
Marc Andreessen – Lessons, Predictions, and Recommendations [audio] - jackgavigan
http://fourhourworkweek.com/2016/05/29/marc-andreessen/
======
dharmon
I am curious to see how a16z's investment results eventually pan out. I don't
believe any of their funds have gone through a full cycle, nor have they
experienced a down market, so its still too early to declare him a top dawg.

His "twitter schools" parrot things like Buffett's shareholder letters pretty
closely ("When the tide goes out, we find out who's been swimming naked."), so
at least at an intellectual level he gets it, but his investment behavior
contrasts this strongly, where he seems willing to pay any price for growth.
Unfortunately this is common in the investment world, where everyone is a
value investor in words, but rarely in behavior.

I guess I am mostly interested to see how the "founder as rockstar" thesis
that is central to a16z works in practice.

~~~
w1ntermute
> I am curious to see how a16z's investment results eventually pan out. I
> don't believe any of their funds have gone through a full cycle, nor have
> they experienced a down market, so its still too early to declare him a top
> dawg.

And the only reason they've been able to reach $4B in AUM so quickly is
because record-low interest rates and stagnating growth in the developing
world have created a rush of capital to Silicon Valley looking for any
semblance of alpha.

The real question we should be asking is what sector of the economy all this
roving capital will target next, when it becomes clear that tech startups
can't live up to the promises of the VCs.

> I guess I am mostly interested to see how the "founder as rockstar" thesis
> that is central to a16z works in practice.

That's just a sales message used to get gullible and desperate founders to
take money from them without giving it a second thought. When things go south,
like they did for Zenefits (YC W13), a16z won't be so nice anymore:

> On Feb. 1, Zenefits held an emergency board meeting. The licensing problems
> and the macro were discussed. [a16z partner] Dalgaard suggested to Conrad
> that, as the person who created the program, he needed to leave.[0]

0:
[http://www.bloomberg.com/features/2016-zenefits/](http://www.bloomberg.com/features/2016-zenefits/)

~~~
mathattack
That's a little more than things going Southz. That's fraud.

~~~
w1ntermute
I'm talking about might, not right. Half of Wall Street was committing fraud
in the years leading up to the financial crisis, and it was a hell of a lot
worse than anything Conrad did. How many of them have been held accountable
the way he was? From that perspective, who are the real "rockstars"?

~~~
te0x
Yeah but no one is using Wall St as a benchmark for accountability. You're
going to call them out for ousting a founder that encouraged fraud?

~~~
w1ntermute
No, I'm calling them out for falsely marketing themselves as pro-founder.

~~~
tasteup
Pro-founder does not mean they drop all standards and expectations. I'm not
familiar with their entire portfolio, but using the Zenefits case (where the
founder is accused of fraud) is a poor argument to support your claim that
they are not pro-founder.

I'm not saying they are or aren't profounder. I just think Zenefits is not a
good example to use to make sweeping accusations about the firm.

------
sheepleherd
Marc Andreessen _is_ a bubble, or a couple of them.

The guy was a programmer (no insult, so was I) who wrote, while young and
enthusiastic, a derivative copy of well known software idea... he got rich,
good for him (no sour grapes, so did I) but that hardly makes him a genius of
business savvy and economics. His name and commentaries started popping up
everywhere a few short years ago which to me smells strongly of having a PR
agency (insult+sour grapes, I don't have one)

So, when I say Marc Andreessen _is_ a bubble, I mean his money came from a
bubble, and his portfolio has expanded in a bubble, and so has his apparent
influence, but I don't myself see evidence of extra-technical genius or being
able to see the future. I have no problem with his living the dream; and if
you're living the dream, it wouldn't even be surprising if you fell in love
with sniffing your own farts (sour, not grapes!) that's human nature. What I
have a problem with is, why is everybody else always hanging on his every
word, what is notable in what he purportedly says?

~~~
saosebastiao
I worked a short internship as an analyst at a mid tier regional VC that was
affiliated with a larger well-known Sand Hill firm. I won't claim to be an
insider, nor will I claim to be especially knowledgeable about VC or visionary
of the future. But I will tell you this: your description of Marc Andreessen
as a lucky know-nothing fits 99.9% of VC partners out there, even in the top
tier firms. They are all bumbling bufoons, spouting fortune-cookie wisdom and
clinging to their solitary past success as an entrepreneur with unparalleled
hindsight bias. They are _completely_ unable to critically analyze _anything_.
You could throw that description against any wall in Sand Hill and be
guaranteed to hit at least one VC partner.

The thing is, the description doesn't really fit Marc. I don't believe in hero
worship; I don't think he is invincible, nor do I think he is especially
prescient about the future. And I don't give credence to everything he says as
if it is some sort of unique nugget of wisdom. But he does do one thing well
that the rest of Silicon Valley hasn't figured out yet: He forms his own
opinion and when he likes something, he throws his whole weight behind it.

The rest of Silicon Valley relies heavily (and by heavily, I mean solely) on
social proof. It's actually quite amusing to watch a forum of partners from
different firms sit in the same room and listen to a pitch. They rarely listen
to the pitch, cause they are so fucking busy looking around the room to try to
gauge the reactions of the other VCs in the room. They are incapable of making
decisions for themselves. They will only decide to invest if they see other
VCs investing.

This groupthink behavior of most Silicon Valley VCs has a real effect beyond
it's soundbite-ness: It bounds their upsides. If you are only willing to
invest in a company if other investors also invest, you might get slightly
better at picking winners, but you end up taking smaller stakes in those
winners, and you end up spending more for those stakes because you essentially
are bidding up their valuations. _This kills the power law distribution of
returns that is supposedly obvious to the VC industry_. It dooms these firms
to making the approximate same level of returns as everyone else in the
industry.

Marc has been a successful entrepreneur no doubt. Even after three very large
successes, you _might_ be able to attribute that to luck. I still consider
that to be mostly irrelevant. Marc has no problem throwing big money around to
acquire as much as possible in a promising firm, and he gives zero shits about
what other VC's think about the investment. This behavior is inherently risky.
Throw your weight behind losers and you go bankrupt. But he got in on the
ground floor of some of the biggest exits in the last decade, and the ground
floor is where those power law exits really pay off. This makes him different,
and worth listening to, even if you ultimately disagree with him.

~~~
petra
Interesting analysis, thanks.

From this perspective, what are some other VC's worth listening to ?

~~~
DeBraid
I find the commentary from (in no particular order): Chamath, Paul Graham,
Sacca, Gurley, Chris Dixon, Balalji Srinivasan, Reid Hoffman mostly
educational or at least entertaining. A random collection of notes on VC and
investing: [https://github.com/DeBraid/investing-
notes](https://github.com/DeBraid/investing-notes)

------
kirubakaran
If we're in a bubble, the opposite of what is listed in the article will be
happening: investments will be increasing, VC backed companies will be
splurging more etc.

It is amazing that they'd list a bunch things that support the position that
there _isn 't_ a bubble and draw the conclusion that there is one! It is sunny
and hot out and people are walking around in shorts in Seattle, clearly this
means it is winter because people would click on an article about winter.

Who knows if we are actually in a "bubble" or not, but if anything we have to
reach the opposite conclusion from the facts listed in the article.

------
dang
Url changed from [http://qz.com/699191/marc-andreessen-isnt-admitting-
theres-a...](http://qz.com/699191/marc-andreessen-isnt-admitting-theres-a-
tech-bubble-but-hes-coming-pretty-close/), which transcribes a few quotes from
this and sticks a clickbait maraschino on top.

Normally we wouldn't change from a text article to an audio piece that has no
transcript, since the latter is much less accessible. But it feels wrong to
reward the above behavior.

------
TDL
My belief why many people are calling this cycle a bubble is because they
experienced two big bubbles almost back to back. I think much of the bubble
calling over the past few years reeks of recency bias and people have been
burned, not just once, but twice.

I have no idea if we are in a bubble or not, I'm sure some segments in tech
are bubbles. I think focusing too much on whether or not we are in a bubble is
a distraction of doing the work in front of us, whatever that work may be.
Don't get distracted by the hype of bulls or the bears.

------
jgalt212
The worst thing about VC's is their herd-like behaviour. You work hard to get
your biz funded and as soon as the valley gets wind of your funding, all the
other VC's immediately fund X other copy-cat businesses (almost seemingly
without regard to viability of the original business model).

And given a16z's huge reliance on PR, I'd argue that if they funded your biz,
you'd then have even more copy-cat funded competition than if you went with a
more low-key VC.

------
elgabogringo
Are we in a "bubble" or just the latter stage of a business cycle? A lot of it
depends on the definition you use for "bubble." Regardless of your definition,
it doesn't matter much one way or another.

Central bank policies have been ridiculous the last 8 years. Nobody should be
surprised there are market distortions - and nobody should pretend there
aren't.

------
tommynicholas
THAT ISN'T WHAT A BUBBLE IS DAMN IT!

~~~
otl1248
That's exactly what a bubble would say in this situation.

~~~
tommynicholas
Damn you got me

------
paulpauper
misleading title. what Andresssen said had nothing to do with valuations . so
tired of click bait

~~~
dang
No kidding. And blogspam to boot.

Normally we'd change the URL to the original
([http://fourhourworkweek.com/2016/05/29/marc-
andreessen/](http://fourhourworkweek.com/2016/05/29/marc-andreessen/)), but
that's audio content, which HN users tend not to prefer, so there's a tradeoff
here.

