Marc Andreessen was recently recognized as a Wired Icon and pioneer of the internet. Given his 20+ year history within the industry as an entrepreneur and now venture capitalist, his perspective has proven to be an insightful one; and so I read the transcript from his interview Chris Anderson.
At one point, Andreessen said something that I think is pretty powerful for innovators and business:
But making it [the internet] easier to use also made it more apparent how to use it, all the different things that people could do with it—which then made people want it more. And it’s also clear that we helped drive faster bandwidth: By creating the demand, we helped increase the supply.
This quote is dense. It is a comment on multi-sided business models. It is also a comment on the power of user-centered and service (since we cannot design experiences) design.
Another interesting strategic business lesson to learn came is Andreessen’s comment on why the LoudCloud business didn’t work:
Well, it worked beautifully right up to the point when all the startups went bankrupt, and then all our big clients decided they didn’t have to worry about competing with the startups anymore. After that, it went completely sideways. ….
and the pivot:
So we just went back to basics and we said, OK, we couldn’t make it work as a service provider, but we think we can make it work as a software company, selling the back-end software to manage big networks of servers. We changed our name to Opsware. That ultimately worked, as a business.
On the importance of timing to market adoption and overall success of an innovative product/business:
Andreessen: We see [social] playing out in retail, where ecommerce is becoming a group activity. Long before Ning, actually, in 1999, I invested in a company called Mobshop, which was Reed’s law applied to commerce, through group sales. It didn’t work back then. But 10 years later, I invested in Groupon, because I could see it was the same idea—finding, on the fly, a group of people who want the same product and using their massive numbers to command steep discounts. …
Anderson: What changed between 1999 and 2009 that made Groupon—and Facebook, and all these other profitable consumer Internet companies—possible?
Andreessen:A big part of it was broadband. Ironically, it was during the nuclear winter, from 2000 to 2005, that broadband happened. DSL got built out, cable modems got built out. So then you started to have 100, 200, 300 million people worldwide on broadband.
How society and culture changes influence success of innovations:
Andreessen: I often wonder if we should have built social into the browser from the start. The idea that you want to be connected with your friends, your social circle, the people you work with—we could have built that into Mosaic. But at the time, the culture on the Internet revolved around anonymity and pseudonyms.
On the power of optimism or the lack of cynicism, Andreessen comments that this is one of the reasons Zuckerberg and Andrew Mason were able to pursue their ideas (i.e. they weren’t burned by the previous dotcom bust).
On which industries are closest on the horizon to being improved by internet technologies:
Andreessen: The next stops, I believe, are education, financial services, health care, and then ultimately government—the huge swaths of the economy that historically have not been addressable by technology, that haven’t been amenable to the entrance of Silicon Valley-style software companies. But increasingly I think they’re going to be.
On “software expressed as hardware”:
Andreessen: … There’s a lot of hardware engineering that goes into it, but 90 percent of the intellectual property is software. So we look at Lytro and we look at Jawbone and we see software expressed as hardware—highly specialized hardware that will be hard to clone.
