Marc Andreessen on Startup Timing

0:00This is not saying that every startup should be an AI startup or whatever, but there is this incredible new tool that can be used. And it's just sort of general fact that the company's big incumbents have a very hard time reacting to these platform changes. Sometimes they pull it off, but a lot of times they really struggle. And so it's sort of the best possible opportunity for a startup to bring up against an incumbent is when there's this kind of shift happening. What it right now is the best time and decades to start a company. In this episode, taken from Speedrun, a three month accelerator powered by A16Z designed to help founders move fast.

0:28Mark Andreessen joins Games, General Partner, Jonathan Lai to make the case that we're entering a once in a generation window for builders. From the explosive rise of AI to shifting global policies, Mark breaks down why the next four years presents a rare and urgent opportunity for founders, and what separates the entrepreneurs who seize the moment from those who miss it. Let's get into it.

0:51As a reminder, the content here is for informational purposes only. should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the company's discussed in this podcast. For more details, including a link to our investments, please see A16Z .com forward slash disclosures.

1:22How much do you think disagreeability or just the ability to sort of fight and sort of disagree publicly as a necessary trait for founders as exemplified by Steve Jobs? Yeah, so start with Steve, who I knew. So Steve is one of the most disagreeable people in the history of humankind. Steve would disagree with you over the shape of the glass on the table in front of you. It was going to argue about everything. So it was for a lot of the genius came from, which is he was just not going to take the status quo for granted under any circumstances. This Elon uses a term for principles thinking and Steve had a lot of those.

1:49Well, so there's a lot of genius in there. But if you read the books on Steve, or you hear the stories, there's basically two stories about Steve. You hear one is that he was a saint and he was perfect in all regards, which was so much true. But the other story that you hear is basically, he was like a screaming lunatic and he would just run around and be all the people in elevators and fire people in meetings and just he was like, you know, off leaders and people have all these kind of awful horrible things. It's like angel devil kind of thing. And I think on this, I think the reality was somewhere in the middle, at least what I saw and what I heard from people who worked with him for a very long time, was basically he was just like absolutely intolerant of anything less than first -class work.

2:22If you brought him first -class work, and if you were top in your field and super diligent, and on top of everything, and had all the details figured out, and knew what you were doing, and were really good, he was like the best manager you were ever gonna work with, and the best CEO you were ever gonna work with. And the thing that comes up when people talk about who worked with him closely is, I did the best work of my life working for him. Right, and part of that is because he really appreciated and understood the quality and great work, and he didn't tolerate anything less than that, which meant that everybody around you also hit that bar.

2:47And sort of his approach of performance management is everybody's going to be doing top -end work if they're not going to be here. As a consequence, the best people in the world are going to love being here because they're surrounded by the best people in the world. And by the way, that's also something, of course, that Elon shares. And so the stories that you hear about, the screaming or firing people in meetings or whatever, it was always a side effect of its not first class work. And it's either somebody who really should have been able to do it, who didn't, or who didn't work hard enough, or it's somebody who was just not capable of doing it, right?

3:12who needed to go find something else. But the result, the core thing always, and this is why there was so much love for him, right, is the core thing was I do the best work of my life, working for him. Having said that, also, she's himself matured, right, and his career kind of got time dilation kind of happens and so you kind of think, well Steve, don't Apple, the company that we all know him of today. And it's like, well yes, but it took a very long time and there were twists and turns along the way. And the big twist in turn, of course, is he got fired, right? So he started the company in 1976, Steve was, was Nehac, Apple One, Apple Two, they built Elisa, actually, which failed.

3:43That was the other thing, by the way, is not every Steve Jobs project succeeded. And he learned a lot from the failures. And now everybody's screwed out the failures. But you can read about them on Wikipedia. And Elisa was before the Macintosh, and it was a complete failure. But then the Macintosh started to work. But before the Macintosh really took off, he brought in the wrong CEO, and then there was a revolt inside the company. And he got fired, and then he spent 10 years out of the company, right? Which is actually what I got to know him is when he was off doing that. Next was like a complete wipeout.

4:09Like it was years of real pain and agony. And they had this little side project nobody understood, which is this little graphics company. Pixar turned out. Anyway, the point is by the time he came back in Apple in like 97, I think maybe he'd been out for like 12 years. And again, what people who knew him better than I did said, he learned how to actually be a great CEO, not at Apple, but at Next. Because he spent 12 years actually doing it the hard way, where he wasn't being shower with praise. He didn't have the magic touch. The product fundamentally didn't take. He had to like just we say, now pivot.

4:35But this is a great new term. We should just say, fuck up. You know, pivoted next. By the way, when I was in college in 1982, I got 89, I got 89, I got 89, 89. We were one of the earliest operas of the next computer. Any XT was the name of the company, I was called the next cube, was the computer. And it was sort of the post -macintosh. And so it was like literally, it was like a $15 ,000 Macintosh. And it was like fully modern, not only graphical, but it was like full unix at a time when that was really unusual for a desktop computer. It had this incredible state of the art. It had the first CD -ROM drive.

5:06And then one of the great stories was it was a perfect cube. It was a perfect 12 inch cube, 12 by 12 by 12. And there's a famous story of his designers and next when they were designing it, they came in with a sort of optimal, foray, no optimal hardware design built from manufacturing cost optimization, which was 12 inches by 12 inches by 13 inches. And he said, fuck you. Go back and make it a perfect cube. And they're like, Steve, that's going to double the cost. And he's like, I don't fucking care. They make it a cube. And so it was like a perfect cube. It was slow -ish. Like it took forever.

5:36It was like walking through molasses to use the thing, completely flopped. Nobody wanted it. Tiffeted the company to software. Nobody wanted the software. Anyway, the point is, like that was really hard. And he had to make every part of the company work. He had tried to figure out how to optimize it's hard, but he had to retain a team through 12 years of basically failure. Well, basically people say as he had this incredible growth and innovation skill set from Apple Phase 1 and then he had an incredible management skill set from the sort of wilderness years. So by the time he came back to Apple in 97, he was both.

6:02And he was also at that point a great CEO, but he maybe not would have ever become the Steve Jobs that we know had he not gone through the hard period. So a big undercurrent to what you've been discussing is the concept of market timing, but what's the right time, the sort of manner of market? It's the technology, truly, ready for the consumer or the enterprise version of that technology. And so, thinking back to the 90s, you wanted to be not patch .com, but chewy eventually did it wrong, like some of these companies that came 10, 15 years later. If you're a builder right now and you're selecting like markets right now to build in.

6:33How would you think about what the right time is? Is it too early for certain markets in such a way? Yeah, so one of my observations, it sounds crazy, but I think it might be true, is I think actually all the ideas might be good. Qualified founders, they know what they're doing. I think generally are right about the opportunity that they're going after and that it's just okay. If you're like a qualified founder doing that you're doing, you should be so deep in the domain that when you think about, okay, this technology now makes this use case possible and we can build a product that does that.

6:55People are going to want that. I think the accuracy rate on that is almost 100%. the problem is the timing. And early as the same as being wrong, right, in practice, right? And you see this in the pattern, which is basically, is any time there's an overnight success, like a technology company that just like lights the world on fire is doing great. What you find is basically there were set of companies that try to do that same thing five years earlier and failed five years before that and failed five years before that and failed, where that failed. Often goes back, by the way, I mentioned that e -commerce and the phone thing.

7:22The first actual smartphone came out in 1987, right? And so there were literally 20 years of failed attempts to do smartphones until the iPhone, you know, 20 years, right? And so I knew many of the founders trying to do smartphones before the iPhone, and they were very, very smart capable people. Many of them, very successful in other domains and very successful later on, it was just too really. The technology wasn't ready yet. And then why is this hard? It's hard for basically two reasons. One is because to be a successful founder, by definition, you have to live in the future, right? So you have to envision a world that doesn't exist yet, in which the thing that you're building is something that everybody's going to use.

7:53And like people around you can't see that yet, because it doesn't exist yet. And so you see a vision of the world that doesn't yet exist. And that may be right and may not be right. Or it may happen now and it may not happen now. And then the other thing about it is the world gets a vote. And I think one of the really interesting kind of conceptual questions is there's like the push side of you trying to make something happen in the world and trying to get the world to understand something and want to do something and buy something. But then there's like some sociological thing on the other side, which is okay, when is the world actually ready for the new idea?

8:21Here's another just like really amazing thing. Somebody got one of the small versions of Lama on Windows 98, they booted up a literally adult desktop computer for my think 1998, with a fresh copy of Windows 98, and they got a lot more running on it. And so, like, all of those old PCs literally could have been smart this whole time. They really could have been. And like, we had neural networks, right? There were lots of people working on AI. But like, we could have been talking to our computers in English for the last, basically, almost 30 years. We now know. And it's the ultimate history. It's the ultimate history.

8:48And like, we didn't. There was an AI startup moving in the 80s. There were a lot of really smart people in the 80s who thought this was all going to happen then. There were people in the 50s who thought it was going to happen then. And so this timing thing is just like incredibly difficult. And then just practically speaking, as a startup, you only have so long to eat a prudet, right? Or not. And basically, give or take five years total. Right? If you don't get traction to start up in the first five years, you're out of the successor very low just because it's very hard to hold the team together.

9:11You're going to be sick in time. Yeah, you're going to race to get you're in racing at time. And then you end up in this frustrating, you know, I have a lot of friends who've ended up in this frustrating circumstance where you started a company in 2010. You thought now was the time your company failed in 2014. and then a company started in 2015 that just hit it and went. And you're just fuck. Right, and so the timing part of it is very hard. I don't think there's an actual answer. The timing thing other than I think that's a really key part of, they call entrepreneurial judgment. Like I think that's a big thing that the founder has to really work hard about and think hard about.

9:40And again, it's this thing of like reconciling. I live in the future and I can see it happening. But like, can I actually deliver it in the form of a product that actually works the way people expect? And then is there enough precondition in the world such that they're gonna want to actually do this thing. And I just, like, I mean, these are also types of, John, tell you, I don't even, I don't even try to forecast these things myself anymore, like in meetings, I just figured like, let's just assume the founder is more likely to be right than we are just because like, this is the best, the founder's best guess is probably the best guess that exists because the founders have the most information, kind of synthesize a view on this.

10:13But having said that, you know, we're gonna back, you know, I don't know, like a third of the companies or whatever, and we're gonna back in a given year, it's just gonna turn out that they were too early. Like, by the way, the other corollary to this is, if it's going to work, it almost always feels like you're too late. So as I found it, almost always feels like, I wish, I should have started this company. If only I started this company two years earlier, because it's like you're in a situation where you're like, oh my god, it's going to happen and the market's coming and it's going to happen.

10:41But my product's not quite ready yet. And like, oh, shit, I'm running out of time. And my experience at least is that feels terrible in the moment because it feels like you're not rising to the occasion. but that's actually the positive sign. What excites you to most when you think about AI and sort of what it can be to create a storytelling and just the entertainment industry at large? So aspirationally, there's opportunity for a complete reinvention of the entire process of storytelling and games and immersive worlds. This is sort of thing. Instead of us making them maybe they're going to get hallucinated.

11:13They're going to get drained. You're playing a game and it's going to basically be AI, sort of a symbiosis with you as the player and it's gonna, you know, adapt, it's gonna learn from you, adapt to you and make you the best possible experience, you know, with the best possible, you know, the trade -off between, you know, the easy and difficult to learn and curve and the most possible entertaining scenario for you. And, you know, the best games people play for, you know, many thousands of hours. And then, by the way, the businesses can be really amazing underneath this because they don't, you don't bear all the cost of manual content creation.

11:43And so, you know, you build an engine like this and it runs, you know, it runs forever. And so that's super exciting. And then being able to have virtual worlds with super smart, lots of populated by these incredible personalities, just a whole new amazing kind of storytelling. So like, and we're big believers in all this. And like I think that's all gonna happen. It's gonna be fantastic. I will say I am also seeing this through the eyes of my nine year old. So I'm regoing through the process of learning about gaming and coming up to speed as a gamer through my nine year old. And so a couple of key lessons.

12:18One is, well, work craft, apparently, is, or not work. Minecraft is immortal. So, like, he loves Minecraft more than life itself. And so that, whatever those guys did, it just, it just worked. And by the way, it really interesting thing, like the nine year olds, at least the nine year olds, they don't care at all about visual fidelity, a visual quality. Like, he could not give it. And so Minecraft and Roblox and Games look like that are fantastic. And he just discovered his first, I just learned about I .O. games. People have heard of those. And so he just discovered, he just discovered his first first first shooter, which just throws, throws me to no end.

12:54It's called Shell Shockers. And it's basically, it's Counter Strike, but with anthropomorphic eggs. Oh, wow. So it's like full military hardware. And then when you shoot another player, he explodes in a shower of yoke. And it's a completely browser -based game, right? It's multiplayer, but it's all browser -based, and so it punches through all the school firewalls. And so it runs great on Chromebooks. He's very frustrated. He can't get it. When we take away his laptop, he's currently on a laptop break. When we take away his laptop, he tries very hard to get it working on the web browser on his Kindle.

13:29That's his main form of frustration his life right now is that we tell him it's good. It's good that Shelf -Shockers doesn't run on the web browser on the Kindle, because if it did, we'd have to take away the Kindle. So, but anyway, I watched him doing this, and then I had this moment when Chad G .P .T. came out, where I was like, wow, this is amazing, and I can't wait to show this to my kid. And I felt like Prometheus bringing fire down from the heavens to my kid. It's like I'm bringing him, AI, and it's gonna be this tutor and coach, and it's gonna be with him forever, and it's gonna talk to him, and he can ask you questions.

13:59And he'll teach him about all these things he's interested in, and I installed on his laptop, and show him you type in a question, it'll answer the question. And I'm like, this is like the best thing I could ever possibly do for my kid is give him this capability. And he looks at me and he's like, so? And I was like, no, it's like, it took 80 years of the neural networks and the best matrating data and the whole thing. And it does the thing and it makes up that. And he's like, that is a computer. Like if it doesn't answer your questions, what would it do? And I'm like, well, against this backdrop, we've got new administration, new policies, new technologies, sort of new sort of cultural movement potentially.

14:38It feels like we're very much at a moment in time. I've heard you describe it before as like we could be in a precipice of literally a golden age for America and for the end of the world. What are some ways that startups today like in 2025 could be thinking about capitalizing just on this moment, but... Yeah, so look, I think for at least the next four years, I think it's basically blue skies. And so I think that, you know, now it's definitely the time to build. You know, you know, as I said earlier, our whole theory of all this is that the prime time for startups is when there's a platform change.

15:10And by the way, this is not saying that every startup should be an AI startup or whatever, but like there is this incredible new tool, you know, that can be used. And it's just against a sort of general fact that big companies, big incumbents have a very hard time reacting to these platform changes. Sometimes they pull it off, but a lot of times they really struggle. And so it's sort of the best possible opportunity for a startup is going up against an incumbent is when there's this kind of shift happening. So I think that's happening. Yeah, there's going to be four years of clear sailing, I think, in the US.

15:41The rest of the world's in a funny state. The EU has all but made AI illegal at this point. They literally, this is the amazing stuff. They literally say public, they're senior officials, they've always said publicly a year ago, they're like, well, we've realized that you cannot be the world's leader in AI innovation. So therefore, we will be the world's leader in AI regulation, which is one of those things that I think you only say if you're an unelected bureaucrat, completely lost in your own thoughts. But they passed this very draconian AI law. As a consequence, even the big AI labs now are not launching new AI products in the EU, because they can't figure out how to do it legally.

16:19The UK actually backsulate on this. The UK should be a haven for openness and instead they basically have matched you on bad regulations and seemed like they're going sideways on that. So, and this is important because like the main US training partners are actually, our main training partners are China, our main training partners are Europe. Like the globalization is sort of based fundamentally, you know, in the West is based on the economic relationship between the US and Europe. And then yeah, I mean, look, you know, the entire world is opening up. I mean, you know, kids everywhere are now online.

16:49They have access to all this. They want to use all this technology. They want to build it. You know, they want to be part of these companies. Some of that obviously happens through, you know, migration. But a lot of that happens through just like everybody's online now. So there's, you know, talent all over the world. And, you know, hopefully the internet itself, you know, and general economic arrangements, stay free enough for people all over the world who come together and build things. That's very exciting. Definitely feels like we're the unique moment in time to be building. It's a, I think it's great to note that through Appadance.

17:17Thank you, Mike and Jason. Let's give him a hand. Good, good, good. Nice hand, man. APPLAUSE

17:27Well, like, it just drives you f***ing nuts, right? And by the way, it's OK. This is an adult audience. Can I swear? Is everybody over the age of 18? It's hard to tell. If you're below the age of 15, it's just whatever the new thing is. It's just the way the world has always worked. It's totally normal. If you're between the ages of 15 to 35, the new thing is very exciting and you might be able to make a career out of it. If you're a lovey, if you're 35, the new thing is unholy and against the social order and it's going to destroy civilization. Thanks for listening to the A16z podcast. If you enjoyed the episode, let us know by leaving a review at ratethispodcast .com slash A16z.

18:05We've got more great conversations coming your way. See you next time.