Marc Andreessen: prediction

Transcript context

…At a certain point this becomes the succession problem. As long as Ben and I are running it our determination is to keep it as much in the bourgeois model as possible. And as you pointed out, literally it’s our names on the door. Ben and I control the firm. The firm doesn't have a board of directors, it's just Ben and me running it. It's a private entity there’s no outside shareholders. And so as long as Ben and I are running it, and we're running it in the way that we're running it, it will be as bourgeois model as any investment firm could be. Some day there's the succession challenge, and I bring that up, because the succession challenge for tech companies is usually sort of when that transformation happens. When it goes from being in the bourgeois model to being in the managerial model. And then this gets to sort of the philosophy of succession in tech companies. And the general thing that happens there is that, you see this over and over again with the great founder CEOs, when it comes time to hand it off, there's basically two kinds of people that they can hand it off to. They can hand it off to somebody like them who's a mercurial, idiosyncratic, high disagreeableness, ornery, sort of entrepreneurial kind of personality, somebody in their mold. Or they can hand it off to somebody who knows how to run things at scale. Almost always, what they do is they hand it off to somebody who can run it at scale. The reason they do that is, there’s actually two reasons. There's the theoretical reason they do that which is — it is at scale at that point, and somebody does need to run it at scale. And then the other is, they often have what I call the long suffering number two. You've had this high octane founder CEO who breaks a lot of glass and then there's often the number two, like the chief operating officer or something who's the person who fundamentally keeps the trains running on time, and keeps everybody from quitting. And that long suffering number two has often been in that job for 10 or 15 years at that point, and is literally the longest suffering. They've always been the underling, and then it's like — Okay they now “deserve” the chance to run the company themselves. And that's the handover. Now, those founders often end up regretting that decision. And in later years, they will tell you — Boy, I wish I had handed it off to this other person who was maybe deeper in the organization who was maybe younger, who was more like I am, and maybe would have built more products and maybe that was a mistake. But the fact that they do this over and over again, to me illustrates why the Burnham theory is correct, which is — large, complex organizations ultimately do end up getting run by managers in almost all cases. The only optimistic view on that is that it's the transition from these companies being in the bourgeois capitalist model to the managerial model that creates the opportunity for the new generation of startups. ptimistic view on that is that it's the transition from these companies being in the bourgeois capitalist model to the managerial model that creates the opportunity for the new generation of startups. Because then the counterfactual, if these companies remained bourgeois capitalist companies for 100 years, then they would be the companies to create all the new products, and then we wouldn't necessarily need to exist because those companies would just do what startups do. They just build all the new stuff. But because in that model, they won't do that and they don't do that, almost without exception. Therefore there's always the opportunity for the next new startup. And I think that's good. That keeps the economy vital, even in the face of this overwhelming trend towards managerialism. If you had a fund with a 100 year lock-in what would you be able to invest in that you can’t invest in right now?…

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