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Selected remarks from Marc Andreessen to Peter Thiel’s Stanford class...


Stashed in: Founders, Venture Capital!, Peter Thiel, Awesome, Growth Hacks!, @hblodget, @ripemp

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Thank you Rip Empson for taking great notes.

Below are my favorites. Andreessen's words are in italics...

Is software eating the world?

"All this is reflected in the Andreessen Horowitz investment thesis. We don’t do cleantech or biotech. We do things that are based on software. If software is the heart of the company -- if things would collapse if you ripped out your key development team -- perfect. The companies that will end up dominating most industries are the ones with the same set of management practices and characteristics that you see at Facebook or Google. It will be a rolling process, of course, and the backlash will be intense. Dinosaurs are not in favor or being replaced by birds."

Is your perspective different as a VC than as an entrepreneur?

"The big, almost philosophical difference goes back to the timing issue. For entrepreneurs, timing is a huge risk. You have to innovate at the right time. You can’t be too early. This is really dangerous because you essentially make a one-time bet. It’s rare are to start the same company five years later if you try it once and were wrong on timing. Jonathan Abrams did Friendster but not Facebook."

"Things are different with venture capital. To stay in business for 20 years or more, you have to take a portfolio approach. Ideas are no longer one-time bets. If we believe in an idea and back the company that fails at it, it’s probably still a good idea..."

Why do you pass on entrepreneurs?

The number one reason that we pass on entrepreneurs we’d otherwise like to back is focusing on product to the exclusion of everything else. We tend to cultivate and glorify this mentality in the Valley. We’re all enamored with lean startup mode. Engineering and product are key. There is a lot of genius to this, and it has helped create higher quality companies. But the dark side is that it seems to give entrepreneurs excuses not to do the hard stuff of sales and marketing. Many entrepreneurs who build great products simply don’t have a good distribution strategy. Even worse is when they insist that they don’t need one, or call no distribution strategy a “viral marketing strategy.”

Repeat after me: Product is easy; distribution is hard.

Once you have distribution figured out, investors will beat a path down to your door.

See also: Software companies are poised to take over large swathes of the economy.

Number three is precisely why you need to build a great team around you.... And ..... Starting from the user experience first and building backwards towards the technology needed to support that experience helps ensure that the product is never developed in isolation from a great marketing and distribution plan.

I give you props for saying this Louise.

In practice I find it's really really hard to rise above the noise. Only a few succeed in doing so.

Blodget credits A/H with supporting product focused founder CEO's in his excellent piece on Zuck:

http://nymag.com/print/?/news/features/mark-zuckerberg-2012-5/

I think it's an salient distinction: opt for founder CEO's when product is the issue, professional CEO's when you need to optimize/exploit maximally (and distribution would fall therein.)

A/H seems focused on founder CEO's but knows they need enough of the pro skills in there to be able to survive. Seems like a very good strategy.

Thoughts?

It is a great strategy except for one thing: There's only one Mark Zuckerberg.

If it was easy to find great founder CEOs, more people would do it.

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