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Andreessen's Secret Plan To Find the Next Netscape
Hugh Pickens writes "CNN reports that Netscape co-founder Marc Andreessen has raised $300 million to launch a new venture capital firm that aims to reinvent the way money is doled out in Silicon Valley while reflecting Andreessen's unwavering view that the Internet will soon take over all aspects of our lives and that online services won't merely supplement your TV viewing or newspaper reading, but will replace those activities altogether. Andreessen, on the board of Facebook and an angel investor in Twitter, says that technology moves so quickly that only the young can keep up with what the latest stuff can do. 'So the 24-year-old coming out of Stanford will have a view of technology that the 29-year-old — who was 24 just five years ago — would never think of,' say Andreessen. 'We love that kind of thing.' Andreessen thinks that when companies are acquired too quickly, innovation slows down, and he says that YouTube might have come up with a path to profitability faster if it wasn't a part of Google. 'It is hard for big ones to out-execute up-and-comers,' Andreessen says. 'Our secret plan is to watch what gets acquired and fund the next company. A good template is to fund companies doing whichever the next-generation product would have been.'"
"that the 29-year-old -- who was 24 just five years ago" I was told there wouldn't be math.
"So the 24-year-old coming out of Stanford will have a view of technology that the 29-year-old â" who was 24 just five years ago â" would never think of," say Andreessen. "We love that kind of thing."
Great. More age discrimination in software development hiring practices.
I'm obsolete at 36.
So how old in Andreessen and how will he recognize the 24yo luminary from the 24yo that is full of shit?
Is anyone else getting the feeling that the board of Facebook just might be the founders of Carrousel in Logan's Run?
You could have the greatest development the tech world has ever seen, but if you're over 30, prepare to be recycled as fodder for Andreessen's mythical 24 yr old.
Said Andreessen, "Our secret plan is..." ...posted on a blog at NYtimes.com.
You're not doing it right!
OMG!!! Ponies!!!
So they'll fund the also-ran companies that no one wanted to buy?
Let's see- for YouTube, that would have been Break.com, Dailymotion, and about ten zillion other video startups that I am having trouble recalling at this point.
This sounds like a strategy out of an airport business book, but it needs a snappier tagline- something like "The Goldilocks Effect." You don't want the company that's too hot...
It is hard for big ones to out-execute up-and-comers
Funny quote, coming from a guy whose company was crushed by Microsoft.
online services won't merely supplement your TV viewing or newspaper reading, but will replace those activities altogether.
Will replace?
For me, at least, it has replaced already.
Many years have passed since I bought my last newspaper, and I only watch TV for live football games.
factor 966971: 966971
Ah. The old "youth is everything, experience is irrelevant" approach. The movers of this new culture can facebrag about it as they pass their hand me ups to their decrepit, tweetless, senile elders (anyone over 25).
Interesting, I'm now late 30s and frequently run across 20-somethings who have little to no computer/Internet interest. Some personality types want to interact socially in person and others want to read paper.
Sure libraries are accommodating new media, but they aren't eliminating the old, which still gets used. Attorneys and doctors continue to need paper.
His perspective generally sounds like a good one, but doesn't seem to recognize an entire segment of our population--like nearly everyone at the BBQ I was at on the 4th.
A friend there was laughing when her sister called to ask where/when fireworks might be shown, despite them having a computer in the kids playroom and their kids being able to search it faster than she could call her!
This guy has a track record of following behind and just missing. The plan sounds like a mission statement rather than an actual plan, and the preconception that age has anything to do with innovation at all is crap thinking.
but hire some old people to run the company. Big ideas and lots of money don't always work out well if you don't have someone experienced steering the ship.
And it doesn't matter. As the prototypical "obsolete" 29 year old from the example, I can tell you it doesn't matter whether the 24 year old is full of shit or not. Shit sells.
When I was applying to ivy league schools, literally every piece of advice I got was to lie out your ass. Lie about your achievements. Write your own recommendations. Just pull stuff out of thin air. Make it as flamboyant as possible, and as convincing as you can. As far as they know, you're a genius black inventor mathematician cellist who can write upside-down and backwards using your little toes. Books, articles, current and former students; they all said the same thing: Give admissions staffers the unbelievably entertaining bullshit they want to hear. Hell, you should even tell them that you have some plan to pay back the ridiculous loans they give you.
And judging by what I've witnessed over the last ten years, that was absolutely the correct advice. Yale, Harvard, the school doesn't even matter. Most of them didn't do well. Some didn't even graduate. But, one by one, a steady stream of the the best liars these institutions have to offer have stood up and lied over and over again to the rest of us and become filthy rich and wildly successful doing so. They have swindled us, stolen from us, violated our rights, led us into wars and destruction and profited greatly by it. All the while giving back to their alma maters in the process.
It doesn't matter that this group of people are investing millions of dollars into completely unproductive Web 2.0 bullshit with no viable revenue stream. It doesn't matter that the money they are frittering away is ultimately borrowed from foreigners, swindled from the elderlies' retirement funds, or doled out via government "stimulus".
It doesn't matter that they are sinking the US economy in the process, wasting an entire generation's productive efforts on shiny trinkets that will be unceremoniously duplicated by overseas competitors if by accident they ever attain any real value.
No, no. What matters is that they are productive, successful "entrepreneurs" who are "innovating". And if they can find an ambitious young 24-year-old with an idea to spy on his neighbor's porn surfing and advertise divorce lawyers to his wife, that'll be the next big thing. Because it'll be easy to patent and will give a 2% greater return than a business plan to manufacture automated fruit-pickers.
"I assumed blithely that there were no elves out there in the darkness"
Whatever happened to taking pride in making something great, and then spending a large portion of your life refining that thing or your ability to make it? Sometimes I wish I was a furniture maker instead of a software developer. New and innovative products are great, but what's the end goal? More new and innovative products? Sure, fine, great. I'm sure it's all just a big race to the bank for most people, like Andreessen, but for some who just need enough money to live comfortably, it's about striving for excellence and enjoying what you're doing for as long as you are physically able.
interesting theory you have there. So, all people who engage in any activities which have risk associated with them only do so because they are unaware of the risks, therefor all risk-based activities are scams and should be illegal?
-- 'The' Lord and Master Bitman On High, Master Of All
There's so much wrong with this young, arrogant fool touting his ageism. Young people are not necessarily the crux of innovation.
Working in the creative industries, it's easy to see that the arrogance and folly of youth might get you noticed and the attention of other young people -- but most great art is done by people with decades of experience. Compare the early work of any artist to their later work and you will see that in most cases.
The trouble with technology and the internet in particular -- is that it is seen as a "young person's medium". It's often just a get rich quick scheme for investors. Many of the new internet ideas have made a great deal of money for a small number of people, but they all have limited shelf life, and their users grow up and mature and seek other things. Yahoo, Facebook, MySpace, are dwindling. Geocities, Altavista, Netscape, and many, many more are all but gone. Twitter will follow them shortly.
The problem is, these innovations are shallow and mostly only appeal to young people. Nobody under 25 is looking at sustainable, reliable, usable services for the over 30s. It's all just fad and fashion and plugging a gap to get rich quick. This is not really innovation.
I've seen very little innovation on the internet in the past 10 years. Google came, changed search, and stayed the same. Social networking and blogs are easier to use and more marketed, but not significantly different from many BBS and similar at the beginning of the web. Google Earth is innovative, bittorrent is innovative, and perhaps there are a few other things. But on the whole the legacy of developers and entrepreneurs in their 20s is just using the same old tech with lots of hype and buzzwords.
DaVinci, Edison, Tesla, and many, many, many, many more, kept truly innovating late into life. As their experience grew, they made better inventions.
Sorry, but this precocious, silly little boy needs slapped. He does not know as much as he thinks he knows. Maybe he will get rich. But it is not likely he will really do anything of any importance to future generations for many years to come.
Now get off my lawn...
One of the big problems with Internet businesses is that there's a huge disconnect between what will attract users and what will make money. In 1999, there were companies saying that growth was about "eyeballs", and only "old economy" people worried about revenue. That didn't work out too well. For a recap of this, see Downside's Deathwatch, which I did back then. (Where it says "Chart is not available for this symbol", it means they're long gone.) So we've heard that particular line of bullshit before.
Similar claims have been heard for social networks, few of which have paid back their original investment. Myspace, in their best year, (2007) made only $10 million. News Corp paid $580 million for Myspace. They'll never see that back. Investors in other has-been social networks (AOL, GeoCities, Orkut, Tribe, Friendster, Classmates, Nerve, etc.) did even worse.
Andreessen has a point that YouTube would have had to find a way to become profitable by now if they weren't part of Google. Of course they would. No VC would continue to fund a money drain like YouTube. YouTube couldn't even survive as a zombie; they cost too much to run. ("zombie": VC term for companies which can't come close to paying their startup investment, but generate just enough revenue to cover their operating costs. They're the living dead of startups.)
Google still gets something like 97% of their revenue from AdWords. Everything else they've done loses money. Google had one great revenue product - AdWords. They've been frantically trying to find another, without success. Google has a great capability for deploying money-losing free services, but none of them, from Gmail to book-scanning, are generating serious revenue.
There are lots of things that are interesting to do technically, and even useful and popular, but don't make money. I've done a few myself. Andreessen probably has some good ideas like that, and I'm sure he can find more. But if he's going to run money as a VC, he'll have to do better.
Better than the average VC, in fact. There are currently too many venture capitalists. VCs as a group lose money, and have been losing money since 2003 or so. Venture capital as a business used to be highly profitable, but it no longer is. Too much dumb money came in during the first dot-com boom, and the VC business overexpanded. Silicon Valley venture capital used to be about funding a few engineers in a lab to do something great. Those startups often failed, but didn't cost more than a few million when they did. If one in 10 did something good, that was a win. During the dot-com boom, VCs started funding companies into the deployment and operating phase, which is when it starts to really cost. That's a way to lose hundreds of millions a pop.
So we'll see how Andreessen does. Remember, though, that it's not a win until long-term profitability is achieved and the original investment paid back.
The advantage that young people have is two-fold; That of Time, and Easy Cross-Cultural Networking.
Back when you were a kid, you didn't have to work. (School work, even when hard, is minimal.) Kids don't have kids, they don't have to worry about car or house payments. They don't have to go grocery shopping. They have all their free time to think about and explore the new trends.
Second, they have the biggest water-cooler to chat around. All day. --After you grow up and enter the work force, you are suddenly segregated into one social category or another and with that, you lose perspective. When you are a kid in school, however, you are rubbing shoulders with everybody; kids who will grow up to become doctors and nuclear scientists and politicos and hair-stylists and crack-heads. You see it all and you have the time to process it. You live right there in the big picture. You just don't have the brains to realize the power of that scenario.
See, on the down side, when you are a kid, you have cognitive blinders on which are so big that when you reach your thirties, you are stunned at the fact that you managed to survive for all the stupid things you did and blind-spots you functioned within. Kids are functionally retarded. --And I say that in the nicest way, because it's a process of growing up and we all go through it. Or at least this has been my own experience, and when I ask others, they nod and sigh deeply. Perhaps you are different, but I doubt it. Brains don't stop growing until you turn 18 or 19 after all, and your internal knowledge processing networks don't really crystallize into a rich enough understanding of reality to be terribly useful for another ten years at least. There's nothing wrong with this. It's called, "Growing up".
So. . . The trick is to make sure that when you reach your thirties you work to put yourself into a position where you have tons of free time and where you can connect with every social class you can reach. If you can do that. . , well then, now you're getting somewhere.
How old were the guys who came up with the iPod?
I'm betting they weren't twenty year-olds.
-FL