(2021-06-22) Smith Interview Marc Andreessen Vc And Tech Pioneer

Noah Smith: Interview with Marc Andreessen, VC and tech pioneer. The 15 months since I wrote It’s Time To Build have been dominated by three big events: the catastrophe of COVID-19, the systematic failure of virtually all public sector entities around the world (the formerly high functioning Asian nations are failing to vaccinate quickly), and the remarkable success of the private sector and in particular the American technology industry in helping us all get through this pandemic. (Not a great interview if you're already familiar with Marc.)

Housing, education, and health care are each ferociously complex, but what they have in common is skyrocketing prices in a world where technology is driving down prices of most other products and services. (See chart below.) I think we should build in the next decade new technologies, businesses, and industries that break these price curves -- and in fact reverse them

I am very optimistic about the future of tech, at least in the domains where software-driven innovation is allowed.

Software is a lever on the real world.

Software is alchemy that turns bytes into actions by and on atoms. It’s the closest thing we have to magic.

Recently you've invested in at least two companies, Clubhouse and Substack, that are part of a new wave of social media.

It’s not so much what is lacking in the incumbents. It’s more the importance of communication as the foundation of everything that people do, and how we open up new ways for people to communicate, collaborate, and coordinate. Like software, communication technology is something that people tend to pooh-pooh, or even scorn -- but, when you compare what any one of us can do alone, to what we can do when we are part of a group or a community or a company or a nation, there’s no question that communication forms the backbone of virtually all progress in the world. And so improving our ability to communicate is fundamental.

Substack is the business model for intellectual creativity that’s been missing on the Internet for 30 years.

Substack is causing enormous amounts of new quality writing to come into existence that would never have existed otherwise

My partner Alex Rampell says that competition between an incumbent and a software-driven startup is “a race, where the startup is trying to get distribution before the incumbent gets innovation”

As time passes, I am increasingly skeptical that most incumbents can adapt. The culture shift is just too hard

Turing and Shannon engage in an increasingly heated discussion about the future of thinking machines when Turing stands up, pushes his chair back, and says loudly, “No, I’m not interested in developing a powerful brain! All I’m after is a mediocre brain, something like the President of AT&T.'"

I suspect “Artificial Intelligence” is the wrong framing for the technology; Douglas Engelbart was probably more correct with what he called “Augmentation”, so think “Augmented Intelligence”. (Augmenting Human Intellect)

What we should see in a world of rapidly proliferating Augmented Intelligence is the opposite of a jobless dystopia -- productivity growth, economic growth, new job growth, and wage growth.

before COVID, only 18 months ago, we were experiencing the best economy in 70 years -- rising wages, low and falling unemployment, and essentially zero inflation. The economy was even improving more for lower skill and lower income people than it was for people like us

COVID is the ultimate cover for restructuring -- what my friend and former CFO Peter Currie used to call “shake and bake”. It’s an opportunity for every CEO to do all the things he/she may have wanted to do in the past to increase efficiency and effectiveness -- from fundamental headcount resizing and reorganization, to changing geographic footprint, to exiting stale lines of business -- but couldn’t because they would cause too much disruption.

it’s hard to overstate the positive shock that remote work works

Companies of all shapes, sizes, and descriptions are retooling their assumptions on geographic footprint

Third, this isn’t just a dramatic change in how companies operate, it’s also an equally dramatic change in how individuals live and work.

all of a sudden, the opportunity to far more effectively match employer and worker all over the world exists.

Crypto is one of those topics that calls to mind the parable of the blind men and the elephant (cryptocurrency)

more fundamental point, which is that crypto represents an architectural shift in how technology works and therefore how the world works.

That architectural shift is called distributed consensus -- the ability for many untrusted participants in a network to establish consistency and trust. This is something the Internet has never had, but now it does, and I think it will take 30 years to work through all of the things we can do as a result. Money is the easiest application of this idea, but think more broadly -- we can now, in theory, build Internet native smart contracts, loans, insurance, title to real world assets, unique digital goods (known as non-fungible tokens or NFTs), online corporate structures (such as digital autonomous organizations or DAOs), and on and on.

Consider also what this means for incentives. Up until now, collaborative human effort online either took the form of a literal adoption of real-world corporate norms -- a company with a web site -- or an open source project like Linux that had no money directly attached. With crypto, you can now create thousands of new kinds of incentive systems for collaborative work online, since participants in a crypto project can get paid directly without a real-world company even needing to exist.

There’s something very old about what venture capital is -- Tyler Cowen uses the term “project evaluation”... But of course there’s also something very new about what venture capital is -- we fund the most cutting edge ideas and projects

So we sit at the vortex of this combination of the very old and the very new. It’s certainly possible that venture capital itself gets pulled into this vortex and comes out the other side radically transformed, and in fact this is what some of the smartest crypto experts are predicting. And yet…there is, at least so far, no substitute to someone doing the work of sorting and filtering all of the potential projects

Closer to home, an increasing focus of mine is whether we can break what I call the “little boy/big boy” pattern of how technology projects are funded and scaled. The “little boy” is the Silicon Valley ecosystem that gets new ventures off the ground; the “big boy” is New York and the Wall Street world of stock markets and investment banks and hedge funds that tends to carry companies to scale during and after IPO.

Virtually all of the constituent components of the vision of the 1990’s have come literally true.

Why isn’t everyone happy? I think it’s that the technology industry went from building tools -- operating systems, and databases, and routers, and word processors, and browsers -- that other people picked up and used, to becoming the center of virtually every major societal and political debate and dispute on the planet, in almost a single step.

I think we should make a practice of revisiting the founding ideas of the technology industry -- certainly the 1990s of John Perry Barlow’s A Declaration of the Independence of Cyberspace and Tim May’s Cyphernomicon -- but also the 1950’s and 1960’s of Douglas Engelbart and Ted Nelson, the 1920’s of David Sarnoff and Philo Farnsworth, the 1890’s of Thomas Edison and Nikola Tesla, even the 1500’s of Leonardo da Vinci

If you could give some advice -- career advice, or otherwise -- to a smart 23-year-old American today

Don’t follow your passion... Instead, at work, seek to contribute. Find the hottest, most vibrant part of the economy you can and figure out how you can contribute best and most.