Marc Andreessen spoke at Stanford’s Graduate School of Business on Tuesday, March 4, to a packed audience that included his wife, Laura Arillaga-Andreessen, and his father-in-law, John Arillaga.
Andreessen covered topics from his views on the current tech landscape to how he assesses entrepreneurial talent to his partnership with Ben Horowitz. He also shared thoughts about journalism.
Despite the fact that many MBAs (at Stanford and elsewhere) are flocking to the industry, Andreessen is adamant that there is not a tech bubble. He said it was simply entering a mature phase. He would not discuss Facebook’s acquisition of WhatsApp, noting that he was on Facebook’s board. He compared today’s companies with shell companies of the late 1990s that ignored details in favor of deals. He said today’s startups are not as strong in the sales and marketing space.
Andreessen joked that MBAs could find roles in startups by trying to become a Sheryl Sandberg equivalent: a high-powered businessperson with deep expertise and a willingness to be a No. 2 person to a tech founder. He cited other examples such as Bill Campbell (who partnered with Scott Cook at Intuit) and Dick Costolo. He said when great pairings like the ones above occur, teams can really crack the code and make 1+1=3.
Andreessen said that as he and Horowitz created their venture fund they talked to many VCs but the only two VCs who provided much help were Jim Breyer (Accel) and Aneel Bhusri (Greylock and Workday). Bhusri tweeted to The Dish Daily that it was nice of Andreessen to say that, “but he didn’t need much help :-).”
He noted that Andreessen Horowitz (also known as A16Z) was built on the notion that a VC firm could empower an entrepreneur with a large network of recruiters, reporters, customers, CIOs, CTOs and other business contacts that VCs typically possess.
Andreessen noted that there are roughly 4,000 startups each year that contact his firm and that his firm only invests in 20. His—and the other VCs at A16Z’s—job is to crush entrepreneurs’ hearts and dreams.
He said out of the thousands of business plans they narrow the number of investible companies to a couple of hundred and that the hardest thing to decide is whom to invest in among the couple of hundred. Within that couple of hundred, there are teams that are fundable by any of the top tier VC firms. Each year, there are probably 15 companies that will generate 95 percent of the industry’s returns. Andreessen said that “even the top VCs tank half of their deals and that funding is not a complete validation of a startup’s idea.”
He said the best founders have a combination of courage and genius, and that one of the A16Z partners liked to quote Fridriech Nietzche, saying that those entrepreneurs have the will to power. These courageous entrepreneurs “simply will not stop.”
He also belittled the oft-repeated notion in Silicon Valley that it is acceptable to fail; he doesn’t buy it. A16Z believe “failure sucks.”He said that the most exciting startups are led by the bright founder who can walk an investor through an idea maze and move the investor from a crazy position to a point where it seems like an executable idea in the real world.
Andreessen highly recommended three books to the audience. The first is The Innovator’s Dilemma, which many in Silicon Valley recommend. The others were more surprising: Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Perez, and Ben Horowitz’s The Hard Thing About Hard Things, which just hit the shelves.
He noted that his relationship with Horowitz is similar to a marriage, and provided the analogy of the old couple on a park bench who sit at opposite ends but nonetheless sit together. He said that “they had been working together for so long” and that they “understand each other and
