Source: David Senra

Organized by: Felix, PANews

Podcast host David Senra recently had a nearly 2-hour in-depth conversation with a16z co-founder Marc Andreessen. During the dialogue, Marc shared personal habits, entrepreneurial philosophy, and management methods. This article organizes the highlights of their conversation.

Before starting the content, let’s take a look at Marc Andreessen's background.

Marc Andreessen is the co-founder and general partner of a16z, which is one of the most influential venture capital firms in the world. Before becoming an investor, he was a practical entrepreneur. At 22, Marc co-created Mosaic, the first widely used graphical web browser; later, he co-founded Netscape, which brought the Internet into the American mainstream. Netscape's IPO in 1995 sparked the first tech boom. The battle between Microsoft and Netscape also became one of the most watched business battles in capitalist history.

After leaving Netscape, he co-founded Loudcloud. The company survived the burst of the Internet bubble by transforming its business and was eventually renamed Opsware, selling for $1.65 billion to Hewlett-Packard.

In 2009, Marc and Ben Horowitz founded a16z, with a concept that radically differs from traditional venture capital firms: they believe that the best venture capital firms should genuinely help entrepreneurs, rather than just engage in financial operations. The firm made early investments in Facebook, Airbnb, GitHub, and Coinbase, while actively expanding into cryptocurrency, biotechnology, defense, and AI. In 2011, Marc published an article titled "Software is Eating the World," which reshaped the industry's perception of the current situation, and it remains one of the most cited articles in Silicon Valley history.

Host: I actually didn't plan to start with this topic. I want to talk about why you consume so much caffeine that you find your heart skipping a beat.

Marc: I really enjoy caffeine. For a long time, I said the perfect day is 12 hours of coffee and then 4 hours of alcohol; that’s the ultimate enjoyment. But for my health, I’ve at least quit the 4 hours of alcohol. Still, caffeine is truly one of nature's most wonderful products; however, it turns out that you can't consume too much.

Host: You once said something I really liked, and I rarely hear other entrepreneurs mention it, which is that you think “not introspecting” is very important.

Marc: Yes, zero introspection, the less the better. Why introspect? Just keep moving forward and take action. I’ve found that those who dwell in the past often get stuck in the past. This is a big problem both at work and at home.

If you go back 100 years, no one would think of "introspection" at all. All concepts of introspection, psychotherapy, and the modern ideas that arose from them were "manufactured" in the 1910s and 1920s. The great figures in history from any earlier period would never sit around doing such things. Western civilization invented the concept of "the individual" hundreds of years ago, and for a long time, being an individual was about creating things, building empires, and companies. But then, in the 1910s and 1920s, people like Freud started a movement where they turned everything inward, believing that individuals needed self-criticism and to dig into the past. These have never resonated with me.

Host: Are the founders you’ve invested in and collaborated with also non-introspective?

Marc: Generally, yes. Introspection might be linked to neurotic personality traits. Many of the best founders may have 0% neuroticism. They don't have emotional fluctuations about things that have already happened, which is a superpower for entrepreneurs. Of course, there are some great entrepreneurs who are actually very neurotic, too, that’s a fact. So low neuroticism could be a plus, but it’s not absolutely necessary.

Some people get tangled up in personal issues, and now it has even evolved into using various psychedelic substances. I once talked to neuroscientist Huberman about a phenomenon in Silicon Valley: some founders are under pressure and anxiety, and some suggest they try psychedelics. After trying them, they report feeling more at peace, like they’ve changed. But the ensuing result is that they often resign from their companies to become surf instructors in Indonesia, completely “saying goodbye.”

Huberman once asked me, “How do you know they aren’t happier now? Perhaps what drove them to become great entrepreneurs was their insecurity and unfulfilled neurotic impulses. Now, sitting on a beach as instructors fulfills them; maybe that’s better for them.” But I replied, “Yeah, but their companies failed.” The best entrepreneurs pursue influence, not happiness.

I tend to tell myself: I’m competing with myself. I get up every morning to strive to be a better version of myself, becoming smarter and more professional.

Host: What is your current worldview and what do you want to do?

Marc: We firmly believe that technology is an incredibly powerful balancing force in the world, and the biggest problem in this world is that there isn’t enough technology and intelligence. We live in a world that is still very primitive and rough compared to what it could have been. Entrepreneurs have a very special personality trait that enables them to create products, build companies, and have a far-reaching impact. Therefore, what we’ve been trying to do at the venture capital firm a16z for the past 17 years is to be the ideal partner for those founders who want to change the world.

Host: When you established the company 17 years ago, was the core idea the same as today?

Marc: The core idea is the same: startups and founders are the core engines of progress in the world. In fact, when we first started, the idea that "founders should run their own companies" was still controversial. Some high-profile companies at the time faced harsh criticisms for allowing these "kids" to manage them. There is a book called "The Machiavellians," which describes two fundamental business organization models in the history of capitalism.

The first is "bourgeois capitalism," in which the founder manages the company, such as Henry Ford in the 1920s, and today’s Musk. This has been the norm for thousands of years in human history.

The second is "managerialism," a modern product formed between the 1880s and 1920s. It gave rise to management studies, Harvard and Stanford business schools, and advocated replacing founders with professional managers to run companies. This concept believes that large systems need specially trained people to manage them, and that the personality traits of founders are different from those of managers. This theory dominated Silicon Valley for 50 years, but the problem is, it assumes that managers can do the job well. Managers may be good at handling things that maintain stability (like banks or traditional car companies), but once changes occur, they flounder. Take SpaceX for example; the assumptions in the rocket industry for the past century were that rockets could only be used once, and then along came a “madman” from California who invented reusable rockets. In such cases, what use are your traditional management skills?

So our core idea is: in the 21st century, it is much easier to cultivate a founder from scratch to learn how to manage than to teach a professional manager how to innovate; and it is more likely to create great things. Zuckerberg is a perfect example; he had never had a formal job before starting Facebook, let alone management experience, but his learning curve has been vertical; today he possesses both founder and managerial capabilities.

Host: How did you observe and break the industry status quo when you established a16z?

Marc: Between 2003 and 2004, angel investors like us were scarce. We invested in many early-stage companies, and because we had operated our own companies for 20 years, we were often pulled to resolve conflicts between founders and traditional venture capitalists. The traditional VCs at that time still believed that founders couldn’t manage companies and were eager to bring in professional managers, which triggered a lot of conflicts. We spent a lot of time doing these “arbitration” jobs and later thought we might as well do venture capital ourselves. During our preparation period, we conducted in-depth research into private equity, hedge funds, investment banks, Hollywood talent agencies, and so on. Hollywood's CAA (Creative Artists Agency) gave us immense inspiration. In the 1970s, Hollywood agencies were all "lone wolf" models, where you had only one agent, and the resources of other agents in the company had nothing to do with you. The Silicon Valley venture capital scene in 2009 was just like that, with partners even disliking each other, competing for power.

So we observed a "barbell effect": in any industry, you were either on one end of the barbell, becoming an early, flexible, solo angel investor; or on the other end, becoming a scaling platform with a huge network and substantial capital (like Walmart or Amazon). Those traditional medium-sized venture capital institutions that were neither here nor there would be eliminated. We saw this in the banking sector as well; today’s JPMorgan Chase and Goldman Sachs are large-scale players at the barbell end, while many medium-sized investment banks that once existed have disappeared.

Host: I want to talk about Jim Clark. He may be the first person in history to consecutively found three independent billion-dollar tech companies. You worked with him in your early twenties. How did that feel?

Marc: At that time, SGI (Silicon Graphics) was the coolest company in Silicon Valley. The dinosaurs in "Jurassic Park" and the special effects in "Terminator 2" were made with machines invented by Jim. Today's NVIDIA is essentially a continuation of Jim's ideas. Jim is a very creative and charismatic founder, much like Musk and Jobs. But SGI's VC brought in a HP-background professional CEO, resulting in the classic "founder vs. professional manager" conflict. Jim believed that all expensive graphic machines in the future would turn into chips costing a few hundred dollars in PCs, and that all computers would be connected to the Internet. The CEO, on the other hand, refused to change the status quo, so Jim left. Later, he invited a dozen of us to dinner at a restaurant to try to recruit a new team. At that time, I was the only one who agreed to join him. I remember that was the first time I drank red wine in my life, and I had no idea how to gauge the amount, so I got completely drunk.

Later we founded Netscape. I had previously developed Mosaic (an early graphical web browser) in college. At that time, the Internet was only used by academic and governmental institutions, while commercial activities were explicitly prohibited. Until the arrival of "Eternal September" in 1993 (PANews Note: "Eternal September" is a slang term originating from the early days of the Internet that accurately captures a permanent shift in Internet culture after 1993. It refers to the many inexperienced ordinary users flooding in since September 1993, permanently changing the quality of discussions and cultural traditions of the Internet, as if the noisy “September” filled with novices never ended.), a large number of ordinary people accessed the Internet. I was single-handedly providing technical support for the entire Internet back then, with my inbox overflowing with help requests. You have no idea how hard it was to explain these things to ordinary people; back then, when computer CD drives popped out, many people thought they were cup holders for coffee, and spilled coffee everywhere.

Host: People’s reactions to new things have always been consistent throughout history. You mentioned the "Bicycle face" story before.

Marc: Yes, every new technology comes with a wave of "moral panic," claiming it will ruin society and the youth. In the 1880s, when bicycles first became popular, young people could easily ride to neighboring towns a few miles away. The media invented the concept of "Bicycle face" to prevent young women from running around. They warned women that if they made too many facial expressions while exerting themselves on a bike, their faces would forever become stiff like that, and they would never find a husband again. We've seen the exact same panic pattern with jazz in the 1920s, rock music in the 1950s, hip-hop in the 1990s, and even with early portable cassette players and calculators.

Host: Apart from Jim Clark, what else did you learn in your early years?

Marc: I had two mentors at the time; besides Jim Clark, there was Jim Barksdale. Clark was an unquenchable source of creativity and a pure founder, while Barksdale was the "manager’s manager," who had battled with large companies like IBM and FedEx. He taught me how to systematize and streamline these new ideas and integrate them into real business practices. You can’t completely change the direction of a company every day; that would destroy your organization.

Host: You just mentioned that you think Musk may be inventing a completely new management style?

Marc: Yes. In traditional large organizations, like IBM at its peak, there could be as many as 12 layers of management between me and the CEO. This creates a disaster: each layer of manager embellishes the reality for their superiors. Lies accumulate layer by layer, resulting in the CEO being completely unaware of the true situation on the ground.

What Musk adopts is a completely new management approach. When a company has issues, he directly bypasses all levels and finds the grassroots engineer who is truly responsible for the work. But this requires the CEO to have extremely deep technical capabilities. Musk can sit down with engineers at 2 AM to troubleshoot specific issues with chips or rocket engines. He treats all the companies he manages as a production line. Each week, he clearly identifies the most critical "bottleneck" that slows down the entire production line, then personally addresses that bottleneck. Tesla's ability to stay far ahead in the automotive industry is precisely because he spends every one of the 52 weeks each year personally resolving the most crucial production bottlenecks. At the same time, he conducts high-intensity reviews: each engineer reports for 5 minutes, and he works several long hours each day, completing up to 120 technical reviews a day. This creates astonishing execution power at SpaceX, where the world’s top engineers are eager to work under a CEO with whom they resonate technically, while those who cannot keep up are immediately cleared out. His method perfectly combines "founder innovation" with "systematic scaling." For example, Starlink; while others burned billions on satellite Internet and went bankrupt, he treated it as a "side business." Since rockets can be reused at low cost, he had to find something to launch into space, right? So I even half-jokingly say, we in the venture capital world should invent a new metric called "milli-Elon": to evaluate how much Musk-like quality an entrepreneur possesses.

Related reading: a16z: To crypto founders, companies shouldn’t buy the best technology

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