13:43By the way, talking about somebody being able to operate in India, the single best dronepilot in the world today– any idea?MICHAEL GREEN: Well, I’m guessing India.JOSH WOLFE: 12-year-old girl in Thailand.MICHAEL GREEN: Really?JOSH WOLFE: 12-year-old girl.And she started playing when she was 8.And she is better on every metric.In speed, accuracy, she beats everybody.Her name is Milk.And that’s, you know, her call sign.But a 12-year-old girl in Thailand is the best drone pilot in the world.MICHAEL GREEN: So it truly is actually Ender’s Game, which is the book by Orson Scott Cardwhere we rely on children to fight the intergalactic battle.Fascinating.That’s absolutely amazing.Let’s think about the nonlinearity for a second.And one of the topics you wanted to bring up was this idea of liquidity as a nonlinearity.JOSH WOLFE: Yes.MICHAEL GREEN: And so one of the things that we see within venture capitals is that there’sbeen this explosion of liquidity, particularly exceptionally well-funded growth equity.So not the true VC stage one, Series A-type round, although that obviously has benefitedfrom this dynamic, but the Series E pre-public here’s $1 billion, here’s a $20 billion valuation,here’s a $100 billion valuation.Talk to me about how you think about this liquidity switch and the impact that thathas on your industry and the impact that has on innovation?JOSH WOLFE: Well, it ultimately is going to define all the returns.And if you go back a little bit and say, well, why are we in this situation, where we’vecalled this in the past, the minnows and the megas?You have lots of these small firms that are starting up that are doing the seed checks,and then you have these large players that are writing these $100 million plus checks.Going back 7 years or so, Andreessen— who I think is a brilliant investor, a brillianttechnologist– basically said, there’s only 10 companies that matter in a given year.And statically, that’s probably true.Now knowing which 10 is very hard, but he said, you just basically want to be in thosecompanies.And I that was a meme that really went very wide.And people said, OK, well, it doesn’t matter if you invest in Facebook at $1 billion, or$5 billion, or $10 billion because we’re going to be hundreds of billions.And so does it really matter if we’re negotiating here and quibbling over $1 billion or $2 billion.Well, of course, it does, but that I think induced a lot of growth investors to15:53let’s just try to speculate on some of these big unicorns.And you’ve got this phenomenon of companies that were pining to signal that they weregoing to be that next Facebook by attaining a billion-dollar valuation.And then you got a positive feedback effect where people were funding these things, andto get access, would write an $100 million check at a $900 million pre.And they would own 10% in a billion-dollar valuation.And the problem for the early-stage investors and their limited partners is they were gettingthese huge markups.
10:20do you do that to a company yeah so alot of this is actually you can actuallyborrow concepts actually from militarystrategy on this which is sort of thedifference between sort of strategy andtactics right at a difference betweengoals and tactics so I think it’sincredibly important to have a reallyvivid clear idea about where you want toget in the long run that you stick toand that you’re very solid on and thateverybody agrees to and then I think youwant to be very very flexible in thetactics and I think the problem is youit’s a dichotomy right it’s a it’s acontradiction so you have to you have tothink about terms you have to think itfrom a long-term standpoint but also youhave to think in terms of day-to-daytactics and this is where you know I’vebeen very critical in the past to thisidea of like fail fast because like Ialways things like fail fast is like thekey word in there is not fast it’s failand failure sucks and success is awesomeand we should be trying to succeed notfail and I think the fail fast thing ispeople thinking because I think failfast makes a lot of sense on tactics ifthe tactics Network doesn’t work find adifferent tactic I think fail fast iscatastrophic if it’s applied to strategyand if it’s applied to goals and I thinka lot of founders frankly even stilllike talk themselves out of what aregoing to be good ideas in the long runbecause they’re not getting immediatetraction and so again it goes back tolong term like we just ruled by data andwhat cited by their gut that’s actuallyso that is actually a racing point sothat is one of the things that happenswhich is in the old day in the old dayswhen I when I was running short pantsyou just didn’t hat you didn’t have allthe data it was much harder to get asense of how well you were doing and solike on the one hand you you you feltless concrete connection to what you’redoing but on the other hand you didn’thave this cascade of data coming at youand now is you know like in all of thesebusinesses today you have daily weeklyif you want you have data to the minuteto the second to the microsecond of howwell or poorly you’re doing and it’sreally easy to get distracted by that bythat short term data and it’s reallyeasy to draw a long termLucian’s based on short-term data andyou do see companies that have gotten inreal trouble over that mm-hmmconversely you see companies you knowthat worked for a very long time onsomething that people think is justcompletely nutty and they get heavilycriticized along the way and by the waysometimes those work and sometimes theydon’t but when they do work that is howyou do something like for all this wholething about how everything’s supposed tobe speeding up it still takes a decadeor more to build something reallysignificant I mean it you know in thisworld like it still really does so whenit comes to like interesting productsthat seem to be sort of jerked around bytheir own data or were for a long time
Marc Andreessen, Co-Founder & Partner at Andreessen Horowitz, discusses his philosophy on investing in technical founders and the role of technology in today’s startups. Andreessen also addresses the kind of entrepreneurs and ideas his venture capital firm look for: “Big breakthrough ideas often seem nuts the first time you see them.”
“every year in the U.S. on average about 21 million jobs are destroyed and about 24.5 million are created,”
.. it’s wise to understand the difference between two types of errors. Mistakes of commission — losing everything you invest in a company — can be tough, but you’ll get over them in time. Errors of omission — not investing in the first place — will scar you for life.
.. “Just because MySpace didn’t reach Facebook levels of scale didn’t mean Facebook wouldn’t be able to. So you have to be ruthlessly open-minded and constantly willing to reexamine your assumptions,”
.. Instead of spending time overanalyzing whether something will work, he advises, try asking what happens when it does.