What virtually everybody finds, including Elon Musk, is the real world is just really really big and really really messy.
The AI thing is so interesting, right?
Because from a technology perspective it feels like you can build products pretty immediately that are going to win.
Our entire way of doing everything as humans, we think it's going to change.
We reinvented the computer, and the new computer is far better than the one that we have been building on for the last 50 or so years.
The purpose of building the dominant venture brand was precisely to be able to have the companies be able to borrow that at the most critical points in their development, so that the companies can kind of use our course in the world as a slingshot to basically build their own force.
You cannot join the firm unless you sign the culture document.
If you had to pick a thing, what are you compounding?
Reputation.
The media ecosystem is entering a more open era, and the conversation about what speech should look like is no longer controlled by a small set of institutions.
In this episode, A16Z co-founders Mark Andreessen and Ben Horowitz join A16Z general partner Eric Thornburg and Not Boring founder Paki McCormick to talk through how the information environment changed over the past decade and what that shift means for creators, platforms and investors.
We start with Paki's reference point, a 2015 New Yorker profile that captured the end of an era when mainstream journalism broadly positioned itself as a defender of free speech, then move into Mark's framing of the uncontrolled or liberated information environment where we are now.
Mark and Ben break down the turning points they think mattered most, including Elon Musk's acquisition of Twitter and Substack's decision to hold a consistent principled line on speech under heavy pressure.
They explain why A16Z invested in Substack and how enabling writers to monetize directly creates a supply of content that pulls new demand into existence.
Ben explains the non-fungible writer and why value has shifted from institutional brands to individual voices.
We also connect these media dynamics to how A16Z operates as a firm, why reputation is the core compounding advantage, how that reputation transfers to portfolio companies and why organizational design matters as the firm scales.
Finally, Mark and Ben dive into what they're personally most excited about next, including Mark's optimism about Zoomer founders.
Let's get into it.
So, Tacky, I want to start by saying thank you for the amazing piece.
Like, it was just incredible.
Like, absolutely incredible.
So, we just, like, really appreciate all the work that you put into it because that was a big one.
Thank you.
I mean, I appreciate being able to tell this story.
It's such a cool one.
And I appreciate, you know, getting to work with you guys on it.
And thank you for the colorful motions.
I think, made the whole.
As soon as I heard that, I was like I know what the whole piece looks like now.
I remember thinking I really shouldn't be doing this in front of a New Yorker or Twitter.
But...
I do that piece.
Actually, I do that meter for pieces my last drop.
That was the last chance to be fully, like, honest with somebody from the mainstream press.
That was, like, the very last moment.
It was, like, what, 2015?
It was, like, right before everything tilted and became super hostile.
Did you know that at the time?
No, I had no idea.
I had no idea.
You know, I think that because it was a cultural change, they just had no idea what they were doing.
Yeah.
You know, it was like... you're writing about, particularly the business publications.
It's like, who reads about business that hates business?
People who hate business don't read about business.
They're basically ruining your own audience.
So the full story on that is, so we did that story.
And then I went to, you know, so I had been on the Facebook board since 2007.
And so I was experiencing a lot of this through basically everything that had Facebook really hard really, you know kind of upfront, you know kind of on the leading edge, you know including every aspect of all the stuff that happened in the 2010s.
And so we used to hold an annual media party where we would, you know, buy all the reporters and publishers and editors and see them and get them liquored up and like do the whole thing.
It was a really good time.
We always really enjoyed it.
But then the one.
After that piece came out, we did the one and I remember three reporters who I know three business reporters and tech reporters to Ben's point, who I'd known for a long time like literally cornered me in the party and started just like tearing it at me because Facebook was not censoring enough political content.
And they were just like absolutely furious that I had to like get to Zuckerberg and tell him that he had to implement like a much, much stiffer, like censorship regime to prevent people from talking about, you know, the wrong topics.
And I remember, you know I'm like a Gen X, you know I'm like a, you know classic, innocent Gen X kind of classical liberal.
And I'm like, you know, but, you know, freedom of speech, you know, the First Amendment.
And they got like super fucking mad at me.
And they're like, no, no, no, no, people cannot be allowed to talk about this.
And I was like, that was like my moment.
Like, journalists are turning against freedom of speech.
Because yeah, I don't know, like my whole life, journalists have been going on and on about our great freedom of speech.
It's like all of their myths and legends are all about, you know, publishing the Pentagon Papers and
Like all these, so Watergate be able to do all these things without being censored.
And then became anti-freedom of speech.
And I felt like gravity like inverted itself and basically like only started to return to normal last year.
So anyway.
So that's why I have stories of the.
By the way, your piece is like a really good bookend to that piece because it feels like those It's sort of the beginning of an era and then the end of an era, beginning of a new era.
What do you think the new era is?
It's like way more uncontrolled.
And you can use various words.
You could say uncontrolled.
You could say I'm a big fan of so-called Russell Conjugation, where you can kind of figure out a neutral, positive and negative way to say anything.
So you could say uncontrolled, anarchic, and liberated.
Yeah.
Right.
And, you know, I mean, we're all experiencing this, right?
You know, we're all seeing it.
But, like you know, just the days of the kind of censorship speech you know it's kind of thought control regime, at least in the US like those days are just over.
And then you may be watching.
Like you know, Europe is trying, you know furiously, the UK, the EU and Australia now are trying furiously to kind of lock down even harder.
And actually, Australia is in the process of doing a thing right now.
It's like a super draconian anti-free speech thing aimed squarely at their citizens.
And so, like the world is, you know, the West, outside of the US, is still headed in the wrong direction.
Not necessarily my view, but like the US, like we've substantially restored Now and, I think, when we restored it, you could kind of argue this different ways.
But I think my suspicion is, like, those wars are just simply over.
Like, even if, like, super pro-censorship people get back and control the government, like, I don't know that anybody's going to tolerate the return back to those days.
You know, there will be different fights.
You know, there will be different political controversies, for sure.
And they'll be very intense.
But I think the days of you know like basically in retrospect, 2017 to 2025 was like the last window for you know, especially the press and the government, to basically just like control it.
It's what everybody does.
Like, I just think that's over now.
You're in the middle of this.
I mean, the two of you, like, what role do you think you played in that?
Like from the inside, without getting cocky on it, like you and a certain, like a small number of people.
Do you think that it actually, like that kind of stuff, shifts it back to this anarchic or liberated view of the press or relationship with the media that we have now?
So I just start by saying I don't think I should claim any moral heroism at all here at all, because I mean I have my own version of my own story, going all the way back to
I turned down the opportunity at the time, in 1993, to implement censorship in the web browser, which would have been a completely different and very dystopian world.
So I don't know, maybe I get a little bit of credit for that.
But I think for the last decade, like I was kind of on the same ride as everybody else.
And I've been on the Facebook board since 2007.
So I kind of went through the entire kind of crazy roller coaster that that company went through over the last decade.
And then we've been involved in lots of these companies.
I was an angel investor on Twitter.
I'm an angel investor on LinkedIn.
They both became kind of key parts of the censorship machine. at certain points.
And so I don't want to claim like huge moral heroism.
I do think a couple of things.
One is obviously Elon's purchase of Twitter obviously was like a gigantic turning point.
I also want to give just like enormous credit to the Substack guys.
And they were very proud because we were the original investor and we're the largest outside investor in Substack.
And I think they did a really, really great job holding the line of freedom of speech under and I would tell you, under enormous pressure.
And took a very consistent and totally principled stance on it.
Yeah, that's right.
And I don't know if people remember this or not, but I mean they got really lit up by a lot of the sort of anti-speech forces, for I mean the whole litany of kind of standard accusations just being absolutely horrible.
And yeah, they stuck to their principles the whole time.
And then at least Elon acts like he's Elon.
And so when he wants to go to war with somebody who's like trying to get him to censor more like, he does it in a very kind of forced public, visible and forceful way.
Substack's still a younger company.
And so they don't have that level of kind of just throw weight in the world yet.
And so they have the harder version of the challenge, and they had to fight a whole bunch of fights, including fights that aren't even public, to basically keep the service with high integrity.
That's, I think, a good place to kind of talk about a bunch of the themes that we covered in the piece, one of which is, I mean, the Substack investment.
I remember at the time I was on Substack, my career was starting because of Substack and I still at the time thought it was kind of a crazy investment.
Were you thinking about it from the perspective of this is going to be a great returner.
This is something that is good for the future.
Is it a mix of the two of those things?
And then, to what extent have you allowed Substack to fight that fight by being on their side, that they wouldn't have been able to do if you weren't there?
Yeah, so we never make investments for just purely kind of social or political reasons.
So the goal, obviously, always as sort of fiduciaries is to generate returns in the main business.
And so we always invest with the intention that the company that we invest in has the opportunity to become what we call kind of a cornerstone franchise, you know in the industry, and an important force in the world.
We certainly believe that as Substack at the time, and we believe that more than ever today.
So I think that's true.
But I also think this is kind of the magic in a lot of what we do, you know, in Silicon Valley, which is, I think, the companies, not in every case, but in many cases, the companies that become the best version of themselves also become the most successful businesses.
And I think Substack is a great example of that.
And Substack is actually a very very, very good example of that, because if Substack is making its writers successful, then it's making itself successful.
Right.
And so it's got this just like extremely direct alignment of interest between its success and its writer's success.
And then, as a consequence of that, if its writers are successful, kind of by definition, those writers readers, are successful, they're getting what they want.
And so I would say there were sort of a bunch of reasons we invested in Substack.
One was just we fell in love with the guys.
And you probably know the guys they're easy to fall in love with.
That was the easy part.
And then look, we had been around the web going all the way back.
And then particularly the kind of golden age of blogging you know was kind of this kind of very special time.
And blogging really I think maybe gets underestimated because maybe there was no single company that kind of got full credit for it or something.
But the phenomenon of blogging created an enormous amount of intellectual content that basically was not going to exist otherwise.
And then blogging kind of just had a series of problems because there was no single company behind it.
But one of the problems was it was very hard for bloggers to make money.
Right.
And so the subset guys basically said, well, we're going to do that.
But we saw the economic model.
People are ready to pay now for content.
And this makes sense.
And then there was this chicken and egg thing right up front which was like well, can you really see that?
You know, the Internet's a wash with content.
People aren't paying for almost any of it.
You know you have to kind of squint and kind of say OK, are people actually going to pay for any of the stuff that they're getting today?
And I think the thing that, in that case, that we had faith in was basically, this could be what we call a supply driven market situation, which is, if you provide the modernization capability, then you're going to bring into existence writers and content that don't exist today.
And that is the way to create new demand that's not visible today.
And then that demand is going to come back around and it's going to incent more writers and more content.
And so it was basically a bet that there's an entire generation of high quality content that doesn't exist because the monetization mechanism doesn't exist.
And that's certainly what Chris and his partners believe.
And I think that's absolutely what's proven out.
And so it's like a great example of founders that like really see a future that doesn't exist yet.
And it's obvious to them.
And unfortunately, in that case, they were able to convince us.
But whenever we really screw up, it's because there's a founder who can see the future.
And they come and they sit in our office.
They tell us what the future is.
And we say, yeah, I don't really buy it.
Right.
And then for the next 30 years we have to read about the glorious success of this thing, as that future actually develops.
And that really sucks.
And I don't like to talk about those.
But I will say, you know, Substack is yeah, maybe they're just really good at sales, but they fully convinced us.
And I'm really thrilled that that's what's happening.
They were kind of ahead of the kind of change from old media to new media in that, you know, as the brand moved from the New York Times or the Wall Street Journal to the actual writers themselves, Substack was like a massive enabler for that.
And they created this thing which they call the non-fungible writer, which is like how many things in the newspaper could anybody write including AI, by the way and how much is truly interesting and valuable?
And they really wanted all the truly interesting and valuable things to be able to build their people, to build their own brands and their own businesses on Substack.
And that also turned out to be very true.
Yeah, and that was where Hamish, in particular right, turned out to be really critical on their team.
And he and I had a conversation early on this where I was like well, I don't know, are these people ever going to leave their publications?
Are they ever going to actually write content?
Like you know, when Substack was gearing up, it's when, in my view, the press kind of became this kind of extreme and negative monoculture.
And so I was like, all right, yeah, all these writers kind of trapped at these places.
And I'm like, well, are they really trapped?
Are they in jail or have they built the jail?
And if they leave, are they going to be any different?
Yeah.
And he's like look, if their only option to basically put food on the table is to work for a publication that basically requires them to write a certain way, then they're going to write that way because they need to pay the bills.
But he basically said I guarantee you that there's a lot of these folks where, if they had an independent path, they would be thrilled to be able to maybe break themselves out of jail.
And they would be thrilled to write about things from different angles and have different tastes on things.
And you'd see this liberation phenomenon take place where you'd have actually many different kinds of voices, even coming from people where you wouldn't expect it, based on the work that they did for the New York Times or whoever.
And of course, he was 100% right.
You can see a world where, because it attracts kind of all of the best writers from all of these different places who can build their own businesses, Substack becomes 10 times larger than any of the media organizations that it replaces.
I love the email that you sent Ali at Databricks Ben, where you talk about the fact that the business was underselling itself.
He was underselling the business and it was going to be 10 times bigger than Oracle, so $2 trillion.
I want to understand the mechanism of that.
Do you think that happens every generation, that the new companies are 10 times bigger?
Why does that happen?
Is it just software?
Yeah, so on that one, it was actually pretty simple, because if you compared the on-premise software companies to the cloud software companies so compare PeopleSoft to Workday, or compare Siebel Software to Salesforce the cloud version was just 10 times bigger.
And Oracle was kind of the on-premise version of Databricks, kind of rough analog.
Things are different.
Data is bigger and so forth.
But if you look at who is going to be the data kind of provider in the cloud, the provider of technology to manage your data in the cloud, I mean I was very confident Databricks would win that.
And so then if you say, well, what's the market size of that?
And, by the way, you know when I said that AI wasn't as big as it is, so I think that's helping my prediction.
But it was just clearly going to be 10 times bigger.
And I was like Ali why are you trying to convince this candidate that you're going to be worth 10 billion?
What are you even talking about?
But, you know, Ali is super paranoid.
God bless him.
So, you know, those are kinds of things.
And like, you have to know your entrepreneur.
I mean, I think this is, you know, one of the things that I think Mark does very well is, like you know that advice isn't advice you give to every entrepreneur.
It's, you know, it was very well specifically for him.
And I think that, um, You know, that's always the case.
Like it's a very psychological game running a company.
And so you have to kind of tap in to that person's particular psychology to kind of change the trajectory of what the company is doing into the right direction.
And I'd also add, you know, packing on the Substack point, like I think Substack could be like a thousand times the size of the existing, like content industry, whatever you want to call it media news industry, the collective, you know, kind of value.
And the reason is because, and, you know, you're an example of this yourself.
So, you know, my whole life, so I'm like, you know, mid-50s.
And so, like I grew up, you know, when I was a kid and teenager, you know the moral panic of the era was television.
And it was just this, like endless litany of sort of social criticism, you know from kind of you know fancy people basically saying, you know consumers are, you know, basically normal people are idiots.
They just want to sit in front of the boob tube.
They just want to like be couch potatoes.
You know, the line everybody used at the time was Americans watch six hours of TV a day.
And then you turned on TV and you just saw this.
They have this term the vast wasteland of, you know, game shows and bullshit.
Yeah.
And it was just like this like very dystopian kind of thing of just like people are just morons.
And then you know the internet version of that is, of course, you know that kind of moral panic is transferred straight over onto the internet in the form of you know, of course you know short form videos TikTok, you know.
So people just want to watch.
You know these stupid short form videos.
And it's just playing the piano is the original one, right?
Yeah, exactly, cat videos.
By the way, I'm an aficionado of cat videos.
I do not look down on cat videos whatsoever.
AI cat videos are my current favorite genre of any form of entertainment, so I will.
AI cat videos are very good.
I will, yes.
Ben can confirm.
I send around a lot of AI cat videos.
However, there is an enormous market for just like mass media, just for like whatever you know, for whatever game shows or sitcoms, or you know, soap operas or their modern versions of those.
And there's a giant, you know, mass media market for cat videos.
But this goes back to this idea of supply-driven market.
There's also, I think, just like enormous latent demand for actual smart, high-quality stuff.
And particularly in media and in every kind of media.
And I think the issue is not lack of demand.
I think the issue is lack of supply.
Because it goes back to consumer marketing 101, which is, people don't know what they want until it's given to them right.
Nobody ever asked for a Macintosh.
Nobody ever asked for an iPhone.
These things had to be designed and built, provided on the supply side, before the demand materialized.
And then the demand, of course, turned out to be far higher than anybody expected.
And I think that same thing is exactly true of media.
I think, a great early existence.
Proof of this was the success of long-form podcasting, which is.
I remember my early conversations with some of the early long-form podcasters and they're like it's the strangest thing we've ever seen, because everybody tells us that the consumers have short attention spans, but people are literally watching three-hour podcasts and we get the analytics and people are watching all the way to the end of the three-hour podcast.
And so I view this very much as, like you know, this is one of these classic markets.
That's a barbell which is yeah, you have a certain amount of whatever.
Just you know whatever you know mainstream, you know sort of mainstream, whatever you know seller, whatever on the one side.
But you have this massive sort of untapped market for high quality content and basically every domain.
And then again, technological transformation.
The existing structure of the media company was a structure that was designed for a world of centralized media.
You need a new structure today.
And of course, that's why we're so high on Substack.
But yeah, when we look at Substack, it's the exact same thing that you were just talking about with Databricks, which is like wow, this thing could be orders of magnitude, orders of magnitude multiples, larger than anything we've seen so far.
And frankly, I think we're starting to see that.
Implicit in kind of the fund sizes that you raise is some kind of view on how big the future is going to be or how much of the world technology is going to eat over the next decade or so.
What does 15 billion say about kind of what the world looks like in a decade and how many substacks there are that are much bigger than whoever they're replacing?
Well, I think that...
We reinvented the computer.
And the new computer is far better than the one that we have been kind of building on for the last 50 or so years.
Well, really longer than that, but 50 in earnest.
And you know so there is not.
I mean, we talk about this all the time in the firm.
There's not a problem that we can think of, that you can't, that you won't be able to solve with AI.
So, like almost every problem in the world and you you know, from cancer to transportation, to massive fraud in the US you just name a problem in the headlines and we're like, oh yeah, we can solve that.
And so it's kind of their reinvention of everything.
So, like, our entire way of doing everything as humans we think is going to change.
And so, you know, I would view it as $15 billion to start for us because—
And there's so much to do and there's so many things that are going to get built.
And you know, like some of it is just timing with the entrepreneurs, but we think the number of entrepreneurs is going to multiply as well because the kind of the ease of going from an idea to a really fast, fantastic solution and a fantastic product is just going to be so much simpler.
Because, you know, one of the things that AI is best at, of course, is kind of building stuff.
And so, yeah, it's just a very unique time in kind of the history of the world.
Yeah, the only about experience I have with AI on a regular basis now is, you know it's like okay, I think about the way Ben does.
And then I'm like, all right, how might you apply AI to solve?
Yeah, for example, the fraud scandal, you know, the kind of fraud that we're seeing play out.
Or, you know, anything like that.
And it's like, oh, okay, I need to think and think about how to have AI solve this.
And I'm like, well, wait a minute, why don't I ask the AI?
And then I go in there and I'm like, you know, how should I do this?
And it's like, oh, well, here it's obvious how you would do it.
And here's, you know, the 18 steps that you would take.
And then I tell it well, you know okay, like you know, interview me.
You know, interview me on all the open questions in the topic you know, to get my thoughts on them.
And then it starts, you know, it starts interrogating me.
Right.
And then I'm like, okay, now give me your point.
And so it's just like you know, as you know, like if you had tried to do that with a normal computer in the old days.
It just like stare at you.
Right.
So like, this is really, really, really different.
And then, you know, I think the venture lens I would put on this is, you know, in terms of the mechanics of venture capital, you know the sort of classic, you know venture capital triangle is team, product and market.
And you're always trying to kind of evaluate all three of those.
And people have always had, you know, different theories over the years, of which of those is more important than the others, and how they interact.
But the thing that basically every investor public market investors, private investors the thing that we're all trained to do, is basically market sizing.
Like you know, we're trained to do technology analysis.
We're trained to do, like you know, background checks on people, and then we're trained to do market sizing.
Like, you know, okay, how big is this market?
Because you know the classic adage right is if you put a huge amount of effort into going after a small market, you still get a small outcome.
But there's a presumption in there, which is that you can actually predict market sizes on these things.
And the problem with that again is this sort of this presumption that you can predict market sizes based on the dynamics that exist in the market today.
But if there's a fundamental change on the supply side, if there's a fundamental breakthrough, a fundamental capability that doesn't exist yet, you're not going to be able to accurately model the market size because you can't see it yet.
Like you've changed one of the major variables and you can't do that.
And, you know, and then you can call that the leap of faith or whatever.
But it's like OK, if you, if you make the change in supply side, then all of a sudden the market gets 10 or 100 or 1000 times larger.
Like you can almost never validate that with math at the time of the investment.
But that's the thing that makes the outperformers, you know, really go.
And I just, I just think, like as Ben and I kind of go through our careers, we just see more and more examples where the mistakes that we or others make is oh, this must be, you know, the market for Uber and Lyft must be the market for taxi cabs.
Or the market for cloud software must be the same as the market for on-prem software.
Or the market for GPUs must be the market for people who like to play games.
Yes, exactly.
And we just keep seeing example after example after example where the significant enough technology change, product change on the supply side unlocks much larger markets.
And I think that's going to be, I mean frankly, that's going to be like the single dominant trend in investing for like the next 30 years.
I think that's just going to like telescope way out.
The AI thing is so interesting, right?
Because from a technology perspective it feels like you can build products pretty immediately that are going to win.
And then A16Z starts to make a lot more sense in that context where it's like all of these other things.
It's how do you do go to market?
How do you do policy?
Like, how do you set the conditions for the actual best technology to win as quickly as possible?
Like, how do you think about all the different things that you do there?
And is that the right way to think about it?
Like the best technology should win and the platform is there to make sure that that happens.
You know, the way we always thought about the firm was what can a partner do for an entrepreneur that will not only help them ensure their success but help them kind of build the company they want to build and the way they want to build it, with the people they want to build it with and the culture that they're proud of?
And to do that, there's many, many pieces.
And a lot of it, you know, some of it is just like very fundamental.
Like, can you do your business in the United States of America?
Can you do it in the world?
And so that's where the policy comes in.
It's just like a very basic question.
And look, governments have a huge interest in technology these days.
So like it's a necessary one.
A lot of the other things come down to.
How do you go from being an inventor to being a competent CEO?
And that really is a confidence game for lack of a better word in that it's very difficult to run an organization when you don't know what you're doing, which nobody does when they're an inventor.
And you get a tremendous amount of advice and advice that's often extremely bad and almost the opposite of what you should be doing.
And there are very few, like the people who've actually built things don't have time to talk to you.
They're often away building things.
So you get these like advisors and you know Silicon Valley people who tell you how to run your company, who to hire this and that and the other.
And then those things turn out to be wrong and you get to this confidence spiral.
And so we, you know, the whole firm, is built to put you in a kind of a virtuous confidence cycle, as opposed to a vicious confidence cycle.
And that means like oh, I need to call somebody who's hard to get to, like an important CEO or, like you know, I've got to recruit a top-end engineer, or I have to figure out how to market my product, or I have to get to somebody important in the government.
If I can do that, my confidence builds.
If I can't do that, my confidence sinks.
And so then, you know, once you're confident, you can make decisions faster.
You can, you know, build the company more effectively.
You can go for what you actually want.
You can have confidence that okay, what I want is the right thing, as opposed to what somebody's whispering in my ear.
You know who is, whatever a CEO, coach or a VC, or this or that or the other.
And so the whole firm is designed to kind of enable that inventor to become a CEO and run their own company and put their mark not just, you know, locally but in the world, by being able to kind of network to anyone.
And so that's a lot of what we're about.
Yeah, and I just add the sort of macro you know kind of outside in lens on that is it's just like you know we get to work with these.
You know super geniuses, but they're specifically, they are super geniuses at building products, building technologies.
You know, to be a super genius at building technologies generally requires you to have been sitting in a lab or, you know, in front of a screen, for you know, 10 or 20 years.
You know they just they have, they are.
You know, these folks are fully capable of understanding everything about the world at large.
They just haven't, they just haven't done it yet.
They just haven't been out yet.
And they haven't met all the people and they haven't dealt with all the issues in the real world.
And so that leads to this kind of recurring.
You know kind of, I would say, misimpression sometimes that people have.
It's just like well, if you build the right product, you know, if you build a breakthrough, whatever XYZ widget like it's just the world is obviously going to adopt it.
Everybody's going to use it.
It's just obviously going to, you know, kind of suit things.
And, you know, and basically if it doesn't, the answer is the product's not good enough.
And, you know, there's, There's a little bit of truth to that.
Like obviously the better, the more breakthrough the product you know, the more there will just be organic traction.
But what virtually everybody finds, you know, up to and including Elon Musk, right?
What everybody finds is the real world is just like really, really big and really, really messy.
Right.
And there are, you know, 8 billion people out there with like opinions that are not necessarily, you know, your opinions.
And you know many of them have a real vote as to what is going to happen with your product and with your company.
You know, including whether anybody buys.
You know your thing or you know all of the X factors that kick in.
You know all the different ways that people are going to come and try to cripple what you're doing.
Or, you know, or maybe even worse than that, you know, just ignore you.
Right.
And so there is this really big world out there.
It's really complicated.
It's really messy.
It's not necessarily in favor of new ideas.
In many cases, it really, really doesn't like them and wants to reject them.
And there's real art and science.
You know, to Ben's point to building the company around the product and the founder to be able to take the breakthrough and be able to take it successfully into the world.
And as far as we can tell, as far as I can tell, that process is getting hairier and more complicated over time.
It's not getting easier.
It seems like it's actually getting significantly harder.
And so yeah, that's a big part of what the firm is built to do is really help founders work through that.
And one of the things that Mark said in the past which is really true, is like look as an inventor, you're looking for power, like a power boost.
So how do I go from little old me with my invention to like I'm the important company in the space and the world, I can build momentum, I can get the best engineers, I can get the customers faster, and that turns into a snowball and I'm rolling downhill.
And so the whole firm is designed as like a very powerful entity that you can just tap into and, you know, take our brand, take our connections, take our expertise and become extremely powerful very fast.
Yeah.
And, by the way, this you know this is the solution to the puzzle that people have had about us for a long time, which is wow.
It seems like those guys are, like you know, awfully promotional.
You know, they're, you know, they do all this marketing stuff.
They, you know, they're doing all this politics stuff.
You know, they must be doing this for ego reasons.
They must be really full of themselves.
You know, this must be about, you know.
Talk so much shit.
They touch on shit like the whole thing.
And at least, you know, maybe it's possible we talk too much shit.
From time to time, maybe.
However...
However, from the beginning the goal was to build.
The purpose of building the dominant venture brand was precisely to be able to have the companies be able to borrow that at the most critical points in their development, so that the companies can kind of use our force in the world as a slingshot to basically build their own force.
And I think that's worked really well.
And that's why we don't shrink back from a lot of these things.
Yeah, I wanted to just squeeze something in and get right back on this conversation.
Talking too much shit is so interesting, but I really love it.
I think the thing that impressed me the most when I started working with the crypto team was seeing never take the negative in person and never talk shit on a technology, never talk shit on a founder, never talk shit on a company.
How do you even train for that?
Because that really, really impressed me.
Well, we train for that.
We train for that.
So we have a culture that is written, culture that you cannot join the firm unless you sign a document, the culture document and says you will adhere to this culture.
And then you must sit through one hour with me understanding the culture.
And fundamentally on that, you know our culture.
Whole point is if you want to do something larger than yourselves and make the world a better place, we are 100 for it.
And we do not care.
You know, like if, in the moment, we think you're making a mistake or like the idea isn't good, it doesn't matter if we invest in you or don't invest in you.
We're for that.
We are dream builders.
We're not dream killers.
We're not here to be like the analytical smarty pants who makes ourselves look smart by making somebody else look stupid.
And that's just that's fundamental to how we think about the world.
So, like anybody who's trying to push the world forward and make it better, like whether we agree with their method or not, like we're for it.
And so you we just ask you to sign up to that idea before you ever join.
Catherine said that you know we believe in the future and bet the firm that way should actually be the number one kind of value in the culture.
By the way, that was Mark's.
You know, I did the wording, so I give myself a little credit, but that was Mark's idea.
Do you think that should be number one?
Do you think that is number one in practice?
Do you think first class business in a first class way is like if you were to rewrite the doc today?
What is the most important thing in the firm?
Well look, I mean, the culture document is seven things that you know, and the culture is more than that.
Every culture is more than seven ideas and kind of seven sets of behaviors.
But those are the ones that All seven of them that we really expect everybody to live to.
So I don't know if I rank them in that sense because they all go together.
They're part of a single thing.
So you know, we believe in the future means that we believe in the people who build the future, which means we're not going to criticize them, which means we're not going to be on the attack side of that.
We're never going to attack the future.
We're going to try and make – there are going to be problems with how we build the future, but we're going to try and make it the best future we can.
We're not going to try and live in the past.
And so that – you can't do that if you're attacking entrepreneurs all the time.
You can't do that if you –
Show up, you know, an hour late to meet with somebody who's trying to build a company.
You can't do those kinds of things.
And so every part of the culture I think is in support of.
We want to build a better future like that is.
That's why we're here.
Haber in his piece Firm Kind of Greater Than Fund talks about.
You know, a firm is something that tries to build a compounding competitive advantage.
And he points to one thing for Apollo, one thing for Goldman.
If you had to pick a thing, what are you compounding?
What is the competitive advantage that you're building over time, do you think, Eric?
Reputation.
Hmm.
Mark and I talked about that from the day we started the firm.
And by the way, there were times when it was like, well, we're investing an awful lot in reputation.
And, you know, it's taken a while.
But that's what we compete on.
Like when we talk to an entrepreneur and they're comparing us to another firm, we say find an entrepreneur that's taken investment from both firms.
See what they say.
Like that's our answer to everything.
We build reputation.
Every relationship matters.
Everybody who we touch.
We try and touch as many people as we can and we try and represent in the very, very best way possible to build reputation over time.
And that compounds and compounds and compounds across entrepreneurs, across industries, across sectors, across industries.
You know everybody from you know people in the government to you know people in companies that we don't invest in, anybody who is anywhere in the world of technology.
We want them to know us and we want them to think of us as the best firm to do business with.
Yeah, and then that transfers, of course.
That transfers from us, that transfers to the portfolio companies, right?
So which is the goal of it?
Which is that then, as a consequence, when a company takes investment from us now, they're basically able to use our reputation to get themselves through those kind of key growth phases with potential customers, and with recruits, and with downstream investors, and with regulators, and with all these different forces in the external society.
So the reputation pays off, not just for us, but it pays off in the form of what our portfolio companies are able to do as a result.
So, having done this for 16, 17 years, are there things about building and transferring reputation that you've learned that are not obvious?
Because to me, it would almost seem that it's a battery.
And if you give it to one company that messes it up, then the whole thing kind of falls apart.
But actually, maybe it's love to be super cheap.
It just grows the more you give it.
Are there other things like that that you've learned?
Well look, I do think that that's a correct insight, in that one mistake is much more powerful than one good deed.
So one mistake person being obnoxious, who's in the firm, or lying to an entrepreneur or doing something like that causes much more damage than you can do by doing that correctly, you know, five or ten times, which is why you have to be so vigilant about it.
Like, you cannot tolerate that kind of behavior.
But I think that the biggest thing that I've learned is it takes a long time to build a reputation.
But once you do, it's the most powerful thing.
It really does compound.
And just to give you an example, look, When Mark and I raised Fund One, it was a $300 million fund.
I think it took about six months to raise.
We had...
A lot of meetings.
I can't count how many meetings.
Some people did not treat us very well, as Trump might say.
They didn't treat me well at all.
Very badly.
And you know this raise, which was 15 billion, when we actually raised the fund, I think Mark did one AMA and I did one AMA.
And I don't know that I took another meeting on this fundraise.
And it was done on the reputation.
And so that's a heck of a change, you know.
And look, a lot of, not that we don't, we talk to our investors all the time.
I mean, I've been all around the world building relationships and so forth.
But when we came to ask for money, it was raised entirely on the reputation.
I think, Paki, I think the external environment has changed enormously.
And so you know we've lived this.
You know, as you have and many others, you know this incredible transformation where tech both is like much much, much larger and more central now than it was in 2009 when we started.
But also you know the level of, let's just say, engagement on the part of the world Attack is.
You know the level of intensity on everything from.
You know attacks.
You know criticism.
You know, by the way, you know completely justifiable questions.
You know impact on society.
You know the intensity level is.
You know, I don't know it's like.
I don't know it's like 1000x of what it was 16 years ago.
And so I think yeah, I think to your question.
I think we've really tried to kind of rise to that on both sides.
Like we're really trying to help these.
You know, these companies get to levels of scale that nobody ever thought was possible before.
But at the same time, we're trying to help them deal with pressures that previous generations and founders generally didn't have to deal with.
Yeah.
You seem like you uniquely, maybe of anybody that I know, have fun engaging in these conversations.
And I wrote about it a little bit in the piece, but kind of stepping outside the situation and viewing it.
What goes on in your head in these situations?
Are you having as much fun as it looks like?
Does it take a toll, every kind of taking the arrows?
What does it feel like in these?
Yeah, Ben, I'll give the rational response.
I would say it's...
I mean, it gets emotional from time to time, right?
Because you know what goes into building these things.
And you know the intentions of the people building them.
And you know, like, the kind of impact they have on the world.
And then to just get like you know, and a lot of the attacks tend to be in the form of character assassinations and so forth.
And now everybody thinks Mark's Jewish, right? you know, just so they can attack him more.
It turns out people love to attack Jewish people.
So I welcome him into that.
My new name, my new name my new name Paki is in certain political circles is Andy Horowitz, because people think that.
People think Andrew and, as swamp French as the internet, people think Andrew Horowitz is a Jewish person.
Yeah.
And so I now introduce myself as I didn't have that on my Twitter bio.
I did have it on my Twitter bio.
My real name is Andy Hurwitz, and I am Jewish, but I took it down.
Yeah, but I would say mostly it's just like it's an amazing thing, an amazing thing privilege to kind of be in the center of it all.
And you know look, and then the responsibility that goes with it that you have to kind of try and help drive the world to the right answer.
But, like, it's...
I don't know if fun is the right word, but like it's special.
It's like we've gotten to a very special position.
And I think both of us try and take it as seriously as we can.
And things happen.
And we have very, very long discussions about how we should react to certain things, how we should not react to certain things, what we can take a position on, what we shouldn't take a position on.
And you know, just to have—just to be, you know, at this stage of life, to be able to be talking about that, as opposed to the things that we had to talk about when we were building Netscape or Opsware like it's amazing.
And, you know, I definitely went trade it.
And look, we're—
We've been criticized so much at this point that it really it bothers interestingly, which I never thought I'd see it kind of bothers people inside the firm much more than it bothers Mark or me.
Sure.
And I am, just for the record, studying for my bar mitzvahs.
Yeah.
Yeah.
The Hav Torah.
You need to learn your Hav Torah tropes.
Yeah.
Yeah.
How do you avoid at this point becoming a big company?
Like, this is becoming a big organization.
How do you avoid being a big company?
Google wanted to avoid that.
Like, everyone wants to avoid that.
How do you actually do that?
Yeah, so I think a lot of that is organizational design.
I mean.
So if you look at the companies that didn't feel like big companies for a long time, they had very very, very thoughtful design to the organization.
And if you look at...
The firm, the crypto group or the infra group or the apps group or the American Dynamism group.
They all feel like small companies.
And they're small companies with a kind of very specific kind of support structure, you know, in terms of the brand, in terms of fundraising and other kinds of things.
But, you know, the fundraising team is a small group.
And every group is very autonomous from every other group.
Like, there's integration points, but they're very simple.
And so, you know, for the most part, there's some that are more complicated than others.
And so you know that's what makes it.
You know the beauty of a small place is you can just get shit done.
The beauty of a big place is you're very powerful.
And so we try and kind of blend those two.
We took a lot... Mark and I borrowed a lot.
Early on, we really studied Hewlett-Packard, which the...
The original Hewlett Packard, before the computer business kind of swallowed.
The company was very much like this.
They were like a series of companies inside a company.
And that's a lot how we are.
How do you vet GPs?
Or like it seems like you have to put a lot of trust in the people that are running the different teams if the whole thing is reputation, but you need to be able to scale by having these kind of decentralized teams.
Is there anything that you do there that's unique or weird that ensures that kind of like no one group can infect the whole?
I think.
Look first of all.
In order to lead one of those groups, you just have to have been here and performed for a long time.
So that's kind of the first thing.
So we just know you extremely well.
We're not interviewing people for that job from the outside.
Like, you can't get that job from the outside.
And then...
You know, I would say, because our culture is so different than other venture firms.
You know, for better or worse we're just different that we don't hire a lot of outside GPs anymore.
We generally try to hire people at an earlier stage of their career and kind of grow them into what we do.
And that's worked much, much better for us, I would say, in general.
Although we have, like, all of us came from the outside at one point of the original cast.
That makes sense.
Kind of winding down here.
But Mark, you said that I think you got shit at one point for saying that VC was going to be the last job in the world.
You know, if the vision of the future that you believe is true, and this is going to be an institution that lasts for a century, like what does A16Z look like and do a century from now?
Right.
Yeah.
So I'll start with, I believe I was misquoted.
I believe it was one of these hypothetical thought experiment things that kind of got overly extrapolated.
But I guess I shouldn't just defend myself.
So the point of what I was trying to get across in that discussion which I think if you pull up the original it's a longer form discussion on it goes back to what Ben said early on, which is There is this repeating pattern in history.
I mean, we can find examples of it for sure going back 500 years.
It's this repeating pattern, which is basically a person with a dream, a person with a deep level of domain knowledge and a dream operating in a domain with asymmetric payoff, with risk and reward.
By the way, the dream may be wrong.
They may not be able to do the thing.
But if they can do the thing, it will have disproportionately high returns.
You know the traditional institutional.
You know places people go to get support and funding.
You know for the dream.
You know for new projects just turn it down because you know a bank can't finance.
You know a bank can't issue a loan against something with a 50.
You know 50 chance of a 10x and 50 chance of failure.
Like a bank just can't underwrite that.
So a bank won't do that.
Big companies, you know, for the most part won't do that.
You know almost nobody will do that.
But somebody has a dream and then you know when the dream works and especially if you can construct a portfolio of those dreams and of those people you know, then the expected you know value on that is going to be very high.
Like, that's a very special thing.
I've had long conversations with Tyler Cohen, who's very particularly is very thoughtful on this and he has a term I forget the exact term they use
It's like some combination of talent picker, project picker.
And it's this thing, you know, it's like we were talking earlier about market size.
It's this thing where like there is an analytical scientific component to it, but there's also like an art to it.
And there's some intangible, because you're dealing with human beings at a very kind of primordial level, you know kind of very early in the process of doing something that hasn't been done before.
And you know, quite honestly, like you know, an early example of this was, you know, Queen Isabella with Christopher Columbus, right.
And I was just like, I was just, I was trying to picture the pitch, right?
You know, Christopher Columbus rolls in, right?
And he's like you know, all right, you know here's, you know I'm going to find a new route, you know, route to India.
By the way.
You know there's like I don't know, whatever 50, 60 chance that you know you'll never hear from me again.
And, you know, maybe I've, you know, died 2,000 miles away from Spain.
By the way, maybe I just like ran away with the money.
It's not like they had Interpol in those days.
And I'm going to go do that.
And by the way, the fact that that bet paid off, but like... The whole idea was wrong.
But the whole idea was wrong.
The whole idea was wrong.
He discovered a completely different continent, and he himself did not believe that he had discovered a completely different continent.
Right?
And I don't even know that Fane was the main beneficiary of that in the long run, right?
And so, like, but, like, you know, like, she funded it, and, like, wow, right?
And then there's a version where...
Yeah, yeah, exactly.
Yes, they did find some gold.
A very similar story.
By the way, the Puritans have a, you know, the Plymouth Rock, that whole thing, the Mayflower.
They have a very similar story to that.
It took, I think, 20 years to raise the financing to be able to make the Mayflower expedition.
And they needed, you know, backers like that.
You know we always talk now about in the adventure industry.
You know, the whaling industry 400 years ago um, you know, operated in a very similar way.
The movie industry has always worked this way.
The book publishing industry has always worked this way.
By the way, politics has always, you know, worked.
Political campaigns work this way that you know any any, any new, you know, future president, starts out as a long shot.
Somebody bets on them, and so there's, there's this intangible that has to do with making, making these long-dated bets with very uncertain outcomes and with high failure rates.
And i mean like, if yes like, i think what i said in the original interview is like look, if we're gonna have ai do that, like god bless, like i'm gonna, like i'm gonna hit the beach and like it's all good.
But you know like, I guess maybe make the following claim
Ben, what do you think of this?
The intangibles seem to be becoming more important, not less important over time.
It seems to be becoming more like an art and less like a science as we go.
Would you agree with that?
I definitely think that's right because history... is a bad guide.
So you can't.
The interesting thing about VC for me, probably the biggest lesson is you got to be very careful about a highly trained neural net, because that's when you make the mistakes, because things change.
And I would say...
Things have changed more rapidly.
Like, the thing that we never thought would ever, ever, ever go away is the Mythical Man month.
Nine women can't have a baby in a month.
Well, with AI, you can.
Software.
It's a metaphor for software.
It's a metaphor for software.
Yes, exactly.
Sorry, sorry, sorry.
So in the old days, no matter how many engineers you put on a team, more engineers would actually slow down the project as opposed to speed it up.
So you couldn't throw money at a problem.
You couldn't throw money at somebody's technological lead.
You'd have to do something different.
Now you can throw money at it.
You know, Elon did an amazing job of throwing money at the foundation model problem and he caught up very, very fast.
And that's something that, in the whole history of our industry, could never have happened before.
So if you had asked an AI, if Elon had any prayer of catching open AI or anthropic, they would have said no way.
And so that's where you're getting into.
I mean, maybe if the AI was smart enough, I suppose.
But like there are these, a lot of it has to do with like, how much do you believe in the person?
Yeah, and then the other part is what we talked about already, but it's the long and twisting path.
You know, the investment is just the beginning, right?
And it's the long and twisting path that that person, that company take over time and all the different ways that we try to help them succeed.
And so I think that, yeah, yes.
I don't know how to have AI do all that, but maybe we'll figure it out.
Yeah, you could imagine an AI who could do it all, of course.
If an AI was smart enough to humanize about every single thing, including human psychology, then...
Certainly.
You're tasked with training this AI.
What are the things that you've learned on this art that you can put into words?
If it is and this is the most optimistic view of the future I can think of the tools are getting better, but the human piece really, really matters.
What have you learned about the art that you can describe?
What do you look for in a Christopher Columbus?
Well, I mean, I think that the first thing and I hesitate to name things in some sense because they're all so different, right?
Like Elon, is really not at all like Mark Zuckerberg, who's not at all like Ali Ghotzi, who's not like at all like Brian Chesky.
So they're all different.
But the things that they all do, I would say, is they all think for themselves.
They're not people who read the room and try and figure out what people want them to do.
They have original ideas.
So original idea is probably the thing that every great entrepreneur has, their original thinkers.
And then they all also have some combination of enough – charisma.
They're interesting enough um, that people want to follow them um, because you know, ultimately you, you kind of need people to go okay, that is the leader and that's somebody who i want to work with, work for, and so forth uh, so that's, those are the things that i would say almost all of them have, and then, and i think all of them have those to be great uh, but everything else i i, You know, like Steve Jobs, is a very different kind of guy.
They're all different, I would say.
Like Steve Jobs is nothing like Andy Grove, like nothing.
But, you know, they're both great.
To close this out, I guess from each of you what is the thing that you're personally most excited about in the next kind of couple of years of A16Z?
But just tech more broadly.
Okay.
Well, I mean Mark had a great line like well, this is on the order of like the steam engine or electricity.
Like this is such a big invention that we're going to end up in a different world.
And the thing that's most exciting to me about it is You know, I wouldn't want to live in the pre-electricity world.
Like, I like this world way, way, way better.
And so I think that, like odds are, we're going to get to a world that's just way, way better than we can even Like.
We can't even get our heads around it, which is why it freaks people out.
Like all this stuff that we have to do and so forth that we've just learned to live with, that sucks isn't going to be required anymore.
And so, like... what does that mean?
What do we think of then?
What does life become?
It could be super exciting.
Now the one thing with humans that's a little messed up is You know, if that takes us too far away like one of the you know too far away from some grounded purpose about you know and beliefs and spirituality, then you know you can attach on to some dumb stuff.
So, you know, that would be actually my only worry.
But I think life, just the quality of life for everybody, is about to get like way, way better than it's ever been.
I'm excited about the Zoomers.
I am.
All right.
I am psyched for the Zoomers.
I was with a.
I was with a founder team the other day and I was who are Zoomers and I was explaining to them you know why the Zoomers are so much better than the millennials and why they're going to save us and like the whole thing is going to be great.
This is so great.
And, of course, they're just like staring at me like I'm speaking Greek because, like they did, you know they're, you know, they just think like millennials, are like old farts that are like completely out of touch.
And of course, you know, us, Ben and I are Gen Xers, we might as well be, you know, Stone Age.
And I was like, but I was like, But I was like, this is what's so great about the Zoomers.
It's the post that I would describe it as.
2015 to 2024, it was a very, very strange period.
And a lot of just things got really weird.
And the Zoomers are the generation that basically was on the receiving end of that.
And at least for the Zoomers we get to deal with.
They're just not having it and they're not walking around feeling guilty about everything all the time.
They're not feeling like they have to, like, deny that they want to be successful.
You know, they don't have any of the moral, you know, kind of hair shirt stuff.
They're just like, if anything, they were told by it all.
By the way, Gen X was like that, too.
Gen X kind of let go of all the craziness of the 60s and early 70s.
Yeah, that's right, that's right.
You're right, exactly.
Gen X was the reaction of the boomers in the same way the Zoomers are a reaction of the millennials.
And so the Zoomer founders that we get to deal with, my view is like it's the best, it's the best.
It's the best, most competent, most capable.
By the way, they're just like incredibly well.
They come in all just incredibly well-trained and educated because they grew up online.
You know they've seen.
You know a thousand hours of YouTube videos from all the great.
You know people in tech talking about how to do everything.
You know, they just know so much more than previous generations of founders did.
And, you know, by the way, now they're all AI native.
You know they all you know, basically learned AI from scratch.
And you know in college and you know they're coming out and they totally understand it.
And so, and they're just like tremendously fired up and like completely, you know completely, you know they wear their, you know they wear their heart on their sleeve.
They're like, they're going to build something.
They're going to build something great.
And they're completely unapologetic about it.
They're very forceful.
They're very determined.
Yeah, I just think it's fantastic.
I've been waiting this, Eric and Ben will tell you, I've been waiting for this for a long time.
We may have to edit this out, but one of the things I do really like about the Zoomers I haven't ever heard anybody say anything like I'm going to do well by doing good.
Like, they never fucking say that bullshit.
No, no.
They have a good sense of humor, too.
They're funny.
Yes, yes.
They're extremely funny.
Well, they're extremely funny.
They get it.
They live through it.
They were on the receiving end of just a tremendous amount of bullshit.
And they're just like, they're just not having it.
And so it's just, I find it just like tremendously exciting to be able to work with them.
And if I had total control over my time, it would be 100% that was humorous.
I appreciate you spending an hour with a millennial.
This was a ton of fun.
Thank you for letting me write about a 16Z and thanks for the conversation.
We're talking about all your future guests.
Exactly.
Vacky, this was an excellent piece.
Thank you so much for writing.
Yeah, 100%.
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