Marc Andreessen and Ben Horowitz, who first teamed more than a decade ago on a start-up Internet shop known as Netscape, are launching their own venture capital firm, cleverly titled Andreessen Horowitz. Starting with a $300 million seed, the company will invest in just about anything computer-related, Andreessen has said, taking advantage of their fleetness of foot (Andreessen and Horowitz are the only principle partners) to seize upon computer technologies, software developments and Web infrastructure opportunities.
But a keen eye for tech success stories is only part of the strategy, Andreessen told the New York Times. The firm also has a “secret plan” to choose their investments based upon which firms are bought up by larger companies. Essentially, Andreessen says, when promising start-ups are acquired too quickly, innovation is often smothered. YouTube, facing collapse without profitability, might have found a money-making model by now if Google had not brought the company under its cash-flush umbrella. More simply put, independence breeds innovation.
For example, Andreessen said he’s watching digital video camera makers in the wake of Cisco’s acquisition of Pure Digital Technologies and its Flip camera. While Cisco may do well with Flip, the company is unlikely to innovate the way Flip would have on its own. So Andreessen Horowitz will look for the next Flip, seeking companies similar to those they feel are acquired prematurely, then doing their best to keep them independent and innovating.
So what investments will Andreessen Horowitz avoid? They’re staying clear of the clean and green movement, energy, biotech, nanotech, space travel, medical devices, and other hot properties that fall outside their area of expertise: classic computer technologies. That’s not terribly sexy, and certainly not as ethonomic as we’d like to see, but when one of your resume highlights is kicking off the dot-com boom, who’s going to tell you you’re wrong?
[via Business Insider, New York Times, GigaOm]