Marc Andreessen: belief

Transcript context

…I think the details will change, and the details have changed a lot, and the details will change a lot. If you go back to the late 60s, early 70s, the details were different then and the details were different 20 years ago. By the way, they're changing again right now in a bunch of ways, and so the details will change. Having said that, there’s a core activity that seems very fundamental. And the term I use I borrowed from Tyler Cowen who has talked about this, he calls it Project Picking. When you're doing new things, new tech startups, making new movies, publishing new books, creating new art, when you're doing something new. There's this pattern that just repeats over and over again. If you look back in history, it's basically been the pattern for hundreds or 1000s of years, and it seems like it's still the pattern. Which is, you're going to do something new, it's going to be very risky, it's going to be a very complex undertaking, it's going to be some very complicated effort that's going to involve a path dependent kind of journey through a complex adaptive system, reality is going to be very fuzzy and messy. And you're going to have a very idiosyncratic set of people who start and run that project. They're going to be highly disagreeable, ornery people because that's the kind of people who do new things. They're going to need to build something bigger than themselves, they're going to need to assemble a team and a whole effort. They're going to run into all kinds of problems and issues along the way. Every time you see that pattern there's this role, where there's somebody in the background who's like — Okay, this one, not that one. This founder, not that founder. This expedition, not that expedition. This movie, not that movie. And those people play a judgment and taste role, they play an endorsement, branding and marketing role. And then they often play a financing role. And they often are very hands-on, and they try to contribute to the success of the project. A historical example of this I always use is that the current model of venture capital is actually very similar to how whaling expeditions got funded 400 years ago. To the point that the term that we actually have, which is carried interest or carry, which is the profit sharing that the VCs get on a successful startup, that term actually goes back to the whaling industry 400 years ago, where the financiers of whaling journeys — like literally out of Moby Dick, to go hunt a whale and bring its carcass back to land. The carry was literally the percentage of the carried amount of whale that the investor’s got. It was called carry because it was literally the amount of whale that the ship could carry back. And so if you go back to how the whaling journeys off, like the coast of Maine and the 1600s, were funded, there were a group of what we — they didn't call themselves venture capitalist at that time, but there were a group of basically capitalists. s off, like the coast of Maine and the 1600s, were funded, there were a group of what we — they didn't call themselves venture capitalist at that time, but there were a group of basically capitalists. And they would sit in a tavern or something, and they would get pitches by whaling captains. And you can imagine the whaling captains. A third of the whaling journeys never came back. A third of the time the boats got destroyed and everybody drowned. And so it's like — I'm the captain who's going to be able to not only go get the whale, but I'm gonna be able to keep my crew alive. By the way, I have a strategy and a theory for where the whale is. And maybe one guy is like — look, I'm gonna go where everybody knows there are whales and other guy’s gonna be like — no, that place is overfished, I'm gonna go to some other place where nobody thinks there's a whale, but I think there is. And then one guy is gonna say — I'm better at assembling a crew than the other. And the other one's like — Well, no, I don't even need a crew. I just need a bunch of grunts and I'm going to do all the work. And then another guy might say — I want a small fast boat. And other guy might say — I want a big slow boat. And so there's a set of people, imagine in the tavern under candlelight at night, debating all this back and forth — Okay, this captain on this journey, not that captain on that journey and then putting the money behind it to finance the thing. That's what they did then and that's still what we do. So what I'm pretty confident about is there will be somebody like us who is doing that in 50 years, 100 years, 200 years. It will be something like that. Will it be called venture capital? That I don't know. Where will it be happening? I don't know. But that seems like a very fundamental role. Will the public private distinction that exists now, will that exist in 50 years?…

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