20VC: Marc Andreessen on The Future of Venture Capital: Will a16z Go Public | Why Labour Displacement with AI is Wrong | Why Introspection is Dangerous | Why "Diamonds in the Rough" is BS in VC | Why a16z Invested $300M into Adam Neumann

16:00Harry Stebbings:I don't know if I'm going to give you - I'm elegantly backing into it, okay?

16:04Marc Andreessen:I don't know if I'm going to give you a great answer to that. I'll tell you what I tell myself is at this point, what I tell myself is I'm sort of competing with myself. I am trying to figure out how to be the best possible version of what I can be and what I can do. And so the way I think about it basically is like, OK, how good did you read? I was at Jocko Willink's book, Extreme Ownership. Did you ever come across that?

16:21Harry Stebbings:I love Jocko Willink. I also listen to his motivational talks when I go to the gym. Brilliant.

16:25Marc Andreessen:A hundred percent. And, you know, his thing on extreme ownership, right? So for people who haven't heard his thing on extreme ownership is just, you know, his famous Navy SEAL commander. very accomplished guy, you know, and the kind of guy people would happily follow into battle or would be a great, you know, would be a great CEO or great founder, you know, that kind of personality. And he has this thing, he says extreme ownership. And he says, look, life just gets a lot simpler if you just assume everything is your own fault. Right? And it's just like, oh, I don't know, like, you know, whatever, whatever, this LP didn't invest, or this founder didn't take my money or whatever.

16:50Marc Andreessen:It's like, oh, okay, it's my fault. It's not his fault. It's my fault. Clearly, I didn't do a good enough job. Clearly, I can do better. And then it basically his argument is it gets you kind of productively focused on improvement. And so I founded that, Like, put it this way, when I'm in my own head, and I'm mad about somebody doing something that I don't like, the number one stress relieving thing I can do is I can say, Oh, that's my fault. Right? Because then it gives me it gives me ownership of the problem. And it gives me something that I can I can do. And then by the way, it also drains away resentment, right?

17:17Marc Andreessen:It means that I'm not resentful and angry at somebody else. Right? Because I'm just like, Okay, I'll just I'll just improve improve myself on that. So I operate in that psychology as much as I can. I try to maintain that psychology. I do that. By the way, I recommended to Ben when that book came out, I fell in love with it. And I recommended to Ben, I said, we need to send this all of our founders and like teach this. And he's like, Mark, you're out of your mind. Like our founders already have the problem where they take too much of the weight of the world on themselves. They're already miserable half the time.

17:39Marc Andreessen:Like we don't need to saddle them with more of that. But I think there's something very, very powerful in that. It also has the enormous advantage of it becomes an intrinsic motivation over an extrinsic motivation, right? So it's not a motivation to put points on a board. It's not a motivation to achieve a certain net worth. It's not a motivation to, you know, whatever, be in some league table to win some prize, you know, These sort of external markers. Because the problem with all the external markers of success is, are you going to get up in the morning when it really, really sucks? The extrinsic motivations don't do that.

18:08Marc Andreessen:You need something intrinsic. And for me, that's the intrinsic motivation, which is like, I know I can do this better.

18:13Harry Stebbings:You said that you're competing with yourself. Do you feel you're your best version of yourself today?

18:18Marc Andreessen:I think I'm my best version of myself relative to all my prior versions of myself. But I'm still far short of what I would like to be. So I know of many, many areas of improvement. What's the biggest one that you'd like to change? Oh, I mean, I mean, there's like, I don't know, there's probably like 100. So like, I'll give you an example. I have a strength and a liability, which is I get emotional. The advantage of emotion is like when I commit, I deeply commit. Then I fall in love with things and I become incredibly determined. And I'll kind of go, you know, very long lengths out of a sense of emotion or love.

18:47Marc Andreessen:You know, the negative is, you know, I will get emotional. And I've spent a lot of time and people who know me will tell you I've spent a lot of time, you know, trying to not, let's say, get negatively emotional in meetings. Do you care what people say about you?

18:57Harry Stebbings:It's something I'm trying to work on, but I still desperately care, honestly, Mark, and it desperately upsets me when I read bad things.

19:03Marc Andreessen:So I have a bunch of friends in the entertainment business who I look at and I say, like, there's no way I could possibly do what you do, which is like make myself vulnerable on an 80-foot screen that way. And they're like, yeah, that's the hard part. And then I always ask, like, you know, do you read your own reviews? Like, do you read what people say about you? And they all basically say this exact same thing, which is they say, I tell everybody I don't, and then of course I do. Right. Right. And so it's very hard to avoid that. I do think don't read the comments is generally a very good life guideline.

19:33Marc Andreessen:By the way, I will say YouTube comments have gotten much better. So maybe your YouTube comments are productive now. But I think in general, don't read the comments is helpful. I mean, it's really hard. I mean, you know, everybody's human. I think it's really hard when somebody like is cursing you out or calling you, you know, saying horrible things. But, you know, it's very hard for that not to stick. I would say I'm pretty happy not not paying attention to that. Are you aware? Are you aware at this point of the concept of the meme of retard maxing?

19:55Harry Stebbings:Do you know what, if I'm totally honest, I've seen it on every comment of our thread where I say, oh, I've got Mark coming on the show. And everyone's like, ask Mark about retard maxing. Ask Mark about retard maxing. Honestly, it's one of those where I'm just like, OK, get back to my normal research because I presume retard maxing is not politically correct and I shouldn't ask it. But you brought up retard maxing. So, no.

20:17Marc Andreessen:So first of all, first of all, retard maxing is totally politically correct because retard is no longer, I mean, we have now 18 other terms that apply to people who are like, you know, developmentally disabled. And so like retard, it now means it now means something completely different. And it turns out what it means specifically in the context of retard maxing. Well, let me explain why I came across this. So the internet meme machine is just absolutely spectacular. I think like the process of cultural evolution of internet memes is like absolutely amazing. I think the whole like clavicular, the terms now are mainstreaming.

20:46Marc Andreessen:and obviously there's many internet meme examples but you know one of my favorite websites in life is knowyourmeme.com the comprehensive catalog of memes and so like the culture evolution of what's happening online I just I just think is incredible and wonderful in so many ways and then I got in this this dust up online a couple weeks ago about introspection uh that you mentioned and then a friend of mine sent me this thing and he said oh he's like oh here's your answer he's like you're you're retard maxing and I said I'm what and he said oh watch these videos and there's this guy we can link to, um, who's on YouTube who has basically, I don't know, a hundred videos on retard maxing.

21:16Marc Andreessen:And he's like my, he's like my new life coach, you know, I haven't met him, but like from a distance. And it's basically just like, you know, retard, it's just like, okay, like fine. Like go to work, do a good job, come home. It's fine. Start a company, succeeds, fails. It's fine. Have too much to eat one night at dinner. It's fine. Go to the gym. Don't count your reps. It's fine. You know, ask a girl if she wants to go out with you. If she says no it's fine right and so it's the simpler form of the extreme ownership or it's the form of it that basically i said maybe another form of it that says i i don't need to take all this in on

21:48Harry Stebbings:myself i can just let it go the thing i love about the internet mark is there is some guy who is doing these retard maxing videos who now has mark andreessen as one of his biggest fans and you're

21:58Marc Andreessen:just like how great is that they're incredible well it's like 130 minute videos about retard maxing and you would think that after the first two minutes he kind of covered oh no we got a catalog but no and by the way they're all hysterical they're all absolutely fantastic and it's literally like him on his porch in the middle of nowhere with like a cigar and it's like a half hour it's just absolutely absolutely absolutely spectacular and so anyway like i i do think there's something to that which is like okay back to your back to your original question it's just like okay like in addition to all the emotional pain that life has already put on us or that we've already put on ourselves you know and by the way you know a lot of it legitimately so for for the things that we actually do to other people and so forth but it's just It's like, okay, how much are we going to torture ourselves?

22:36Marc Andreessen:And, you know, there's something about modern culture, modern Western culture or something where we've become like very guilt oriented and very, you know, very into like self-flagellation and very into the little concept of the hair shirt. You know, you just like, we wear these metaphorical garments that just are like tremendously painful. And so it's just like, all right, like maybe there's a point at which like some of that is helpful to like correct bad behaviors, but, you know, it's clearly gone way too far and people get like way too down the rabbit hole in this and it becomes very disabling.

23:00Marc Andreessen:And I, you know, you probably know a lot of people who are like that. So the way I think about it is like inherently what you do, what I do, what venture startups, like, look, these are high risk operations, right? And sometimes they go right, but they go wrong in a thousand ways before they go right. And then even then they may not work. So the nature of the beast is like just like tremendous variability and pressure. By the way, another thing I always thought about a lot as a founder, and I really see this now as a VC, is that in particular, founders have a very hard time ever finding anybody they can confide in.

23:26Marc Andreessen:As a founder, you feel like if you admit that you have an issue, like you're being a bad leader, right? Because you're showing a crack in the armor. And if your people pick that up, they're going to lose confidence in you. Or if word gets around that like you're second guessing yourself or that your thing isn't going well, or that you don't have total confidence in it, then it'll, you know, all of a sudden investors won't want to invest and candidates won't want to join. And so there's this need of somebody, you know, if you're going to lead one of these things, you have to do it with such a brave face.

23:49Marc Andreessen:And then, you know, kind of, I always call it, it's a metaphor is sort of that, you know, the duck looks totally placid above water, and then it's paddling furiously underwater. And so I just think like, in particular, founders have a very hard time finding anybody that they can actually confide in. And then what happens is I think everybody individually has an inaccurate view of what everybody else is feeling. Because I think in practice, everybody's kind of feeling, you know, very tense and nervous and anxious and, you know, fearful and so forth. But everybody's pretending they're not feeling that way.

24:14Marc Andreessen:But everybody thinks everybody else is doing great. Everybody else thinks they're the only one that's like faking the smiles at the party. And so I think it's like incredibly important to be able to have an internal psychological mechanism to be able to deal with that and not have that overwhelm you and i at least this week my nomination is retard maxing you can you can kill me you can

24:31Harry Stebbings:tell me i don't i don't want to ask that i remember i did a show with orlando bravo and it basically turned into a therapy session and then he kind of became my adopted father give me a lot of advice what am i scared of i'm scared that i'll be macaulay culkin mark do you remember home alone yeah that kid whoever knew when he was young and then it's like oh yeah what is he doing now oh kind of no one knows i have nightmares about being macaulay culkin adventure what are you scared of to me you're you're the great mark andreessen of Andreessen Horowitz. You've got nothing to be scared of.

24:58Marc Andreessen:Yeah, I mean, I've been through kind of every version of this myself. There's a famous F. Scott Fitzgerald line where he said in the 1920s, where he said, you know, author of The Great Gatsby, and he said, there are no second acts in American lives. You get one shot and that's it. And fortunately, I think like he was very, very, very deeply wrong about that. And I think he was definitely wrong about that for American lives. And I think he was generally wrong about that for lives, at least elsewhere in the West. Maybe a little bit less so in Europe, but I think still, you know, more than not. Anyway, the point being like, I mean, look, somebody once told me there are two great stories, Oh, the glory of it and Oh, the shame of it.

25:29Marc Andreessen:And so Oh, the glory of it is like the story of great success. Oh, the shame of it is a story of like great disaster. But then the even better version of it is Oh, the glory of it followed by Oh, the shame of it followed by Oh, the glory of it, right. And so the recovery, and you know, getting back up in your feet, and then reachieving and rebuilding. And so, you know, I don't know, I think as long as you're still alive, and as long as you've conducted yourself in a way that you know, you haven't, you know, brought, you know, some sort of fundamental like legal issue on your head or something like that.

25:53Marc Andreessen:I think generally, at least in our world, I think second chances are actually available for a lot of people. And by the way, of course, a lot of the great success stories have this in their background, as you know, including Steve Jobs himself.

26:05Harry Stebbings:You mentioned the nature of the beast there being our business. I've been a student of the business, hence reading so much of your writing for years. When we look forward, how do you think about the future of venture? Is it as simple as go big or go home? Obviously, we see Andreessen be so big now.

26:20Marc Andreessen:So I believe, and we try to run the firm this way, I believe the core of the business is a permanent state of affairs. The core of the business is early stage. The core of the business is a founder or a small founding team with a dream and a clean sheet of paper, ideally a garage, although these days, you know, it's hard to keep the kids in the garage. So maybe they have a house or an office. They're expensive in Palo auto market. It is a not cheap garages. Palo Alto garages are indeed expensive. Yes. But you look a couple of kids in a dream and a clean sheet of paper and then first money in and then, you know, the first two years, that is the core of the business.

26:52Marc Andreessen:Like that, that really fundamentally is the core of the business. A metaphor we use all the time at the firm. It's like startups are like baking a cake. If you bake the cake and you leave the sugar out of the cake, you can't pour sugar out of the cake afterwards and fix your mistake, right? Sugar has to go in the cake. That first two years is when you're baking the cake. Like that first two years, when you're really figuring out what the formula is of what you're doing and what the product is and what the company is and what the business is and what the culture is and who the team is. Like those decisions are like absolutely fundamental.

27:18Marc Andreessen:And if you get those right as a founder, like the payoff from that will go for decades. And if you get those wrong, like even if your company succeeds, you're going to live with those sins forever. They're going to extrapolate out. And so like, that's it. Like that is the core of the business. And like many great companies, you know, later on bring in lots of other partners and growth stage investors and, you know, other people to the team and build boards and it's fantastic and it's great. But, you know, there really is no substitute for that kind of inception point, you know, that early moment.

27:44Marc Andreessen:There's no substitute for being the investor that does that. And then, you know, as you know, like the investor who's engaged with the company at that stage, it often becomes the key advisor to those founders for the rest of the company's life because you build this incredible emotional bond and then, you know, you have like complete context on why all the decisions got made and you, you know, you remember how it first started. I think there's just no substitute for the early stage. And I think like a firm like ours. This is what I always tell our folks, like, look, at the end of the day, the early stage business has to work.

28:10Marc Andreessen:If the early stage business works, we have option value in doing all this other stuff. But that always is the core of the business.

28:14Harry Stebbings:To what extent is the late stage fund a function of executing on the omissions of the early stage fund?

28:22Marc Andreessen:So it's basically, I think it's in two parts. So part of it is, yes, fixing the mistakes of omission, fixing the mistakes and becoming partners later. And look, that can work really well. Those can be very good investments. You know, and we do get very close to some of those founders, you know, but again, it's not, you know, they always at that point have somebody early on who they're very close to. So, you know, we do see the difference there. And then, look, the other part of it is doubling, you know, doubling down, you know, doubling down on the companies that are working or growing. And I would just say on that, you know, part of that's just economics, which is if you have the chance to do that, you know, you should do that as a professional investor.

28:51Marc Andreessen:But there's another really fundamental thing where we decided why we decided to go so big in growth on that front, which is this is less true now. But, you know, 10 years ago, 15 years ago, these companies would raise money from venture investors and then they would get to a certain point and then they would raise money from a completely different kind of investor that was not tech centric. And then they would all of a sudden end up in this situation where they had, you know, a conflict between investment mentality is a fundamental conflict on the cap table over things like, you know, level of risk, level of reinvestment.

29:20Marc Andreessen:You know, how fast they should go public when if they should sell the company. Do they need to replace the founder, bring in a professional CEO? So, you know, to the extent you bring in non-tech mentality, non-whatever you want to call it, Silicon Valley mentality, growth stage investors, you do set yourself up for like you're now going to get a different set of pressures. And so one of the things we wanted to be able to do is to be able to, you know, with our founders that have the chance to build something really great, like we want to be able to be their partner across, you know, potentially every round that they do.

29:46Marc Andreessen:And then as a consequence of that, they can basically preserve our mentality on their cap table for longer and longer and longer. And I think that that works pretty well.

29:53Harry Stebbings:Is it possible to literally, I love what you said there, because I love the boutique craftsman style of venture. But is it literally possible to care about a$5 million seed check when you have$15 billion that you raise at once?

30:07Marc Andreessen:Yes, and it is. And the reason for that, twofold. One is just the conceptual kind of reasons that I described. But the other is just on pure economics, it is. Because, as you know, the upside on the$5 million check is every bit as big as the upside on a$500 million growth investment. And this is what's so unusual about venture. If I make a$5 million seed investment and I nail it, I can make$10 billion on that,$100 billion on that. If I make a$500 million growth investment and I nail it, I can make$10 billion or$100 billion on it. You see what I'm saying? It's the same upside.

30:35Harry Stebbings:Do you buy the, oh, entry price doesn't matter because we're going to have$100 billion companies? I just see the round inflation across every round. It makes my life harder. With the greatest of respects, large funds make my life harder because you have a different cost of capital. Do you buy the, if it's$100 billion, the entry price? doesn't matter? Or do you think differently?

30:55Marc Andreessen:Yeah. So look, the enterprise definitely matters in particular as you go, in particular as the company grows in size. By the way, it matters for a couple of reasons. And this is a lesson that gets like relearned over and over again, and will be learned many times in the future, which is, you know, the old Don Valentine thing, which I do think is correct, which is more companies die from indigestion than from starvation. Overfunding is actually very dangerous to the operations of a company. By the way, this is the one piece of startup advice that I think is like tremendously grounded it in reality for which everybody has many examples in the past.

31:23Marc Andreessen:No founder ever listens to it. My track record of ever convincing any founder on this point, I think is zero, but I will keep trying.

31:30Harry Stebbings:It's because it's so flattering. Oh, I want to give you money. Okay. You think I'm brilliant. Oh, great.

31:35Marc Andreessen:Yeah. And then, you know, they come up with 18 reasons why, and then they, you know, then, you know, I'll really push them on and they're like, well, we're going to have a lockbox and we're going to put the money, you know, it's like, no, you're not like. I've never had the lockbox. I've never seen it. Nobody's ever going to do the lockbox. Nobody ever does lockbox. So, so, so back to your question, I would just say, look, I think I I'll come back to high valuation in a second, but I think there's an actual core fundamental linked thing is very important, which is the amount of money overfunding is actually just as dangerous or more dangerous than underfunding, number one.

31:59Marc Andreessen:And then number two, look, the problem with these high valuations is like, OK, God help you if you need to clear the bar next time and you can't. Every round sets a post. It sets a threshold, a hurdle for being able to raise the future. And this is something that people learn every cycle, kind of for the first time in a hard way. No new investor wants to do a down round in anybody else's company. If you put the investor hat on and you're like, I'm going to go do a down round in this company because I'm going to be the hero and save the company or whatever because it raced too high last time and now I'm going to do the rational investment.

32:25Marc Andreessen:Like everybody's just going to hate me. Like the employees are going to hate me. The other investors are going to hate me. Right. The founders are going to end up hating me. So nobody ever does a down round in somebody else's company. And so setting these posts high is intrinsically a problem. Once again, I would say this is advice that generally people completely disregard. There are problems like that in the system now and there will be more problems in the future. Having said that, I will tell you, at least on the venture side, growth is a little bit different on the venture side. I think every time we passed on a promising venture company over price, I think it's been a mistake.

32:54Harry Stebbings:Have the best companies been the most expensive?

32:58Marc Andreessen:I think the underlying question, and tell me if you agree with this, the underlying question is the question of diamonds in the rough. Is that right?

33:03Harry Stebbings:Whenever I've done a good deal, it's never worked out.

33:06Marc Andreessen:That's right. Okay, so here's another thing we see in the firm, which is don't ever do diamonds in the rough, only do diamonds. So this is another thing. This is actually an investor ego thing. I think, which is you basically say, wow, I'm the investor that's going to go find the thing that nobody else knows about. Another form of this would be like, you know, all these other investors are herd animals. You know, they're all just copycatting each other. And like, I'm the one who's going to be different. I'm going to go do the thing nobody else can think of. By the way, Peter Thiel does that really well.

33:30Marc Andreessen:Nobody else does that well. And you're probably not Peter Thiel. And you're probably not. I mean, you spent a lot of time with Peter. Let's say I am not Peter Thiel. And yes, and you, the listener, probably are not as well. So put it this way, or maybe I could say this, especially if you go online, there's a tremendous amount of VCs are stupid, VCs are blind, you know, they're herd animals, they're blind, you know, they're consensus seeking, they're heat driven. You know, they only do the obvious thing. You know, they don't appreciate, you know, you often get this from, you know, they don't appreciate my special thing.

33:57Marc Andreessen:Having said that, the general pattern is, you know, and this is like nine out of 10 times, or I would even say probably 99 out of 100 times, which is like, if it's got merit to be investable for venture, there are a lot of really smart and hungry VCs out there. and they are working extremely hard to sniff these things out. And it's their full-time job and it's all they do. Yeah, I think it's really unusual to have the diamond in the rough. And usually if it's the diamond in the rough, it usually means two things. It basically means, number one, it means a company that's like offside in some fundamental reason.

34:25Marc Andreessen:It's in the wrong place, right? Or it was like structured wrong. There's a reason why it's a diamond in the rough that actually ends up becoming a big problem. You know, the example people use, which I think is legitimate, which I think there was a point when Uber was available for investment by anybody on AngelList. So it's like, yeah, every once in a while there's one of those. Yeah. And look, there's a reason, you know this, there's a reason where if you just look at the great outcomes adventure over the last 50 years, if you just rank the outcomes, it's just like, it's the same names over and over and over again, you know, and it rotates, you know, every decade or so there's some rotation of the names.

34:52Marc Andreessen:The other reason you have diamond in the rough is you have a founder who fundamentally is just too ornery to just do things the obvious way. And they're just like hyper disagreeable. And they're just like, ah, and these are often the founders that like have all these theories about how venture is terrible and awful. And these VCs are all evil. And they're like very focused on like terms and control and like all this stuff. and it's just and they kind of alienate and so that and then by the time you meet them it's just like they've alienated like six of the mainstream venture firms and now they're the diamond in the rough and it's like and again it's like okay every once in a while one of those is going to succeed but like i'm not sure i would want that to be my business do you need to like the founders you invest in mark so i say no opinions vary you know i said earlier i'm emotional both in good and bad ways like it you do end up getting very close to people um and you do end up wanting to have a high level of trust and it certainly helps if you like each other and trust each other and and so forth But like, I would just say, on the other hand, like some of the best founders in history and, you know, look, I give you example after example in the distant past.

35:43Marc Andreessen:They were not very likable people. And a lot of, you know, by the way, the same thing is true of many of the great artists, many of the great filmmakers, many of the great literary geniuses, many of the great philosophers, you know, many of the great political leaders. There's a lot of cases where these people are like not not likable. So I say no, you don't, because I think like if you're trying to fulfill your personal emotional needs at work, like I think that's a very fundamental problem and you shouldn't try to do that. it's the Harry S. Truman quote. If you need a friend, get a dog. Like, or another version of this is, you know, we say, do not bring your whole self to work.

36:11Marc Andreessen:Like, whatever you do, do not bring your whole self to work. Like, if you show up and you're a professional and you're great to deal with and you're very productive and you add value in every engagement that you do. And if that's true for you as a VC and you're working with a founder and you're never friends and you just like have a great working relationship and you don't, you know, and the company in the later years, whatever sells or whatever, and you never talk to each other again. Like I've seen that work many times and I think it's totally fine.

36:34Harry Stebbings:Mark, do you want to take Andreessen public? It's the question that came up time and time again. But when you look at the machine that's been built, would you like to take it public?

36:43Marc Andreessen:There's nothing that we're missing today that we could solve by going public. By the way, it's also increasingly true of a lot of the companies that we both invest in. And so I don't think so. I mean, I would never rule anything out. We have, you know, Ben and I have run public companies before. Ben's been the CEO of a public company before. And so, you know, we know what that entails. My funny version of this story. So when we first started A16Z, we went around and we met with a lot of the top VCs at the time. This is in 2009, 2008, 2009. I kind of pitched them on what we were doing and got a variety of very interesting feedback.

37:12Marc Andreessen:And some of them became very, you know, very helpful to us and really helped us. But we got some very interesting feedback. And what one legendary VC told us at the time, he said, the thing you're going to hate the most about being a VC is you're going to hate, you're going to hate the LPs. They are just like the worst people in the world. And he gave us what we call the mushroom talk, which is he said, you need to treat LPs like mushrooms, which is you put them in a cardboard box, you put the lid in the cardboard box, you put the box under the bed and you don't open it for two years. And we said, okay, that's one mentality.

37:37Marc Andreessen:And then we said, well, wait a minute, we've been running public companies for the last 15 years. We've been dealing with hedge fund managers. Say what you will about LPs, whatever you think, at least when you walk in the room, you know, they're not short your stock. If you want to deal with pain in the ass investors, go public. And of course, what we found is our RLPs have been incredible. Like RLPs have been like incredibly supportive. They've been incredible partners. Obviously, we tried to treat them as partners, but it's just been an incredibly productive relationship that, and as you know, like the best LPs understand, they understand venture, they understand the time horizon, they understand the risk aspects that we were talking about earlier.

38:09Marc Andreessen:And they've given us license to do a tremendous number of things that have been very risky, of which some have worked and some haven't. And so it's been an incredibly productive partnership. And so I just go all through that to say, like I can imagine venture firms going public. I think you'd have to have a real theory on the value that you would get. And you would have to really sign up for what it really takes to run a public company these days, which I would just say like public company CEOs have a very hard job.

38:30Harry Stebbings:If you were a betting man, who would go public first, Andreessen or General Catalyst?

38:36Marc Andreessen:That's a good question. I haven't actually talked to Heymont about that. He is certainly, to say this, he's certainly building a firm that could go public. But I don't know whether he would or not.

38:44Harry Stebbings:Interesting. How big a check do you have to write as an LP to get in a meeting with Marc Andreessen? Oh, I would shut that question to my head of IR. are. Fair enough. It was a press. I was just intrigued. Well, I will say this.

38:58Marc Andreessen:It's actually, I think the same answer is your question of what you care about the$5 million investment. There are certain LPs that are really, really smart. And then specifically, there are certain LPs that are very influential in the LP community. They are not necessarily the same LPs as the ones who write the biggest check. And so I should say, probably shouldn't get a name, but there are certain LPs where I would 100 % meet with them independent of check size. Those are the really great ones.

39:20Harry Stebbings:What product do you not have in the Andreessen suite today that you would most like to have?

39:25Marc Andreessen:So the two that we've kicked around for a long time are public equity on the one hand and then credit on the other hand. I think there's really good reasons to do both. And then there's issues with both issues specifically with respect to running, doing them inside a venture firm. And so we've never kind of hit the catalyst moment where we've pulled the trigger on either one, but those would probably be the two nominations.

39:42Harry Stebbings:If I were asking you about diamonds in the rough, I would say that I'm in Europe. And so location can help you find diamonds in the rough. Do you think you have to be in San Francisco today or Silicon Valley today if you're building an AI company?

39:56Marc Andreessen:So let me start by saying I wish that we could decentralize tech. You know, I come across as a Silicon Valley partisan a lot and a Northern California partisan. I should, by the way, note, I didn't grow up here. You know, I'm an immigrant, you know, internally in the US immigrant to California. By the way, I haven't left, which is... You haven't gone to Miami?

40:15Harry Stebbings:I got lots like, Why has he moved to Miami? I'm like, has he moved to Miami? My research tells me no, but fuck, okay. Maybe he's done a Sergey.

40:22Marc Andreessen:No, I'm a California. I'm very dug into California. And so like, look, I am very keenly, I am not a Silicon Valley partisan in the sense of like, I think everything should be in Silicon Valley or I think it'd be good if everything was in Silicon Valley. Like, I don't believe that. And I am a very, very keen student of all the issues in Silicon Valley. And I could spend a long time taking you through them. You probably know them all already. But like Silicon Valley has real issues as a place, including, by the way, just like practical issues, cost, cost of living, cost of housing, cost of transportation, commutes, like, and then when you get into politics, and it's a whole nother kind of parade of horribles.

40:54Marc Andreessen:And so like, there are a lot of issues. And then, you know, look, San Francisco proper, there are a lot of issues, like, you know, it's a city that 100 % does not want to grow. It's a city for which like the voters, on average, do not want business to be there. You know, it's a city that's, you know, has real issues for, you know, quality of life, and so forth. And so like, I would love to see the industry spread throughout the US, and then spread throughout the world. I would love to see that. I was very optimistic about that happening in 2020, 2021. I thought COVID was obviously horrible, but the sudden phenomenon of video conferencing and then Slack and then virtual workplace and all the hybrid and all these new methods, management methods and technologies that were brought to bear to help companies decentralize and run from home.

41:32Marc Andreessen:I was blown away in 2020 that the banking system didn't collapse, the stock market didn't collapse, that it turned out you could just put all these companies online and they could just keep running. The Valley didn't collapse. In fact, a lot of Valley companies grew a lot. And so I was very enthusiastic between 2020 and let's say 2023 that we had cracked the code on how to finally get away from the geographic constraints of Silicon Valley. I think in the last two years, I think that that process has whiplash reversed in an incredible way. And I think the tech industry is more centralized in Silicon Valley than it has been in its entire existence.

42:01Marc Andreessen:And I think it's AI, very specifically. And I think something very close to 100 % of the quality AI companies are in California, and specifically in a 20-mile radius of where I'm sitting right now. There are exceptions. And 11 Labs, of course, is one of the big exceptions, and Black Forest Labs. And we have a whole bunch that we're very proud of, Mistral. There are definitely exceptions, but like, man, if you look at just like the value creation numbers and if you look at the talent base and if you look at the flow of where people are going, for better or for worse, it's in Northern California.

42:30Marc Andreessen:And so I just think in practice, this region is going to be more central than it's been. In the next decade, it'll be more central than it's been in the last 50 years.

42:37Harry Stebbings:You mentioned the multitude of problems that are in the Valley and kind of California more generally. When you look at the state of play in the U.S. today, are you more optimistic today or are you less optimistic today?

42:50Marc Andreessen:I'm a lot more optimistic than I was two years ago, and I'm a lot less optimistic than I was 20 years ago. There is something magical in the American, I don't know what you want to call it, gestalt character psyche. Quite honestly, a lot of it is the inflow of people from all over the world. And a lot of that is the great Europeans who have moved here over the last 400 years. there's something about having a country that is this big and this powerful and this you know kind of let's say lucky and blessed in its geographics and it's in its uh you know natural resources and size and scale and all the rest of it that nevertheless is like incredibly dynamic and has like risk-taking at the core of its dna and and a willingness and a history of like throwing the harpoon at like really big bets in extremely aggressive ways and there's just something amazing about that and you know you always kind of worry or at least i was kind of you know i was kind of worry that that's diminishing and kind of, you know, there's this term managerialism I use a lot, but he's kind of worried that everything's just becoming managerial.

43:44Marc Andreessen:Everything's becoming bureaucratic. Everything's becoming stale. And there's certainly, you know, lots of aspects of the U.S. in which that's true. But having said that, it's like when the new thing like appears, like there's something in the American gestalt that like jumps at it like crazy, like throws the harpoon unbelievably hard. And it's exactly what we're seeing in AI right now. I mean, it's actually a thing that's, I think, even really under discussed the level of enthusiasm, capital concentration, the level of determination on the part. Elon's tariff presentation the other night. Right.

44:16Marc Andreessen:It's just like you watch that thing. My jaw's on the floor. Right. I'm just like, I cannot believe. Look, I spend all day with like these incredibly competent, capable people with all these great ambitions. And, you know, I get to work with Elon on some things. But I watch that thing and I just like my jaw's on the floor at the scope of the ambition. And the honest truth is, Elon would say there's only one place in the world where that could be achieved, that could be accomplished and achieved. It's here. You know, there's only one place in the world where Elon would be able to do what Elon has done over the course of the last 30 years.

44:43Marc Andreessen:You know, thank God that he, you know, came here to do it. And, oh, my God, like, that's amazing. You know, what the AI companies are doing, the big AI labs, I think, is absolutely amazing. What NVIDIA is doing is absolutely amazing. There's just something to that. I understand why a lot of other parts of the world don't want that. You know, young Mark would be like, this is crazy. Why doesn't everybody see this? Why doesn't everybody do this? Obviously, it's not all pure upside. Like there is the American character, I think, is rougher than a lot of other countries, a lot of other cultures. And so, you know, there are definitely pros and cons to it.

45:10Harry Stebbings:Do you worry about the inequality that we're seeing in terms of wealth inequality? I didn't feel, to me, it feels like it's greater than it's ever been. I think we're seeing wealth created in technology larger than it's ever been, obviously. Do you worry about that wealth inequality?

45:24Marc Andreessen:Yeah. So to start with, it's definitely not greater than it's ever been. And we know that because we know history. and we know the natural mode of history for thousands of years was like there's a strong man like and we call him the king or the prince right or the whatever tribal leader and like he has all the stuff and then there are the serfs and then they just like work the fields and they don't have any stuff god forbid you know then you know typically in human history then they're the slaves and they also don't have any stuff or any rights um and so the i would say the long-run state of human history has been like a much greater most more profound level of inequality than anything under capitalism.

45:56Marc Andreessen:And so number one, I would challenge the premise of the question. And then two is like, look, I mean, you know, the debate, the debate about inequality always is, would you rather live in a society that has a faster level of aggregate growth, and a generally rising standards of living across the board, but with greater inequality? Or would you rather live in a society which has lower standard of living, lower growth, or maybe even no growth or declining growth in which things are more equal? And like I said, like, I look, I have a lot of European friends who say, like, look, Mark, you don't understand, like, for a normal person living in Spain is like much better than living in the US because like the baseline is just like much more secure.

46:29Marc Andreessen:And I buy that. And I think that's probably true. Having said that, like if you want the country that is going to go to the moon and build AI and all the rest of the stuff that is happening here, of course, you're going to have a dispersion of outcomes. I think if you look at the economic growth rate itself, it actually tells you a lot. Just as an example, there are a bunch of European countries now that are either, you know, flat or shrinking. Do you worry about the future of Europe

46:49Harry Stebbings:when you look at that flat or sinking growth rate for many European countries? Do you worry about it. Yeah.

46:54Marc Andreessen:So I would say I am a tremendously, tremendously pro-European. I am like pro-European on my very core. Like I'm an Anglophile and a Francophile and a Germanophile. I love all these countries. I love all these people. I think it's absolutely, you know, every country in Europe, I think has made like fundamental contributions to civilization. I think the human capital in Europe is just like absolutely amazing. You'll hate what I'm about to say. But one of my things in the firm is I say we should back every single European founder who moves to the US. Like we you just reflexively say yes.

47:23Harry Stebbings:I 100 % agree with that. I think the data would agree with that too.

47:27Marc Andreessen:Yeah, exactly. And right, that's a combination of two things, right? That's a combination of just the raw level of talent. And by the way, the great education system and everything else that goes with that, which Europe has a lot, and then coupled with, again, if the move to the US indicates a willingness to seek risk and throw things up in the air to go after a greater level of achievement. And so I would love to see Europe flourish. I would love to see Europe be a full scale, like every bit as dynamic and exciting as the US is on all these fronts. I would love to see AI in Europe be a huge thing.

47:56Marc Andreessen:I would love to see London. You know, obviously London has already played a key role with DeepMind and, you know, 11 Labs is, you know, is heavily based there now.

48:03Harry Stebbings:If I were to make you head of the EU, Mark, what would you change about Europe? You can change anything. It's a magic wand to incite growth and ambition in a way that would allow us to seek new levels of achievement.

48:16Marc Andreessen:I have had this conversation many times. So I've, over the course of 30 years been visited by lots of, you know, heads of state, senior officials, you know, people working on different kinds of, you know, commissions studying this kind of thing and so forth. And basically the conversation is always, it's always the same. I don't know, good news or bad news. The conversation is always the same, you know, which is we really want a Silicon Valley, you know, kind of phenomenon in location X. And then I say, well, okay, then do ABC, you know, DEF, here are the things that you do to do it. And then they say, well, what if we can't do those things?

48:43Marc Andreessen:No, no, no, no, no. Yeah. Clearly we can't do those things, but there must be some other set of things we can do. Do you have an option B? Exactly. Well, and this is the thing is you and I think every one of our listeners can fill in exactly what, you know, ABCDEF are. By the way, you know, as you know, Mario Draghi just did this, right? He just like wrote, you know, the Draghi report two years ago. He just did this. He just studied the issue. He just, everything's in that, you know, just read that report, do those things. And you'll notice what's not happening is any of those things.

49:12Harry Stebbings:When you think about all the people that you've met who have been heads of state or in positions of political power, which one were you most compelled to feel you wanted to invest with, work with? You'd want to work with them.

49:24Marc Andreessen:So I will say like in the last five years, it's the heads of, I would say in particular, UAE, Saudi, Qatar, Kuwait. There is something really special happening in those countries. I find there's a lot of very talented people, politicians, European politicians, heads of state, former heads of state, where when you get them in private, they know everything. They know what needs to be done. You just pick a topic and they know what, again, it's almost like the policy discussions have been had so many times that we kind of know all the answers already. It's just, we either like, or we don't like the answers.

49:56Marc Andreessen:And specifically, right, of course, we like, or don't like the consequences of the answers. We don't, we don't like the trade-offs. But like, I think there's a lot of people who like, know, like, okay, this, this, there is a formula, there are a set of things to be done. And it could be on this question of having a tech industry, or it could be on some, some other, you know, a pressing issue, fiscal, whatever, whatever, whatever the issue is. And they kind of know what it is. And then they kind of explain, you know, here's why we can't do that. And then they kind of go back and then they kind of go out in public and they kind of kind of half pretend that they don't know what the answer is.

50:22Marc Andreessen:And so I don't know whether that's, I don't know what other view of that is encouraging or I guess the encouraging thing is I think the intelligence level is probably higher than it looks. The discouraging thing is, you know, the courage part of it is probably not quite there. And then they get unelected and then the cycle starts again. Well, so there is this, I mean, which I don't know, and just talk geopolitics the whole time, But there is this really fascinating, as you know, the big difference, the American constitutional system versus the European kind of parliamentary system. There is this thing where when an American president becomes deeply unpopular, he sinks down to like 40 percent approval rating.

50:51Marc Andreessen:When a European politician becomes unpopular, he gets down to like 6 percent.

50:55Harry Stebbings:Yeah. They start at 40. They start at 40. That's a high point.

50:59Marc Andreessen:And they just nose dive straight to six. And so, I don't know. I always look at that and I'm kind of like, wow. If you know that your default path is to go from 40 to 6, maybe it's time to try something different.

51:10Harry Stebbings:We did have a prime minister, Mark, who once the whole nation was betting on whether I think it was a potato would last longer than her in office or not. And it was a legitimate prediction marketplace, a potato. And by the way, it was live streamed. We need a proof of death of potato. So there we go. We brought up kind of the future of Europe and whether you need to be in Silicon Valley because of AI. When I look forward to how this plays out, when you project forward, does the gains in AI look like AWS in terms of infrastructure dominance? Or does it look like the Internet in terms of application value dispersion?

51:49Marc Andreessen:The question that I answered before of like concentration in Silicon Valley is like the mainline companies building AI. Google and OpenAI and Anthropic and Meta and, you know, XAI and like Silicon Valley. Right. So that's true for sure. But I think there's a second phase to it, which, again, I'm very excited about. And the second phase, which relates to your new question, the second phase is I think the benefits of AI, the power of AI diffuses out globally, like to a degree people are really not expecting. And furthermore, I think that's already happening. And I think this is also an answer, by the way, to your inequality question, because the sort of assumption always is, well, surely the biggest companies in the world will have access to the best technology or the rich people will have access to the best technology or whatever like that.

52:27Marc Andreessen:And it's actually quite striking if you look at AI. I think it's the most hyper-democratic, small-D democratic technology I think we've ever seen. And it follows kind of the Internet and follows smartphones in this, which is why I'm pretty confident this is what's going to happen. I think it's already happening, which is the best AI in the world is the app that you download on your iPhone off the App Store. The best AI in the world is OpenAI or whichever one it is of the three, four, five that are really in the race. You download that app. That's the best AI. And by the way, look, you're in a quality point.

52:53Marc Andreessen:You're probably going to have to pay$20 for it. And if you really use it a lot, you're going to have to pay$200 for it. But by the way, the free ones are pretty good now. And by the way, Google gives away a lot of AI value for free. And Microsoft is starting to do that. And others are doing that as well. But the best AI in the world is the consumerized version that's available to everybody. And so I think there's a part two to our earlier conversation, which is I think people all over the world, I mean, it's already happening because, you know, these apps now are about to cross a billion users and they're growing fast.

53:17Marc Andreessen:And so we're not that many years away from 5 billion people in the world having AI running on 5 billion people who have smartphones and Internet access. And so I think that's such a hyper democratization of the technology. And so I think the use of AI, the consumer benefit, the business benefit, the economic benefit, I think that has the potential to be decentralized to a radical degree.

53:35Harry Stebbings:I guess the question is really to what extent do we feel it is a just assessment that the models will move into the application layer and erode value? You know, we saw, obviously, Anthropic announced security update. I'm using that as an example because it's ridiculous in my eyes. They announced security update and CrowdStrike and CloudFlare tank 8%, 9%. Obviously, it's not threatening CrowdStrike and CloudFlare today. Do you think the core models, AI, OpenAI, for example, will move continuously into the application layer and consume more and more of the value chain?

54:07Marc Andreessen:Yeah, so a couple things. So one is there's a bigger phenomenon, which is what I was heading towards in my earlier answer. So there's actually an even bigger phenomenon than that. And there's actually a paper on this, maybe we can link to it, and it uses the term Schumpeterian economics, after Joseph Schumpeter is the kind of, you know, the economist who kind of developed the theory of creative destruction. And the economist basically goes through and says there's a concept of Schumpeterian economics, Schumpeterian gains. And the idea of it basically is, and he does this whole analysis for a whole bunch of different technologies.

54:33Marc Andreessen:And basically, when there's a new fundamental technology, whether it's electricity or steam power or computers or the Internet or smartphones or, you know, AI, what actually ends up happening is like something close to 99 percent of the economic value arrives in the market, not in the form of economic benefit to the companies that make the thing, but rather to the customers. And the economists call this consumer surplus. Consumer surplus is all of the benefits that the consumers are getting that they're not fully paying for. The way this analysis basically works is if you look at the total amount of economic value creation, for example, downstream of the Internet, something like 99 % of that accrued to the users of the Internet, not the companies that built the Internet.

55:09Marc Andreessen:Same thing with the smartphone, right? Who gets the economic value of the smartphone? Everybody in the world who uses a smartphone to become more productive in their life or in their business gets 99 % of the value from the smartphone. Apple and Google get 1 % of the value from the smartphone. I think AI is the exact. I think it's already that way. I think it's going to be exactly the same way. It might even be greater than that. it might be 99.9999 % of the value of AI is going to accrue to the users, not to the companies that make the AI. That's like such a larger economic force. That's such a larger amount of value.

55:37Marc Andreessen:That's just like extending out into the world that, like I said, it's almost like dark matter. It's like everybody's going to experience that in their own life and in their own business that they run and everything that they build, you know, wherever they are in the world and they're using AI. And nobody's ever going to really like tally that up or get credit for it. But if you do the analysis, it's going to turn out where that's like overwhelming and where the gains are. So your question is basically a question of then fighting for like the 1 % that stays captured, you know, kind of in the AI industry itself, which is a very important question.

56:01Marc Andreessen:And, of course, it's central to what we do.

56:02Harry Stebbings:Well, I guess that actually the question is, does that whole economic theory change when we believe that we will see the labor being eaten? when actually software spend is no longer software spend, it moves into human labor spend, in which case the TAMs explode and we have bigger companies than we could ever have, but a Harvey of the world actually eats a large part of legal work and junior lawyers. Does the TAM explode and how do we feel about that?

56:29Marc Andreessen:Yeah, so you have friends, I'm sure, who were great coders before AI and are now using AI for coding. What's the thing that they all report? They're far more productive. Are they working more or fewer hours than before?

56:40Harry Stebbings:More.

56:40Marc Andreessen:More. Yeah. So this entire labor displacement thing is 100 % incorrect. It's completely wrong. It's classic zero sum economics. It's the lump of labor fallacy. It happens over and over and over again. It's always been wrong. It's going to be wrong again.

56:54Harry Stebbings:Do you even believe it for mediocre people? And I know that sounds very judgmental and horrible, but most social media managers mark a crap. I'm getting in trouble for this, not you. A crap. If you get a social media tool that is AI driven and can replace an average social media manager for AT &T, surely you'd do it.

57:09Marc Andreessen:I don't say this to be insulting, but it's the classic Marxist analysis, which is there's a certain amount of work to be done. And neither the machines do it or the humans do it. And so surely those jobs go away. The answer has to be, and this is what technology has always done, and this is what AI is going to do, and this is why I went through the long description that I did of the hyper-democratization of AI. Every single one of those people who's a social media manager today now has AI. They all have AI. They all have AI or they're about to have AI. And they're going to have it at their fingertips.

57:34Marc Andreessen:and if they want to, and then anything that they want to do in their life, in their work, in their career, in their profession, in their job for the rest of time, they're going to be able to use AI to do those things. They're going to be able to use AI to become a better version of themselves. They're going to be able to use AI to be able to learn new skills. They're going to be able to use AI to become more productive at work. They're going to use AI to be able to not do a lot of the grunt work they're doing today so that they can do higher value work. And then now I'm just talking classical economics, which is just, you know, the kind of the other side from Marxism.

57:59Marc Andreessen:Classical economics says that the actual function, the actual economic function of technology, and this includes AI, the actual function is to raise productivity and specifically to raise marginal productivity of the individual worker. And again, this has happened many, many times. You take an individual worker who used to write on pencil and paper and you give them a typewriter and then they used to write on a typewriter and then you give them a word processor and then they used to do hand accounting and now you give them a spreadsheet and, and, and, and, and. By the way, social media manager, a job that didn't exist before the internet, right?

58:26Marc Andreessen:Technology actually creates a new job.

58:27Harry Stebbings:Maybe I'm a European communist, Mark, but then why are we seeing layoffs? Why are be seeing layoffs everywhere? Why is every CEO in a meeting saying, oh, we're flat headcount or we're reducing?

58:36Marc Andreessen:Oh, that's very easy. So number one, interest rates. So interest rates were at zero. And then interest rates went from zero to 5 % at record speed like three years ago. Every big company had to replan all of their financial, their cost of capital went up five points. They all had to completely replan financials. And then number two is they all overhired during COVID. The hiring binge that companies went on in COVID was just like wild. Right. And it was the combination of the two. It was the interest rates going to zero during COVID. And then it was just the complete loss of discipline at all these companies when they went virtual and when employees just became an icon on a screen.

59:08Marc Andreessen:And they just, you know, because like, yeah, just like, oh, hire like tons more of them. And so specifically what you have happening right now is you have essentially every large company is overstaffed. We could debate how much it's at least overstaffed by 25%. I think most large companies are overstaffed by 50%. I think a lot of them are overstaffed by 75%. And now they all have the silver bullet excuse, right? Ah, it's AI. Well, I know this for a fact because number one, I talked to them. But number two, I know this for a fact because AI until like literally until like December was not actually good enough to do any of the jobs that they're actually cutting.

59:40Marc Andreessen:And so it like it just can't have been AI. So the other thing is people look at the hiring rate for new hires. And they look at, you know, at the spike and how hard it is for new college grads to get new jobs. And again, people peg that on AI. But I think that's actually two things. Number one is, of course, the companies that overhired and overinvested and I have to bring down their spend and their headcount, obviously, they're not going to hire very many people. So that's part of it. And then the other is, you know, one might make the observation that maybe the skill set of a lot of college graduates over the last decade doesn't necessarily match to the job market.

1:00:07Marc Andreessen:And that's a very uncomfortable conversation for people to have. But I think that also has if you talk to any employer, they'll immediately tell you that.

1:00:14Harry Stebbings:Final one before we do a quick fire. You are probably the best copywriter of our time. It's Time to Build, American Dynamism. software's eating the world. I picture you in this kind of musky room, kind of American countryside billowing out as you come up with these titles. What is your copywriting process?

1:00:33Marc Andreessen:It's the culmination of raw frustration. It's the amount of -

1:00:36Harry Stebbings:That ruins the romanticism of my imagination, but keep going.

1:00:39Marc Andreessen:It's the Mount Etna exploding phenomenon. It's basically always when I just literally can't take it anymore. People are thinking the wrong thing. Somebody's saying something wrong on the internet, you know, that kind of extrapolated up. And so it's when I just think like there's a fundamental misperception in the world. And it's just not correct. And then of course, I have the, you know, I have a sufficient ego to be able to say I can I can correct that. And so it's usually that basically everything you mentioned, the actual drafting in every case has been like two hours. It's just like, it's just rip it and go.

1:01:07Marc Andreessen:But it's it's because I spent the preceding two years getting increasingly frustrated. I don't know about you, you have an internal monologue.

1:01:12Harry Stebbings:Do you talk to yourself in your head? Are you kidding me all the time, especially when I run?

1:01:16Marc Andreessen:Yeah, exactly. Right. And so what happened, you're probably like this too. So what happens is I'm just arguing with myself all the time. And so by the time I write, I've been arguing with myself in my own head for two years and trying to figure out what the good arguments are. And then it just all kind of comes, I just like dropping on the page.

1:01:30Harry Stebbings:I asked Doug Leone this, but I'm intrigued because you have the same challenge. The weight of your voice is so significant. How do you ensure that people will fight back when the weight is as great as it is?

1:01:40Marc Andreessen:So number one, it's nice.

1:01:47Marc Andreessen:There's an upside to it. So I don't want to lose the upside. I do like the upside to it. But yeah, look, the very specific form of that is, I think, well, so there's actually maybe you could say two problems. There's the giving advice part. And then there's actually the just asking questions part, which is also a problem because people will interpret the questions as advice or directives. I just think you have to, like, the way I think about it is if I'm dealing with one of my partners at the firm or if I'm dealing with one of our portfolio CEOs, I just have to be really careful to say, look, I'm not, I don't know what the right thing to do here is.

1:02:15Marc Andreessen:I don't have the information that you have. I don't believe I can dictate, you know, what this is. Do you remember the concept of an in-flight magazine? Does that ring a bell?

1:02:24Harry Stebbings:No, but tell me.

1:02:25Marc Andreessen:So in the old days, before phones and tablets, when you took an airline flight, there would be a magazine from the airline in the pocket of the seat. That's what everybody would kind of sit there and read if they didn't bring anything. So it'd be like the Southwest Airlines in-flight magazine. And then the pejorative was like in venture, it was basically board members who gave advice by way of in-flight magazine, which is, you know, they flew in for the board meeting. They read the magazine. The magazine said, you know, Java is going to be a big thing. And so they said, what's our Java strategy?

1:02:49Marc Andreessen:Right. Or for every other new thing that came along. And, you know, maybe the current version of that is whatever I read on X yesterday or whatever I saw on a YouTube video or whatever. Right. Or in the newspaper. You do have to be like really, really careful, I think, as you get more senior in this field, be really careful both in your firm and also with founders. God forbid, telling them what to do, A. B, suggesting what they do, which is sort of the same as telling them what to do, which is dangerous. And then C, even just asking questions, you know, becomes very dangerous because they interpret the questions.

1:03:16Marc Andreessen:And so I think you just have to acknowledge that up front and bend over backwards and kind of say, look, you know, this is genuinely not what I'm trying to do, and I'm just going to ask questions and do that. Generally, the way that plays out at our firm is, like I said earlier, Ben and I almost never weigh in on a direct way on an investment that one of our partners is working on. And the reason is just because we don't want that warping effect to take place, and specifically because we know we lack the knowledge to be able to do that. And in particular, maybe obvious, but doing that in public is particularly dangerous, right?

1:03:44Marc Andreessen:If there are other people around, and then there's perceived social pressure. And so if we're going to have like a difficult conversation with somebody or we're going to really question something, we have to take it one on one and have to be very careful in how often we do that.

1:03:55Harry Stebbings:We're going to do a quick fire round and we're going to start with an easy one. Adam Neiman and Flo was a controversial deal. Why did you do it? What was the thinking behind it?

1:04:04Marc Andreessen:So at the height of the WeWork meltdown, when it was in the newspaper every single day and kind of reaching its end point, I talked to a friend of mine who is one of the legends of the real estate world, who I won't name, but is a very, very credible, very famous real estate guy. He said, look, he's like, whatever people say about this whole thing, he said, look, there are only two people in the history of the world who have built brands, built compelling brands, where people care about the brand, care about the name on the building for commercial real estate and the history of the entire world.

1:04:32Marc Andreessen:And he said, one of them is president of the United States and the other is Adam Neumann. And so he said, people need to understand like, yeah, this is not like whatever it's going, this one's going sideways now, but like this guy is like a generational or all-time talent in that industry at doing that. And of course, not just the brand, but like the value proposition, like the thing that's underneath that. That really stuck with me, right? Because then that was up against the absolute wall of negativity, right, at the time where people were just tripping all over themselves to just say the worst possible things they could about the guy.

1:04:57Marc Andreessen:And then, yeah, and then we got to know him after that. And, you know, as you know, like became, you know, thoroughly convinced or reinforced our view that he was a generational talent. And I think, yeah, we feel very strongly that that is the case. We're very happy with that investment.

1:05:10Harry Stebbings:What was the most controversial deal or most disagreed upon deal internally from your memory?

1:05:16Marc Andreessen:I don't think we've had individual deals that are really controversial internally. So the deal we kind of make with all of our investing partners is they all get to go out on a limb and do the things that other people are going to think are dumb. They don't generally backbite each other on that. The bigger issue, I think, is probably more, and I put this more on Ben and me than anybody else, but it's just like, okay, what are the kinds of investments that we do? What sectors are in and out of the strike zone? I'll give you an example. I mean, the most straightforward example is the deal we didn't do, we should have done is the Andrel Series A, which was just sort of obvious that it was going to be special.

1:05:45Marc Andreessen:And, you know, Palmer, we had worked with Palmer at Oculus and it was just, you know, and his colleagues were clearly very capable. And it was just kind of obvious that, you know, there was something, you know, very special. But it was just like the, say, like the politics, the cultural elements of that at the time when it first came around, I would say we got scared off in a way that I very much regret. And so you'll notice that like we are now extremely enthusiastic investors in defense tech and in, you know, things involving law enforcement, national security, public safety. 100 % we would not make that same mistake again.

1:06:10Marc Andreessen:And I think it has to do with us, Ashley. You see what I'm saying? It's risk-taking at the conceptual level beyond the level of an individual company. And then, like I said, it's generally been in me when we screwed that up.

1:06:22Harry Stebbings:You sit down with your kids and you can tell them one thing that you think would make them the most proud about what you've done. What would that one thing be?

1:06:30Marc Andreessen:It's impact on the world. And it's in the form of what I described earlier with the economic idea of consumer surplus, but conceptually, it's just like, wow, like stuff that I worked on or built or helped build is something that's really like, it's all over the world and people all over the world are using it. And it's been tremendously, you know, on net tremendously beneficial. I think that's one. And then look, the other that I think rises in importance over time is just the number of people that hopefully I've been able to have a positive impact on. So, you know, the number of people who I've been able to, you know, help or support or help get through hard times or teach different things to who've been on, you know, gone on to be very successful.

1:07:04Marc Andreessen:And I think it's time's passing. It's more of that second category.

1:07:07Harry Stebbings:Penultimate one. What was the most memorable first founder meeting you've ever had? Not the best founder or anything like that, just the most memorable first founder meeting.

1:07:15Marc Andreessen:First meeting with Mark Zuckerberg. It was amazing. Mark's like 19 or whatever. And it was Mark and Sean Parker. And I knew Sean a little bit, but not well. And I'd never met Mark before. And Sean talked the entire time. Sean literally talked the entire time. It was just talking about a minute, every idea. It was just absolutely amazing. And Mark didn't talk. And so Sean and I basically talked the whole time. And Mark sat and listened. And I walked away and I was just like, wow, that was really weird. I was like, one of two things that's happened here, like either he's completely unsuited for the job because like he literally doesn't talk or he's like listening and absorbing everything that people are saying around.

1:07:47Marc Andreessen:And he's going to be on a vertical learning curve like crazy because he doesn't have the ego need to just like say things he could, he can just like absorb. And of course it turned out to be number two, which is, you know, and I've talked about this before, like he's just on this incredible learning curve and has been his entire life in the most like amazing way. But yeah, I would say that one. I've never told that story before, but that was memorable. The second meeting, I got him to talk. And by the way, everything Sean said was right, and it was all genius.

1:08:12Harry Stebbings:I would love to have seen that. Final one. You've been an incredible entrepreneur. You've been a great investor. And you're also an amazing firm builder. If I were to push you, and one of the greats in venture submitted this one, but I can't tell you who it was. If I were to push you on which one you'd most like to be remembered for in history, what would it be?

1:08:30Marc Andreessen:Yeah, entrepreneur. and you know Ben and I are lucky in that we've been able to you know A16Z itself has been an entrepreneurial project and so uh yeah I would I would if I if I could choose that would definitely be the one.

1:08:42Harry Stebbings:Mark I cannot thank you enough for doing this as I said 10 years I wanted to do this so thank you so much for joining me.

1:08:48Marc Andreessen:Awesome thank you I really enjoyed it the questions are fantastic and I look and you've been doing an incredible job so I also really appreciate the chance.

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