Tomorrow's producer (part 8)
← Part 7
In 2011, the article “Why Programs Eat the World” (“Why Software Is Eating The World” ★ ), published in the author's column in the Wall Street Journal, caused a wide discussion. Andrissen laid out the most optimistic tendencies of Silicon Valley. The article talks about how technology companies are cleaning up huge parts of the economy: books and movies, financial services, agriculture, national security - this “weeding” Andreinssen considers to be a healthful cleaning of his obsolete corpses. He developed the topic on Twitter: “Imagine a world in which all material needs are met for free, robots and synthesizers of matter ... Imagine that 6 or 10 billion people are not engaged in anything other than art, science, culture, research and training. What kind of world will it be? ”He places particular emphasis on how“ it is technological progress that will make reliable, widespread social protection possible ”.
Andreissen's telepathic method — an extrapolation of the future from current trends — may be the best available, but it also gave questionable results. Of the eighteen firms that received over a billion dollars in dizzying 1999–2000, eleven have withdrawn from or been eliminated during “fire sales” ★ , including: Home ★ , eToys ★ and Webvan ★ . A16z bought Zulily ★ online retailer with an estimated $ 1 billion, then its market capitalization soared to $ 5 billion, but has since been blown away again to $ 1.3 billion. Another billion-dollar company from the a16z portfolio, the purchase service with discounts Fab ★ , was recently sold for about thirty million dollars. On the other hand, the game company Slack ★ was already written off to zero, but then turned into a popular office messenger, which is now valued at $ 2.8 billion.
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The randomness and unpredictability of the ways in which the future becomes reality is an endless source of frustration in the Valley. Incubator President Y Combinator Sam Altman (Sam Altman ★ ) notes that his early investment in Stripe ★ now shows an estimated yield of 2000x. “So, ninety-seven percent of the return on investment in 2010 and 2011 is concentrated in one single investment that I could easily miss!” He complains. “I allow myself such reflections only on vacation. Because if I admit that ninety-seven percent of my time is wasted, which is from an economic point of view, I will not be able to continue my work. ”
The key to investing, says Andriessen, is the ability to be aggressive and the ability to overcome the instinct of pattern thinking. “Breakthrough ideas seem crazy, insane,” he explains, adding: “It’s hard to think that way. I see it in other people's body language, I feel it in myself. Sometimes I don’t care if the idea works, I can’t accept changes anymore. ” Andrissen believes that most of the obstacles to change are of a sociological nature: people are able to accept only a very limited number of new ideas at a time. “Ok, here's Google.” OK, now Twitter. But Airbnb !? Do people live in other people's homes, and this does not lead to mass stabbing? ”
A16z missed Airbnb ★ on round A in 2009. Friend Andreessen, a venture capitalist from the Greylock ★ fund Reed Hoffman (Reid Hoffman ★ ), who conducted this round, says: “As soon as something like Airbnb arises, Mark acquires a keen sense for such things, for an economic model. But this does not mean that he has an understanding of the psychology of the reasons why such models come to the fore. ”
Brian Chesky ★ , co-founder and CEO of Airbnb, told me: “In 2011, when we received our first user recognition, Mark and Ben turned 180 degrees and were very humble in communication. Mark said he now sees this through the lens of eBay. ★ : buy all sorts of stuff from strangers. ” A16z conducted Round B for Airbnb. Shortly after, the company was overwhelmed by headlines about how guests looted a house in San Francisco ★ . Well, of course, that is not a stabbing, but, according to Chesky: “It was a PR nightmare. Yesterday we were a company of ten people living in a three-room apartment, and we had no idea how to be a billion-dollar company. Mark came to our office in the middle of the night and read the letter I wrote to our community - this was Airbnb ★ Warranty. The two edits he made changed the company forever. I wrote that we give a guarantee of five thousand dollars to cover property damage, and he added another zero, which was insane. ” Andreessen also added a clause stating that a complaint should be attached to the police report, which, as he correctly suggested, would scare off fraudsters. “And he told me to enter my personal email address. He gave us permission to be insolent. ”
For a venture capital company, not the ability to take a punch, but the ability to attack is crucial. Steepness is everything. When Google Glass ★ appeared , a16z, like other funds, considered the possibility of investing in a project. Andriessen then openly declared: "You will spend everything to the penny, and you will not need anyone." Google abandoned this product in January ★ . But Andresen adds: so what? His thesis is that such a16z slips as Fab, Rockmelt ★ , Digg ★ and Kno ★ are not only an acceptable side effect of the risk assessment algorithm, but also a vital indicator of it. It is quite acceptable for the most part disgusting to predict the future, so long as in those rare cases when you were right, you are really right. Between 2004 and 2013, only 0.4 percent of all venture capital investments returned at a rate of 50x or higher. The real blunders are not those companies that you have in vain allowed into your portfolio — you lose no more than your investments on them — but those that you missed. There were many compelling reasons because of which a16z did not participate in the purchase of twelve percent of Uber ★ in 2011: at least the fact that a few hours were devoted to making a decision. As a result, the company's lost profit is estimated at more than three billion dollars.
The beauty of risky technology bets is that sometimes you are right - it’s possible that we’ll all be fools without Google Glass 3.0. When a blunder happens, Andriessen prefers to believe that his mistakes are not so weighty as in general his gift of foresight. And although he pretends to be completely uncomfortable for him, he prefers not to mention that in 2004 he became a co-founder of the social network Ning ★ . When I asked him about how the company had died, he admitted: "It did not work." And it can be easily touched by criticism. In one of a series of questions and answers, when the interviewer read him a snooty quotation from Sam Biddle (Sam Biddle), the author of the rumor website Valleywag ★ , Andrissen gestured how he jerked himself with a shoal of grass and pricking his veins, thereby characterizing Biddle’s mindset. Who in the eyes of the public becomes the face of the venture industry, he is under attack from several sides at once: even when you are philosophizing about the advent of a new century of democracy, you should also remember to make money for younger partners. Given that an ideal startup must achieve both of these goals, in reality, none of them is achieved. Venture capitalist Bryce Roberts (Bryce Roberts ★ ) told me: “You try to replay yourself when you want to believe that you are changing the world for the better. But how can I write a check for Fab and assume that some discounts on tzatskis change the world? ”▼
To be continued…
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 ← | Part 8
About the author: Ted Friend has been a regular contributor to The New Yorker since 1998. Author of various reports and investigations, multiple winner of awards in the field of journalism.
KDPV: andrebartholomeufernandes.com
In 2011, the article “Why Programs Eat the World” (“Why Software Is Eating The World” ★ ), published in the author's column in the Wall Street Journal, caused a wide discussion. Andrissen laid out the most optimistic tendencies of Silicon Valley. The article talks about how technology companies are cleaning up huge parts of the economy: books and movies, financial services, agriculture, national security - this “weeding” Andreinssen considers to be a healthful cleaning of his obsolete corpses. He developed the topic on Twitter: “Imagine a world in which all material needs are met for free, robots and synthesizers of matter ... Imagine that 6 or 10 billion people are not engaged in anything other than art, science, culture, research and training. What kind of world will it be? ”He places particular emphasis on how“ it is technological progress that will make reliable, widespread social protection possible ”.
Andreissen's telepathic method — an extrapolation of the future from current trends — may be the best available, but it also gave questionable results. Of the eighteen firms that received over a billion dollars in dizzying 1999–2000, eleven have withdrawn from or been eliminated during “fire sales” ★ , including: Home ★ , eToys ★ and Webvan ★ . A16z bought Zulily ★ online retailer with an estimated $ 1 billion, then its market capitalization soared to $ 5 billion, but has since been blown away again to $ 1.3 billion. Another billion-dollar company from the a16z portfolio, the purchase service with discounts Fab ★ , was recently sold for about thirty million dollars. On the other hand, the game company Slack ★ was already written off to zero, but then turned into a popular office messenger, which is now valued at $ 2.8 billion.
')
The randomness and unpredictability of the ways in which the future becomes reality is an endless source of frustration in the Valley. Incubator President Y Combinator Sam Altman (Sam Altman ★ ) notes that his early investment in Stripe ★ now shows an estimated yield of 2000x. “So, ninety-seven percent of the return on investment in 2010 and 2011 is concentrated in one single investment that I could easily miss!” He complains. “I allow myself such reflections only on vacation. Because if I admit that ninety-seven percent of my time is wasted, which is from an economic point of view, I will not be able to continue my work. ”
The key to investing, says Andriessen, is the ability to be aggressive and the ability to overcome the instinct of pattern thinking. “Breakthrough ideas seem crazy, insane,” he explains, adding: “It’s hard to think that way. I see it in other people's body language, I feel it in myself. Sometimes I don’t care if the idea works, I can’t accept changes anymore. ” Andrissen believes that most of the obstacles to change are of a sociological nature: people are able to accept only a very limited number of new ideas at a time. “Ok, here's Google.” OK, now Twitter. But Airbnb !? Do people live in other people's homes, and this does not lead to mass stabbing? ”
A16z missed Airbnb ★ on round A in 2009. Friend Andreessen, a venture capitalist from the Greylock ★ fund Reed Hoffman (Reid Hoffman ★ ), who conducted this round, says: “As soon as something like Airbnb arises, Mark acquires a keen sense for such things, for an economic model. But this does not mean that he has an understanding of the psychology of the reasons why such models come to the fore. ”
Brian Chesky ★ , co-founder and CEO of Airbnb, told me: “In 2011, when we received our first user recognition, Mark and Ben turned 180 degrees and were very humble in communication. Mark said he now sees this through the lens of eBay. ★ : buy all sorts of stuff from strangers. ” A16z conducted Round B for Airbnb. Shortly after, the company was overwhelmed by headlines about how guests looted a house in San Francisco ★ . Well, of course, that is not a stabbing, but, according to Chesky: “It was a PR nightmare. Yesterday we were a company of ten people living in a three-room apartment, and we had no idea how to be a billion-dollar company. Mark came to our office in the middle of the night and read the letter I wrote to our community - this was Airbnb ★ Warranty. The two edits he made changed the company forever. I wrote that we give a guarantee of five thousand dollars to cover property damage, and he added another zero, which was insane. ” Andreessen also added a clause stating that a complaint should be attached to the police report, which, as he correctly suggested, would scare off fraudsters. “And he told me to enter my personal email address. He gave us permission to be insolent. ”
For a venture capital company, not the ability to take a punch, but the ability to attack is crucial. Steepness is everything. When Google Glass ★ appeared , a16z, like other funds, considered the possibility of investing in a project. Andriessen then openly declared: "You will spend everything to the penny, and you will not need anyone." Google abandoned this product in January ★ . But Andresen adds: so what? His thesis is that such a16z slips as Fab, Rockmelt ★ , Digg ★ and Kno ★ are not only an acceptable side effect of the risk assessment algorithm, but also a vital indicator of it. It is quite acceptable for the most part disgusting to predict the future, so long as in those rare cases when you were right, you are really right. Between 2004 and 2013, only 0.4 percent of all venture capital investments returned at a rate of 50x or higher. The real blunders are not those companies that you have in vain allowed into your portfolio — you lose no more than your investments on them — but those that you missed. There were many compelling reasons because of which a16z did not participate in the purchase of twelve percent of Uber ★ in 2011: at least the fact that a few hours were devoted to making a decision. As a result, the company's lost profit is estimated at more than three billion dollars.
The beauty of risky technology bets is that sometimes you are right - it’s possible that we’ll all be fools without Google Glass 3.0. When a blunder happens, Andriessen prefers to believe that his mistakes are not so weighty as in general his gift of foresight. And although he pretends to be completely uncomfortable for him, he prefers not to mention that in 2004 he became a co-founder of the social network Ning ★ . When I asked him about how the company had died, he admitted: "It did not work." And it can be easily touched by criticism. In one of a series of questions and answers, when the interviewer read him a snooty quotation from Sam Biddle (Sam Biddle), the author of the rumor website Valleywag ★ , Andrissen gestured how he jerked himself with a shoal of grass and pricking his veins, thereby characterizing Biddle’s mindset. Who in the eyes of the public becomes the face of the venture industry, he is under attack from several sides at once: even when you are philosophizing about the advent of a new century of democracy, you should also remember to make money for younger partners. Given that an ideal startup must achieve both of these goals, in reality, none of them is achieved. Venture capitalist Bryce Roberts (Bryce Roberts ★ ) told me: “You try to replay yourself when you want to believe that you are changing the world for the better. But how can I write a check for Fab and assume that some discounts on tzatskis change the world? ”▼
To be continued…
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 ← | Part 8
About the author: Ted Friend has been a regular contributor to The New Yorker since 1998. Author of various reports and investigations, multiple winner of awards in the field of journalism.
KDPV: andrebartholomeufernandes.com
Source: https://habr.com/ru/post/293186/
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