana. Okay. So now you got to get a job. No. No. Well, I had a slight advantage in my job search.

Okay. Which is like, you 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, 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 of here. 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 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. This is 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 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 super highway. It was going to be sort of set top boxes, interactive television. But it was going to be provided by big companies.

Yeah. Or should the government? Or the government. Yeah. They built the regular highway. Should they build a digital super highway? And that'll help us against Japan, quote unquote. Exactly.

That was the big thing. That was the thought process. Yeah. The country was going to take everything at the time. So, but it was 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 of be part of it. It would be this top-down thing. But like, they would decide what it was going to be. And then that goes to the second thing, which is one way. versus two-way, which was it was going to be a, it was going to be a one, primarily video, but like a one-way push, right? And so this was, this is why the whole metaphor, the top, 500 channels, 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. You'll just have a button that has a slice of pizza on it. Yeah, exactly. Like, we really had those. Or like, you know, American Idol. I'll be like American Idol. I'll just be like, oh, you can vote for the person who's, you know, singing the vest or something like that. Yeah. 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. Right? And by the way, the press, the press was one way at that time. And 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 these supercomputers and you're building a browser. It's almost like the world was thinking in Cartesian coordinates. and you were raised only thinking 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 found is it's like noticing. It's, it's, 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. You're 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 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? Yeah. 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. 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 talking about like, there are pings from the future. Is the other way that 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 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, there wasn't anything for you to unlearned. 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 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-WIS 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 work on, to work with them.

And so he literally went out to a whole bunch of people in the industry who he knew. 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 of mutual, a guy, actually a guy he worked with this guy, 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, you know, 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, okay.

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. Paige calls you. You know, hey, you know, this is Larry Page. Which would 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. Yeah. Yeah. And so I'm like, yeah, you know, 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 of 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 a job. Yeah. But he did not get as nearly a positive response as I would have imagined. from a lot of people who had like actual, you know, had careers, let's say. And so through process of elimination in part, I think it came down to me. And then he and I started brainstorming. And we actually, yeah, and then we started working together on plans. 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. 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,

bottom, bottom, stuff thing, which is just like, even 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, 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. 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 is great. 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 had 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, Orlando, Florida. This was written up in all the magazines and newspapers at the time. It was a really cool, like, system that's kind of analogous to what you have today on a modern, you know, whatever Comcast or DirecTV 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 the 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 they're like, okay, those two plans don't work. And then it was literally 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 it's going to 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. 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 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, It's got a 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 context, 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 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. By process of elimination,

it's like, okay, we're doing this. Yeah. Then you just go raise money from John Dorr, Kleiner Perkins? Say, we ran about six months with Jim. We ran about six months with Jim's money. And then he was like, you know, I'm rich, but I'm not that rich. And so he was like, we're time to go raise money. So Jim zeroed in a Kleiner Perkins because KP had actually backed Son,

which was SGI's big competitor. And he had always really, he told me he had always really respected how he, So he had son, 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 go for it. And this must be around the time when Mosaic has started to see even bigger lift, right? Yeah, yeah. Because I seem to remember like the summer of the summer of 94, it was starting to really become a thing. So it just, it was snowball. It was a snowball. It was a snowball.

down the hill, picking up speed. And it was starting to mainstream. And so you were starting to get, you're starting to get the first signs of consumers actually coming on the thing, which is normal people. Okay. 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 on at the time. And 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 on 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 it 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 rewrite with what we knew now. But we did figure, like, it's the name of the research project. I knew the name Sun was actually named after the research project at Stanford spawned 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 free thing.

Yeah. So it's just obviously, we'll just call this thing Mosaic Communications. We'll figure out the product name later. Yeah. And, and then University of Illinois then did a very 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, they went, they sent lawyers to all of our potential customers and told them they were going to sue us. Oh.

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 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 an inconvenient fact, as they say.

And so we actually ended up suing them before, 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 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 suing them.

And then we negotiated a settlement. Okay. And we paid them. And as part of the settlement, we changed the name. Okay. Yeah. And that was the, 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 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. Yeah. But it was building directly in the momentum from the previous thing. And then Ellen, We knew, what else do we knew?

We knew Illinois was not going to continue the Mosaic project because we knew they didn't. Yeah, 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's time we can need a secure, needed encryption, which the original browser didn't have.

It's, so then, so, 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 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, we hooked up one of the computers to the stereo system. And the Canon fire sound effect for every time somebody downloaded it. And the Canon started to go off.

Okay. Before long, the cannon was going off continuously. Like how long? Oh, that was like in a couple. That was a few hours. Okay. But I mean, 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 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 that 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, yeah, 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. There 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. Right. And then it's just.

Well, and a few more customer support calls. And 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? Uh-huh. I'm basically learning, like, you know, I don't know, whatever is in an NBA plus another 10 years of operating experience. Yep.

You know, and, like, as fast as I possibly can. Right. So I'm basically 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 notion of 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. Yeah. 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 led to the creation of like very interesting companies. And there's probably, I don't know, in the U.S. alone, 50 or 100 or 150.

a few 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. 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. 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 Nescape to have strong encryption in 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 of 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 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.

NSA has it pre-wired effectively because they could 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 secure systems, fine. I guess we'll stop trying to build them. I guess they'll get built, you know, in other countries. And, you know, 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. 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 card 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-cryocurrency. 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 do.

like they came close to dying. Yeah. They almost got regulated out of existence. They just barely got through it. And so 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.

Yeah. 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. Yeah. Right. It would not be based on any of this privacy stuff that people were worried to be. about today, it would be based on money and trust. Yeah.

And it would be a fundamentally better, stronger system. And so, and so, like, with crypto currency, 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 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 harassing 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. That was 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 podcasts. 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.