Cofounder, Andreessen Horowitz; inventor of Mosaic, the first popular web browser
Fast Company: How long do you think it takes for a truly significant technology to take hold?
Andreessen: The really big ones are generational. People are strange. On a micro level, everybody likes a new product, a new TV show, new software, a new smartphone. At that micro level, people love change. At the macro level, we hate change. Big, new ideas that challenge preconceptions make people really angry. So it’s young people growing up in the developing world who are going to be the vanguard of something like bitcoin [Andreessen Horowitz has invested some $50 million in bitcoin-related startups]. A young person who’s 16 in a country like Argentina or Mexico, with a shambles of a government and a shambles of a financial system and a terrible currency, who finds out on their smartphone that they can have a currency like bitcoin that lets them transfer money freely and not have it be stolen or inflated away? They’re going to love it, adopt it, and use it. There’s an inevitability to these changes, a generational shift.
Let’s turn to one of your portfolio companies with a big idea, the virtual-reality startup Oculus VR.
This one is very apropos of our discussion about how long technologies can take. I worked on virtual reality 25 years ago, with access to the world’s most advanced supercomputers. We were trying to visualize stuff, like what it would be like to be inside black holes and thunderstorms. There was Jaron Lanier and his VR glove and goggles, and it all just didn’t work well enough. It was too early. It was like the Apple Newton–the Newton and the iPad are pretty much the same product, but the Newton was 20 years too early. Virtual reality didn’t work in the ’90s, so in the 2000s, everyone just gave up.
The founder, Palmer Luckey, is one of our Most Creative People in this issue. Can you walk me through the process of turning a creative idea like his into a business?
A couple of years ago, Palmer is in his garage tinkering around. And since he’s 17 at the time, he doesn’t know that VR’s “not possible,” right? But he does realize that a smartphone screen is amazing, and that new graphics cards and chips and new interconnection technologies and new gaming engines are all amazing. And he thinks, You know what, I don’t see why this couldn’t be made to work! So he puts together a prototype [of a video-gaming headset that places a gamer in an all-encompassing VR world], sets up on Kickstarter to raise money, and a whole generation of kids who didn’t know this was “impossible” say, “Oh, that looks like a great idea!” This is where the magic of Silicon Valley kicks in. The former CEO of Gaikai, Brendan Iribe, had just sold his company to Sony. He meets Palmer and they team up. Brendan pulls in a bunch of people he had worked with in the video-game industry. They get venture funding. They send a prototype to John Carmack, the father of 3-D video gaming, the guy who built Doom and Quake, and John emails Palmer and says, “This is real cool! Can I help?” That’s like Bill Gates emailing, “Your software’s real cool. Can I help?” So with John on board, now they’re just hiring all the good VR talent around.
So what happens to the creative founder in that case? What did Palmer’s role become?
We and his other partners just build a company around him. He’s being surrounded by experts in all the areas that are known and understood. Supply chain, consumer marketing, distribution, the development of an ecosystem that supports developers–those are all known and understood topics. So Palmer can spend his time on new ideas. He’s the chief visionary. He’s the guy with the original insight, and he’ll be the source of ongoing insight. There is another universe, you know, where Palmer would have never found Brendan.
And in that universe, who knows? Maybe Palmer is still in his garage. Maybe he’s still on Kickstarter. Or maybe someone else would have done VR, two years from now. Clearly, the time is right–so somebody’s going to do it.
And now it’ll get done at Facebook, I suppose. Could you have traveled that kind of alternate universe path, and never created Netscape, say?
Oh, yeah, of course. But the times have changed. I had never heard the term venture capital before I arrived in Silicon Valley, let alone met an actual VC. Now it’s so much more obvious how you start your own company. Palmer just goes to the Internet and types in the words venture capital. Next thing you know, he’s reading about everything that it took me a decade to learn the hard way.
Why does your firm focus so much on public relations? Your emphasis has changed the way other VC firms have to think about the subject.
The stuff the industry is doing today affects the whole world. It used to be that you could be HP or DEC or IBM, with 5,000 total customers and maybe 50,000 people paying attention. Computers didn’t matter to most people on the planet. Even during the ’90s and aughts, people in the developing world couldn’t afford a computer.
With the smartphone, we’ve shrunk the super- computer to a palm-sized device and made it available to everyone on the planet for $100. At Qualcomm, they predict that between 2013 and 2017, 7 billion smartphones will be sold. That’s amazing! That’s amazing! For a lot of those people, their smartphone will be the first computer they ever have, the first phone, the first connection to the Internet, the first way to learn online and organize politically and get accurate information and access to global markets. So the burden on the industry has increased. We have a responsibility to explain this to everybody. Then, the burden on the rest of society and business is to adapt and respond. In so many ways, it’s prime time for technology.
You wrote an op-ed piece celebrating bitcoin just before the largest bitcoin trading site, Mt. Gox, collapsed. Any regrets? Isn’t that the peril of PR?
Mt. Gox actually reinforced my thesis. The largest bitcoin exchange in the world went down in flames, and bitcoin was unaffected. It was a stress test of the system, and the transaction network just kept running. Contrast that with Lehman Brothers.
Bitcoin is the most powerful innovation in financial technology in decades. I compare it to the emergence of the Internet 25 years ago, when there was enormous confusion, skepticism, and scorn. People are going to look back at some of the things being said now, and they will be embarrassed.
Doesn’t this fear connect to the “class war” going on in San Francisco? It’s as if the world is still trying to come to grips with the power of technology.
That’s a great example. There’s still a view that, basically, technology is going to destroy all the jobs. That these computers and the Internet and robots are all going to be great, except we’re not going to have anything left for people to do. So everyone’s going to be poor.
The alternate view is that that view is entirely wrong. Ask a young person anywhere in the world, “Would you rather make your way with your parents’ technology or with a smartphone, a tablet, a PC, and an Internet connection; with online learning, access to online markets, the ability to find work online and to work remotely with teams around the world; with the superpowers that Facebook, Twitter, LinkedIn, and Google give you?” Obviously, they want the new tools, tools that augment their capabilities. How is that worse for the world? I don’t see how people will have all those tools and find nothing whatsoever useful to do with them.
In the past few months, you’ve been very public on Twitter about subjects like bitcoin, eBay, virtual reality, and anonymity. Why?
Twitter is an amazing conduit. It’s a direct pipeline to the entire community of founders, to the press, and to the customers our companies sell to. And I really enjoy it. I’m sort of a hybrid introvert/extrovert. I’m an introvert when it comes to face-to-face conversations. But something that lets you talk to 83,000 people while you’re wearing your boxer shorts and drinking a glass of Scotch? What could be better?