Marc Andreessen Says Now’s the Time to Build Companies Like It’s 1999
Few people have the perspective of living and working in the tech industry that venture capitalist Marc Andreessen has. Founder of the browser company Netscape and then of the software company LoudCloud, later renamed Opsware, he’s seen the boom and bust cycles and the shrill choruses of hype (tempered by reality) that go with them. Now, as one of the two primary partners in the venture capital fund Andreessen Horowitz, he’s playing the completely different role of shepherding what he hopes are the next great tech companies.
Andreessen (pictured from a legendary Time Magazine cover on which he appeared in the late 1990s) was the first speaker today at Fortune Magazine’s Brainstorm Tech conference being held in a very rainy — but still beautiful — Aspen, Colo. Asked by interviewer Andy Serwer what he’s excited about right now, Andreessen looked back.
“It feels like a lot of the work we put into building the PC industry and the Internet and now the smartphone industry, a lot of that work got us to the point where we have the Internet in everyone’s hands,” he said. “It seems like now the game is really beginning, and we’re going to see what the great killer apps and the great Internet franchise businesses are that are going to be built. That was the conversation that everyone was having in 1999. We were all just early. Back then there were only 50 million people using the Internet versus two billion, and now and we’re on our way to five billion smartphones. Now we have the chance to build the businesses that we thought we were going to build in 1999.”
Asked about Andreessen Horowitz’s huge investment last week in GitHub, he referred to his op-ed in The Wall Street Journal about how software is eating the world and described GitHub as “software eats software development.” Another recent investment in Solum he described as “software eats the soil sampling business.”
From there he pivoted to an argument that the consumer electronics industry is coming back to the U.S. Yes, it’s true, he says, that products like iPhones and tablets get assembled in China, but they often include components made in the U.S. and run software that more often than not was designed in the U.S. “You have to ask where the profits go, and they really go to the U.S. The assembly part is really an arbitrage of labor and transport costs.”
And while Andreessen Horowitz has tended to invest more heavily in software plays, it does have a few bets on hardware. Lytro, which demoed at last year’s AsiaD conference, and Jawbone are two examples.
Andreessen said the firm has made an investment in a third hardware company that he declined to name. “We’ve recently made a stealthy investment that we can’t talk about, but hopefully next year everyone will get to take one home to the kids.”