Marc Andreessen with Charlie Ross – Innovation, mobility, Social Media & Viral platforms


A very informative interview – Charlie asked interesting questions and Marc has equally insightful answers & discussions.

Video and full text at http://seekingalpha.com/article/121915-marc-andreessen-on-charlie-rose-internet-and-new-media-companies

For the attention challenged my bullet notes:

  1. Future of news papers

    • Two words – kill it ! Stop Printing newspapers !
    • Fundamental structural change happening in the newspaper business. It is happening in all branches of the media industry but the newspaper is at the front
    • Investors have seen thru the transition. But the industry is still trying to survive.
    • An interesting analogy : Chronic pain vs acute pain – How many years of chronic pain vs one year of acute pain for transition ;o)
    • Acute pain will be acute but inevitable. But need to build for future.
    • Wrote a blog New York Times deathwatch ! “What is with you & NY Times ?” Charlie asks. Blog post no longer there
  2. Social Media Industry

    • Facebook: Facebook 175 million users, half of them use it every day; many use it 50 times a day. On its way to 500 million users !  Mark is on the board of directors. 135 million active users  equates to 6th most populous country in the world !
      They are taking a more organic growth model if they had taken the normal advertising, they would make been over a billion dollar in ad revenue. Facebook has tremendous potential for example could monetize the home page just a question of how they choose to extract the value. They want to build a long term business, eyes way on the horizon and big vision (to connect everybody on the planet (what about beyond?))
    • Ning: Ning has crossed 20 million users adding 2 million users a month. There are a million social networks on Ning !
    • YouTube, Facebook et al – under-monetized assets
    • Twitter as a real-time electronic nervous system – says you could twitter when a plane lands in water. May be people did, but I wouldn’t be twittering if my plane crash landed on water ;o)
      Story of twitter – Evan Williams had a podcasting company ; raised ~3.5 million; didn’t succeed and returned all (Evan made up the difference!) Twitter was a side business at that time, it took off. So they changed focus, closed the podcast operation and focused on Twitter
    • Social networking is here to stay and it’s potential is just beginning. Marc is big on “viral” applications
    • The Obama campaign employed the social networking approach and philosophy as the engine for fund raising, volunteer coordination
    • Viacom suing YouTube wrong strategy – They should be using it to distribute their videos ! Every time there is a Viacom video in YouTube, there should be a buy button! Distribution channel that bring traffic to their properties !
      Napster – 20 million people showed up. If music industry had a buy button they would have been successful. When people line up, find a way to monetize it
  3. Innovation

    • More opportunity than ever before – Cascading effect – every new layer of technology makes another layer of innovation possible and that keeps rolling
      There is an interesting discussion of Intel’s transformation from a memory chip maker to a microprocessor maker in around 1985; was not an obvious bet to make, but they had to do it to escape the overhang of Japanese memory makers who were crushing Intel.
    • Innovation Cycle: Silicon graphics was out of business due to Intel’s microprocessor and that freed up engineers to work on nVidia/ATI which in-turn is posing challenges to Intel in video and graphics business
  4. Mobility, iPhone & the new landscape

    • Usually people talk about a new idea for long time, finally the technology comes together and the thing takes off – internet in ‘95 is an example, mobile is in that stage now
    • iPhone is a template every other vendor will copy. For first time iPhone real os, sdk and an application delivery infrastructure – 1st time all of these over a fast network
    • iPhone itself is fantastic – beams from the future as Marc characterizes it – and inspired a lot more creative thinking around it
    • He mentioned an investment of his Qik [http://qik.com/], where any phone can be the source of live streaming video to any device or other phone; will be very effective as phones with HiDef videos capability in 2 years
  5. The Magic Business

    • Bill Joy once said : some products have the “it works” feature !
    • There were more than thirty-five search ventures before Google; but Google search really worked in terms of the core technology plus they unlocked the ad business model.
    • Marc characterizes this as the “Magic Business” which happens once in 10 years or so – Cisco was a magic business, intel was one, so was Microsoft and even Amazon. With Magic Business, one goes for scale and size. People had written AMZ off in 2002, but Bezos had the fortitude and foresight to stick with the long vision
  6. New form factor

    • Marc believes Kindle is the new form factor along with iPhone and netbook; each with a different but effective purpose.
    • Kindle is the web-pad, a 7” form factor, the next opportunistic screen size which people will for video, telephony and conferencing.
    • Most probably the next new product from Apple would be this 7” e-Book, conference, web appliance !
  7. New VC Firm with a slightly different focus

    • Marc is starting a new VC fund with Ben Horowitz. They have invested their own money in the last 3 years in 36 companies
      They focus on smaller companies – 100K-200K; may be 500K to million. Marc is of the opinion that a whole generation of startups do not need very much money (“very much” defined as  200K – 1.5 million)
    • His new VC firm’s name – Andreessen Horowitz ; can be a law firm or a vc firm! Abbreviates to A to Z and will get listed first in yellow pages – could be a good name for a tow truck business as well!
  8. Impact of the recent economy related challenges

    • During the 2001 recession, we were the nose of the dog , this time we are the tail. Companies on valley do not generally run on debit financing and so affected the least. But the big recession will impact salesSilicon Valley will be the tragic beneficiary from damage in other industries – like banking et al
    • <KS>
      • I thought the discussion on new types of banks was a little asymptotic but the concept of new way of just-in-time credit scoring and credit provisioning by Bill me Later is interesting.
      • On a tangential discussion, Marc was referred to “Good Banks, bad banks and ugly Assets” and ideas by Paul Romer
    • </KS>
    • Innovation will continue tons of innovation will be bottled up in the next 5 years. Companies like Google, YouTube and Facebook developed thru the last bust. Look for return in 7-10 years from today’s funding.

Updates

  1. Good Comments. Thanks.
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4 thoughts on “Marc Andreessen with Charlie Ross – Innovation, mobility, Social Media & Viral platforms

  1. I like the idea about the “new banks”. Great stuff. Just wonder if a bunch of new banks sprung up, wouldn’t everyone move their cash over and break the current banks though?

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