Tad Friend, writing in The New Yorker, pens a fascinating profile of the venture capitalist Marc Andreessen (and the firm which he co-founded and is currently a general partner, a16z). A representative snippet of the man:
Something of the transporter beam clings to Andreessen, a sense that he just rematerialized from a city on the edge of forever. He’s not great at the basics of daily life: directions confound him, because roadways aren’t logical, and he’s so absent-minded about sunglasses that he keeps a “reload station” with nine pairs on his hall table. Perhaps Edison haunts his conversation because Andreessen is a fellow-tinkerer, except that his gadgets are systems and platforms, and his workshop is his own mind. He regularly reprograms his appearance and deportment—his user interface—to suit his present role, and friends refer to chapters in his life as versions of an operating system: “Marc 1.0,” “Marc 2.0,” and so on. A charismatic introvert, Andreessen draws people in but doesn’t really want them around. Though he has a crisp sense of humor, it’s rarely deployed at his own expense. He hates being complimented, looked at, or embraced, and has toyed with the idea of wearing a T-shirt that says “No hugging, no touching.” He doesn’t grasp the protocols of social chitchat, and prefers getting a memo to which he can e-mail a response, typing at a hundred and forty words a minute. He didn’t attend Netscape’s twentieth-anniversary celebration, because it combined two things from which he recoils: parties and reminiscing.
Curious what would have become of Facebook if it weren’t for Marc’s advice to Mark Zuckerberg:
In 2006, Yahoo! offered to buy Facebook for a billion dollars, and Accel Partners, Facebook’s lead investor, urged Mark Zuckerberg to accept. Andreessen said, “Every single person involved in Facebook wanted Mark to take the Yahoo! offer. The psychological pressure they put on this twenty-two-year-old was intense. Mark and I really bonded in that period, because I told him, ‘Don’t sell, don’t sell, don’t sell!’ ” Zuckerberg told me, “Marc has this really deep belief that when companies are executing well on their vision they can have a much bigger effect on the world than people think, not just as a business but as a steward of humanity—if they have the time to execute.” He didn’t sell; Facebook is now worth two hundred and eighteen billion dollars.
I empathize with this philosophy for the world:
“I could never tolerate not knowing why…You have to work your way back to figure out the politics, the motivations. I always stop when I get to evolutionary psychology, and why we have tribes—oh, O.K., we’re primates cursed with emotions and the ability to do logical thinking.”
This is a key paragraph on how venture capitalism is more about errors of omission:
In venture, it’s not batting average that matters; it’s slugging average. Boldness is all. When Google Glass appeared, a16z joined a collective to seek out investments, and Andreessen declared that, without the face shield, “people are going to find they feel, basically, naked and lonely.” Google withdrew the product in January. But, he would argue, so what? His thesis is that such a16z failures as Fab and Rockmelt and Digg and Kno are not merely a tolerable by-product of the risk algorithm but a vital indicator of it. It’s fine to have a lousy record of predicting the future, most of the time, as long as when you’re right you’re really right. Between 2004 and 2013, a mere 0.4 per cent of all venture investments returned at least 50x. The real mistakes aren’t the errors of commission, the companies that crash—all you can lose is your investment—but those of omission. There were good reasons that a16z passed on buying twelve per cent of Uber in 2011, including a deadline of just hours to make a decision. But the firm missed a profit, on paper, of more than three billion dollars.
A must-read all the way through if you’re at all interested in tech, Silicon Valley, or entrepreneurship.