Marc Andreessen, co-founder of a16z & Netscape

14:53Marc Andreessen:And that's the model that dominated Silicon Valley for 50 years. The problem with his argument is that assumes the managers are going to do a good job, right? And I think if there's like one dominant theme that we're seeing in the last, you know, 30 years, you know, in the West for sure, it's like managers generally, you know, writ large are not doing a great job. Or another way to put it is the managers maybe are good at managing something that's going to be status quo for a long time. Like if it doesn't change, maybe they, you know, maybe they can run the banks for a long time or they can run the power company for a long time or the car company.

15:19Marc Andreessen:And as long as the car is the car is the car, you know, or soup is soup is soup, it kind of doesn't matter. but the minute things change, the manager personality type, because it's not the founder personality type, it doesn't know how to be able to change. Not everything is changing. A lot of things aren't changing, but for the things that are changing, they're changing like really, really quickly. I mean, SpaceX is like the classic example of this. Imagine being a professionally trained manager, trained at like, you know, a top management school working for a rocket launch company, you know, competing with SpaceX.

15:48Marc Andreessen:And the assumption of the entire rocket industry for, you know, the last hundred years has been the rockets are used once and then, you know, that's it. And the economics of launch are dominated by having to build a new rocket every time. And then this crazy guy in California comes up with this thing where the rocket's flying in their butt and you can't replicate it. Okay, your management skills, what good are your management skills at that point? And I think there's a whole bunch of interesting areas of human activity where that shift is happening. And so I think this is where Burnham's thesis collapses, where it's just like, okay, the managers actually can't do it.

16:16Marc Andreessen:Yes, there's a need to run things at scale, but no, the managers actually can't do it because they can't adapt.

16:20David Senra:And the founder can just learn how to run things at scale.

16:22Marc Andreessen:Well, that's the theory. And that's a big part of our theories. Yeah, the founders can actually learn how to do this. And, you know, this is still a controversial topic. This, you know, this still comes up. Is it controversial? Well, it is, because founders aren't necessarily, especially founders on day one are not good at doing this. Like, okay, so in tech, let's just talk about tech specifically. Like in tech, the founder tends to have been in a lab, you know, literally or metaphorically for 20 years before they start their company. Like they've been, you know, probably working by themselves or with a small team.

16:47Marc Andreessen:They've been building technology. They haven't been running things. Like they haven't been, you know, managing large organizations. They haven't been, you know, running public companies. And so there is a missing skill set, right? And on day one, they don't know how to do that. And so they do need to be willing to learn how to do that. And then by the way, they do need to be capable of doing that because, you know, some of them can and some of them can't. But yeah, so this maybe is like the core thesis behind our firm, which is you're much more likely to build something important in the 21st century if you start with the founder and train them on management, than you are to start with the manager and try to train them on being a founder, on creating new things.

17:21Marc Andreessen:And I think that this trend is intensifying. And so you're, because what's happening is all the old edifices, all the old incumbent institutions in the last 100 years that are run by managers, they're all in some state of fundamental collapse. Like they're all collapsing in like trust and credibility because they can't adapt. And so this issue is becoming more and more acute, which is the system that we thought was necessary and sufficient actually just like does not work. And if anything good is going to happen, it's going to have to be somebody. It's going to have to be Henry Ford, Elon Musk type who actually does it.

17:49David Senra:You think it's in a vast minority of people agree with you?

17:52Marc Andreessen:Look, it's becoming more common. I mean, when you get an Elon Musk and a Steve Jobs, when you get these kind of archetypal examples of it, it's a lot easier to sell it. Mark Zuckerberg, we were talking about earlier, he's now a great case study of this, right? Yep. When Mark started Facebook, he had never had a job before. Okay. Not only had he not managed people, he had not worked for anybody. So he started with zero. And his learning curve, which, by the way, happened fully in the public eye, his learning curve was vertical. And by the way, it's still vertical. He spends an enormous amount of time learning how to become better at running these things at large scale.

18:26Marc Andreessen:He's still the founder, and he's still the innovator, and he's still a fountain of ideas on what to do. So he's that double, he's like the classic example of a double threat. And then what happens is other founders look at that, and they're like, oh, I could do that. Right. Which is exactly what Steve Jobs said when he saw Nolan Bushnell. Exactly. I can run my company. I can do that. Yeah, exactly. And by the way, you know, it's amazing like how fast this stuff shifted because like, you know, Steve famously had this, you know, short period of time where he worked for Hewlett Packard. And I think, I don't know if it's true.

18:52Marc Andreessen:The legend is that Jobs pitched his manager at Hewlett Packard. No, Wozniak pitched him. Was it Wozniak? Yeah, Wozniak. Okay, okay. Wozniak pitched. There was some other story where Jobs went into some meeting with some manager trying to pitch the thing. And the line from the manager was, absolutely not. This is the dumbest study I've ever heard. get your feet off my desk and get out of here. Right. You can just imagine Steve with his, you know. And they had to be bare feet at that time.

19:12David Senra:My favorite Apple lore is that the first sale in Apple's history was made barefoot when he walked into the bite shop. He was barefoot.

19:21Marc Andreessen:What's amazing about that is, you know, yeah, so Waznack for sure were for Hewlett Packard. Everything I'm describing was Hewlett Packard in the 1950s and 1960s and 1940s. That was also Dave Packard and Bill Hewlett were that founder type. And Dave Packer and Bill Hewlett ran their company for, between the two of them, for like 50 years. Do you think that's the most— And by the way, Silicon Valley was built in large part on HP. HP was the original Silicon Valley company. Okay, that's the next question. And it was run by its founders for 50 years, and yet people concluded the founders shouldn't run the companies.

19:47Marc Andreessen:Right. And so it's like, it's one of those things where it's like, it's kind of so obvious it was staring everybody in the face. And so people had to construct kind of elaborate, you know, basically, you know, these elaborate kind of lattices of like, you know, theories to basically get around the fundamental fact that you need somebody who knows what to do after they're running the thing.

20:01David Senra:Do you think HP might have been the most influential company in Silicon Valley history?

20:05Marc Andreessen:It was for sure the most influential company from 1940 to 1980. And then probably after that, Intel.

20:12David Senra:Well, you go to the founders of Intel and you read biographies of them and they talk about modeling off of HP. Yeah, that's right. That's right. Yeah, that's right. And then how many founders modeled off of Bob Noyce and Intel after the fact, including Steve Jobs, who would go to Bob Noyce's house for dinner. Yeah, that's right.

20:26Marc Andreessen:By the way, that's another great example because Bob Noyce at least, you know, if you look at photos of Bob Noyce, you're like, wow, this guy's like a pillar of society. Like he's very well-dressed and he's kind of very adult and he's very like, you know, he's famously the leader of the Traitorous Eight. You know, the group that left Shockley to start Fairchild. And then left Fairchild to start Intel. To start Intel. And so Bob Noyce was 100 % the Steve Jobs of his time just in a short-sleeved white dress shirt and a skinny black tie. But it was, again, it's like the exact same thing. And so I, you know, I never, I unfortunately never met Bob Noyce, but I could easily imagine Bob Noyce and Steve Jobs sitting down and being able to talk for three hours and completely understanding each other, despite the fact that they, the look and feel is like completely different.

21:03David Senra:He was almost like a disciplinarian to Steve because Steve was, you know, wild and reckless. Like I was also wild and reckless. You need to mature. And I think Bob's wife maybe went to work at Apple early on too. So it was, he talked about this in his biography. There's a few great biographies of Bob Noyce, but he said that the reason he spent so much time after he's really successful spending time with young entrepreneurs, He said it was restocking the stream in which he fished from. He thought it was really important. He's like, I learned from all the guys before me. I need to take that knowledge I've built up over multiple decades and push it down the generation.

21:32David Senra:I want to go back to starting the firm, though. This is interesting. What was occurring in your life either at that time or before that, that you had this observation that this had to be done?

21:41Marc Andreessen:Oh, so, you know, we've got all these elaborate theories. The practical reality of it was my partner Ben and I had become very active angel investors. And I'd been an angel investor since like the mid-'90s. But then Ben and I started doing it kind of as a real thing, putting significant time into it, probably starting in 2003. Well, I did it kind of throughout the early 2000s, but 2003, 2004. It's hard to remember now, but if you go back to 2003, 2004, there weren't thousands of Asian investors. There were like eight. It was like a short, it was like Ron Conway and a handful of people. And then Ben and I were running around doing it.

22:11Marc Andreessen:And this was very significant in the evolution of the venture capital industry, because this was the point at which the traditional VCs got disintermediated by angel-less and seed investors who kind of inserted in before the overseas arrived, which was this fundamental change that changed the whole industry. But we were part of that. But as a consequence, we were investing in all these new companies, basically at the point of formation. We were basically playing amateur early stage VC. And we were always like, we're not going to go around the board. You're going to raise money for a real venture firm later.

22:37Marc Andreessen:They're going to go on your board and whatever and work with you. And what we just found over and over and over and over again was we ended up getting pulled into these companies, either because there were issues that just like the other people that they were working with or they either hadn't raised venture yet or the VCs that they'd raised from couldn't help them with. And so we just got pulled in. And the reason was we had been running companies at that point for whatever, 20 years. And so we at least had some idea of what we were doing. And then the other is we kept getting brought into conflict resolution between the founders and the VCs.

23:08Marc Andreessen:Because, you know, especially because, again, much more common at that time, especially if the VC's fundamental point of view is the founder's not going to run the company and we need to like replace you with a professional manager as fast as possible. Like the founders are not necessarily gonna like that and they might resist that. And by the way, even if they're on board with that idea, they might not like the person who the VC wants to bring in. And so we kept ending up in these kind of, basically as arbitrators in this sort of, you know, in theory, we were kind of trusted intermediaries because we knew the founders, we knew the VCs and we could kind of help bridge between that.

23:35Marc Andreessen:But literally what happened was after a while, we were like spending like eight hours a day just doing this. And we're like, all right. And it's like weird. It's like you're writing a$100 ,000 check and you're like spending all this time doing it. And then to basically arbitrate it, somebody who wrote a$10 million check. And it's just like, all right, we should probably just write the$10 million check. And that was that. So it was, I always think like the best, the founders, one of my theories of like the great founders is they tend to be able to operate at kind of a conceptual level and then the practical level at the same time.

24:04Marc Andreessen:And so we had a whole theory I could take you through for the evolution of the venture business. Yeah. But underneath that was just this actual, you know, the lived experience of what was actually happening on the ground. The big theory of the firm that we had at that time was linked to this idea of founders running the show, but it was also a structural observation of what was happening in the venture industry, which was, basically what we did was we, sort of in line with your philosophy, we went back and we studied a lot of other businesses that have similarities to the venture business. And so we studied private equity, venture capital, or sorry, private equity, hedge funds, investment banks, law firms, management consulting firms, ad agencies, accounting firms, basically anything where the product is fundamentally a relationship, a knowledge work kind of relationship as compared to something that gets manufactured.

24:50Marc Andreessen:And what we observed is basically, and Hollywood talent agencies actually is the one we've probably talked publicly about the most. And so that was a great case study. He was in this studio a few months ago. Fantastic. And so, and he actually, and by the way, he gave us, you know, we make a point of credit, like he gave us a lot of this theory. So a lot of this comes from him. But, well, actually, I'll tell it through his experience. So when he started his agency in, was it 80, whatever, no, 75, 75. In the 70s. In the 70s, like in the mid-70s. It was actually very similar. Structurally, it was very similar to when we started A16Z in 2009, which was the configuration of the industry at that point was basically a bunch of essentially service firms, a bunch of talent agencies.

25:30Marc Andreessen:none of which were at very high scale. And then each of them was basically a tribe of basically solo operators and kind of lone wolves. And so the concept in Hollywood was you had an agent and that was your guy. And that agent knew whoever that agent knew and had whatever relationships that agent had. But the other agents at your agency were not available to you. And there was no collective benefit to the fact that you were at an agency that had not just your guy, but like 100 other guys, there was no collective payoff to that. They ran that in that way for a very specific reason, which is this kind of this eat what you kill professional services mentality where everybody should have to go build their own book of business.

26:03Marc Andreessen:But you end up just dealing with a guy as opposed to a firm. Like there's no firm. There's no collective thing. And that was basically the condition of venture capital in 2009, which is you have been – at this point, we knew all the VCs really well. And we had raised venture and we had worked with all these other companies that had raised venture. And basically all of the sort of legacy venture firms at that point, they were all like that. They were all just like tribes of lone wolves. And then the thing that we knew that was not publicly known was, generally speaking, inside the firms, they didn't even like each other.

26:31Marc Andreessen:Oh, I hear stories like this all the time. Right. And so it's like, you know, whatever. There's Joe and Mary, you know, who are partners at a venture firm. And you're working with Joe. And Mary has, like, a key connection that you need access to. And so he asks Joe, can Mary introduce me to so-and-so? And what you don't know is they're having, like, a brutal fight. You know, they're, like, trying to destroy each other because they're fundamentally economics. They're going for, you know, a greater slice of the profit pool. And so they're really going at it. So we saw example after example of a venture firm that was basically either two things, actually.

26:59Marc Andreessen:One is either melting down due to just internal strife and conflict. Or, by the way, the other was generational succession. The other issue is a lot of the dominant venture firms of 2009 had been around for 30 or 40 years, and they were now on their third generation of partners, going to their fourth generation of partners. And, you know, and again, it's the same thing. They had been founded by dynamos, and then they were, you know, the later generation people were not like that. So we basically said, oh, this is where the oldest thing comes in, is we said, look, like, that's not going to last.

27:24Marc Andreessen:And so, our theory of it was what we call death of the middle or sometimes the negative way to frame it is death of the middle. The positive way is the barbell, which is what's happened in all these other industries, which is basically the industry gets stretched apart like taffy. And what you get is you get this barbell thing. And on one side of the barbell, you get early stage angel seed investor who are really like first money in, like, you know, staying very light on their feet, writing a relatively small check, but like being involved in companies extremely early on and taking a lot of risk.

27:51Marc Andreessen:And then on the other side, you get basically scaled platforms, right? So you get large-scale enterprises that have a lot of throwaway, a lot of access, very big networks, and then access to a lot of money. The other comparison we always make is to retail shopping, which is there used to be department stores like Sears and JCPenney, which basically where the brand promise was pretty good selection of products at pretty good prices. And then now those are dead. And what you have instead of boutiques like the Gucci store or the Apple store, and then you've got this super scale e-commerce companies like Walmart and Amazon.

28:20Marc Andreessen:We were to the point where it's just like there's no reason to ever go to a department store because it's got less selection than Walmart and Amazon. But it doesn't have the quality tier and the special experience of a Gouchier or Apple.

28:30David Senra:But you had that thought in mind when you started A6?

28:32Marc Andreessen:Yeah, 100%. Yeah, exactly. It was a conceptual leap for venture capital at the time, but the exact same thing had happened in private equity. The exact same thing had happened in hedge funds. The exact same thing had happened in investment. And you knew that by what? Just reading about the history? So like investment banks is a classic example. So if you read about the sort of the original investment banks in the U.S. between like 1880 and 1920, they were all like boutique venture capital firms in the 1970s, 1980s in the U.S. It was like 20 guys. These are more like merchant bankers. Yeah. Well, and so the classic stories, which I love so much.

29:00Marc Andreessen:So J.P. Morgan's one of my kind of favorite historical figures. And J.P. Morgan was an example of that. The J.P. Morgan Investment Bank was like this basically this time. It was very important, but it was like this tiny little operation. It was, you know, fit in a single office. who's, you know, I don't know, probably 20 principals and some office staff or something. You know, it was not large. And actually, the hidden secret to J.P. Morgan was he was the son. The father was Junius Morgan. Okay.

29:25David Senra:I literally, when you were talking, I was like, wait, I was shocking that you would say pick him because I actually found his father more formidable individual than him.

29:33Marc Andreessen:He was. So he was, which is almost always the case of any famous puppet figure. The father is almost always a more interesting story, which a lot of examples of that. But however, yeah, so Junius Morgan and then J.P. Morgan has filled a specific economic role that's gotten lost in history, which is basically Junius Morgan, the Junius Morgan Bank was in London, the J.P. Morgan Bank was in New York. And what the Morgan family was doing was they were funneling money from the old slow growth economy of Europe into the new high growth economy of the US. But again, it was exactly your point. Like it was this little boutique family operation.

30:02Marc Andreessen:The other great thing about that era of history is these were, they were all bifurcated by religion. and so they were the protest investment banks and they were the jewish investment banks and they did not mix and no not at all completely different worlds and as a consequence jp morgan was the protestant banks like like jp morgan were able to find like the railroads which were considered like the real businesses at the time uh but then like the all the disreputable stuff like movie companies and like department stores like that those are all the jewish investment banks by the way with jewish almost entirely jewish founders uh with like and then goldman And J.P.

30:34Marc Andreessen:Morgan is the big survivor of that today in the form of J.P. Morgan Chase. And then on the Jewish side, it's Goldman Sachs, you know, is the great survivor. But again, if you go back there.

30:42David Senra:So you consider that the barbell in investment banking? You have the J.P. Morgan kind of like family partnership, and then you have the complete scale of like Goldman Sachs.

30:50Marc Andreessen:And so what happened was both J.P. Morgan and Goldman Sachs started out 100 years ago. They were on the one side of the – 100 years ago, they were actually in the middle. They were kind of, again, this sort of – you know, they were boutiques. But they were like, of their time, they were like, today you call them like mid-market, you know, sometimes called bulge bracket, you know, kind of thing, as opposed to just like a solo operator or something. Actually, the way JFK's father got started was he literally hung out a shingle in the 1920s, which was Joseph P. Kennedy banker, you know, private banker.

31:17Marc Andreessen:And he like just did deals. And he was like an angel investor at the time. And so, and then you had the big commercial banks, but the big commercial banks had no interest in issuing loans to these speculative, crazy, you know, entrepreneurs. And so in that time, JPMorgan and Goldman Sachs and Kuhn Loeb and Drexel and all these other kind of mid-market banks, Morgan Stanley, the bank that became Morgan Stanley, were kind of these mid-things. Now, what's happened, you know, sitting here 100 years later, those are now the scaled players. The ones who didn't scale are kind of long forgotten. Having said that, there's one firm that survives in the old model, and that's Allen & Company.

31:46Marc Andreessen:And there are other boutique investment banks today, but Allen & Company was founded in the 1920s and is uniquely the one that survived in the original model of deliberately being a boutique investment bank. And it stayed that way for 100 years. And so one way to think about it is that today that's the barbell in banking, which is Allen & Company on the one side and then J.P. Morgan and Goldman Sachs on the other side.

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33:21Marc Andreessen:Ben and I spent about a year and a half planning the firm. And part of it was he was in what we call industrial servitude. He was working for Hewlett-Packard after we sold our company to HP. So he was running a big part of HP at the time. And so we couldn't literally start a new full-time thing until he got free of that. So we had a year and a half, you know, to kind of study and think and work.

33:38David Senra:And because you had this period from 2003 or 2002 when you're doing angel investing, you know, a lot, until you start your company six, seven years later, you're observing all of the weaknesses in the model. And that's where you have, hey, why don't we take the CAA? I think Ovitz calls it like the phalanx, where it's like if you have one agent at CAA, you have all of us. And they would like roll deep. I think he says in his book, like, it was like, oh, my agent's coming to the career. No, it's like 20 agents are coming. And I think they'd be dressed to like the same kind of suit maker. And like they were intentionally trying to intimidate like their competition.

34:09Marc Andreessen:Armani suits, Sulca shirts was an old shirt maker in Beverly Hills. And sober, you know, all sober colors, white shirts. And then I think he had a bulk purchase deal, I think, with the local Jaguar dealer. And the legend at least has it is that the license plates all said CA1, CA2, CA3. And so you'd go to a premiere and there would be like 20 Jags lined up. And then 20 guys in identical suits coming out. And yeah, this is exactly the thing. It's just like, now that's the Hollywood version, but just imagine the psychological impact of that if you're just like an old school agent. This is sort of, you know, Michael's a very dear friend.

34:44Marc Andreessen:He became very controversial over the years. And the reason he became so controversial, I think, is just because he smoked his competition so severely. Like he pounded them so hard. There was no response. You're just a guy working for an old agency and you've got your clients and these 20 CAA motherfuckers are showing up. and like, it's just, yeah, it's this force. And the clients, if you talk to him, by the way, you know, a lot of his clients are, you know, still active today, you know, from the period you talk to him, it's just like, yeah, it's just a no brainer. It's like, do you want to work with a guy or do you want to work with a firm?

35:10Marc Andreessen:It's just obvious. He has, I don't know if he told you all these stories. Did he tell you about his morning schedule thing? The, like getting on the bike, doing the karate. For the firm, for the firm. No, no, no, I don't remember this. So this is, you know, something that's specific to Hollywood, but it's a great example of that. Okay, so the agency business, At the time he started CAA, the agency business is like 90 years old or something, right? It like started out doing vaudeville bookings and like music halls. And like it had been around for like decades. And so the people involved in it had had decades to think about like the best way to do it.

35:39Marc Andreessen:And they had arrived at a set of practices. And one of the practices, I think I'm getting this right. One of the practices was at every agency, they would have their staff meeting in the morning at 9 a.m. And they would basically share, you know, whatever information was going to get shared in the agency would get shared at that point. And, oh, you know, this studio head wants a script to do. He wants to do a crime thriller and here's the script and whatever. And then, you know, this is like the point where there would be minimal, you know, whatever minimal handoff existed to the other agency.

36:00Marc Andreessen:And so this is where everybody would kind of get updated. And so the staff meeting would go from like 9 a.m. to 10 a.m. And then at 10 a.m. they would start calling their clients. And they'd be like, oh, you know, we heard there's a, you know, whatever. There's going to be a casting call for, you know, this great new role for this professional thief or whatever. And you should consider doing that. And so, of course, Michael's like, all right, well, we'll have our staff meeting at 7 a.m. We'll be done at 8. Between 8 and 9 we'll call the clients. By the way, we won't just call our clients. we'll call their clients, right?

36:26Marc Andreessen:And so imagine you're whatever, Paul Newman, and you've got some agent you've been working with for 20 years. And he calls you at, your agent calls you at 11 o 'clock and it's like, I've got this great role. And you say, oh, the guys at CA called me about that three hours ago. And your agent's like, they don't represent you. And Paul's like, yeah, isn't it great? Isn't that fantastic? And so you just, again, you just like, you rinse and repeat that a thousand times. And it's just, to the client, it's just like completely obvious what to do. And so, yeah, so the reason I go through this, the moral of the story is, again, And it's sort of this idea, incumbency status quo.

36:58Marc Andreessen:Like you just end up with all these embedded assumptions. Generally, and then 90 years later, right? So the founders of the agencies were 90 years ago, they weren't involved anymore. So the people who were running competitive agencies were managers, not founders. But the thing a manager never does unless they're under duress is reconsider fundamental assumptions. Like they hate that. Like that's not the whole point of running something big is you don't have to do that. You get to run the big thing at scale. You don't have to go in and reinvent it from scratch. That sounds like a nightmare. But anyway, as a consequence of that, you end up with all these embedded assumptions that are basically just unspoken.

37:36Marc Andreessen:Nobody's questioning. It's not happening. And if you take the time, you can kind of go in and go back. First principles, you can kind of go in and you can say, okay, well, how do they arrive at that? And what we found in just industry, I mean, this is what our founders do every day. It's just industry after industry after industry. There's all these embedded assumptions that made sense in 1970 or 1930 or 1880 that just don't make sense anymore.

37:53David Senra:I love that you did it. I always say it's like not what you do, it's how you do it. And if the idea that you could take, I'm like, I'm not running a talent agency, but there's so many of these principles that I comply to venture capital. And your blog archive, which I absolutely love, and I told you I've read like multiple times, I did episodes on it. You would give advice to like young people. And it's like, my advice is like, go work in an industry that's still, the founders of that industry are still working. When I read Ovitz's book, the way I would summarize his approach, because he's in this big, stodgy, slow moving, you know, very bureaucratic organization.

38:24David Senra:It's like, oh, mediocrity is always invisible until passion shows up and exposes it. Oh, interesting. Yes. Right. And that's what he did. Yeah, that's right. He's just like, there's so many things that you guys could be doing better here. I can't do it in there. And I remember correctly, he took some of these ideas to his boss.

38:37Marc Andreessen:Oh, yeah, yeah, yeah.

38:37David Senra:Because that guy was his mentor. I can't remember his name. You famously worked for the CEO of William Morris, which was the biggest of the talent agencies at the time. So were you and Ben essentially just designing what you wish you had when you were founders?

38:48Marc Andreessen:Yeah, that's right. And again, that may be a cheat code, but yeah, if you've been the customer, obviously this all becomes a lot more obvious.

38:54David Senra:I don't know if you want to answer this question or not, but Warren Buffett's shareholder, he has this great line where it's like really important to pick, to play against weak competition. Did you feel that there was going to be like that point in time in venture capital history that you were going to be playing against weak or weaker competition?

39:10Marc Andreessen:I would say not exactly. We didn't view them as weak. We viewed them as basically – we viewed them as running on a status quo set of ideas. And so – and to be clear, like we – and part of why we think about this is we had to raise money from at the time – in the time we were probably the two best venture firms. So Clare Perkins in the 90s and I worked with John Doerr very closely for five years in Netscape. And then we, CloudCloud, we raised money from Benchmark when they were like King of the Hill. And Andy Ratcliffe, who was one of the founders of the firm and is a legendary, brilliant VC. And so we had worked with, we just had, for accident of history, we had worked with two of the whatever top five or whatever people in the field for a long time.

39:45Marc Andreessen:And they were and are, by the way, brilliant at running on the model that existed. John was brilliant at that. Andy's brilliant at that. They're still brilliant today. It was less a competition of, oh, these people are soft or these people aren't smart. It was none of that. It was, no, they're really good at executing against this particular playbook. And by the way, that's why it's okay. Like if we're going to do this, we need to be playing by a different playbook. There was no such thing as like scaled venture capital at the time? No. At the time, no. No. Because the firms all hit this, they all hit this limit.

40:14Marc Andreessen:They all fundamentally hit this limit. They all hit this limit where they just could, the idea of a partnership of equals or even a hierarchical partnership, like it just breaks at some point because there's just too much internal dissension. It is too hard to coordinate. And then everybody's fighting for slices of what was viewed at the time to be a thick-sized pie. And so none of the other firms could – structurally, there was just no way to get to scale.

40:37David Senra:Where else did you take ideas from besides the agent business in Hollywood and, like, the merchant bank investment banking industry?

40:43Marc Andreessen:Oh, I mean, it was just very obvious that it had happened in private equity. Like, you know, this was the time when, like – it was actually really – this was around the time when, like, KKR and firms like it were hitting their stride with – they were actually building, like, a lot of operational capabilities in-house. They were actually building their own actually investment banks in-house. One of the things we've never done, but has always been on the ideal list is to actually just have an in-house bank. And KKR had actually done that, just build a captive bank. And so they had done a bunch of things like that.

41:09Marc Andreessen:And so we saw it happening, which is the mid-tier private equity firms were collapsing. And you either needed a solo, very light on your feet, kind of solo operator on the one side doing small deals, or you needed to have a scale platform like KKR. It happened in hedge funds. It happened in - but I mean, it had long - Actually, the TV show Mad Men. Mad Men tells the structural story of this happening in the advertising field in the 60s and 70s. And I will ruthlessly spoil Mad Men because it's been out there for like 20 years at this point. But, you know, a big part of the arc of Mad Men is those guys are working.

41:40Marc Andreessen:Sterling Cooper is a classic mid-market ad agency. Right. And then whatever, the third season, they sell it to McCann, which was the scale player at the time. And they show you all the pros. They clearly talked to people who had been through this because they showed you all the pros and cons of working for McCann because McCann's this giant machine. And so Don Draper is used to like making all the creative decisions. And now he's just in this conference room arguing with people until he just like gets up and walks out. But then Don Draper and Roger Sterling start their own startup. They start Sterling Cooper Draper Price.

42:09Marc Andreessen:That's the second one, which starts out as a true startup, as a true boutique startup. And then they have this, whatever, year and a half, just fucking hell. Like they can't get anywhere. They can't get clients because they're too small. You know, they're subscale. And so it kind of, and then I think in the end, I forget, it's a bit too long, but I think in the end, I think they end up selling it. No, no, no, no, no, no, no, no. Sorry, I got it wrong. They sell the first one to the British ad agency that just like completely destroys it. And then they sell the second one to the can. So they actually show that process happening twice.

42:39Marc Andreessen:And so that, again, if you go back to history, that is what happened to the ad agencies basically between the 40s and the 70s. Like basically television catalyzed that. Like when television emerged, advertising became a much bigger deal than it had been before. And it just, it had to be professionalized in a different way. The other thing that happened is, of course, the external environment changes, right? So everything we just talked about just has to do with the internal mechanics of how these things run. But the other thing that happens is the external environment changes, right? And so part of what I think what Michael would say, I think you would agree with this, part of what made CAA possible is at one point, basically, Hollywood was just movies.

43:07Marc Andreessen:And then there was like whatever, a low kind of TV division. And by the 70s and 80s, Hollywood was becoming much bigger than just movies, right? It was movies and TV and advertising and music and sports and politics and culture and like all kinds of things. In fairness to the kind of our competitors, you know, Silicon Valley between call it 1950 to 2010 was primarily just in the tools business, right? Primarily the companies that, you know, starting with Hewlett Packard, the companies that we all backed and built were basically just building tools. And you build a tool like an operating system or a disk drive or something and you'd sell it to people and they'd figure out what to do with it.

43:39Marc Andreessen:It was right around the time we started our firm that the Valley was going from being primarily tools businesses to actually building directly competitive companies in incumbent industries, right? And so Airbnb going directly into the hospitality industry. So alternate universe Airbnb is just boutique-looking hotel software for running Airbnbs. It's a tiny little boutique business building basically little spreadsheet software. But no, Brian Chesky decided brilliantly, we're just going to go into the hospitality business and compete with hotels directly. Uber and Lyft, in the old world, were just taxi dispatch software.

44:09Marc Andreessen:In the new world, they're full transportation providers. Tesla, in the old world, would have just been software for self-driving cars. Tesla, in the new world, builds the entire car. By the way, Facebook, same thing. Prior to Facebook, if you built like online ad, you know, software, you were selling it to the media companies. Mark's like, no, we're just going to beat the media company. Like we're just going to build the entire thing. And so this was the other thing that happened was, you know, for us was that that was right around the pivot point when the Valley's ambitions went from just building tools to going directly into incumbent industries.

44:37Marc Andreessen:And then this goes back to the scale thing. It's like, okay, why do you need to scale a venture firm? It's because the companies need to scale, right? And then, of course, AI now makes that crystal clear, right? Because the winning ad companies are raising billions, tens of billions, in some cases, hundreds of billions of dollars. Right. The old world of$10 million or$30 million or$50 million checks where VCs tap out is just not a relevant thing anymore.

44:59David Senra:But did you know the scale was changing at the time you founded the firm?

45:01Marc Andreessen:We had a pretty good idea. So I've been involved in Facebook basically informally since inception and then formally on the board since 2007. And so I saw that when that thing hit the knee in the curve, it was just very clear. It was just like very clear that we didn't know how big it was going to get. but it was going to get much, much bigger than the internet 1.0 companies had gotten. And so there was that. What else? It was also around the time Apple was directly entering the cell phone market, which was another great example of this. Silicon Valley didn't used to make cell phones. The original cell phones weren't made by Silicon Valley.

45:29Marc Andreessen:They were made by these like giant industrial companies like Sony and Nokia and whatever and Motorola in Illinois or whatever. And then Silicon Valley would make the chips that go into them or the software. And of course, Steve was like, yeah, no, screw that. We're just going to make a phone, right? There were these signals that it was happening. And then the other thing was just the internet itself was maturing, right? And so, you know, at that point, the consumer internet was 15 years in, and we had, you know, seen every part of that. And so, you know, I forget what the number was, but that was probably around the time the global internet penetration was like crossing a billion users on its way to 5 billion.

45:59David Senra:Yeah, you have a very interesting lived experience where, like, you were there at the very beginning of the internet. One thing that I'm fascinated by, and that actually was going to be the first question for you, because I've never heard you speak about this, at least on a podcast. but your partnership and relationship with Jim Clark. You were, what, 20 when you met him?

46:18Marc Andreessen:How old were you? I was old-fashioned. I actually graduated from college and got my degree. It's a very Stone Age concept these days. So that was in 1994. So I was probably 22, 22.

46:28David Senra:So there's this great book. I don't even think you like the book, written by Michael Lewis, Silicon Valley Story. I've skipped it. I've read it twice just because I don't know if anything's in there is true, but the portrait he paints of this very eccentric character It's just wildly entertaining to me. But what's shocking to me is when you talk to young founders, I'm like, this guy started three, I think he was the first person in history just to found three separate billion-dollar technology companies. I think that's right. And almost no one knows who he is. Can you just talk about how you met him?

46:55Marc Andreessen:What was it like working with him? I knew exactly who he was. And the reason was because his company, Silicon Graphics, his first company, they were the company in the valley between, like, call it 1987 to 1994 or something. They were like whatever, Google or OpenAI or whatever, you know, comp you want to make. Like they were like the company. And by that, I mean like they were the company where the smartest people in the industry all wanted to work there. They built the products that were like the coolest products you could possibly imagine. They had this incredibly young and vibrant and dynamic culture.

47:21Marc Andreessen:And then they hit this like cultural moment that was just incredible in I think 92, which was the turning point in the movie business when computer graphics really kicked in. And the two movies back to back with Jurassic Park and Terminator 2.

47:33David Senra:Run on the machines they made.

47:34Marc Andreessen:Build on the machines. It was the technology they made. The technology Jim invented was the technology that made that possible. And those movies, you know, those are still two of the great all-time, you know, movies. But at the time, I mean, I still remember the chills that you get seeing dinosaurs on screen. It's just like this is – and then there's this company that builds the machines that do this. By the way, the Silicon Graphics computers are actually in the movie. There's a scene in Jurassic Park where the kids are navigating through Unix. Yeah. And it was actually the 3D software. It was actually – those were actually the Silicon Graphics computers.

48:04Marc Andreessen:And so that was like this moment where they were just like the absolute it company of all time. But by the way, their legacy lives on in NVIDIA. NVIDIA is Silicon Graphics, basically, with one – it's like a trader or a saint thing. It had to be a new company for reasons we could describe to do the GPUs instead of the workstations and servers. NVIDIA fundamentally is based on Jim's ideas. That's where that stuff all comes from. And so he was already legendary. And again, he was one of these, he was the full deal. He was legendary as an innovator in technology because he's a PhD in computer science.

48:39Marc Andreessen:And he actually, he himself invented the original, I forget what they call it. I think it was the reality engine. The original interactive 3D graphics on a chip thing was actually him. I think it was like his PhD thesis. And then he started the company and then he ran the company. And then, by the way, and then the VCs brought in professional manager. And by the way, and the reason we know about NVIDIA today and not SGI is because of this founder manager issue. which we could talk about. No, let's talk about that real quick. Yeah, yeah, yeah.

49:05David Senra:Because I don't remember this part of the story.

49:06Marc Andreessen:Yeah, yeah. So now, by the way, there's two sides to the story and I wasn't there. And so I just reflexively side with Jim Clark, but I'll try to at least represent both sides of the story. So Jim, I don't even remember what's in the Lewis book, but like Jim's like a true, Jim's like a true, he's like an Elon, he's like a true Elon Steve Jobs level guy. And so like incredibly creative, incredibly bright, incredibly charismatic. but like he's volatile. Like he's, he's, he's, he's exciting. Like he's exciting. It's like being around him. It's just like incredibly exciting. There's always something new.

49:40Marc Andreessen:He always has new ideas. And, and again, that was in that time where it's just like, okay, that's the personality type that clearly can't run the company. And so the VCs brought in a guy out of Hewlett Packard who had been trained at Hewlett Packard. And because at the, at the time what happened is he wanted to hire a professional CEO. He went and hired a general manager out of either Hewlett Packard or IBM were the two training grounds for this guy. So they brought in a really, really sharp guy who, I don't really know. I think I met him once. I don't really know. By all accounts, he was like a very good example of this kind of HP general manager type who became a CEO.

50:09Marc Andreessen:He took over the company. And by the way, like in his defense, under him, the company scaled enormously. Like I forget when he took it over, but it was like 87 or 88 or something. And then, you know, by the time I got to the Valley in 94, like this company had become huge and, you know, whoever's running the company gets at least some credit for that. So, but anyway, they got in this classic fight. Like they got in this classic fight and the classic fight was, you know, you can just, it's the same story every time. The founder's like, founder's talking to CEO and the founder's like to the CEO of like, we need to do things completely different.

50:37Marc Andreessen:And the CEO's like, no, like what we're doing is working. Like stop fucking with, stop fucking with the thing that's working. And the founder's like, no, it's working now, but it's not going to work in the future. And the manager and the CEO's like, well, then we'll deal with it in the future. And the founder's like, you can't wait to deal with it in the future because by the time the future arrives, it's going to be too late. And the manager's like, why are you in my pants? I'm like making you all this money. The company's super successful. Like, get out of my shorts, right? And you get in this, and you see this, and that was exactly the deadlock that they got into.

51:03Marc Andreessen:And Jim Clark basically made two predictions as the founder of Silicon Graphics. So Silicon Graphics at the time was selling, their computers basically started list price at like$50 ,000 for a desktop workstation and then scaled up into the millions. And Jim was like, look, two things are going to happen. It's amazing that he, and he figured this out by like 1991 or something. He said, two things are going to happen. He said, number one, everything that we sell today for $50 ,000 is going to go on a chip, and that's going to go on a card, and it's going to go on a PC, and it's cost 300 bucks. And either we're the company that's going to make that, or we're going to get destroyed, right?

51:32Marc Andreessen:Which, by the way, is what happened. That's NVIDIA. Like, that's what actually happened, right? So he was completely correct about that. The other thing that he had was, he's like, look, this idea of standalone computers is not going to be the thing. These computers are all going to get networked together, and the network is going to become the important thing. At the time, there were different terms. People were using terms like information super or a video on demand or 500 channels. You had all these kind of concepts kind of coalescing around what became the internet. And even before the internet kind of became a mainstream thing, Jim was just like, look, it's just inevitable that this is all gonna become connected.

52:02Marc Andreessen:And then the function of a computer is no longer going to be mainly what just the computer does. It's gonna be the fact that it can talk to all the other computers. And we need to do that. And to do that, he actually went to Japan. He actually got this incredible deal. Nintendo, you know, then and now, it's like this giant video game company. So he actually had this deal with Nintendo where number one, and Silicon Graphics actually did this, actually built the original 3D graphics chip for a consumer game player, the Nintendo 64. So he did that deal. And then he went to Time Warner, which at the time was this very important media company doing all kinds of things.

52:33Marc Andreessen:And he struck a deal with them to do what was called interactive TV, which was basically pre-internet. Basically, it was like Netflix before Netflix in like 1991, right? Like amazing foresight, right? Just like amazing foresight. But again, he and the CEO got in this conflict and the CEO's like, look, we just can't, we can't, we have to, we have to focus on the thing that we're doing. We're not going to do these things. And so Jim did the classic founder thing and he left. And when I met him, basically that was the state that he was in, which was, okay, like, you know, I, Jim, am like in the prime of my life.

53:03Marc Andreessen:I know I have all these ideas. I don't know exactly what to do with my next company, but I know it should be a software company, not a hardware company. I know it needs to be a company that is able to anticipate these changes that are happening in the world. And I know that, and he was very sad about this. And Silicon Graphics is not the company that's going to be able to do these things. And so I have to build the new company that's going to do it.

53:20David Senra:Brad Jacobs has started eight separate billion dollar companies. He said, I've come to know a lot of extremely successful people in my life, and they all have one thing in common. They think differently than most people. All of them, to a person, have rearranged their brains to prevail at achieving big goals in turbulent environments where conventional thinking often fails. What Brad noticed is that great business leaders are pattern spotters. But you can't spot patterns if you can't see all of your data. Most businesses only use 20 % of their data. Why? Because 80 % of customer intelligence is invisible.

54:00David Senra:It's hidden in emails, transcripts, and conversations. That's where HubSpot comes in. With HubSpot, all of your data comes together so you can see the patterns that matter. This is important because when you know more, you grow more. And that is a pattern that never fails. Visit HubSpot.com today. That is HubSpot.com. I want to hear more about what it was like working with them, but there was a very astute observation you made in your blog archive because you were trying to, you know, essentially this post was trying to educate founders, just like recruiting is the most important thing you're doing at the very beginning of the company, maybe forever, and you're underestimating how difficult it is, and you tell the story of Jim Clark in the blog archive.

54:39David Senra:You're like, this guy was a legend. He was, yeah. Like most famous person, best entrepreneur. And he's like, he tried to recruit all these other people. And like, I don't know, it was like a hundred people. And you're like, you were one of two or three that actually followed through and took the chance and jumped and started working with him.

54:55Marc Andreessen:Yeah. And again, this is like, I don't know, Zuckerberg or Sergey Brin or Elon or whatever decides to start a company. Like that was his candle power wattage in the community at that time. And so, yeah, you would think that the obvious thing people would just like say, you know, Jim Clark wants to start a company with you. You know, just the obvious thing is you just say yes. Like it was not happening. And so I don't know if I told the story, but the crystallized memory is a dinner of 12 of us at this famous Italian restaurant in Palo Alto called Elfernaio. That's where a lot of these companies were formed.

55:23Marc Andreessen:It was Jim's favorite restaurant at the time. So Jim had like a dozen of us, us being people who were like in existing companies who were like basically technical people who he knew. Well, this is the thing. He was constrained. He had a non-solicited agreement with Silicon Graphics. And so he couldn't just rip people out. And he didn't want to violate that. And so he needed to basically reach out to the tackle community and find new collaborators. So there were like a dozen of us in there. And I remember that dinner very precisely for two reasons. Number one is I was the only one of the dozen to say yes.

55:51Marc Andreessen:And then the other was it's the first time in my life I drank red wine. And I didn't know what to make of it. And so I kept sipping it, trying to figure out if I liked it or not. And I didn't realize that I was getting completely hammered. Because I had no idea how to calibrate red wine. And so the true version of the story is, you know, I leave the dinner and I'm like, wow, this is amazing. Like, you know, I'm going to say yes to this. We're going to do this. And I go to my car in the parking garage in Palo Alto across the street. And my brand new car, my first new car I've ever owned, right?

56:20Marc Andreessen:My brand new car. And I gun and I pull it out and I rip the entire front end of the car off. It's like this screaming metal. So like the whole front end of my car is just like hanging on the ground. And I'm like, oh, fuck me. So anyway, I parked the car, get out of the car, walk home. No Uber this time. No Uber. I'm just like, no, three-mile walk at, you know, whatever, 11 o 'clock at night with, you know, six bottles of red wine. And you're what, 22? 22, yeah, exactly. 22. I'm like, I think I probably won't mention this to Jim.

56:52David Senra:I don't know. There's some wild stories in that book. He might have admired you even more. He might have. Yes, yes, yes. How many founders of the companies? Just you and him?

57:00Marc Andreessen:And so originally, yeah, originally it was him and me. Yeah, we started the company. And we had a long, it was again one of these things where we had long conversations about like what to do. Well, okay. So then the problem that he had was there was the idea of doing the graphics chip. But like, and again, that's what NVIDIA did. But NVIDIA was essentially a spinoff of SGI. But like at that time, starting a new chip company from scratch would have been tough. And he didn't want to compete with SGI doing that. And then the interactive, what do you call the interactive, it's lost to history, but this interactive television street, like it wasn't time for that yet.

57:28Marc Andreessen:It wasn't actually time for Netflix yet. And so it was going to be cost prohibitive. Time Warner had rolled out this interactive television thing in Orlando, Florida to 500 people. Yeah, and Microsoft was involved. They were doing a ton at Oracle. At the time, like all the big companies were. It's all these Bill Gates wire fees. Yeah, exactly. He talks about that a lot. But the CapEx per house was like$50 ,000 or something because you had to have like a silicon graphics station in the house. It just wasn't going to work. And so he couldn't figure that out. And then we cycled through a whole bunch of ideas.

57:57Marc Andreessen:He actually went back to Nintendo and we almost pulled the trigger on basically building what today you'd call like Xbox Live or what is it called? It's a PlayStation Network or Xbox Live, like an online gaming service for the Nintendo 64 in 1994, which might have been a good idea. We thought it was too early. We almost did that. And then what happened literally was the Internet. You know, I had worked on the Internet in college. And then, you know, this is, you know, fortunately only a few months later. But the Internet just kept growing. Hold on, hold on, Mark. Yes.

58:24David Senra:You'd worked on the Internet. I worked on the Internet. That's a little bit modest. Yes, well. I think a lot of people listening to this will know, but you should probably explain how you're working on the internet.

58:32Marc Andreessen:So at the time, it was not, so this is part of the story. At the time, it was not that big of a deal. It's not nearly that much of a big of a deal at the time as it's viewed now. So the internet, I've told this story many times, so I won't go into huge detail. But yeah, so a group of us at Illinois did this thing called Mosaic, which was the first widely used web browser, the first one with graphics.

58:50David Senra:Explain what was different about what you made compared to what existed before.

58:53Marc Andreessen:Yeah, so like previous web browsers were like text-based. And so there was like this nascent concept of the web, but it was like text-based terminals. And then it didn't have graphics. It wasn't point and click. You know, it didn't work in the way that you would like the spec software to work. And then, by the way, it didn't also have like, you know, no scripting language, no security, you know, none of the actual capabilities that like make the browser a useful thing. And so there was this like nascent idea, but it needed to get built into a full thing. And so we built the original kind of full thing, full browser at Illinois.

59:24Marc Andreessen:And then we also built the first kind of mainstream web server, like the first web server again that kind of had everything that people needed. You know, this had been a project at college. And then this was a project. And again, at the time, the Internet was not viewed as a consumer phenomenon.

59:37David Senra:Wasn't it illegal to commercialize? Steve Case of AOL tells a story that he had to like lobby and get a law changed. Yeah, that's right. What was the details there?

59:45Marc Andreessen:So the Internet as we know it today in the 1980s was called the NSFnet. NSF stands for National Science Foundation, which is a branch of the U.S. government that funds research. And the National Science Foundation funded the Internet. The reason I was able to do the work I was able to do at Illinois is because the NSF had actually dumped a ton of money into four universities around the country to build what were called the supercomputer centers. And then those were also the main hubs for the NSFNet. And the function of the NSFNet was fundamentally to connect the supercomputers to all the people who were going to use them.

1:00:16Marc Andreessen:And so it was this government research academic program. And it was, like, very exciting. in the technical field, but there was no conception that ordinary people are ever going to use any of this. It was just not. Nobody ever thought that this was a thing that the normies were going to use. And so NSF, it's taxpayer funding. So the government at least is not supposed to be funding businesses directly, although sometimes they do. But there was formal legal restrictions on funding things with commercial applications. And so what there was is there was something called the AUT, the Acceptable Use Policy.

1:00:50Marc Andreessen:And the Acceptable Use Policy said that basically the internet, the internet, the NSFnet turned internet was for academic and research use, and commercial activities were strictly prohibited, like literally not allowed. And again, it's just like, oh, as a taxpayer, that makes total sense. Like, I'm glad my tax money is not going to fund something like that. But like, as a user, you're just like, all right, that's nuts. Like, that's clearly crazy, right? And if you took the conceptual leap to say, no, this is going to escape the lab and this is going to be something normal people are going to use, then it just became obvious that it would have to have commercial activities.

1:01:20Yeah.

1:01:21Marc Andreessen:And then AOL was one of the early pre-internet online services that wanted to connect to the internet. I think they famously connected to the internet in 1993. Do you know about the concept of eternal September? No. Oh, okay. So there are two internets. There are two internets. There is the internet that existed before 1993 and the internet that existed after 1993. People who were on the internet before 1993 often describe it in utopian terms because because it literally was like, you take the whatever million smartest people in the world and you put them on a network together with like no commercial activity, no advertising, no nothing, just the million smartest people in the world.

1:01:53Marc Andreessen:And you just like let them talk to each other. And it's just like amazing. It was like amazing. Like there was this, the old messaging system was called Usenet and like the discussions on Usenet were just like absolutely spectacular. It was just like this, it was like, it was amazing. It was like the most pure, clean, intellectual, like vibrant space since like, I don't know, Athens, you know, 500 BC. It was just like this amazing phenomenon. And then AOL connected. AOL had, I don't know, whatever, a million or two million people at that point. They connected all the AOL users, which were just normal people, to the internet in September 1993.

1:02:24Marc Andreessen:And so it became eternal September, which is that's the day the internet changed. And by the way, I'm pro that. I'm glad that happened. But like the pro and the con of that is that took the internet from this like ivory tower, you know, kind of thing to this basically mainstream consumer ordinary people thing, which is, of course, is just a fundamentally different thing. It's obviously right. The concept of eternal September literally was, it was like when every new wave of college graduates like graduated and got their first job and then went online. So September is when the new crop of like internet users showed up for a long time.

1:02:54Marc Andreessen:So the September effect didn't just happen once, it like happened over and over and over and over again. And every cycle of internet user would basically be like, oh my God, this is great, but like it's all gonna get ruined in September.

1:03:05David Senra:Yeah.

1:03:05Marc Andreessen:Right. And so the internet that we live in today is the result of - They can only see us now. 30 September. Right. But yeah, by the way, there was controversy at the time about whether the acceptable use policy should be revoked. There was controversy over whether normal people should be on it or not. There was controversy over whether the kind of content normal people wanted to be on it should be allowed to be on it. There was controversy about whether there should be, like there was controversy. We got quite a bit of flack at the time for putting images into web pages under the theory that that would like fundamentally make everything worse because you'd have like normal content.

1:03:39Marc Andreessen:That would be bad. And then, you know, so said about like e-commerce, by the way, advertising. I remember when there was actually a moment, there was a guy, there was a guy, there was a guy named Sanford Wallace and he became known as Spamford, Spamford Wallace. And he was literally, he sent out the first spam message on the internet in like 1992. And it was like, literally it was like the first internet ad and it was like a spam for whatever, legal services or something. And he just dropped it on the Usenet. And it was like a thermonuclear explosion because it was like, you know, get this commercialized crap out of my newsfeed.

1:04:11Marc Andreessen:And so like all of these things were like hotly controversial. I was generally on the other side of all these arguments because I was like, look, this thing is great. Obviously, everybody should have access to this. Obviously, we need to connect everybody to this. Obviously, to do that, these need to be businesses. There needs to be commerce. There needs to be advertising. Like all these things obviously need to happen.

1:04:31David Senra:So is that the discussions you and Jim were having where you're like, okay, we're going to start an actual company on this?

1:04:36Marc Andreessen:So, yeah, so that's how we got to the conversation, Jim, and I had, which was basically like, okay, because that was right at the pivot point. It was like in early 94. So this is like the AUP had just been revoked and it was just, and AWOL had just done the first September and it was, the whole thing was just about to tip. And I knew that, I knew that because I was tech support for the browser, personally. No, explain that. Just me. Well, so if you did Mosaic at the time was the browser everybody used. And so if you use Mosaic, there was a, you know, submit a bug report or whatever. You have a question submitted here.

1:05:07Marc Andreessen:And that went to an email box. And that email box was me. And so I became tech support for the internet for like, you know, three years. I got all the emails. How many emails were you getting? Well, there were actually two. That was one email box. And the other email box was Mosaic was actually created under by, it was also funded by the National Science Foundation. So it was actually not the original license that you couldn't be used for commercial use. It was for academic and research and individual use. And so we had this thing. We did a deliberately ambiguous license. And we said, if you want to use the browser commercially, you need to email us to arrange terms.

1:05:42Marc Andreessen:Now, we had no concept at all of what those terms would be. But we just said we need to create the same coming flow. So I was getting bombarded with tech support requests. And by the way, tech support for the internet means your tech support for everything. So it's like, you know, the old PCs had, you know, they had CD-ROM trays. You press the button, the CD-ROM tray comes out. You put the disk in the thing. The problem is a lot of people thought that those were cup holders. So you press the button, the cup holder comes out, you put your cup and coffee down. And then, you know, 10 seconds later, the cup holder retracts back into the PC, spills your coffee all over the place.

1:06:12Marc Andreessen:You're like, how the fuck do I keep the cup holder out? It's like, man. Let me email Mark. Yeah, let me email Mark. You know, it's like, sir, that's the CD-ROM drive. So there was a lot of that. So one of the funnier things you can always do, in politics, they call this focus groups, but you can use your testing. You see this over and over at tech companies, take whatever amazing new thing you have and just put it in a room with like normal people and let them try to use it. And you just like learn so much about how much of a bubble that you're in, about the kind of things that you're familiar with that like normal people are just like, I don't know what the hell any of this stuff is.

1:06:44Marc Andreessen:So there was a lot of that. But then I had this other email box, which was all the commercial licensing requests. And so I saw the consumer takeoff on the one side, and then I basically, I think that, and then the commercial request hit like 400 messages that people wanted to like pay money for this thing. And so I basically took those to Jim and I was like. There's a business. Yeah, this is going to happen. And then we actually went to my, underwrite, my old boss at NCSA actually had gone to, we actually went to Washington in 93 to try to get NSF funding to staff a support desk so that it wasn't me answering all the emails.

1:07:19Marc Andreessen:And the National Science Foundation people were very nice. And they were like, yes, the National Science Foundation is not in the business of funding customer support desk for your software. And so I still have the denied NSF grant that would have kept the whole thing an academic project. But yeah, so at that point, at least to Jim and me, it was just obvious that that was going to be a business. By the way, again, very controversial. The original press coverage on Netscape for the first year was that these people will never make money. Like, this is ridiculous. Like, everybody knows the Internet's free.

1:07:47Marc Andreessen:Like, everybody knows that none of this is going to work. So, you know, even— What did you think the business model, though— Even then, it was controversial. Was just literally licensing it? It was a combination of things. So it was definitely software licensing. And we did this thing up front where the browser was free, but the server software cost money. And then we, out of the gate, started building all these, we call it applications, server-side applications. So we built, like, the first publishing system. We built the first, like, publishing system for, like, running a newspaper or magazine online, you know, content management system.

1:08:11Marc Andreessen:We built the first e-commerce system for selling—you know, this is pre-Amazon. So we built the first e-commerce system for selling things online. So we built and sold a lot of that software. And then we owned the main website that the browser had as its default homepage. And so we built the original internet advertising business. So Netscape was the largest internet advertising company until I think 1997. That's incredible. I didn't know that. And Yahoo passed us, yeah. And so, yeah, so we invented, people at the firm invented, at the company invented, I don't know exactly who gets credit, but like the original ad formats, you know, were right around that time.

1:08:43And a lot of them rolled out on our site, you know, first.

1:08:46Marc Andreessen:And so it was literally, it was advertising pre Yahoo. It was, it was e-commerce pre Amazon. It was, yeah, content pre, you know, we literally sold. I mean, we put the Wall Street Journal online. It was our, you know, that was our software that did that. And a lot of other newspapers, magazines, all that stuff. And so, yeah, it was a lot of that. And then it was the web operation. And again, it was, again, it all looks obvious in retrospect, but like, again, it was like, okay, when we started this, like, I don't know what the total number was in like. So we started the company April 94. there couldn't have been more than 2 million people total online, right?

1:09:18Marc Andreessen:And then almost everybody was coming in over dial-up. This is like pre-broadband, right? So everybody's coming in on like 14.4 kilobit modems. And we're like hoping that people are going to upgrade to 56 kilobit modems, like, you know, that that would be like super helpful. Computers at that time did not come with TCP IP installed. So to get your PC actually on the internet, you needed to buy a TCP IP stack. Try explaining to a normal human being what a TCP IP stack is. Like, it makes no sense at all.

1:09:43David Senra:They're going to ask if they can put it next to their cup holder.

1:09:45Marc Andreessen:Exactly, yeah. It was just like talking to Martians, right? Talking to us was like talking to Martians. And then, you know, monitors were, you know, like three feet deep and just like bathing you in radiation. You know, just kind of hoping that the radiation stays up here and, you know, everywhere else. In retrospect, it was like super early and it was all very – and then again, it was just like, okay, e-commerce, like, are people going to buy things online? It's like, I don't know, maybe. But like the press at that time, it was just like wall to wall. Like if you put your credit card number online, hackers are going to steal it.

1:10:10David Senra:I was going to say, if you read any books around this time, they're like, there's no way in hell anybody's ever going to put their credit card on the internet.

1:10:15Marc Andreessen:By the way, the other thing you would never, ever, ever, ever do is put your real name online because it would be immediate identity theft. Your life would be ruined. So you would never, ever do that. By the way, the other thing was right in the beginning, you had all the panic around, you know, kids know this is going to destroy children. You know, this is a huge risk to children. So you had all that panic. And then there was, you know, there was the beginning of the calls for censorship. You know, there's clearly all this stuff that you have to take down. The New York Times kept running stories talking about how the whole thing was fake anyway.

1:10:38Marc Andreessen:They kept saying that like all the numbers were made up and like there actually wasn't anybody online. It was like a tiny little user base and we were all like inflating the numbers and committing fraud. And so it was just this, it was just this. In retrospect, it's all like quaint and cute and sweet, but it was like, it was the precursor. It was all the moral panics around technology today.

1:10:56David Senra:You could see nascent versions of them back then. You pick up on something that, because me and you've read a bunch of the same books where it's like humans' reaction to something new is just consistent throughout history. And so I heard a podcast with you. I thought it was the only one that would tell the story in private about bicycle face? Bicycle face.

1:11:12Marc Andreessen:Do you want to say what bicycle face is? Bicycle face, bicycle face, bicycle face. Yes. So it basically turns out every new technology is greeted with what they call a moral panic, right? So a moral panic basically is whatever this new technology is, or this new form of media is, it's going to ruin everything. It's going to ruin everything. It's going to ruin society, it's going to ruin morality, and then especially it's going to ruin the children. And then back, the bicycle was pre-feminism, so it's also going to ruin the women, very specifically, seen in the room of the women, which clearly cannot be, because women clearly in 1880, you know, cannot be trusted to use a bicycle without getting into real trouble.

1:11:43Marc Andreessen:I'll explain, I'll explain why. So this is this persistent theme. And basically you go all the way back, and this is like, you know, this is like this famous thing where Plato and Socrates thought that like, you know, basically they thought that written language was a big mistake, that all information transmission should be oral. And they had this, you know, whole thing back in 500 BC. And then it was just like every, you just have to like imagine, it's, I always like to hypothesize like, you know, the first guy who brought fire, you know, it's like down from the mouth. They probably killed him.

1:12:09Marc Andreessen:Yeah. They're like, what the fuck is, right. Exactly. Like, you know, this thing is horrible. This thing could burn down the village. Like, this is awful. This is going to destroy everything. And so it's just been this, this consistent thing. And, and there's this great website called Pessimist Archive where he, there's these guys who go back and they find all these newspaper articles that are contemporaneous to these things, but it's, it's everything. And, you know, so when I was a kid, you know, it's like heavy metal music, Dungeons and Dragons, you know, it was like all this stuff was awful.

1:12:32Marc Andreessen:I remember the moral panic around the Walkman, the very first cassette, portable cassette player with the headphones, because it was going to destroy society because everybody's going to just be listening to their own music. I remember the moral panic around the calculator was going to destroy education because kids were not going to learn how to do math anymore. And then you go back and it's like in the 50s, it was like comic books and it was rock and roll music. Obviously, it was going to ruin everything. In the 20s, by the way, jazz music was going to ruin everything. Playing cards were going to ruin everything.

1:12:57Marc Andreessen:What else? Novels, paperback novels. Kids were going to sit around to just read novels all day instead of doing any real work. So it's just over and over and over again. It's this constant story. So the bicycle one is the great one. So the bicycle rolls out in like 1870, 1880. And so the U.S. still at that point was like, you know, thinly populated, you know, from today. And the West had been settled and so you had all these little towns and villages scattered all over the place. But, you know, to get from one town to the next was like, you know, 5, 10, 15 miles. And so people didn't generally walk that.

1:13:25Marc Andreessen:And so the bicycle comes out, all of a sudden, it's easy to go five miles into the next town. And then, you know, young people discover the bicycle and they discover that there are young people who they didn't grow up with who are in the next town over and they're like, you know, they head out to do it. And so the specific - To do it. Well, to do it, yes. Do everything. To do whatever it is the young people do, they're going to head to the - Yeah. Look, it's just the nature, you know, if you've known the same group of people since you were two, like you're going to - What's over that hill. What's over that hill.

1:13:52Marc Andreessen:Yes, exactly. Right. I grew up in a small town. I can identify with that. And so, and then specifically at that point, young men obviously, but specifically young women started to do the bicycle. And so, and this is a big threat. And so like, if you're like a guy in a town and like all the, you know, attractive young women are like heading over the hill to the next jail on this bicycle thing, like that's a big problem. And so the press at the time created this thing called bicycle face. And the idea of bicycle face was, it was part of the moral lecture that was given to young women in the press at the time, which was basically young women should not use bicycles because if you go on a bicycle, you have to exert yourself.

1:14:25Marc Andreessen:And if you exert yourself on the bicycle, you're going to end up making like an exertion face. But the thing was, if you did that too much, your face would freeze in the bicycle face. They literally thought it would stay that way permanently. It would stay that way permanently and then you would never find a husband, right? And so, yeah, so that was that moral panic. Yeah, and so these things just like ripped through every, I mean, it's just, well, it's incredible. Music is always a great one because it's like, I don't know, it's over now, but like in the 90s, 2000s, You know, it was all this moral panic around hip-hop.

1:14:55David Senra:Dude, Jimmy Iovine, who's your neighbor, he was in here two weeks ago. And he had to deal with it. They called him a chemical gas or mustard gas. They compared him to literally what he's doing is the same as genocide. Yes, that's right. Because he's funding hip-hop music and white kids are starting to listen to hip-hop music. Hip-hop music in the late 80s, early 90s. In front of congressional hearings on this, like the media behind him. That's right. He was pushed out of a conglomerate. This wasn't a joke.

1:15:22Marc Andreessen:Yes, that's right. That's right. And it's actually funny because like we – I'm not in the music business, but like hip-hop has become so normalized that today it would just never even occur to you. It just like feels like – in fact, hip-hop is kind of – you know, it's a cultural phenomenon. It's even kind of fading today. But yeah, no, that was super intense at the time. And then rock and roll, that was like super intense in the 50s and 60s. And then the amazing thing is – Remember Elvis Presley? They wouldn't shoot him. That's right. Because he would shake his hip. So they're like, no, no. He can't – it's waist up on TV from now on.

1:15:47Marc Andreessen:That's right. But here's the one. Here's the one that I love. Jazz. They said all the same things about jazz in the 1920s and 1930s. Jazz music is corrupting. And it was the exact same thing. It's because like kids are going to get together and they're going to dance to jazz. And then who knows what happens. And then it was like, there's a jazz musician that's like smoking pot. And that means all the kids are going to start smoking. It was just, so it's the same. It's the same story over and over and over and over again. And I'll just say, by the way, in fairness, like it's not that society doesn't change.

1:16:12Marc Andreessen:Like, you know, many of the technologies that we just described did cause society to change. Like, you know, things are different pre and post the bicycle. They're different pre and post the car. You know, they're different Korean posts, you know, the creation of modern culture, rock and roll or whatever. But like this, like the more again, this idea of the moral panic, this idea of just like outright panic, end of the world is just like this repeated over and over and over again thing. And then what's happened is like this is just this is the obvious way to sell newspapers. Right. Like this is like the meta story of the press, which is just like whatever is happening is like horrible and awful and it's going to kill everything.

1:16:43Marc Andreessen:You know, you know, be sure to buy our newspaper tomorrow.

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1:18:03David Senra:Deal is trusted by over 40 ,000 businesses. Learn how they can help your business today by going to deal.com. That is D-E-E-L.com. I want to go back to Jim Clark real quick. Is there anything that you learned? Because Jim Clark was what, like two deck, probably 20 years older than you? Yes, about that probably. So like, is there anything that you learned working, what a fucking education you had to be able to work with that guy in your early twenties? Yeah, that's right. So is there anything that you learned by working with him back then that you still use today?

1:18:33Marc Andreessen:I mean, yeah, a lot. You know, as I said, it was very formative for me, so a lot of it. But yeah, I mean, you mentioned the sort of quote earlier about the world is a malleable place. Like, Jim was like the ultra version of that. And so, yeah, he would just like, yeah, when he had an idea, and he was right. His ideas were correct almost all the time. He would just like pound the world into adopting them, into believing them. Like, you know, the idea of being like a complete force of nature.

1:18:56David Senra:One thing that was malleable was himself. He has this great quote in that book where he calls himself a self-described loser at 30 years old. I mean, the guy had like two PhDs. He was a professor. But he just like, I think he'd been in a second or third divorce. And he just snapped one day. And he's just like, I had woke up one day with the undeniable urge to achieve something. And that's when he goes from academic to founder and just rips off company after company for like a few decades. So it's like, oh, he's, he realized that he is malleable too. He just reinvented himself over and over and over again.

1:19:23Marc Andreessen:And of course, he does that not just by like starting a company, but like inventing interaction computer graphics. And like completely changing the field. You know, indirectly like completely changing Hollywood. But is there anything about recruiting

1:19:34David Senra:or managing or any other way that he ran his company?

1:19:36Marc Andreessen:No, so my two mentors at that time, actually they were in some ways polar opposites. They always got along but they were kind of polar opposites. They were both Jim. So Jim Clark and Jim Barsdale. So the Jim Clark side of my personality is like the like will to power, like I'm just going to bludgeon the world into doing what I want. You know, and then just, and then the idea of just like, you know, try to be a fountain of creativity. Like just like, Like there are many new ideas out there and like you just, you need to go find them. And then, you know, I'm going to say also, I'm going to put this like a sense of professional dissatisfaction.

1:20:04Marc Andreessen:Like, okay, like whatever. Look, this is the other part of the story. Like a lot of founders would have had a success like selling graphics and that would have been it. And they would have spent the next, whatever. Whether they were totally happy with how it turned out or not, like they would have spent 30 years just coasting on that, right? And having a great time and taking credit for it and the whole thing. But Jim, you know, was always, you know, at least in that part of his life, you know, dissatisfied in the productive positive sense of like, okay, no, there's something better. There's something bigger.

1:20:27Marc Andreessen:You know, there's something new that we should do. So, you know, there's that side of it. And then Jim Barksdale was the other, who I just literally was with yesterday in Jackson, Mississippi. Jim Barksdale's the other side, which was Jim Barksdale's like the manager of managers. So Clark is like the ultimate example of that bourgeois capitalist thing I mentioned. So the Henry Ford, Elon Musk type. And then Jim Barksdale's like the ultimate example of like the super manager. and Jim had run, you know, big parts of IBM and AT &T and Federal Express and, you know, came into Runetscape. And what was interesting was, like, that's kind of where I got a lot of this from and a lot of my skills from is I got trained by both of those guys and then kind of both of those guys at the same time and then was able to, like, very clearly observe what is just the difference between those metalities, but then the other is, of course, how those concepts converge, right?

1:21:13Marc Andreessen:Because just the fountain of creativity, you can't build anything big just with that. just the management, you don't do new things.

1:21:22David Senra:Who's a great example of that from history? So, like, would it be like Nikola Tesla? Founded Creativity.

1:21:26Marc Andreessen:Oh, that's right.

1:21:26David Senra:He needed somebody, he needed like a George Westinghouse to commercialize his ideas.

1:21:29Marc Andreessen:Well, it's a Tesla versus Edison. Yeah, so Tesla versus Edison. So, I'm an Edison guy. So, Elon's a Tesla guy. He's a Tesla guy, obviously. But Elon, of course, himself has now become like a really outstanding, I mean, obviously, become an outstanding manager, like in his own way. Back to the point where I think he's actually inventing an entirely new school of management, which we could talk about.

1:21:49David Senra:Let's go there next.

1:21:51Marc Andreessen:Yeah, he's maybe the greatest manager of our era despite the fact that nobody thinks of him that way. So I actually think Elon's more like Edison than he is like Tesla. And there was a big war. And it was kind of this thing because everything kind of turns into these little morality plays. And so kind of the basic story of Tesla and Edison was Tesla had all these ideas, but couldn't commercialize them, couldn't turn them in companies ultimately, couldn't figure out how to make money on them, couldn't build like big companies kind of based on them. And then Edison, you know, it basically, at least the way the legend goes is he was more of this grinder.

1:22:21Marc Andreessen:He was less incandescently brilliant and he was more of a grinder. And he's just like, we're just going to try a thousand things. You know, it's like when they invented the filament for the light bulb, they just tried like a thousand different combinations of things to get to the filament and, you know, sort of this brute force approach. But then he built General Electric. He built the like National Electric Grid, you know, and built these giant companies. And then, you know, funded by? Funded by J.P. Morgan. There you go. As a venture capitalist in his spare time. Yes, exactly. 100%. And so, and then, you know, Edison also invented the movie projector and then literally spent years trying to enforce his path.

1:22:55Marc Andreessen:Right. And the phonograph. And the phonograph.

1:22:57David Senra:You tell the story, and I knew because I read the book, too. Yeah. We should tell people what he thought the phonograph was going to be used for.

1:23:03Marc Andreessen:So this is a bit of a digression, but it gets to the personality type. So one of the things that people look for is just like, oh, what are the consequences of a new technology going to be? Oh, let's go ask the people who invent them because obviously they know. And so this is what happens when like these AI guys, for example, the AI guys get, you know, the pioneers of AI get interviewed in the press. It's like, well, tell us the future of AI. And it's like you get the one I'll pick on is Jeffrey Hinton, who's like an actual self-declared socialist. Like he's an actual capital S socialist. And people ask him, what's the future of AI?

1:23:31Marc Andreessen:And of course, he says it's going to be rampant unemployment and we need to give UBI to everybody. It's like, what a coincidence the answer from the socialist is communism. Like what an amazing coincidence. But people think because he's one of the inventors of AI that he must be the guy who knows. And so the story I always tell is the Edison story. Thomas Edison was like a very proper wasp. He was like a waspy personality type of that era. Extremely proper gentleman, always like impeccably dressed, very, you know, kind of very ethical, you know, upstanding, you know, kind of citizen of that time and very religious, very religiously devout.

1:24:02Marc Andreessen:And so for him, it's just obvious that the application of the record player was that everybody would buy a record player and everybody would buy a library of discs that would be the great sermons, religious sermons, all the great preachers of the time. And then you get home at night after a long day of work and you turn on the record player and you would listen to a sermon, you know, with your adoring, you know, wife and kids, you know, gathered around you. And of course, the record player drops and immediately, of course, like it's just, it's music. It's just like obviously music and it's like ragtime and you swim and then it's jazz and Edison's just like completely horrified.

1:24:30David Senra:He didn't know that if you put the phonograph in the window and you play good music, then you have all these girls on bicycles coming over there.

1:24:36Marc Andreessen:With bicycle fists. Exactly. Exactly. And so this is what I always tell – this is always my thing. It's like if Edison didn't know what the phonograph was going to get used for, the idea that, you know, I don't know, whatever, Joe AI entrepreneur is going to be able to forecast the economic implications. Like, no. No. Like, that's not going to happen. And in fact, the people who invent the technology are often like the least qualified people to understand the long-term implications because they're just – they're too buried in the specifics of the here and now. And then all these other questions, you know, these are all big cultural, social, economic questions.

1:25:04Marc Andreessen:You know, and by the way, I don't know if there's anybody that can predict big cultural or economic or social trends, but it's certainly not somebody who's been in the lab for 20 years, including myself.

1:25:11David Senra:So how this started, you think you greatly benefited from the two gyms, essentially like being polar opposites. Yeah, basically. And showing you. But also working very closely together.

1:25:19Marc Andreessen:Did they get along? I don't know if I've told this story publicly, so I should tell this story. So they got along great, became very good friends. They both did great and they're both very responsible for certainly everything that Netscape did and everything that I've done. But, you know, it's different disciplines, different worldviews. You know, so there's an oil and a water kind of aspect to that. And so, you know, Clark ran the company for the first like nine months, which at the time felt like, you know, just like this internet time. It felt like much longer, but it was like this highly compressed nine month period.

1:25:46Marc Andreessen:And, you know, and it was like we were like doing all these new things. We were doing all these new things. Like the company was just doing like a hundred new things. It was amazing. But like nothing was being systematized, right? By default, it was not going to turn into a large company without the management part. And so Barstow comes in and he basically is like, wow, this investment is great, but we need to actually start to have systems and schedules and processes and actually run this thing like a business. And as founders do, Clark originally found that a little bit frustrating because it's like whatever is the latest idea is not the thing that we're just going to turn the entire company to pursue.

1:26:19Marc Andreessen:And this is when Clark was still coming to Jim's Barstow staff meetings. And so Clark got upset. He had a negative reaction to Barstow saying, no, we're not going to do this new thing. We're going to keep doing the thing that's already working. You know, it's one of those moments. And Barstow's like, you know, can I talk to you outside? And so, you know, they went back. And I heard the story from both of them later. And, you know, Clark's like, you know, look, this is the whole reason we're here is because we do these new things. And, you know, if we don't do these new things, we're going to destroy the company.

1:26:45Marc Andreessen:And Barstow looks right at him and says, Jim, I hear you. This is as serious as dick cancer. What? It was the deep Mississippi draw, right? And Clark stares him right in the face and bursts out laughing. And they got along great ever since. Like they just loved each other ever since. First up, basically saying, look, we're not gonna make these decisions in a state of kind of superheated passion. Like we're not gonna do that. We need to have the full version of this conversation, but we're gonna have it in kind of this longer and maybe more dispassionate way. But it was to puncture the stress of the moment.

1:27:23Marc Andreessen:And so I will say I have used that one a few times. But I could see Clark. And Clark thought it was hysterical. Nobody had ever talked in that way before.

1:27:33David Senra:But I could see Clark like, oh, no, here we go. This is a replay of what happened at Silicon Graphics. I think probably he was probably afraid of that to a certain extent.

1:27:41Marc Andreessen:But, yeah, yeah. But I would say, yeah, I don't want to say anything negative about the SGI guy. But yeah, I mean, Clark, like I said, Clark was just like, Barstow was just like, was the manager of managers. He was like so advanced on this. That story notwithstanding, Barstow never took the position of like, no, it's time for the new ideas to stop. But it was always like, okay, we need to thread the new ideas into a business, which is kind of the hybrid of the two.

1:28:04David Senra:So I just had this thought while sitting here listening to you speak. Is there something about your partnership with Ben where like you, like he's more Barstow, you're more Clark? Yeah.

1:28:14Marc Andreessen:Although we do mix it up a little bit more because he does have his own edge. But yeah, there is some of that. Yeah. So like for example, he runs the firm. And then I, yeah, I will, I tend to come up with, you know, he comes up with lots of new ideas, but I do tend to come up with new ideas. And then we do have this kind of discussion, you know, frequently.

1:28:31David Senra:So if I was to follow you around without you knowing with a camera, what would your day look like then? Are you just like a fount of ideas? Are you like this uncontrolled energy, like a Jim Clark back in the day? But I've got both.

1:28:42Marc Andreessen:This is the thing, Because they both train me, I've got both parts of it.

1:28:45David Senra:So you're not as uncontrollable or unmanageable as...

1:28:48Marc Andreessen:Yeah, I believe Ben would tell you, oh, I mean, look, Ben's been working with me now for 30 years, and so I think if this was a real issue, I think that our partnership would not have lasted. But I think he would say that I have a pretty strong internal edit function. I want to see unedited. Well, unedited is really fun. Unedited is very enjoyable. It is very disruptive. And so, yeah, it has to be calibrated.

1:29:11David Senra:When do you show the unedited side?

1:29:14Marc Andreessen:I don't tend to do it in the spur of the moment. Again, this is the thing, and Elon threads this incredibly well, just incredibly well, as does Zuckerberg. It's like it is this thing, and again, this goes back to like the Edison-Tesla thing, when you're responsible for an organization, when you're responsible for a team of people that's more than five or ten, if you're going to have an organization that's like 100 or 1 ,000 or 10 ,000 or 100 ,000 people, you can't change the plan every day. Like you just can't, you'll just, you'll destroy every, you'll burn everybody out. You'll destroy everybody.

1:29:46Marc Andreessen:They'll just be mass confusion. People will quit. It's just going to be like, you can't do that. There has to be some calibrated middle ground. There are a handful of examples of like great business successes where it's like one or two or three people, right? And so maybe it's like Bitcoin and Minecraft and WhatsApp and Instagram. And then I start running out of examples, but like AI, there will probably be more, there will probably be more like single person companies from here on out. Or by the way, artists, an artist, a novelist. Let me say, this is the difference between like a novelist and a movie maker.

1:30:16Marc Andreessen:A novelist is like, you can put whatever the fuck you want in your novel. But like, if you're a director of a movie, you can't like change the entire plot like on Tuesday while you're shooting the movie or you go like, there's 300 people who are relying on you to like complete a movie. So anyway, so the point being is like in tech, if you're gonna have an organization, or by the way, in anything, in any field of activity, if you're gonna have an organization, you do need to have some calibration, titration process. Like change does need to happen, but it needs to happen in a measured way. And so you can't just like blow it up every day.

1:30:45Marc Andreessen:And so, yeah, so either what you need in that case to get kind of the holy grail of the large scale organization that's still innovating, either you need two people involved who are able to balance each other. And by the way, you could say this is like Steve Jobs and Tim Cook, you know, would be a canonical example. Or by the way, early on Zuckerberg and Sheryl Sandberg, or early on Bill Gates and, you know, Steve Ballmer. So you can have that kind of configuration. or every once in a while you can get that in a single person, right? Which is very rare, but like Jensen Wang would be a single person example of that.

1:31:13Marc Andreessen:So, you know, every now and then you get that. And so I would say Ben and I have like a version of the yin and yang kind of aspect to it. But like I said, he's very creative on his own. And I have this, because I have the Barksdale training, I have this additional level of sort of, most of the time, you know, sort of self-governance. Like I kind of, I get it. Like I'm not, but it's one of my big things. It's just like, look, if I'm going to walk in and I'm going to like throw a fit and I'm going to like, Like we have to change everything tomorrow and Ben's going to be like, fuck you. Like this fucking sucks.

1:31:37Marc Andreessen:I'm like, that leads nowhere good. Right. So that can't be the thing. And so I do, yeah, I do do a lot of self-editing. You just said something. I think you said you believe Elon is inventing a new way to manage. I think he may have figured out the best way to reconcile the two. The fountain of ideas with the systematic builder, I think he might have figured out a fundamental. I don't know if it's a new way to do it, but I think he might have cracked the code on like how to do that for the next hundred years or something.

1:31:59David Senra:So break down what you've observed with the way that Elon's managing.

1:32:02Marc Andreessen:Yeah, I should start by saying, look, Elon's method has been described by people before. And I should say, I work with him, but from the outside. So I've not worked in one of his companies. So I have one layer of indirection. But I work with him quite a bit now. And I study him very carefully. It's this extreme focus on substance. It's this extreme focus on getting to the truth. So one of the things you notice in any organization with multiple layers is basically that it's compounding lies. And I got this lesson early because I worked for IBM at the point of their kind of maximum size and importance in the world.

1:32:30David Senra:Can you explain? I mean, I don't think people understand just how big and powerful and almost monopolistic IBM was. Yeah.

1:32:38Marc Andreessen:So I worked for IBM at the very height of their power, right before they fell. It was my first job when I was in college. And they were in the mid-'80s. They were 80 % of the market capitalization of the entire tech industry. There's nothing even close to that. There's nothing even close. So this is like Google times 10 or something. It's just like Apple times 10. It's a level of scale and importance that just nobody had. And by the way, the TV show actually that does a great job of this is Halt and Catch Fire in the first season has this thing, this point where these guys are basically inventing the PC effectively.

1:33:08Marc Andreessen:It's the point where IBM shows up and it gives you a sense of like, it's like the CIA story. It's like the phalanx. It's like 20 people in like blue suits are just here to like completely crush you. Like it was just this overpowering, you know, kind of thing. And, you know, they invented like all kinds of stuff and the industry wouldn't exist today without them. And they were an incredible company for a very long time. and the whole thing. And by the way, run by their founder for 30 years, run by the founder's son for 30 years. You know, this incredible company. But then, you know, they're still, you know, they're not that anymore, but they're still a big and important company today.

1:33:37You know, whatever, 1940 to 80 years later.

1:33:40Marc Andreessen:It's like how many companies survive in tech, you know, 80 years. My favorite IBM story is Thomas Watson Sr. had been convicted of antitrust crimes before he started IBM. Is this the cash register? The cash register. And so he had previously run a company called NCR, National Cash Register. And he had been convicted by the federal government of monopolizing the cash register business before he even started IBM. And at IBM, he monopolized the mainframe business. And then they convicted him again. He's a double dipper. He got very used to being an antitrust court. So he was incredible. By the way, there's a, Kevin Meaney, an old school tech reporter wrote a book, a biography of Thomas Watson, Sr., which you've seen.

1:34:22Marc Andreessen:The Machine and the Man or The Man and the Machine, right? It's one of, I'm not sure if it's that one, but it's one of those. I think it might be that one, yeah. And he actually went back, and this is like, you know, this is what we're talking about, like 1940s, 1950s, 1960s. And he went back and he got them, at the time, they had a secretary transcribing in real time all of the executive staff meetings every Monday morning. And he went back and he actually got the archives of the transcripts of the executive staff meetings. And it's just literally Thomas Watson's just like cursing everybody out and just like a complete tyrannical psychopath, just like screaming at people.

1:34:53Marc Andreessen:And it's all in the records. And so it's like, you know, how much of this stuff ever changes? You know, it's like, you know, whatever, I don't know, whatever Elon gets accused of or whatever Steve Jobs is like, oh, no, that guy was whatever it is. It's a pale version of what that guy was doing. But anyway, the point being is like IBM. So by the time I got involved in IBM was like six years later, you know, yeah, 50 years later after that. And so they were kind of peaking in their power. But what happened was, I remember this because I was their intern and I was trying to figure out whether I should work there after college.

1:35:20Marc Andreessen:And they had a, their intranet was a mainframe app. And one of the functions was the org chart. And it calculated there were 12 layers of management between me and the CEO, which meant the following. It meant that my boss's boss's boss's boss's boss had a boss, boss, boss, boss, boss, boss, before it got to the CEO. And then really what happened, the story of the thing, really what happened was, and I saw this happen. I saw this happen up close. What I saw this happen was each layer of management was lying to the one above it. Right. Because each layer wants to look good and wants to, you know, whatever, put a little spin on the ball.

1:35:54Marc Andreessen:And like if one layer lies to the next layer above it, maybe that's okay. But when that happens two or three times, the lies compound. If that happens six times, the lies really compound. If that happens 12 times, the CEO has no idea what's happening. Like absolutely no clue what's going on in the company, which was the state of play that IBM had. But they actually had a term, it was actually a term, they had a whole vocabulary. I mean, this company was like a nation state at the time. You could like live your whole life like in Austin, Texas and never meet anybody who didn't work for IBM. Like it was just like this incredible thing.

1:36:20Marc Andreessen:They had this concept called the Big Gray Cloud. And it was literally the cloud of men in great business suits who followed the CEO around and prevented him from ever talking to anybody who was ever actually doing the work. And so when he would come to visit, it was like a state visit. It was like a visit from the king. And it was like the king and the traveling court. And so it was completely impervious bubble to get information through. And so, but I tell that story because that's the polar opposite of Elon approach. Right? And by the way, being the CEO of IBM in 1989 was a great way to live, right?

1:36:46Marc Andreessen:Cause it's just like, wow, everybody's bringing me good news all the time. Like I wake up in the morning and like, everything is great. And I'm like famous and I am like rich and I am successful. And like, I've got a chauffeur and I've got a jet and I've got these 80 guys in gray suits who are like taking care of everything for me. And I don't have to ever talk to engineers. They're like, this is great. You know, until, you know, it's like the turkey on Thanksgiving, you know, until things change and there's a problem and then you have no idea what to do about it, which is what happened to them.

1:37:12Marc Andreessen:The Elon approach is the polar opposite of that. And the polar opposite of the approach is literally like, I'm only going to talk to engineers, right? And so when there's an issue, I am going to go straight to the source of truth. And the source of truth is the engineer who actually knows what's going on. And so what Elon literally, and I've seen him do this, so he literally does this. He goes to whatever, when there's an issue, one of his companies, he goes to whatever is the engineer who's working on that problem. And he sits down to the engineer and they solve that problem. And I can just tell you, like the number of CEOs in tech, even the great ones who do that, like, I mean, almost nobody ever does that.

1:37:39Marc Andreessen:Why does nobody ever do that? Well, first of all, it's just like a giant pain in the ass because like your life consists of like having to actually solve all these problems. Like the whole point of being like big and powerful and successful is you pay people to do that and now you're doing it. And you're in there at like two in the morning doing it, right? Like it just sucks, right? And so like most people won't do it. And then the other is you have to, that means the CEO of the company has to have the skill set to be able to do that. So the CEO has to not just be a great CEO. They also have to be like a great technical technologist, not just that they have memories of having been a programmer, one point or whatever, a chip designer, but where they can actually sit down with the chip designer right on Thursday night at 2 a.m.

1:38:13Marc Andreessen:in Austin, and they can actually figure out like what's wrong with the chip. And Elon has that ability. And he's like encyclopedic on like every area of technology and is able to go hands-on with rocket designers and AI designers and everything in between. And almost no CEO has that. And so, but that's literally what he does. And then the way that he thinks, the way that he thinks about it, I think, is basically, you know, he runs whatever, six companies, six companies at once or something. And it's like, basically, any given week, in any given week, he thinks about everything as a production, basic production line, you know, sort of production process.

1:38:42Marc Andreessen:It's like, he's actually like an old school industrialist. So everything's like a production process. And then any given week, there's, there's, in any production process, there's always a bottleneck. So there's always, there's always the thing that is slowing down the process the most. And that's always one thing. So what he does for each of his companies is he identifies what he charts, he literally maps out the production process. And he literally has these like monitors where he like has the whole thing laid out. And then he basically says, okay, this is the issue that's holding up production this week.

1:39:09Marc Andreessen:And then he goes and he works. And that's the thing that he goes to work with the engineer on is he goes to fix that bottleneck. And he does that every week for every company. Right. And so think about what that, this is why Tesla is smoking the, is like, has been so much dramatically outperforming the rest of the auto industry is because Tesla, he's, he's fixing the critical production bottleneck at Tesla 52 times a year himself. I can tell you what the CEO of the legacy automakers are doing. Like they're not doing that. That is not what's happening. Right. And so it's in a contrast, like a normal company, it might take six months to solve these problems.

1:39:40Marc Andreessen:And Elon's like fixing it like right now, tomorrow, like let's go fix it right now. And so he just like runs this, he runs this loop over and over again. He's just, he's absolutely indefatigable. I offered, he famously for a while, he had sold all of his houses and he was literally really couch surfing. You know, it's one of the most successful people on the planet. And so I have a vacation house and I offered him, I said, if you wanna take a week and use the vacation house whatever, take the kids, feel free. And he'd sit back five minutes later, it's like, you know, whatever, 11 o 'clock at night, the forward response, I don't take vacations.

1:40:11Marc Andreessen:Which again, it's like, there's no CEO like this. The whole point of being a CEO is you get to go jet around. And so, so anyway, so he's doing that. And then, you know, he turns this into routine. And so, you know, when he does like, He does like a day a week at each of his companies, and he'll basically do like all day. He'll do like a 12, 14-hour stretch where he'll do design reviews. But the way that he does it, he does it with five minutes per engineer, right? And so he does five to 60 divided by five. It's been way too long in this podcast. How much is that? 12? 12. He can do 12 design reviews an hour.

1:40:46David Senra:Yeah.

1:40:46Marc Andreessen:And then he does it for 10 hours a day. So Elon will do 120 design reviews in the course of a day. Are these 101? I have not actually sat on these. I suspect there are other people around, including people who work for him and probably some of the leaders of the companies are involved in different ways. But it literally is the thing I noticed. It's literally a rotating cat. It's the point engineer on each of the important things coming in and presenting for five minutes. And then the question is, if it's going great, that's great. If it's not going, what's the problem? And then how does that problem rank?

1:41:14Marc Andreessen:Is that the production bottleneck? And if it is the production bottleneck, then that's the thing that he then fixes. And then that's when he's there from whatever, 8 o 'clock till 2 a.m., working with that engineer to fix that problem. One way to think about this is the velocity. Like in military affairs, it's called maneuver warfare, right? So just the speed at which he operates is just, the cycle time is just so much faster than anybody running in a traditional method. It's hard to even compare the different, it's like four hours versus six months. Like it's just this incredible gap. And then the other part of it is somebody I know once went to work for SpaceX and they asked what it was like.

1:41:49Marc Andreessen:And he said, it's like being dropped into a zone of shocking competence. Like everybody is like ultra competent. And the reason everybody's ultra competent is because, number one, if they're not, Elon sniffs it out and fires them. But he knows because he's talking to the people actually doing the work. So he, you know, at this point in his, you know, having done this for whatever, 25 years, he can sniff this out really quickly now. And then the other is the best engineers in the world want to work for him because he's the one CEO like this who's able to work with them as a peer on whatever the technology is.

1:42:21Marc Andreessen:And as an engineer, you're just like, what would be better as an engineer than being able to design a rocket engine with Elon Musk as your engineering partner? And so he just has this incredible positive selection where the smartest people in the world want to work for him, and then anybody who can't cut it gets fired. The world sees this as raw aggression, but it's beyond that. It's a very systematic way of optimizing these companies to be able to take on these profound challenges and then being able to actually solve all the problems and do these things, and at a speed that is just completely unmatched.

1:42:46Marc Andreessen:The challenge of all of this is like, okay, that all works great if you've got Elon. And so, one of my concepts is I think we need a metric for founders in Silicon Valley called the Millet Elon. And so, how many Millet Elons are you? Are you 10 Millet Elons? That would be great. Are you 100 Millet Elons? That's 10 % of an Elon? Well, that'd be fantastic. You know, 500 millilons, like I'm going to give you all the money, right? Most people are like one millilon or 0.1 millilon. The question that falls out of this, which is a question that, you know, bedevils us, it's like, okay, like, you know, you can't clone him.

1:43:21Marc Andreessen:You can't bottle the essence. So what out of that can be transplanted to like normal human beings?

1:43:28David Senra:And how much of it is predictable or knowable when he's much younger? Because like the famous example of this is Michael Moritz passing, made all his money in PayPal with Elon. Obviously, there was contention there. He got kicked out and everything else. But then Elon pitched him Tesla and he passed because he's like, there's no way that you're ever going to surpass Toyota. And then Moritz, to his credit, was just like, I drastically underestimated the guy's determination and pain tolerance, I think is the term he used.

1:43:57Marc Andreessen:I wasn't there for that. So I don't know about that. I will say the idea of having been a software entrepreneur, building a car company. Okay. When Tesla started, there had been no new successful car companies in the United States for like 100 years. For like 100 years.

1:44:11David Senra:There was like 2 ,000 of them founded from like 1900 to 1910 and three that survived. That's right.

1:44:18Marc Andreessen:And the previous real attempt to start a car company in the US before Tesla in the preceding decades was? Tucker or something? Tucker Automotive. Yeah, Tucker. which was such a disaster that they made a movie called Tucker, which is about what a disaster it was. And so like, obviously you don't do that. Obviously this is insane. And for a software guy to do this is insane. And oh, by the way, this is only one of the things he's doing. He also has the rocket company. Yeah. Which is also insane, right? And so, yeah, so it's like, and I wouldn't, like, by the way, I didn't see it. And I did, I was, you know, I'm a software guy and I just, I was, I don't know, whatever he's going to go.

1:44:50Marc Andreessen:I guess he's going to go do cars. I don't know anything about cars. So it's not like I saw it, but I'm just saying like, Like the level of incredulity that he was greeted with at the time was, I think, almost uniform. And, you know, there's that famous photo, the most famous Elon photo, I think, or the most powerful one is the one where he's young Elon, probably 2005 or whatever.

1:45:06David Senra:He's in the shorts and the polo and all, and he's like crouched down and there's nothing but the explosion remains of the third rocket, the second or third rocket. The one he had been funding partially, like. Yes. Did you ever read Eric Berger's book, Liftoff? No, I didn't. Oh, you got to read it. I'm surprised you haven't. But it only focuses, I like these company histories that focus on like the first like six years. And it just stops. It's the first six years history of SpaceX. And there's nothing good in the book. It's just reading one failure after another after another. One catastrophe after another after another.

1:45:39Marc Andreessen:It's a great read. When my kid was five, he loves rockets. And so his favorite rocket video was the compilation of all the SpaceX rocket explosions.

1:45:45David Senra:Well, Elon talks about this, that before his friends, when, after he sold them to, he had, I think he had like 180, I think the story tells you like 180 million after taxes. He's like, I'm going to do this rocket company. One of his, I think, Adeo Rossi, I forgot the friend, sat him down and they made him watch all the rocket. There was a compilation, this is probably pre-YouTube, of just rockets blowing up over and over again. Like, no, you're literally going to light your fortune on fire. It's going to explode in the sky.

1:46:11Marc Andreessen:Yeah, exactly. Exactly. So, I mean, obviously it's working, right? So his method obviously is working and it's obviously working like far better than, I mean, it's certainly working far better than anybody else's method in cars and certainly working better than anybody else's method in rockets. And then in a bunch of other areas also. So like, it's clearly working. And so it's like, okay, you know, and then he just draws because of just who he is and what he's doing and how he does it, you know, he just, he draws so much heat, you know, there's just so much, the environment is just full of criticism and attacks, you know, just nonstop.

1:46:37Marc Andreessen:And, you know, we all kind of get sucked into these narratives. But I think that, I think the key thing is just the, for me, it's just like, okay, like there is a method there that he has been working on and refining for, you know, coming out 30 years that has worked better than any other method. Like, I don't know, like I said, I don't know how many people can do it. And maybe there's just like a fundamental limitation, which is you could do it if you're Elon and you can't do it if you're somebody else. Or maybe you need to be above 30 mil Elons, but not below or something like that, right? Maybe there's some threshold where you break through on this.

1:47:05Marc Andreessen:But it is clearly the best method. Like it clearly is generating the best results. And then again, conceptually, I like it because, again, it's this bridging of the founder mentality with the manager mentality. Because he's not just doing, these are not just one-offs. He's scaling. Everything is scaling. What is it? Starlink just hit, what was the number? Starlink just hit 10, was it 10 million subscribers? I'm one of them. Something like that. Yeah, exactly, right? You probably have read about Iridium and Teledesic. No. Oh, okay, okay. So Elon's not the first guy who said we're going to do satellite-based like internet access.

1:47:36Marc Andreessen:There was Bill Gates, Craig McCaw. So when Microsoft on top of the world. And Craig McCaw basically built cellulite telephony in the US, built what's now AT &T Mobile. Those guys teamed up in the early 90s and did this thing called Teledesic, where they put up satellite-based voice, and then it was going to be internet access. Complete catastrophe, total bankruptcy, complete disaster. And then Motorola, which used to make all the cell phones in the US, had another system that's actually still up called Iridium. And again, it's just like this classic business school case study of just complete disaster, or capital destruction.

1:48:09Marc Andreessen:And so Elon's like, I know, I'm going to do number three of those. We're starting as a side project at the rocket ship company, right? Because he's like, I, and in retrospect, it's total genius because he's like, we're going to be putting up, if the rockets are reusable, we're going to be launching them all the time. And then the question becomes, what's going to go in the rockets? And he's like, I can wait for the customers to come to me with more stuff to put in the rockets or I could just put up my own satellites. What would be the satellite to put up? Oh, it would be consumer grade, you know, consumer priced internet access.

1:48:33Marc Andreessen:And it's just like, okay, anybody who knew anything about the history of like satellites knew that that was like the great, you know, that's the new craziest idea in the world. And of course, it's like this like, you know, giant success. It's like the side project. There's clearly a method. It clearly incorporates invention. It clearly incorporates scale. It does a brilliant job of both of those. It's clearly in part the Henry Ford, whatever, Alexander the Great method, clearly. But there's also like real scale and heft to it. SpaceX now is building, you know, they got their own city, like, you know, down in Texas, right?

1:49:02Marc Andreessen:And so it's a formula that captures both sides of it. And it may be like the least studied and understood thing I know of in the world right now.

1:49:10David Senra:It's incredible. Mark, we're running out of time. When I started the show, you were at the top of my list for one of the guests I want to talk to. Thank you so much for doing this. I hope you come back in a few months because there's a million other things we need to talk about.

1:49:19Marc Andreessen:Good.

1:49:20David Senra:Awesome. Fantastic. Thank you. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through founders.