The Tim Ferriss Show - #163: Marc Andreessen -- Lessons, Predictions, and Recommendations from an Icon

Starting point is 00:00:00 At this altitude, I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question? Now would have seen a perfect time. What if I did the opposite? I'm a cybernetic organism living tissue over metal endoskeleton. The Tim Ferriss Show. This episode is brought to you by AG1, the daily foundational nutritional supplement that supports whole body health. I do get asked a lot what I would take if I could only take

Starting point is 00:00:32 one supplement. And the true answer is invariably AG1. It simply covers a ton of bases. I usually drink it in the mornings and frequently take their travel packs with me on the road. So what is AG1? AG1 is a science-driven formulation of vitamins, probiotics, and whole food sourced nutrients. In a single scoop, AG1 gives you support for the brain, gut, and immune system. So take ownership of your health and try AG1 today. You will get a free one-year supply of vitamin D and five free AG1 travel packs with your first subscription purchase. So learn more, check it out. Go to drinkag1.com slash Tim. That's drinkag1, the number one, drinkag1.com slash Tim. Last time, drinkag1.com slash Tim. Check it out. This episode is brought to you by Five Bullet Friday,

Starting point is 00:01:22 my very own email newsletter. It's become one of the most popular email newsletters in the world with millions of subscribers. And it's super, super simple. It does not clog up your inbox. Every Friday, I send out five bullet points, super short of the coolest things I've found that week, which sometimes includes apps, books, documentaries, supplements, gadgets, new self experiments, hacks, tricks, and all sorts of weird stuff that I dig up from around the world. You guys, podcast listeners and book readers have asked me for something short and action packed for a very long time because after all the podcast, the books, they can be quite long. And that's why I created five bullet Friday. It's become

Starting point is 00:02:00 one of my favorite things I do every week. It's free. It's always going to be free. And you can learn more at Tim.blog forward slash Friday. That's Tim.blog forward slash Friday. I get asked a lot how I meet guests for the podcast, some of the most amazing people I've ever interacted with. And little known fact, I've met probably 25% of them because they first subscribed to Five Bullet Friday. So you'll be in good company. It's a lot of fun. Five Bullet Friday is only available if you subscribe via email. I do not publish the content on the blog or anywhere else. Also, if I'm doing small in-person meetups, offering early access to startups, beta testing, special deals, or anything else that's very

Starting point is 00:02:40 limited, I share it first with Five Bullet Friday subscribers. So check it out, tim.blog forward slash Friday. If you listen to this podcast, it's very likely that you'd dig it a lot and you can, of course, easily subscribe any time. So easy peasy. Again, that's tim.blog forward slash Friday. And thanks for checking it out. If the spirit moves you. Hello, my friendly little mogwai. This is Tim Ferriss, and welcome to another episode of The Tim Ferriss Show. I'm very excited about this one, folks. I've wanted to do it for a long time. It took about a year, year and a half to set up. And of course, every episode is my job to try to deconstruct world-class performers, to tease out the perspectives, habits, routines, favorite books, etc. that make them as good at

Starting point is 00:03:27 what they do as they are. This episode, we have Mark Andreessen at PMARCA, P-M-A-R-C-A on Twitter. He is a legendary figure here in Silicon Valley and indeed worldwide. Even in the epicenter of tech, it's hard to find a more fascinating icon. Mark co-created the highly influential Mosaic internet browser, the first widely used graphical web browser. He also co-founded Netscape, which later sold to AOL for $4.2 billion with a B, and then co-founded a loud cloud, which sold as Opsware to Hewlett Packard for $1.6 billion. He is considered one of the founding fathers of the modern internet. This all makes him one of the few humans ever to create software categories used by more than a billion people.

Starting point is 00:04:10 Also one of the few who's established multiple billion dollar companies. He's now a co-founder and general partner of the venture capital firm Andreessen Horowitz, where he's quickly become one of the most influential and dominant tech investors in the world. Now, I want to try to keep this short, but it's hard. And I think you'll enjoy at least what I'm about to read. So we refer to an email in this conversation. And our conversation took place at the Sand Hill Road offices of Andreessen Horowitz. We refer to an email from Mark to Ben Horowitz and exchange. And this is how it reads, because we don't dig into it in

Starting point is 00:04:47 the interview. This is page 13 in the hard thing about hard things by Ben Horowitz, which is a great book to Mark Andreessen. This is after a media interview where Ben felt that Mark disclosed the company's strategy prematurely to Mark Andreessen from Ben Horowitz. Subject, launch. I guess we're not going to wait until the 5th to launch the strategy. Period. Signed, Ben. Within 15 minutes, I, this is Ben, received the following reply. To Ben Horowitz, CC, bunch of folks, from Mark Andreessen. Subject, launch. Apparently you do not understand how serious the situation is. We are getting killed, killed, killed out there. Our current product is radically worse than the competition. We've had nothing to say for months. As a result, we've lost over $3 billion in market capitalization.

Starting point is 00:05:34 We are now in danger of losing the entire company and it's all server products management's fault. Next time, do the fucking interview yourself. Fuck you, Mark. So we get into some really fun stuff in this interview that I don't think Mark has discussed in many places. We talk about his epic debate versus Peter Thiel. We talk about all the usual questions, favorite books that he's gifted to other people, favorite documentaries, movies, morning rituals, what he would put on a billboard, et cetera. We talk about rules for investing, what he would put on a billboard, etc. We talk about rules for investing, what he does in partner meetings to make people defend ideas or propose ideas. We talk about AI. We talk about the future of Bitcoin, drones, who to watch. We talk about

Starting point is 00:06:18 what he would teach in a ninth or 10th grade class, advice to his younger self, what he misses about the mid-90s internet and how he might recreate it, how he thinks about or handles FOMO. It goes on and on. We really had an extremely detailed and rich conversation, and I hope you enjoy it. And please do say hi to Mark. He's very active on Twitter, at PMARCA, P-M-A-R-C-A. Without further ado, please enjoy. Mark, welcome to the show. Thanks, Tim. I am so thrilled to be here. I've been hoping to make this happen for quite some time,

Starting point is 00:06:56 and I figure we'll just jump into it. Awesome. So the first question is strong opinions loosely held. You're associated with that expression. Can you explain what that means? Yeah. So it's kind of a mentality. It's a mentality around how to start a company for sure. And it's a mentality of how to invest for sure. And I think it's a mentality that's probably helpful in a lot of other areas of life. And so it's, it's kind of this, I'm drawn to paradoxes. I'm drawn to kind of, or, you know, is it the philosophical term? It's like a thesis antithesis, uh, synthesis kind of thing. And so, cause a lot of people, a lot of people in the Valley have very strong

Starting point is 00:07:32 theories. And then the problem is they carry them too far because there's always, there's a countervailing theories, right? So you kind of yin and yang kind of thing. And so strong views, strong views is very important, right? So most people go through life and, and, and basically never develop strong views on things or, or things or specifically go along and basically buy into the consensus. And so one of the things I think you want to look for as both a founder and as an investor is you want to look for things that are out of consensus, right? So something very much opposed to the conventional wisdom, which sounds easy, hard to do, but you want to try to do it. And then if you're going to start a company around that, if you're going to invest in that, you know, you, you better have strong conviction because you're making a very big bet of time or, or money or both. Um, the problem is, okay, it's a strong view. Great. Okay. What happens when the world changes, right? What happens when like something else happens? Uh, right. And basically the way, right. The way the world works kind of in business and investing and other places is just when you think you have everything figured out that everything changes,

Starting point is 00:08:22 right? So the sort of system evolves and things happen. What do you do when the world changes? There, what you just see everywhere, I think, in the world and everywhere in business, everywhere in investing, are people just hate changing their minds. It's just like people get locked in. You see it in politics all the time as well. People just get locked into a point of view on things, and then you get all these biases like confirmation bias where people feel like they have to. That's the thing in politics where flip-flopping is viewed as bad. Right.

Starting point is 00:08:49 Right. So take it as an example. Politician who flip-flops is viewed as bad and sort of weak and probably evil. Actually, it's interesting. If you talk to the world's best hedge fund managers, they're the exact opposite. They love changing their mind. I'm one of the few people who will openly admit I love spending time with hedge fund managers. I think they're awesome. I think they're, I feel the same way. They're fantastic people. And they, they are the most

Starting point is 00:09:10 open-minded people I know. And they, they love when you tell them that they're wrong, they get all excited, their eyes light up and they're like, Oh, why, why do you think that? And they're genuinely interested because if, if you're right and they're wrong, they will change their minds and they will, you know, their hedge fund managers, they'll literally reverse the trade. They'll, if they were long in a company, they'll flip around and go short on it. They're totally fine with that. And that's how it works. And so, so what I carry away from that is it's, it's, it's the weekly held part, which is convicted, convicted, convicted, new facts change, right? But, but it's a paradox, right? Or it's,

Starting point is 00:09:40 it's a tension because those are, those are antithetic, you know, it's determination coupled with flexibility. Like they're, they're, they're, they're antithetical. What you see in the startup world is sort of these two kinds of advice then that, that, that, that express this. And there are people who with a straight face will give both of these forms of advice without ever acknowledging that they're in conflict, right? One of which is fail fast, right? You know, you want to fail fast. Like it's going to be, it's great to fail. You want to discover what's wrong. You want to fail and do something different. And then the other, uh, is you have to be determined and you can't give up. Okay. Like how do you possibly reconcile those? And my view of that is that's, that's where you get to strong views weekly held.

Starting point is 00:10:11 So how do you advise in, in that particular example, for instance, or assess which tact founders or a company should take potentially, because you, you look at some examples, let's just say Uber or something like that, where the model as it began is very much similar to where it is now. Then you have other companies, let's say, uh, like a Twitter or others where they, they pivot into a gold mine effectively. And then, I mean, then obviously other things have to be later on top of that to make it successful long-term. But having been in the Valley now myself for 15, 16 years, you see a lot of people who change their mind almost too frequently with inconsequential facts, perhaps. How do you think about advising a company that's struggling as to whether they should stay the course or pivot, as they would say? Yeah, yeah.

Starting point is 00:11:02 So we see both cases. We see both, we see both cases, both failure cases. We see companies that are just, they're almost, it's fail fast thing is frankly completely out of hand. And, and I'm old fashioned where I come from. People like to succeed. Like it's like, I like to say like we, before this word pivot, like we didn't have, like when I was, when I was a founder, when I first started out, we didn't have the word pivot, right? We didn't, we didn't have a fancy word for it. We just called it a fuck up. So like I'm old fashioned on this. Like I like to succeed. I think succeeding should be the goal, not failing and certainly not failing fast or slower, any other form of failing. So,

Starting point is 00:11:32 so I get really kind of cranked up about this, but, but we do see companies that literally every time we meet, every time I meet them, they pivoted. Like, and so every time I meet them, they're off to something new and, and they're, it's like, I don't know, it's like watching a rabbit go through a maze or something. They're just never, they're never going to converge on anything because they're never going to put the time into actually figuring it out and getting it right. But then you do see the other case. And this is where the fail fast thing came from, is you do see the other case. You see people who just absolutely are determined, will just pound their head against the same wall for years and years and years and years. And you admire them for their determination. And then at a certain point,

Starting point is 00:12:04 it just becomes obstinance, right? And then at some point it becomes self-destructiveness. It becomes Don Quixote. You're just tilting against windmills kind of arbitrarily. Those are polls. We do see behavior at the polls. The question you're asking is, of course, the key question, which is like, okay, what's in the middle? How do you know? And frankly, I don't think there's an answer to that. I think that's, or the answer is judgment. I think that's the test. Basically there's, I think there's a couple of key tests for, for founders or for that matter, for investors in these kinds of decisions. I think that's one of the really core tests is, you know, do you fundamentally have the judgment

Starting point is 00:12:35 to be able to make that call knowing by the way that either, either way could be a big mistake. Like, you know, nobody's going to tell you, you're not going to get any confirmation from anybody that, oh yeah, you made the right call like that. You're not, you're not going to realize like if you change and then succeed, it's all great. But by the way, you might have succeeded at the old thing even better. If you change and fail, you know, you'll never know whether the old thing would have worked. Like, you know, the, the counterfactual, like, you know, science, I call it the counterfactual. You never know the counterfactual. The way my brain is, what I'm always thinking in terms of the counterfactuals, I'm always thinking in terms of the way things could have been right.

Starting point is 00:13:04 The world evolved in a certain way, kind of as a consequence of people making all these decisions on the fly. People could have very easily made a different set of decisions. The world could have ended up in a very different place. And so the idea that you're ever going to know the consequence of your decision, I think, is probably a fallacy. Or what the alternative would have been. Like the relative result of your decision. And so I just think you basically have to fall back on judgment and you have to fall back on some sense of the intangibles.

Starting point is 00:13:28 And when you're looking to, say, stress test ideas, and if we look at it in, say, the case of a partner meeting here, so you mentioned hedge fund managers, and I read a profile of Ray Dalio at one point. I guess it's Bridgewater Capital. And they talked about his meetings and how they stress test ideas and how people need to defend ideas.

Starting point is 00:13:53 How does a good partner meeting go? If someone say proposes, I was going to say a trade, an investment, that is a substantial investment. What then happens from that point to a yes or a no decision? So we don't get to hedge fund manager can reverse himself, hedge fund manager, bad trade.

Starting point is 00:14:11 The next day he can turn around and take the opposite trade. We, we don't get to do that. Right. So when we invest, it's with, it's knowing that we're in for 10 plus years basically is our assumption. So it's,

Starting point is 00:14:18 and by the way, we make an investment decision. It's a, it's a commitment of dollars. It's also a commitment of somebody's time. And, and by the way, the organization's time and bandwidth. And there's only so much of that. And then the other thing we have in venture is when we make a decision, we then become committed to that company in that category.

Starting point is 00:14:34 And so we can't invest in their competitors, including, by the way, their competitors that don't even exist yet. For example, the investors in Friendster were more likely than not completely, not only maybe unwilling, but also unable to invest in Facebook when it came along because they were conflicted. Because the founder of Friendster would have said, you know, you can't invest in a competitive company. And so our decisions are big decisions, and they have serious consequences for the future of the firm. So on the one hand, it's very important to us to have a full discussion and get all the facts on the table and really kind of vet these things out. On the other hand, we're trying to preserve the contrarianism kind of at the core of what we do, the strong non-consensus views. We're trying to be able to invest in the things that really are unusual and odd that other people aren't taking seriously.

Starting point is 00:15:15 And one of our theories about venture capital is that so everybody thinks like in investing, it's like you either make a good investment or a bad investment. I actually think that's not the big issue. I think the issue, at least in venture capital, is whether you make a good investment or a great investment. I actually think that's not the big issue. I think the issue, at least in venture capital, is whether you make a good investment or a great investment. And I think good is the enemy of great. We see many companies that are just fine. And that are, you know, yep, founders are good, and the market seems good, and the product seems good, and the customers kind of like it, and they get a little revenue, and it's kind of all fine.

Starting point is 00:15:40 But those companies tend to never go anywhere. And then every once in a while, we'll see these companies that just have some extremely strong strength, some extremely kind of special, wonderful thing going on that, by the way, may have all kinds of problems and issues, but there's something at the core of what it is that's really special and magical. And those are the ones that we want to do. What we're trying to do is basically stock our portfolio with just investments like that. And so to capture that, you can't have, it'd be very easy in a conversation about the weaknesses of something to beat the idea to death and you never invest. And so the rule that we have, and then you would only invest in the consensus ones.

Starting point is 00:16:12 You'd only invest in the very good ones as opposed to the great ones, and then you would fail as a firm. So we have to kind of, we have to do, again, both things at the same time. We have to try really hard to encourage the strong non-consensus thinking, but also have the full discussion to make sure that we really stress test that thinking. So the way we do it is basically each of our GPs has the ability to pull the trigger on a deal without a vote or without consensus. And basically what we say is if the person closest to the deal has a very strong degree of positive, you know, commitment and enthusiasm about it, then we should do that investment, even if everybody else in the room thinks this is the stupidest thing they've ever heard of.

Starting point is 00:16:44 However, you don't get to just go do that yourself completely on your own without stress testing your own thinking. And so it's the responsibility of everybody else in the room to stress test the thinking. And if necessary, we actually create a red team. We'll actually formally create sort of the countervailing force and we'll designate some set of people to counter-argue the other side. It's like a debate team. Yeah, basically, right. And then the way that we try to, you know, and this is fraught with, like, there's all kinds of ways this can go wrong, because, like, what if I bring in a deal, or what if Ben brings in a deal, or what, you know, versus the new person bringing in a deal, or whatever.

Starting point is 00:17:16 And so what Ben and I try to do is we do this to each other, right? And so whenever he brings in a deal, like, I just beat the shit out of it, right? And I may think it's the best idea I've ever heard of, and I'll just trash the crap out of it and try to get everybody else to pile on. And then at the end of it, if he's still pounding the table saying, no, no, this is the thing, then we all say, okay, we're all in. We're all behind you. And then it's a disagree and commit kind of culture. By the way, he does the same thing to me. So it's the torture test. What are some of the keys to fighting well?

Starting point is 00:17:48 I think it seems key to many different types of relationships, personal business or otherwise, the ability to sort of conflict resolve or just fight well and then make up. So it seems like you and Ben have, not my words, but like fought like cats and dogs, but you always kind of get over it. We prefer old married couple, old married couple. There is a story. I don't know if it's accurate about Netscape early days, something related to an interview with a journalist. Do you know the story I'm talking about? It's in Ben's book. Okay. So, right. That's okay. Here we go. Including the email you're about to reference. All right. So could you, could you, could you describe this for people who are unfamiliar?

Starting point is 00:18:27 I really think you... For that, you've got to read Ben's book. Let's just say we started out our relationship with vigorous disagreement. And we've continued that to this day. But how do you... This is a family podcast. I don't want to use it. Oh, it's not a family podcast.

Starting point is 00:18:42 If you want all the bad words, Ben's book, The Hard Thing About Hard hard things. It's in the book and I'll put it in the show notes. The, how do you, I mean, you guys got off to a very aggressive start. How did you identify that Ben was someone worth having those types of disputes with that? There was a value in, in, uh, what he brought to the table as opposed to just another person that you were butting heads with who is not worth keeping at the table. So honestly, there, there were, there were three, there were three things. So one is he would, he would talk back to me. So he would like argue right back at me. He wouldn't just go into the field. He would just roll over. Like he would argue right back. And a lot of, a lot of what

Starting point is 00:19:20 you see this, I don't know if you just observe a lot of companies over time or investment firms or whatever, you know, everything, you know, there if you just observe a lot of companies over time or investment firms or whatever you know everything you know there's there's a temptation everything wants to become a hierarchy and then the people always don't have trepidations about speaking truth to power and a lot of what i've always found the really sort of wise and smart leaders are trying to do is they're trying to actually find the people in the organization who will actually talk back um it's actually you know it's one of the ways to really get ahead you know this way there's certain organizations where the way to get ahead is to talk back to the leadership, right? That's how you get noticed.

Starting point is 00:19:49 By the way, there are other organizations where that doesn't work at all. And I would recommend getting out of those as fast as possible. We try to be, at least Ben and I want this organization to be one where people will actually speak truth to power and argue back at us just like anybody else. And so, which is why he and I argue so much is because we want to set the model and set model and set the precedent. So that was one is he would talk back to me too, as he was often, if not always right. And I wouldn't say always just because nobody is, but like he was very smart and very clear thinking. And then the third thing is I saw something early in him, um, that he was just amazing working with people, um, which is not something I think has ever been necessarily true of me. Um, but he was just like watching him in front of a group of people was just routinely magical

Starting point is 00:20:27 in terms of how he could get people, how he could communicate with people in a very clear way, how he could be very fact-based, but he could really make people feel, you know, kind of in a really fundamental way. And so that combination, you know, made it clear that he was somebody very special. So we mentioned Ben's book, which is one of a handful of books that many, many of the best operators, founders I know in Silicon Valley routinely reference. There are a handful that come to mind. Aside from that, four steps to the epiphany, I guess, would be one. This one here that was right in the lobby of your office, High Output Management with a new forward by Ben Horowitz,

Starting point is 00:21:07 is another which went out of print and then came back into print because it became a bit of a cult classic here in Silicon Valley. Are there any books that you would prescribe to, say, a would-be entrepreneur coming out of college just to give them and to increase the likelihood of them succeeding? Are there any other books that come to mind? Yeah, so High Output Management, it's one of Andy Groh's books.

Starting point is 00:21:30 It's the best book on management ever written. He wrote another book called Only the Paranoid Survive, which is one of my favorite topics. And so that is also a very good book we recommend. Ben's book is good. I think Peter Thiel's book is self-recommending. And it's an excellent book, zero to one. And then there's a bunch of others.

Starting point is 00:21:44 There's a bunch of others that are, are, are, are, are good. Um, uh, really though, I think where I got a lot of my education from, um, was, uh, history, reading history. And so I would go back, like I would go back and read rather than reading a lot more about the contemporaries. I would go back and read about Edison. Um, I would go back and read about Ford, Rockefeller, JP Morgan. Um,, I don't know, maybe it's just me, but like I find the period of kind of call it 1870 to 1920, 1930, really interesting. So you had sort of the arrival of many of the technologies

Starting point is 00:22:13 that kind of built the world that we live in today. Disruptive period. Yeah. And histories, I always find histories is where like, I didn't really study history in college or anything, but I find histories is weird thing where the way that you're taught history, like in school, like in high school, you know, it's like it's all these legendary people and they're kind of all, you know, Olympians, the founding fathers and these great generals or

Starting point is 00:22:30 whatever. And it's like, they've, you know, you got the names, you got the dates and they did these amazing things. And they're kind of these great, like, and they feel like unrelatable, like, and you, like, you couldn't possibly like to even at least where I come from, I even think that you could have ever had, have anything in common with these people. It was just like a non, it was not something that ever occurred to anybody. Like they're like the, you know, the Pantheon of kind of the legendary people who have lived. Um, and I just found like the, the really well-written biographies that get you inside the heads of what it was like to be Walt Disney at age 20, right. Or what, what it was like to be, you know, I don't know, Carnegie or

Starting point is 00:22:59 Mellon or Ford, um, or what it was like to be, you know, for that matter, William Randolph Hearst, or, you know, these people we've all heard of, like the really good biographers are really good at getting inside the head of what it was like to be them then before they became right before they became the people who ultimately made it into the history books. And, and honestly, a lot of stuff, like a lot of things have changed, but a lot of things haven't changed. Like people haven't changed a bit. And so I always find like in those histories, you can always kind of see, okay, that personality type, like, yep, I know 13 people like that. And so I find that there's actually a lot more to template against and a lot more to kind ofon. And people don't change. I mean, you see the same archetypes. You're like, oh, that's Bob, my coworker. He does the same thing.

Starting point is 00:23:49 And the biography mention made me think of Walter Isaacson's book on Ben Franklin, who was always sort of untouchable in my mind. But it included all of his foibles and challenges and self-doubt. And it really humanized it in a way that actually made me aspire to do bigger things. If you wanted to get someone hooked on biographies, is there any particular book you would recommend? Oh, there's a bunch. The Walt Disney biography.

Starting point is 00:24:13 I'll just mention it because it's a great, one of our founders, Brian Chesky, the founder of Airbnb, is sort of, Walt Disney is his hero. And so he's gotten me even more deeply into that. So the author Neil Gabler, who's written the best biography on Walt Disney, and it's a phenomenal book. I actually like another one. I really like, um, coming out of kind of left field, but there's a Charles Schultz is the

Starting point is 00:24:33 creator of peanuts. The Schultz biography is amazing. And basically the case that he makes is that, um, he basically makes the case, biographer makes the case that Peanuts was the longest continuous work of American art ever made. It was a 60 year art project, um, with deep foundations in American history and psychology and philosophy. Um, and, uh, through, and so it was a reflection of the life, you know, of the, of the, of the person who made it. And, and of course it was also a great Peanuts is a great entrepreneurial accomplishment because, you know, it was this very personal thing, but at the same time it became this gigantic business success. So I think that one is great. The Wizard of Menlo Park is a great biography of Edison. And Edison is very much, Edison was kind of proto-Silicon Valley in a lot of ways. And I

Starting point is 00:25:18 think he's really interesting to, his record of sustained innovation in many, many different areas and how he then went out to try to commercialize things. We, we, goodness is we are much better at the commercialization part now, um, than, than, than, than people were in those days. We, we know how to build the companies much better now, but the pace, you know, he would just routinely invent things like the phonograph, like just, it was just obvious, right. To him. Yeah. Um, and so, and he did that, you know, for decades, he, he, he was a fountain of innovation and I, it's a obvious, right. To him. Yeah. Um, and so, and he did that, you know, for decades, he, he, he was a fountain of innovation and I, it's a very inspiring story.

Starting point is 00:25:48 The Netscape, uh, story, we touched on it very briefly and there are many places people can read about that. So I don't want to take up too much time, but on a related note, I wanted to ask, is there anything you miss about mid nineties internet? Oh yes. And what, what would it be? Yeah, so when I got to the Valley in 1993, 1994, I thought I had missed the whole thing. Because I thought the PC, I had studied the history, and I used all this stuff. And I thought the PC, Apple and Microsoft up in Seattle, but Intel down here, and then all these

Starting point is 00:26:23 great, all the big software companies at the time, you know, Novell and Lotus and all these companies, the game, you know, EA, the gaming companies, um, I, the, the great PC companies had gotten built in the seventies and eighties. Right. And by the nineties, by the time the nineties arrived, like it was, the PC was done. Like it was, it was finished and like, you could go buy one and it was great, but like it was done. Um, and, and in fact, the overwhelming mood in the Valley when I arrived was that it was done, like the, the, the PC was done. And in fact, the overwhelming mood in the Valley when I arrived was that it was done. Like the PC was done. And by the way, the Valley was probably done because there was nothing else to do. And then there was this moment where I and, you know, various people

Starting point is 00:26:55 and then more people and then more people, for whatever reason, it was kind of like, we really wrapped our heads around the implication of the internet, which today seems obvious, but at the time was a very contrarian. When I got to Silicon Valley, if you had said the internet will become a mainstream consumer medium that 3 billion people are going to use worldwide for all forms of human activity, you would have been laughed at. Like you would have been institutionalized like here, like people would have laughed at you. And so as we figured that out, then what happened was it was like, okay, new frontier, right? And it was part of the, it goes back to the kind of history thing. Like, you know, for a long time, the development of like, you know, the United States, the new frontier was

Starting point is 00:27:27 whatever was further West, right? And then eventually they got all the way to California and then they have the gold rush. And like, and then there was famous thing, you know, famous kind of theme in American history is the closing of the frontier. Like there's a theme of like every Western, right? That every revisionist Western that gets made is like, there's no more frontier. You know, the radicals can't go any further West. They just, they'll drown in the ocean. So instead of what we have, or we have kind of virtual frontiers, we have intellectual frontiers, right? Or we have creative frontiers, or we have entrepreneurial frontiers, technological frontiers. And, um, and so the internet kind of represented the opening of a new frontier.

Starting point is 00:27:56 And once we recognize that it was like, ah, brand new. And then at that point, and that was where all the enthusiasm came from. Cause it was that point of like, okay, if that's going to happen, then what do we have to do? And at that point, the list becomes very exciting. Like, we have to do e-commerce. We have to do online publishing. We have to do transactions. We have to do social networking. We have to do auctions.

Starting point is 00:28:17 We have to do all of the big franchise companies that came out of the next 10, 15, 20. We have to do search. All the ideas kind of immediately materialized. And then people, you know, it was off to the races. Is there anything comparable right now for you? So I think in my view, there always is. The thing is these things look like cults and fringe activities until they break mainstream. And so for me, it's not, I mean, so like, for example, the mobile rush in the last 10, you know, basically since the release of the iPhone, the mobile rush qualified for this. The social networking rush kind of post Facebook qualified for this.

Starting point is 00:28:49 And those are kind of known and well understood. And it's just straight entrepreneurial opportunities, probably, you know, generally kind of reaching some level of saturation, right? Slight digression. We don't foreclose the possibility that there will be another mobile killer app or another social killer app, but it's getting harder and harder and harder because more and more people have figured out that you can do these things. And then the winners have now got very established, right? One of the ways we think about it is to have enough, you know, first you had Facebook and then you had Twitter and then you had Instagram and now you have Snapchat and those all became big winners. Okay. Now what would it take to make the fifth one? Well, it's got a,

Starting point is 00:29:24 there's only so many icons on the home screen of the phone, right? The fifth one has to knock something off, has to knock one of the other ones off. And so it's become as these markets saturated because we're of a zero sum game or even, even smartphones, you know, smart smartphone unit smartphones, a giant industry, but like unit volumes globally are now expanding at like single digit percentages. And so the smartphone industry is becoming one that's mostly people competing directly with each other, not creating new things. We would say those opportunities, those businesses are gigantic and those companies will get much bigger, but there's not as much entrepreneurial opportunity. The opportunity is more likely to be in the areas that people think are cult and fringe. What would be some examples?

Starting point is 00:29:58 We call our test on this, what do the nerds do on nights and weekends? Their day job, like the day job is I work at Oracle or I work at, you know, I work at salesforce.com or Adobe or Apple or Intel or one of these companies, um, or I'm, or, or not, or I'm just, I work in an insurance company or I work at a bank or whatever, uh, or I'm a student, whatever, that's fine. They go, they go do whatever they need to do to make a living. It's the question is like, what's the hobby? What's, what's the thing at night or on the weekends? So then things get really interesting, right? So then you look at like things like cryptocurrency, Bitcoin. Um,

Starting point is 00:30:27 you look at things like a lot of the new advances, there's a whole, the whole area of kind of health hacking, you know, quantified self is a very interesting new area. There's food, you know, there's kind of, you've, you've actually been, been part of the catalyst for this, but there's this whole kind of area of like scientific food and food hacking that's emerging. Um, there is a revolution actually happening, I think, in robotics because robotics has finally become something tractable where people can do it at home. There's AI. Deep learning is right on the tipping point. As a hobbyist, you can now download this thing called TensorFlow from Google. TensorFlow. TensorFlow, which is a deep learning

Starting point is 00:31:00 framework. It's a framework for doing AI. It's in the field of AI. It's for how computers can kind of deal with the real world and do things like self-driving cars or, you know, self-flying drones or all these things. This is technology. It was so, five years ago, it didn't really work. Two years ago, you would have had to have been an employee at one of three or four big companies to have access to this technology. And then Google just open sourced it. And so now anybody in the world can download it and run it on their own computer. So all of a sudden, like AI is like a tractable thing that you can just have on your own laptop and you can build, you can build new things on top of it. You can build, you want to build a bot, you can build a

Starting point is 00:31:33 bot. You want to build a self-driving. We backed a founder, we backed a founder who literally built himself his own self-driving car. I read about it. Right, George. And by the way, you should, him, you should interview. But like literally like one guy can now build a self-driving car, right? 10 years ago, this is like a DARPA funded, like grand challenge, like research project. Five years ago, this is a team of a thousand at Google and now it's George, right? And so that, that's an example of the kind of thing where it just looks like it's going to tip. And then, you know, there's one George today, there'll be a thousand Georges tomorrow. Do you think the dangers of AI that some people talk about, uh, are overblown? Completely. A hundred percent. Yes. Can you elaborate? All

Starting point is 00:32:12 the many things I worry about, the machines rising up and killing us. Luddite fallacy. It's not actually, it's very, it's related. It's, it's, it's related to the Luddite fallacy. Um, uh, it's, it's sharply related. It's, it's the, it's the, it's the, um, it's the Promethean fallacy. There's something deep seated in, it's the, it's the, it's the Promethean fallacy. There's something deep seated in human psychology where we are always going to invent the thing that's going to kill us. And at one point, or we're going to, we're going to, we're going to unlock fundamentally, we're going to unlock the power of the gods, right? It goes back to the Promethean myth. It's like the, it's, it's, it's almost like the concept of original sin. It's like fire, right? The big, the big moral of the Promethean myth was like fire. Fire is the thing

Starting point is 00:32:44 that enabled human civilization. It's also the thing that's going to burn everything down and kill us all, right? And so this is very deeply embedded in our psychology. Frankenstein. Frankenstein, the subtitle of Frankenstein of the novel, the subtitle was The Modern Prometheus, right? Frankenstein was a reinterpretation of the Promethean myth, except in this case, it was literally the monster that was stitched together and then brought back to life through unholy, literally unholy science. And then there was, there's even religious versions of it. In Jewish literature, there's a concept of the golem, which is the creature made out of mud that rise up out of the,

Starting point is 00:33:19 sort of like the ghettos of Warsaw or something to kill all the enemies and then come back and then it kills all the people who created it, right? So this is very kind of core. John Henry, the steel driving man, right? John Henry is the famous, there's a song or the sort of story about the railroad worker and there's the machine that can hammer in the railroad spikes faster than a human can. And John Henry, it's a famous showdown between him and the machine. And of course he wins and then drops dead of a heart attack, right? And it's critical in the myth that he drops dead of a heart attack, right? Because technology has to get its revenge. And so it's just that projected forward. And the reason I'm so confident on this is because it's just every single era of technological advance. This has

Starting point is 00:33:56 always been the response. There's always been this line of thinking. And then it turns out it's a tool. It's a technology. It's a tool. It's something that helps us do things in a better way. It's overwhelmingly to the benefit of mankind. And then we wonder why everybody got so worked up over it. So if we put aside the existential threat piece, the summoning of the demon conversations, if we put that aside entirely, how would you answer someone who worries about job displacement of AI? There are some reasonably smart people who

Starting point is 00:34:26 are very fearful of what will happen to society when people are massively displaced. How would you encourage them to think about that? Yeah. So let's crystallize the concern. So the World Economic Forum came out with this thing last year that kind of freaked a lot of people out. They said there'd be 5 million jobs destroyed by 2020 by AI. So let's run the numbers on that. So that sounds like a lot of jobs. That's a lot of people. That sounds like a lot of jobs.

Starting point is 00:34:51 So then you look at the American economy just this year, 2016. And we don't quite have this AI thing working yet, so we can't blame what I'm about to say on AI. This year, the American economy will destroy 21 million jobs and create about 24.5 million jobs for a net add of about 3.5 million jobs is about the pace we're on. And that's this year. And so we will destroy in the next three months, we will destroy more jobs than the World Economic Forum projected will be destroyed by AI over the next five years. Why don't people know this? Why is this not obvious? Because whenever you read news stories about job growth, it's always, the numbers quoted are always net numbers.

Starting point is 00:35:29 So last month, 200,000 jobs, 230,000, 250,000 jobs got created. And so, but those are net jobs. Nobody ever reports the gross numbers. The gross numbers are, you look at back numbers, we destroy more than 5 million jobs a quarter, and we create more than 6 million jobs a quarter, basically quarter in, quarter out. And so one is people just dramatically underestimate the size and complexity and churn in the American economy as it currently exists. Another example would be there's about, it turns out there's about 5 million people who drive professionally in the U.S. And so one of the questions with like self-driving cars, right, is where this, what's going to happen to the truck drivers and the taxi drivers and everything else. Again, 5 million jobs. We can redeploy.

Starting point is 00:36:03 We redeploy every quarter. We redeploy 5 million jobs. We can redeploy. Every quarter, we redeploy 5 million people. This is not, in the scope and scheme of the American economy, it's a totally doable thing. The other thing that people don't appreciate and understand, I find mind-blowing, which is would you guess, based on everything that people say, would you guess that the rate of job creation and destruction in the American economy is rising over time or falling over time? Oh, this seems like a test I'm bound to fail. I don't have an informed opinion. I think most people would guess that it's rising. The view would be technology is having

Starting point is 00:36:35 ever greater impact, and change feels like it's accelerating. The big theme in the political season is it feels like the world's kind of getting away from us. Technology's getting away from us. Trade's getting away from us. You know, something is, you know, basically dramatic changes are happening that are historically unprecedented, right? It's kind of the feeling. So almost everybody believes if you do a poll on this, almost everybody believes. It's definitely the perception being created. Right. Almost everybody believes that change is increasing, change is accelerating. Actually, it turns out in the American economy, the reverse is happening. The rate of both job destruction and creation are falling

Starting point is 00:37:05 and have been falling for decades, have been like over the last 50 years. They're not dramatic lines down, but they're basically very slow lines down. So basically what's been happening is in, in, in fact, every year, the American economy gets less dynamic, right? And you might say, oh, that's good because that means that you'll have stability. That means people won't have to change jobs, all that stuff. I would argue that's bad because what that means is we're not creating enough opportunity, right? And if we're thinking about the future, I think we want to think about opportunity. We want to think about what we're going to be able to do in the future. And we want to think about what our kids are going to be able to do in the future, right? What will be the new, the new fields, the new sciences,

Starting point is 00:37:37 the new forms of art, the new industries, the new businesses, the new companies, the new jobs that will get created, right? Every job that we all have, and everybody listening to this podcast has, got created as a consequence of the process of change, right? Which has been very positive to literally everybody on planet Earth. Like, these have been very, very positive changes in terms of increase in human welfare and opportunity. And so the idea of living in a world where change is becoming less rapid, which is what's actually happening, to me, that would be the problem. We should want more change. We should want more change because we should want more advances because we should want more opportunity to get created. We should want more products and

Starting point is 00:38:13 services in our lives. We should want more industries created. We should want more medical advances. We should want more advances in art and science and every other field of human activity. And basically, the way I view it is we have to fight to get that as opposed to what everybody thinks, which is we have to fight, fight to prevent that. What's the smartest way to fight to get that? If you were willing to go into politics, sure, I'm willing. This is, this is a, when you run for office, when you run for office, I will help you put your platform together. Um, short of that, um, I think the thing to do, I mean, I think that the value of you, and I guess my view is,

Starting point is 00:38:45 you know, do what you can to directly contribute to it, right? And so do what you can. Do what you can to either try to create the new things, try to create the new products, create the new, again, art, science, technology, products, consumer goods, create new things, create businesses around those things, right? Create companies, or for that matter, by the way, nonprofits, like create organizations or models that can let things scale so that they can touch more people. And then, you know, a big part of our role is fund them, fund them and support them and help enable them and train them and get them up and running. You mentioned, for instance, when you first got to the Valley, there was a feeling on the part of many people that it's done.

Starting point is 00:39:21 PCs are finished. You missed the boat, kid. Now in the venture capital world, there's a term used fairly often, FOMO, fear of missing out. How do you think about or handle FOMO yourself? Yeah, mostly we just fall right for it. We're probably just total suckers for it. So the way we describe it, so fear of missing out, where does fear missing out comes from? It's, it's like, it's clear and visible signs that something is happening that you're not a part of. Right. And so it's not FOMO of something that hasn't happened yet. It's FOMO of something that's clearly obviously happening. So.

Starting point is 00:39:59 Which, which for those people, not in, in the tech investment world, comes in a concrete form, just as a maybe mundane example, like an email from a founder. Hey, we would love to squeeze you in. We're overcommitted. So-and-so and so-and-so is in. Can you get us docs by tomorrow if you're interested? Blah, right? I mean, there's a lot of sort of cult cortisol-driven emergencies, some of which may be real, many of which are illusions. Yeah. Yeah. And so the thing is,

Starting point is 00:40:26 and so I guess there's kind of, there's kind of, you know, there's kind of a couple of ways to handle it. And one is you've just like you, one of his, you view that as a sign of success. Like you view that as like what it appears to be,

Starting point is 00:40:34 which was like, okay, the train is leaving the station and do I want to be on the train or not? That strikes everybody as like, so clearly wrong. Like that must be wrong. Like that, that must be just foolish behavior,

Starting point is 00:40:43 which is why it's been encapsulated into this term called FOMO. That's kind of designed, you know, designed to sound scary. Like that, that must be a stupid thing. You know, a lot of people will at least say that what they try to do then is kind of take the cynical kind of counter, you know, theory, which is like, okay, then by definition, those are probably bad ideas because you're probably getting played or you're probably a sucker kind of, you know, along for the latest scam. And so, or the opportunities passed, or if it was a good opportunity, why would you be asked to participate in it? Then you go to the other side, the other cynical side of the poll, which is like, okay, now I'm not... And there are certain VCs who do this, by the way.

Starting point is 00:41:15 I'm not ever going to invest in anything hot, because it's going to have that characteristic. I'm only going to invest in things that aren't hot. The uncrowded trade. Yeah, the thing that nobody else is interested in. For old companies, we call that value investing, you know, for new companies, we just call that, you know, cold sectors. It's just an area in which nobody is interested. And, and so, and, you know, by the way, like, I don't think that that's, I don't think in any way that's a dumb conclusion and there are investors who do that and it works very well for them. My personal preference, what I try to get us to do around here is to just eliminate this as a variable altogether

Starting point is 00:41:45 and literally just like not think about it. And so like if it's urgent and we have to invest tomorrow and then if it's, you know, they may or may not ever be able to raise money in five years. What I try to get us to do is just ignore that part entirely. Basically just take that out on both sides, both the hot and the cold.

Starting point is 00:41:59 Just take it all out and then try to get to the actual thing, right? Try to get to the it. So what is it really? This specific thing, right? Try to get to the it. So what is it really, this specific company, right? Doing this specific thing with a specific technology, the specific people at the specific time, what is that thing? And let's make our own evaluation of that thing independent of whether it's hot or cold. And then if it makes sense, we'll invest. And if it doesn't, we don't, but we won't factor in whether it's hot or cold. Now, the challenge,

Starting point is 00:42:24 we've actually, we've worked on this over time. Roughly on average, the things that are hot are priced somewhere between 2 to 4x higher than the things that are cold. At the extreme, from cold is cold to hot is hot is about 4x, right? And so in investing terms, if it's super hot, it could be 40 pre. If it's super cold, it's 10 10 pre and for the same quality, right? For the same fundamental quality level. And a big part of our answer is okay, fine. Like it's fine. If we're going to invest, we'll invest on market terms. If the market terms are 10, cause it's cold, we'll invest there. If the market terms are 40, because it's hot, we'll invest there. But we've made our own decision about whether to invest. So we just try to strip it away. Got it. Very

Starting point is 00:43:00 easy to say, easy to say, hard to do. Hard to do. Yeah. Are there any particular investors outside of venture capital who impress you? Yeah. So I spend most of them, when I study other investors, I either study the people we compete with and collaborate with very closely. I also, I particularly study the value investors on the completely other side of the spectrum. And it's a fascinating, and I've gotten to know some of them directly, it's a fascinating kind of thing. It's sort of Warren Buffett as the archetype, but also there's now a lot of famous value investors, Seth Klarman and a bunch of others that have kind of written books and kind of built up this whole kind of theory of value investing that goes back to Ben Graham in the 1920s, 1930s. And so there's this whole world of value investing. And on the one hand, there's no overlap between the worlds because I like to say, like, basically anything Warren Buffett's worth willing to invest in, we run screaming in the other direction and vice versa. Right.

Starting point is 00:43:55 And that's as it should be. Right. Basically, everything he invested in, like Heinz ketchup. Right. And the reason he invests in Heinz ketchup is because people have been eating Heinz ketchup on hamburgers for 100 years. And therefore, the best guess would be that they're going to continue to eat Heinz ketchup for the next hundred years. Um, we weren't screaming from that. Cause like, you're not going to invest in C's candy. No, no, we like, no, absolutely not. And furthermore, I'm going to,

Starting point is 00:44:15 I'll, you know, every time I hear a story like C's candy, I want to go find the new, like scientific, you know, superfood candy company that's going to blow their mind out of the water. Right. So like we're, we're, we're wired completely opposite in that sense. Basically, he's betting against change. We're betting for change. And that's a very, very big, like when he makes a mistake, it's because something changes that he didn't expect. When we make a mistake, it's because something doesn't change, right, that we thought would. And so they could not be more different in that way. But what both schools have in common is an orientation towards, I would say, original thinking of really being able to, kind of going back to the previous conversation, willing to really view things as they are as opposed to what everybody says about them or the way they're believed to be. Value investors are always talking about getting to the core of the truth of what's actually happening in the business.

Starting point is 00:44:57 And then the other is long-term. It's the only other place, value investing is the only other place in the market anymore where you can find long-term investors. Buffett will actually invest in a company and he will hold it for 40 years. And that does not happen, you know, elsewhere in the market. It's only the deep value guys who will do that. It's funny that at the extremes, they have that in common. Yeah, that's right. Yeah. If you, you were talking about creating opportunity, if you decided to close the chapter on your, your career as a venture capitalist, a funder of ideas, a catalyst, and you had to teach a class. So let's just say ninth grade or freshman year in college, 50 students, what would you teach?

Starting point is 00:45:38 I would be highly inclined towards teaching people how to build things. There's a book I've actually never read, but I love the title. What's the title? It's called Smart People Should Build Things. I do like the title. I almost don't even want to read the book because after that title, almost everything, almost anything it says is going to be a letdown, but the title is absolutely brilliant. It's one of my two favorite titles. What's the second one? Steve Martin. I have read this one. Steve Martin's autobiography is a fantastic book. Oh, My Life Standing Up? My Life Standing Up. Actually, sorry, it's not the title of the book. It's called my life standing up as a title, but the main lesson of the book, he says, the key to success is quote,

Starting point is 00:46:11 be so good. They can't ignore you. Right. And so, and I think it's just, I basically, if you just have those two principles, like if smart people should make things and, and be so good, they can't ignore you. Like that's a pretty good way to like, that's a pretty good way to orient. The autobiography is amazing. Also just a side note, I listened to the audio book, the Steve, Steve Martin audio, but yeah, I mean, he's, he's a comedy genius, but more than that, the level,

Starting point is 00:46:31 it's like the Schultz thing. It's like the level of thoughtfulness that he put into how he constructed his career, like nothing about his career as an accident, which I thought was as fast anyway. So I think it would be how to make things. And by the way, I don't necessarily even just mean new software, new computer programs, but how to make things more broadly. And so how to make, you know, again, it goes back to how to make things. And by the way, I don't necessarily even just mean new software and new computer programs, but how to make things more broadly. And so, again, it goes back to how to make new art, how to make new science, how to make new technology, how to make a new company. How would you teach that?

Starting point is 00:46:55 I think projects. Projects. I think hands-on projects. So you would have, say, an art assignment. You would have a science-slash-engineering assignment of some type. Yeah. Or you'd have an objective. engineering assignment of some type? Yeah. Yeah, or you'd have an objective. You'd be trying to construct something.

Starting point is 00:47:10 It actually turns out one of the reasons why computer science has advanced so fast in the last 30 years is because people can make new things on computers without anybody's permission. And so it lends itself very well to that. But people can also write books without anybody's permission, and they can also write music without anybody's permission, and they can also start companies mostly without anybody's permission and they can also write music without anybody's permission. And they can also start companies mostly without anybody's permission in most industries. And so it's basically just anywhere where you can actually do, where you can actually yourself create something new, make something new.

Starting point is 00:47:34 And then I find, you know, I'm, I'm actually a little, I'm very, a little bit from folks like Elon Musk on this. Like I find making something new that for sure there's part of it, but everybody wants to say is it's creativity. And so therefore it's like, you want to do something new, have an original idea. But, but again, that, that makes people feel like it's a, it's a, it's an unattainable thing. It's like, how, how am I, how am I, how, how am I possibly going to come up with a new idea in a field and where people have been working in it for a hundred or 200 years? Like it just seems implausible. So I also find, and I think the great artists and the great scientists and the great business people often have this in common.

Starting point is 00:48:05 It just goes back to history, which is okay for whatever it is you're going to make, learn about how things got made in the past and get inside the heads of the people who made things in the past and what they were actually like. And then realize that actually they're not that different than you. Like at the time they got started, they kind of just like you. Steve Jobs had a great, he said one of his, I think in his famous commencement speech, he said, everything in the world around you was made by somebody who's no smarter than you are. Right? And so there's nothing stopping any of the rest of us from doing the same thing. And so I think that would probably be what I would try to do. Maybe a boring left turn, but I'm interested to ask.

Starting point is 00:48:40 And that is, what are the companies or who are the people you're watching most closely in AI drones and cryptocurrency? Yeah. So I'm very proud of, we have a bunch of, we have a bunch of companies that we put our, like to say we're conflict of interest or put your money where your mouth is. We have both. Um, we have lived up to both principles. So, um, we have two drone companies that I think are spectacular. Um, uh, so spectacular. So Airware was our first drone investment, commercial drones, which turns out is going to be just a giant market in industries, oil and gas and insurance and all kinds of implications. But the one that people are going to see, I think, in their day-to-day lives is going to be more the other one, which is called Skydeal, which is a company we back doing autonomous consumer drones. And this is going to be a very big advance in what you can do at the kind of hobbyist level. What does an autonomous

Starting point is 00:49:30 consumer drone do? Well, whatever you tell it. Got it. Okay. And so they haven't really, they haven't rolled out the product yet. And so I don't want to spoil too much of the surprise, but it's basically, it's a drone that can, it can fully fly itself. It doesn't, there's no, it doesn't require remote control. And so it can be given assignments and it will go carry out those assignments. And it can fly through tree branches. It can fly through power lines. It can fly through underground parking garages without any collisions.

Starting point is 00:49:56 It can pilot itself, which is if you've tried flying any of the current drones, they don't work that way. Hard to do. Yes. It's exercise in how quickly you crash it. And so like that, that technology is about to tip and become very widely usable. And so that's very exciting. So there's that. I'm sorry to interrupt.

Starting point is 00:50:15 Yeah, sure. Commercial drones for insurance. Yeah. So for instance, so be an example. Yeah. Residential insurance, residential insurance. You get an insurance inspector, your new construction, you're remodeling or building a new house and there's, you know or building a new house and the insurance company is going to insure it. They do an inspection. The inspection involves a person

Starting point is 00:50:32 climbing up on the roof and hopefully not falling off and taking a bunch of notes on a clipboard and writing up a bunch of stuff. It actually turns out to be a pretty dangerous job. Another example, cell tower inspection. There's all these cell towers. There's 30,000 or something cell towers in the U.S. They all need to get inspected. Inspection literally is a dude on cables, right? And some of these are big towers. And then you get to like oil and gas. Like you get to a drilling rig. You got to inspect that thing. Okay. You know, try climbing up to the top of an oil and gas rig, right? Like these are very, these are, these are, these are dangerous things. Lethal professionals. Right. These are, these are, yeah. And so if you could, but what if you could, what if you could

Starting point is 00:51:08 just fly the drone? Like what if you could literally do the entire thing by air, right? What if the inspector just rolled up to the house and just took the drone out of the back seat and just launched up in the air and the drone flies a pattern above the house, takes comprehensive 2D photographs of everything, and then creates a 3D representation from the 2D photographs, which you can now do, and then does all the recognition, elevations, everything, materials, figures everything out. And then the guys, literally the, you know, the inspectors like sitting in the driveway in the car, you know, with air conditioning on like in no danger. Safe and sound. Yeah. Yeah. And so that kind of thing, or there's another, I'll give you another, um, uh, this nobody's doing this yet,

Starting point is 00:51:42 but somebody is going to, um, so if you're So if you're a cop, if you're a cop on the beat, two in the morning and you get a call that there's a convenience store and somebody's broken into the convenience store, you have to go do the check. The check involves going and seeing whether the lights and all this stuff and broken glass, but you also have to check the roof. And checking the roof is actually a very important thing because if there's a bad guy and they saw the cops coming, they might've climbed up on the roof and they might have a gun and they might shoot at you. And so you gotta go clear the roof. And so what do you do?

Starting point is 00:52:09 You get your flashlight and your gun and you climb the ladder and you poke your head up and you hope that nobody's on the roof. Hope no one plays whack-a-mole with your head with a revolver. Yes, exactly, right? And so what would be the, what could we do to help that?

Starting point is 00:52:21 How about every police car have a drone in the backseat and you just, you get to the thing and from a safe distance, how about every, every police car have a drone in the backseat and you just, you get to the thing. And from a safe distance, you launch the drone and the drone does an infrared camera sweep, right. Of the roof, right. Before you even walk up to the thing.

Starting point is 00:52:32 Right. And by the way, like if there's a bad guy on the roof, like what if the drone recognizes like, okay, there's a person on the roof. And what if the drone locks onto that person and then just basically follows that person wherever they go and they rabbit,

Starting point is 00:52:42 you know, they run, they run for it. And the drone is like right there, 10 feet above following them the entire time, right? So all of a sudden, like just the job of beat cop becomes a lot safer. And so, and this, by the way,

Starting point is 00:52:51 even goes back to the question you asked, which is like, isn't AI a threat? And it's like, no, no, like this is a case, the way those drones are going to work is with, those are powered by AI. This is all based on deep learning. This is this new technology, this new AI. It's the same technology, by the way,

Starting point is 00:53:03 that was just used in that Go, in the famous now go a thing where the Google AI beat the human player. It's the same technology. And it's just going to use for, it's going to use for drones. And it's going to be, there's going to be things in our lives that we are just going to be able to rely on to be able to make our lives safer and better. Um, and we're just going to take them completely for granted and we're going to work in combination with them. And we're going to be really glad we have them. And we're going to be completely unwilling to go back to a world where we didn't have them. And it's just going to be obvious. It's just, we have to get it. We have to get this stuff in people's hands before they can,

Starting point is 00:53:33 they can really, I think really fully see it. What do most people not understand about cryptocurrency? I think it's just such a, well, so a couple of things. So this will not come as a surprise to you. I thought I understood it and I really didn't. Money gets people really cranked up. Yes, it does. The entire concept of money is probably the single, I don't know, maybe after God, it's like the single most emotionally loaded concept that we have in humanity. Money makes people mad under any circumstances on any topic related to money. And I think it's just because it's such something that we all rely on. And it's something that we always think is being, you know, like there's always this sense of unfairness. And so money gets people really cranked up. And so I think that there's sort of the idea

Starting point is 00:54:15 of cryptocurrency and blockchain and this kind of new idea of distributed trust in the internet. And then there is this application of that technology, which is a very fundamental application, which is a, you know, a new kind of money. I think most people are unable to just simply objectively dispassionately look at the mechanics of how it works without almost getting preemptively upset, like just angry. Like how dare the nerds come up with some new form of money? Like this has got to be like, there has got to be something wrong with this. Right. And I will now attempt to find, you know, the 30 possible things that could be wrong with this until I find one that basically proves that this can't possibly work. Because obviously it violates the laws of nature and government and whatever, whatever.

Starting point is 00:54:51 And somehow I'm going to come out on the wrong side of this. People just get – and by the way, I'm not even just talking about regular people. I'm also talking about bank CEOs who just are furious. You bring up Bitcoin and they just get really upset. And I'm like, did you get upset about your new toaster? It's just a technology. Like, it's just a thing. And you can, you can study it and you can learn about it and then you can think about it and then you'll either conclude it's good or not, but like, it's not going to bite you. Like, it's just a thing. Right. And so like the way I look

Starting point is 00:55:16 at it, it goes back to like, it's just a thing. It's just, we now have this idea of cryptocurrency. It's a, it's a fundamentally new and very important idea. We now have this ability to have this new kind of currency based on top. Everybody's had 18,000 theories why it's not possibly going to work. Bitcoin is still working today, exactly the same as it worked last year and the year before that. The system is completely, by all the noise and all the stuff and all the crashes and this and that and the other thing, it just continues to work. It just is. It's becoming like air or water.

Starting point is 00:55:44 It just is. Like it or hate it, it just is. We're still very excited. We're very excited. We're actually going to continue to make new investments against it. Are there, of your current investments or non-investments, are there particular companies that you think are breaking new ground or doing interesting things in crypto? Coinbase is sort of our big bet that most people have have as a company that most people have heard of. It's kind of the easiest way to buy and sell Bitcoin. And they have a whole bunch of stuff they're doing. Um, and then we have this company 21, um, uh, with a, uh, really brilliant founder,

Starting point is 00:56:15 uh, Balaji Srinivasan, who was a, um, uh, actually was a partner here. He used to be a very, very smart guy. Um, and he has, he, he has the, he has the highest output per minute of new ideas of anybody I've ever met in my life. And by the way, I mean, output per minute. Oh, I've been at a few dinners with him and it's hilarious to just watch the outpouring after, especially after, you know, one or two glasses of wine. It's, it's astonishing. Yeah. He's, he's like an Edison for me. He's like an Edison kind of character. It's just, it's just literally thousands of ideas. Um, and then it's whatever percentage of the ideas that he can personally get to. Right. And then he'll give the other ideas to everybody else and

Starting point is 00:56:51 then wonder why they're not pursuing them, which is, which is, which is often a good question. Um, and then the next time you meet him, he'll have a thousand new ideas. And so his, his company, he's, uh, people can read about it if they want, but it's done a bunch of interesting things. He has a whole additional set of ideas he's pursuing now. I had a long, I went to this thing up north and I drove back and I was on the phone with him for two hours, you know, the middle of the night driving, you know, on the freeway, biology in my ear, you know, idea number 38. I was like, this is awesome. It could be worse use of time, you know, that's good food for thought. The, uh, on, on food for thought, what, what advice would you give to Mark the

Starting point is 00:57:25 20 something at Netscape? And you can pick the time. You know, I've never even thought I've never for a moment even thought about that. I don't do. So the thing I don't, I don't do replays well. It goes to this history. Like I don't do replays wellness. I like the question I'll never answer is what would you do? What would you have done differently had you known X? And I never, ever play that game because you didn't know X. Right. And so have you ever read, I was at the Elvis Cole novels? No.

Starting point is 00:57:57 The great crime novelist, Michael Grace. His novel, Elvis Cole, is this kind of postmodern LA private detective. They're great novels. And he's got this partner, Joe Pike. It's my favorite fictional character, maybe of all time. Joe Pike. Joe Pike is a former Marine force recon guy. So it's a lot like your, your friend Chaco.

Starting point is 00:58:15 Yeah. And in the, in the novels, Joe Pike has a, he's, he always wears the same outfit every day, wears jeans. He wears a sweatshirt with the sleeves cut off and aviator mirrored aviator sunglasses. Love them already. And, um,

Starting point is 00:58:27 and he's got, um, uh, bright red arrows tattooed, um, on, on his deltoids, uh,

Starting point is 00:58:32 pointing forward. And basically his entire thing is forward. So that's, that's how you feel. We don't stop. We don't slow down. We don't revisit that, you know,

Starting point is 00:58:40 past decisions. Um, we don't, uh, we don't second guess. Um, and so, yeah,

Starting point is 00:58:44 I actually, honestly, that question, I have no idea how to answer. I think you just did. Okay. Good. Onward. When you think of the word successful, who's the first person who comes to mind and why? Oh, geez, that's a great example. That's a great question. I mean, honestly, my father-in-law for one, who's a whole, could be the subject of a whole podcast. Okay. Can you give us a taste of, uh, why that is? He's an amazing guy, John, John Arriaga. Um, he, uh, is one of the small handful of people who basically built Silicon Valley. Um, and so he, um, he has an amazing life story, but, uh, just to do the short version is he went to Stanford. He went to Stanford on a

Starting point is 00:59:20 basketball scholarship in the 1950s, grew up, grew up very, in a very, uh, very poor part of the country. Went to get a basketball scholarship, um, uh, studied, uh, got a bachelor's in the 1950s. Grew up in a very poor part of the country. Went to get a basketball scholarship. Studied, got a bachelor's in geography from Stanford. You may have not ever in your life met a lot of people who have a bachelor's degree in geography. I have not. They abolished the major the year he got his degree. Abolished. That's a strong word. Wow. He became a real estate broker, a commercial real estate broker in like 1958 when the Valley was all orchards. Within two years, he was making 10 times more money buying and developing properties as he was as a broker.

Starting point is 00:59:55 And his boss fired him because he was making all the other brokers feel bad. So he started, it's basically continuously from 1960 to today, he's been one of the biggest developers in Silicon Valley. Uniquely, by the way, as far as I can tell uniquely, I've never met anybody else. Um, after the first few years, he basically, he, he has not used debt on a project, I think in almost 50 years. So he's a real estate developer who does an entire, it's extremely uncommon, entirely on equity.

Starting point is 01:00:20 And, and basically it was he, he, and there's a small handful of him and his contemporaries who basically built literally, literally built the Valley. Um, and so, yeah, no, when I want to, yeah, he's great. He's fantastic. I really love him. He's fantastic. He, um, he, he once sat me down and he's like, okay, he's like, you know, he's like this tech stuff. I understand. Like you guys think it's a big deal. It's fine. You got, you should go do it for now. He's just like, I just want you to know the real money's in real estate. Does have a lot of street cred. And I said, yes, sir. Do you have any particular morning rituals that are important to you?

Starting point is 01:00:57 Sleep in as long as possible. Sleep in as long as possible. When do you usually wake up? Try not to blow through any red lights on the way to work. When do you usually wake up? Try not to blow through any red lights on the way to work. When do you usually wake up? Oh, um, uh, 45 minutes before I have my first meeting. It's yeah, no, it's, I, I do, I do the, uh, what do they call the hot docking? Hot docking. It's like the, the, the controlled crash into the office. Uh, it's not, yeah, no, it's, it's, you read these things. It's the whole, the 14 things successful people do in the morning. Like I can't even imagine. Do you drink coffee? Yes, you do. Yeah. That was an emphatic. Yes. If it has caffeine in it, I drink it. Yeah. Uh, I really think, no, the perfect day is caffeine for 10 hours, alcohol for four. Like I

Starting point is 01:01:34 think it balances everything out really well. It sounds a lot like my day. I'm not shy for a second about that. The Silicon Valley speedball. Yeah, that's right. Uh, do you have any favorite documentaries or movies? Uh, lots of favorite movies. Um, I don't know where to start. What have you seen? Actually, you know, in the last 20 years, in the last 10 years, really, you know, it's TV even more than movies. Okay. Um, what, any favorites? Well, the Holy Trinity. So, uh, Mr. Robot, um, which I just think is absolute genius. Um you can ever go out of the way, you should get him sometime. The guy. He's great. Sam.

Starting point is 01:02:08 I have never met him. You probably read about him, heard about him. Yeah. So he's, he's directing. He's, he's written and he's personally directing all 10 episodes of the new

Starting point is 01:02:15 season. So it's going to be, I think he's, he's, he would be, he would win. He has actually made a movie, but like he's,

Starting point is 01:02:21 he's definitely gonna win Oscars or whatever it is. People win. And then Halt and Catch Fire. I'm not familiar with that. Halt and Catch Fire is extraordinary. It's the best fictional portrayal of what a tech startup is actually like. Halt and Catch Fire. Halt and Catch Fire.

Starting point is 01:02:36 So the title is there was a mythical, IBM mainframe days, there was a mythical instruction that is sort of an urban legend that there was a specific piece of code that you could write that would cause the computer to stop and then catch on fire. It's like the Mission Impossible command. Yeah, I don't think it was ever really verified for sure whether or not it existed, but it kind of became this mythical thing. And so it's the story, actually, it's loosely the story of the birth of the PC, and particularly it's sort of based on how the company Compaq got built in Houston. It's set in Texas. But it's basically the birth of a new computer company. But it's a very, and it's funny because the reviews, the reviews are funny.

Starting point is 01:03:11 So it's a historical piece. It's very serious, very serious drama. So, you know, it gets compared to Mad Men and shows like that. It's set in the office and the personal lives of everybody. And so, and it's funny because the critics reviewed it and they said, I don't, you know, it all seems like, it all seems superheated. Like it's all too, like the melodrama is too exaggerated of like all this stuff that happens. And everybody I know in the Valley of Sina is like, no, no, that's actually what it's like.

Starting point is 01:03:32 That's actually a hundred percent what it's like. And like, I knew that guy and I saw that thing happen and I saw that person blow up that way. It's like Ben's book. Yeah, exactly. Yeah. Yeah. It's what it's actually, it's what it's, it's what, so they, they really caught the, it's fictionalized, but they really, for anybody who really wants to know what it's actually like to go through one of these things that, that, that shows tremendous.

Starting point is 01:03:50 And then of course, Silicon Valley. Yeah. Do you have a favorite scene or episode? So I've actually still only seen the first season. Um, uh, I, I'm not current, I'm starting to actually become culturally irrelevant cause I, I can't, I don't get any of the new references at all. I think you'll survive. You seem to be doing just fine. I have to, I have not current. I'm starting to actually become culturally irrelevant because I don't get any of the new references at all. I think you'll survive. You seem to be doing just fine. I have to binge. The sesame seed scene in the first season was probably the highlight. Let's just say loosely based on Peter Thiel scene. Yeah, loosely or not.

Starting point is 01:04:25 Or not, right, exactly. Or not. Or maybe very precisely, very accurately. You know, who knows? If you could have one billboard anywhere with anything on it, what would you put on it?

Starting point is 01:04:36 That could not be an advertisement for one of your portfolio companies. Outside Trump Tower. Okay. No, I'm just kidding. It's too tempting. What would you put on it, though? If you wanted to convey a short message to as many people as possible? Oh, I've got one. All right. Maybe this is a little, maybe a small scale for what you're looking for, but I've got one. I've actually

Starting point is 01:04:55 thought about hiring a sky writer to do this one. Let's do it. Okay. Uh, right in the heart of San Francisco, it'd be a billboard of just two words on it. Raise prices. Raise prices? Yes. Can you explain? The number one thing, just the theme, and we just see it everywhere, the number one theme of our companies have when they get really struggling is they are not charging enough for their product. It has become absolutely conventional wisdom in Silicon Valley that the way to succeed is to price your product as low as possible, and then under the theory that if it's low-priced, everybody can buy it, and that's how you get to volume. And we just see over and over and over again people failing with that because they get into a problem we call too hungry to eat. They don't charge enough for their product to be able to afford the sales and marketing required to actually get anybody

Starting point is 01:05:35 to buy it. And so they can't hire the sales rep. They can't afford to hire the sales rep to go sell the product. They can't afford to buy the whatever TV commercial, whatever it is. They can't afford. They cannot afford to go acquire the customers. Too hungry to eat. Too hungry to eat. And then they sit there, they don't sell anything. And then they don't sell anything and they get nervous and upset and then they cut the prices. And then it's a race to the bottom. Which just makes the problem worse. And so probably the single number one thing we try to get our companies to do is like raise prices. Raise prices. Yep. So the last. And by the way, you know, it's like, okay, like, is your product any good if people won't pay more for it? Exactly. You know, it's like you get good litmus test,

Starting point is 01:06:08 good litmus test, right? Uh, last two questions. What have you changed your mind about in the last few years? That's a good question. So one is we started, I'll just give you a very practical one. Uh, we started on, um, we started out, we did, we didn't do any healthcare related stuff here, investments here. Um, and we've now done a complete, almost complete 180 on that. And we're now very deep into health because we think a bunch of really interesting things are happening. And that was a response to, like, the hedge fund thing I was telling you. Like, that was a response. We just basically had very smart founders coming through here basically telling us we were dumb.

Starting point is 01:06:39 Like, and by the way, they were right. Like, we just hadn't figured it out yet. And so we got serious about it a couple years ago. And we have this guy, Vijay Pandey, he's a former Stanford professor running this program now for us. And it's extraordinary what's happening at the kind of intersection of healthcare and computer science. So there's a lot that's happening there.

Starting point is 01:06:58 The thing that I probably think about the most that I am still trying to work out in my own head is that a uh, a combination of Peter Thiel, Larry Page, and Elon Musk in different ways have provoked a fundamental crisis, a fundamental conversation in the Valley around, you know, kind of the, um, the sort of moonshots, the big, the big, the big, the big, um, the, the big challenges. Um, and so, you know, Elon, you know, why can't we build self driving cars? Why can't we have new kinds of rocket ships? Why can't we go to like literally

Starting point is 01:07:29 go to Mars? Um, why can't we cure cancer? Why can't we, you know, do nuclear fusion? Why can't, you know, long list of things, um, that are like, you know, big, big things we talked about earlier a little bit, like Silicon Valley has always viewed itself a little bit in the tools business, right. Or a lot in the tools business, Silicon Valley has been getting more and more assertive entering more and more industries directly, right? So like Uber and Lyft entering directly into transportation, Airbnb entering directly into real estate, FinTech companies entering directly into banking.

Starting point is 01:07:55 So our, our, our companies are getting more assertive at going into markets that previously they may not, you know, other founders may not have been willing to go into in the past. And then Larry, Elon, and Peter basically all say in different ways, like, we're still not doing enough. There are these much bigger things to be, to be done. Um, and why are we waiting for either governments to do them or for large industrial companies like GE to do them or for, you know, I don't know, research universities to figure them out. Like, why can't we do these things? Um, and you know,

Starting point is 01:08:23 there's one school of thought that says they're simply too hard. They're simply too hard. They're too daunting. They're too expensive. They're too different. You know, they're, they don't have Moore's law on their side. Like they're, they're, there's a reason we haven't been doing them is because they're, they're, they're too difficult. And then there's another school of thought that says, you know, that's just being a wimp and you should go try to do all these things. Um, because if we're not going to do it really, who is, and then I'm trying to find, is there something in the middle? Like, is there like, what are the shades of gray? Right. What's, what's the line, right. What's, what's the line where, you know, Tesla, what's the line where Tesla made sense, but you know,

Starting point is 01:08:52 Tesla, a Tesla that flies didn't make sense. Like, right. And there's a line in there somewhere, I think, right. Or maybe Peter's right. And maybe there isn't a line and maybe, and maybe, maybe the next Tesla should be one that flies. Right. And so it's, to me, that's the provocative thing. Cause it, it's a question about stretching the limits. How far Icarus myth, how far can we stretch the limits of what we can do before our wings melt? Right. And it strikes me also that, I mean, just, you mentioned Peter. So the, we wanted flying cars and we got 140 characters.

Starting point is 01:09:24 There were a lot of questions from, from fans asking how to, how would he suggest people, uh, entrepreneurs are be encouraged to say solve the big problems versus making social media networks, et cetera. And I think you made a point actually in a debate with Peter at one point, maybe it was at the Milken conference could have been elsewhere that Twitter. And I would agree with you as one example, the 140 characters, has been world-changing in a lot of ways. I mean, you look at political activism, you look at many different examples when you have adoption that is that wide, that global, free, with the emergent properties are just unpredictable. I mean, you get some incredible use cases.

Starting point is 01:10:04 Including political revolutions. Exactly. Right. Yeah. Last question. Oh, sorry. Go ahead. So that was, it was a debate at the Milken Conference, which is one of my, one of my

Starting point is 01:10:13 shining moments is I prepared for weeks for that debate. Yeah. Knowing Peter wasn't going to prepare at all. And I bring that up because I think I was actually able to go toe to toe with him, but I had to sandbag him to do it. He was absolutely shocked that I had prepared for it. I really enjoyed the conversation. That was one of my great debating moments is I could almost keep up with Peter.

Starting point is 01:10:34 It's actually funny. His whole thing, his whole slogan, the slogan of his firm, which is, as you said, we were promised flying cars instead of we got 140 characters. It's actually interesting. He will immediately concede that both of those are actually not the point. First of all, he immediately concedes that flying cars probably don't make sense. And then he immediately concedes that Twitter probably is more important than just being dismissed like that. And so he basically says the slogan is just to provoke the conversation. But to your point, it does provoke the conversation. And I actually think you're right. I think it provokes the conversation from both sides, which is, okay, why don't we

Starting point is 01:11:03 have the other bigot? Maybe flying cars are not, but why don't we have nuclear fusion? Why don't we have like all these other things? Why don't we have supersonic flight? Right. Like we have the Concorde. Now we don't even have the Concorde. Like seriously, it takes nine hours to get to London. Like really? Right. I mean, I think that's, it's a very relevant question. And then, but I also think it provokes the thing on the other side, which is, I think the computer stuff, communication stuff like Twitter and all these other things. I mean, Peter flatly says the iPhone doesn't count as innovation, and I just think that's too far. I think the iPhone absolutely counts as innovation.

Starting point is 01:11:33 I think it's one of the most important products ever developed. I think the impact on the world is absolutely enormous and growing. And so I think there's a tendency to write off the stuff that built the Valley, and I don't agree with that. I think there's a lot more to do in the core of what we do. The last question is, do you have any ask or request of my audience, people listening, anything you'd like them to consider, ponder, do? First of all, they should all, for sure, work for our companies. Please come to our website, a16z.com. We have job listings. We'd like to get everybody in our orbit. Anybody smart enough to listen to your website, a16z.com. We have jobs. We have job listings.

Starting point is 01:12:05 We'd like to get everybody in our orbit. Anybody smart enough to listen to your podcast, we definitely want to work for our companies. And then, you know, I would say, you know, I would say build new things. And then if it's something that needs, if it's a, you know, if it's a business that's promising that needs money,

Starting point is 01:12:19 you know, we're open for, we're open for business. Mark, any last places you'd like people to check you out online? Where can they say hello? Oh, Twitter. Twitter's good. Twitter's good. Twitter.

Starting point is 01:12:29 At Pmarca. At Pmarca. P-M-A-R. Is that from your Unix handle way back in the day? It's an old, old joke. A boss one time who was so important that he had both his real, he had his public email address and he has P with his name behind it, which is his private email address. So we thought that was a little bit too much.

Starting point is 01:12:47 And so we all gave ourselves P, but nobody knew who we were. And then it stuck. Perfect. Well, everybody, check out the Andrews and Horowitz website. I'll put that in the show notes as well. You should also check out their podcast, which I've greatly enjoyed. You can start with, I mean, one that I really enjoyed was the sort of deconstructing Amazon episode. And thank you so much for the time, Mark. This

Starting point is 01:13:11 has been a blast. I really appreciate it. Thanks, Tim. And to everyone listening, you can find all the links and everything else in the show notes, which you can find at 4hourworkweek.com forward slash podcast. And until next time, thank you for listening.

Pet Camera - EBO Air 2

The Tim Ferriss Show - #163: Marc Andreessen -- Lessons, Predictions, and Recommendations from an Icon

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.

Your Ad Here

Pet Camera - EBO Air 2

The Tim Ferriss Show - #163: Marc Andreessen -- Lessons, Predictions, and Recommendations from an Icon

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.