# Ben & Marc: Why Everything Is About to Get 10x Bigger **Channel:** a16z **Source:** https://www.youtube.com/watch?v=Kdql4I-NJ0M **Transcript page:** https://www.withtranscript.ai/video/Kdql4I-NJ0M ## Chapters - 0:00 — Opening Remarks and Media Ecosystem Evolution - 2:15 — Free Speech Advocacy and Platform Investments - 4:29 — Substack Investment and Media Liberation Case - 10:08 — Market Sizing and AI's Transformative Role - 17:47 — Venture Mechanics and a16z Entrepreneur Support - 23:49 — a16z Culture, Reputation, and Competitive Advantage - 34:51 — Art of Venture Investing and Future Outlook ## Transcript **[0:00] Speaker A:** What virtually everybody finds, including Elon Musk, is the real world is just really, really big and really, really messy. **[0:06] Speaker B:** The The AI thing is so interesting, right? Because from a technology perspective, it feels like you can build products pretty immediately that are going to win our entire. **[0:12] Speaker C:** Way Way of doing everything as humans, we think is going to change. We reinvented the computer, and the new computer is far better than the one that we have been building on for the last 50 or so years. **[0:24] Speaker A:** The purpose of building the dominant venture brand was precisely to be able to have the companies be able to borrow that at the most critical points in their development so that the companies can kind of force in the world to slingshot, to basically build their own force. **[0:34] Speaker C:** You You cannot join the firm unless you sign the culture document. **[0:38] Speaker B:** If If you had to pick a thing. **[0:39] Speaker C:** What What are you compounding reputation. **[0:45] Speaker B:** We have a very special guest, Packy McCormick, who just wrote an excellent profile of a six and Z. Packy, thanks for coming on the podcast. Thanks for having me. **[0:52] Speaker A:** Pack, I want to start by saying thank you for the amazing piece. Like, it's just like, incredible. Like, absolutely incredible. So we just, like, really appreciate all the work that you put into it, because that was a big one. **[1:02] Speaker B:** Thank you. I mean, I appreciate being able to tell this story. It's such a cool one. And I appreciate getting to work with you guys on it. Everybody, welcome to the Ben and mark show, first of 2026, and we're now getting into how the media ecosystem has changed. We talked about this great, great Tad friend profile in the New Yorker in 2015 that I referenced in the piece that I wrote on a 16z this past week saying that that kind of kicked off or was the last kind of point in an era where journalism cared about free speech. I think Mark will do a better job kind of summarizing what happened over the. Now we're at the end of that point, and I was asking to what extent Mark thinks that he and kind of a few people who stood up against this actually kind of shifted back to this anarchic or liberated view of the press or relationship with the media that we have now. **[1:50] Speaker A:** Yeah, and I was just saying I think you could describe what's happening kind of going forward, the information environment being. You could use kind of three words. You could say uncontrolled. It's maybe the neutral word. You could say anarchic is the negative word. You could say liberated is the positive word. You know, in terms of freedom of speech, freedom of thought, you know. And I would say, at least in the U.S. i think generally on the Internet and then, you know, we can talk about what other countries are doing. But at least in the U.S. you know, we're clearly entering a much more free speech world. **[2:15] Speaker A:** So I should start by saying, like, I don't, I don't think I should claim any moral heroism at all here, like at all. Because, you know, you know, I mean, I can. I have my own version of my own story going all the way back to. I turned out one of my claims to. I turned down the opportunity at the time in 1993 to implement censorship in the web browser, which would have been a completely different and very dystopian world. So I don't know, maybe I get a little bit of credit for that, but I think for the last decade I was kind of on the same ride as everybody else. And I've been on the Facebook board since 2007. So I kind of went through the entire kind of crazy roller coaster that that company went through over the last decade. And then we've been involved in lots of these companies. **[2:53] Speaker A:** I was an angel investor in Twitter, angel investor in LinkedIn. They both became kind of key parts of the censorship machine at certain points. And so I don't want to claim my huge moral heroism. I do think a couple things. One is obviously Elon's purchase of Twitter obviously was like a gigantic turning point. I also want to give just like enormous credit to the Substack guys. And there we're very proud because we were the original investor and we're the largest outside investor in Substack. And I think they did a really, really great job holding the line of freedom of speech. And I would tell you, under enormous. **[3:23] Speaker C:** Pressure, especially a very consistent and totally principled Stanton. **[3:31] Speaker A:** Yeah, that's right. And they, they got a few, you know, I don't think people remember this or not, but I mean, they got, they got really lit up, you know, by, by, by a lot of the sort of, you know, anti speech forces for, you know, I mean, the whole litany of, you know, kind of standard accusations of, of, of just being absolutely horrible. And yeah, they, they, they stuck to the principles the whole time. And then they, you know, you know, at least with Elon acts like he's Elon. And so when, when, when he wants to go to war with like, you know, somebody who's like trying to get him to censor more like, he does it in a very kind of force, you know, public, visible and forceful way, you know, the substack, you know, substack still, you know, a Younger company. And so they don't have that level of kind of just throw weight in the world yet. **[4:06] Speaker A:** And so they have the harder version of the challenge. And they had to fight, you know, a whole bunch of fights, including, you know, fights that aren't even public, you know, to basically keep the service with high integrity. **[4:15] Speaker B:** So I think a good place to kind of talk about a bunch of the themes that we covered in the. In the piece, one of which is, I mean, the Substack investment. I remember at the time I was on Substack, my career was starting because of Substack, and I still at the time thought it was kind of a crazy investment. **[4:29] Speaker B:** Were you thinking about it from the perspective of this is going to be a great returner, this is something that is good for the future? Is it a mix of the two of those things? And then to what extent have you allowed Substack to fight that fight by being on their side that they wouldn't have been able to do if you weren't there? **[4:45] Speaker A:** Yeah, so we never make investments for just purely kind of social or political reasons. So the goal, obviously, always as sort of fiduciaries, is to generate returns. And so in the main business. And so we always invest with the intention that the company that we invest in has the opportunity to become what we call kind of a cornerstone franchise, you know, in the industry and an important force in the world. And, you know, I said we certainly believe that a substack at the time. And, you know, we. We believe that more than ever today. So. So I think that's true. But. But I also think I, you know, I, you know, I think this is kind of the magic in. In a lot of what we do, you know, at Silicon Valley, which is I, I think the companies, in many, not in every case, but in many cases, the companies that become the best version of themselves also become the most successful businesses. **[5:25] Speaker A:** And, And I think Substack is a great example of that. And they're. And. And in Substacks. Well, I say a very, very, very good example of that. Because if Substack is making its writers successful, then it's making itself successful. Right. And so it's got this just like extremely direct alignment of interest between its success and its writer success. And then as a consequence of that, if its writers are successful, kind of by definition, those writers, readers are successful. They're getting what they want. And so I would say there were sort of a bunch of reasons we invested in Substack. One was just we fell in love with the Guys, and you probably know the guys, they're easy to fall in love with. So that was the easy part. And then, look, I have been around you. We had been around, you know, the web going all the way back. **[6:06] Speaker A:** And then, you know, particularly the, you know, the kind of golden age of blogging, you know, was kind of this kind of very, you know, special time. And you know, you know, and blogging really, you know, I think, you know, maybe gets underestimated because maybe there was no single company that kind of got full credit for it or something. But, you know, it really create the phenomenon of blogging created an enormous amount of intellectual content, you know, that basically was not going to exist otherwise. And then it just, you know, blogging kind of just always had, it had a series of problems because there was no single company behind it. But you know, one of the problems was bloggers just could, it was just very hard for bloggers to make money. **[6:37] Speaker C:** Right. **[6:38] Speaker A:** And so, you know, the substack guys basically said, well, we're, you know, we're going to do that, but we're, you know, we solved the economic model. People are ready to pay now for content, and this makes sense. And then, you know, there was this chicken and egg thing right up front which was like, well, you know, can you really see that, you know, the Internet's a wash with content. People aren't paying for almost any of it. Like, are they really going to, you know, you have to kind of squint and kind of say, okay, are people actually going to pay for any of the stuff that they're getting today? And I think the thing that in that case that we had faith in was basically this could be what we call a supply driven market, which is if you provide the modernization capability, then you're going to bring into existence writers and content that don't exist today. **[7:13] Speaker A:** And that is going to create new demand that's not visible today. And then that demand is going to come back around and it's going to incent more writers and more content. And so it was basically a bet that there's like an entire generation of high quality content that doesn't exist because the monetization mechanism doesn't exist. And that's certainly what Kristen has and his partners believe. And I think that's, that's absolutely what's proven out. And so, yeah, I think it's like a great example of founders that like really see a future that doesn't exist yet. And it's obvious to them. And unfortunately, in that case they were able to you know, convince us whenever we really screw up, it's because there's a founder who can see the future. And they come and they sit in our office, they tell us what the future is, and we say, yeah, I don't really buy it. **[7:51] Speaker A:** Right. And then for the next 30 years, you know, we have to read about the, you know, glorious success of this thing as that future actually develops. And, like, that really sucks. And I don't like to talk about those. But I will say, you know, Substack is. Yeah, maybe. Maybe they're just really good at sales, but they fully convinced us, and I'm really thrilled that that's what's happening. **[8:06] Speaker C:** They were kind of ahead of the. The kind of change from old media to new media in that, you know, as the brand moved from the New York Times or the Wall Street Journal to the actual writers themselves, Substack was like a massive enabler for that. And, you know, they created this thing which they call the non fungible writer, which is, you know, like, how many things in the newspaper could anybody write? And including AI, by the way, and how much is truly interesting and valuable? And they really wanted all the truly interesting and valuable things to be able to build their people to build their own brands and their own businesses on Substack. And that also turned out to be very true. **[8:51] Speaker A:** Yeah. And that was where Hamish, in particular, turned out to be really critical on their team. And he and I had a conversation early on this where I was like, well, I don't know, are these people ever going to leave their publications? Are they ever going to actually write content that's, you know, like, you know, when Substack was gearing up, it's when, in my view, the press kind of became this kind of extreme and negative monoculture. And so I was like, all right, you got, you know, because he's like, you got all these writers kind of trapped at these places. And I'm like, well, are they really trapped? Like, are they, you know, are they in jail or have they built the jail? Like, what? You know, like. And if they leave, are they going to be any different? And he's like, look, if their only option to basically put food on the table is to work for a publication that basically, you know, requires them to write a certain way, then they're going to write that way, you know, because they need to pay the bills. **[9:30] Speaker A:** But he said. He basically said, I guarantee you that there's a lot of these folks, you know, where if they had an independent path they would take, you know, they would be thrilled to be able to, you know, maybe break themselves out of jail. And they would be thrilled to, you know, write about things, you know, from different angles and have different takes on things. And, you know, you'd see this basically this, you know, this liberation phenomenon take place where you'd have actually many different kinds of voices even coming from people where you wouldn't expect it based on the work that they did for, you know, the New York Times or whoever. And of course he was 100% right. **[9:57] Speaker B:** You can see a world where, because it attracts kind of all of the best writers from all of these different places who can build their own businesses. Substack becomes 10 times larger than any of the media organizations that it replaces. **[10:08] Speaker B:** I love the email that you sent to Ali at Databricks, Ben, where you talk about the fact that the business was underselling itself. He was underselling the business and it was going to be 10 times bigger than Oracle. So $2 trillion. I want to understand the mechanism of that. Do you think that happens every generation? That the new companies are 10 times bigger? Why does that happen? Is it just software? **[10:31] Speaker C:** Yeah. So on that one it was actually pretty simple because if you compared the on premise software companies to the cloud software companies, so compare PeopleSoft to Workday or compare Siebel software to Salesforce, the cloud version was just ten times bigger. And Oracle was kind of the on premise version of databricks, you know, kind of, you know, rough analog, things are different, you know, data is bigger and so forth. But if you look at like who is going to be the data kind of provider in the cloud, the provider of technology to manage your data in the cloud, it was going to, I mean, I was very confident databricks would win that. And so then if you say, well, what's the market size of that? And by the way, you know, when I said that AI wasn't as big as it is, so I think that that's helping my prediction. **[11:27] Speaker C:** But you know, like it was just clearly going to be 10 times bigger. And I was like, ali, why are you trying to convince this candidate that you're going to be worth $10 billion? Like that's what are you even talking about. But you know, Ali is super paranoid, so, you know, God bless him. So, you know, those are kinds of things. And look, you have to know your entrepreneur. I mean, I think this is, you know, one of the things that I think Mark does very well is like, you know, that advice isn't advice you give to every entrepreneur. It's you know, it was very. Worked well specifically for him. And I think that, you know, that's always the case. Like it's a very psychological game running a company. And so you have to kind of tap into that person's particular psychology to kind of change the trajectory of what the company is doing into the right direction. **[12:25] Speaker A:** And I'd also add packing on the substack point. I think substack could be like a thousand times the size of the existing content industry, whatever you want to call it, media, news industry, the collective kind of value. And the reason is because, and you're an example of this yourself. So my whole life, so I'm in mid-50s and so I grew up when I was a kid and teenager, the moral panic of the era was television. And it was just this endless litany of sort of social criticism, you know, from kind of, you know, fancy people basically saying, you know, consumers are, you know, basically normal people are idiots. They just want to sit in front of the boob tube. They just want to like be couch potatoes. You know, the line everybody used at the time was Americans watch six hours of TV a day and then you turned on TV and you just saw this. **[13:05] Speaker A:** They have this term, the vast wasteland of, you know, game shows and bullshit. And it was just like this like very dystopian kind of thing of just like, people are just morons. And then, you know, the Internet version of that is of course, you know, you know, that kind of moral panic has transferred straight over onto the Internet in the form of, you know, of course, you know, short form videos. **[13:26] Speaker C:** And it's just Cats playing the piano was the original one, right? **[13:29] Speaker A:** Yeah, exactly. Cat cat videos. By, by the way, I'm an aficionado of cat videos. I do not look down on cat videos whatsoever. AI cat videos are my current favorite genre of any form of, of entertainment. So I will. **[13:38] Speaker C:** The AI cat videos are very good. **[13:40] Speaker A:** I will, I will. Yes, Ben can confirm. I send her. I send around a lot of AI cat videos. However, there is an enormous market for just like mass media just for like whatever, you know, for whatever game shows or sitcoms or you know, soap operas. They're modern versions of those. And there's a giant, you know, mass, mass, mass, mass media market for, for cat videos. But this goes back to these idea of supply driven market. There's also, I think, just like enormous latent demand for actual smart, high quality stuff and particularly in Media and every kind of media. And I think the issue, the issue is not lack of demand. I think the issue is lack of supply. Because like, this guy goes back to, you know, kind of Consumer Marketing 101, which is concern. People don't know what they want until it's given to them. **[14:19] Speaker A:** Right? You know, nobody ever asked for a Macintosh, nobody ever asked for an iPhone. Like, you know, these things had to be designed and built, you know, provided on the supply side before the demand materialized. And then the demand, of course, turned out to be, you know, far higher than anybody, anybody expected. And I think that that same thing is exactly true of media. I think a great early existence proof of this was the success of long form podcasting, you know, which is, I remember my early conversations with some of the early long form podcasters and they're like, it's the strangest thing we've ever seen because everybody tells us that the consumers have short attention spans. But, you know, people are literally watching three hour podcasts and we get the analyt and people are watching all the way to the end of the three hour podcast. **[14:54] Speaker A:** And so I view this very much as like, you know, this is one of these classic markets that's a barbell, which is, yeah, you have a certain amount of whatever, just, you know, whatever, you know, mainstream, you know, sort of mainstream whatever, you know, seller, whatever on the one side. But you have this massive sort of untapped market for high quality content in basically every domain. And they're just, you know, and then again, you know, technological transformation. The existing structure of the media company was a structure that was designed for a world of centralized media. You need a new structure today. And you know, of course that's, you know, that's why we're so high on substack. But yeah, when we look at substack, it's the exact same thing that you were just talking about, databricks, which is like, wow, this thing could be orders of magnitude, orders of magnitude multiples larger, you know, than anything we've seen so far. **[15:38] Speaker B:** Starting to see that implicit in kind of the fund sizes that you raise is some kind of view on how big the future is going to be or how much of the world technology is going to eat over the next decade or so. What does 15 billion say about kind of what the world looks like in a decade and how many substacks there are that are much bigger than whoever they're replacing? **[15:59] Speaker C:** Well, I think that we reinvented the computer and the new computer is far better than the one that we have been kind of building on for the last 50 or so years. Um, well, really longer than that, but 50 in earnest. And you know, so there is not, I mean, we talk about this all the time in the firm. There's not a problem that we can think of that you can't, that you won't be able to solve with AI. So like almost every problem in the world and you, you know, from cancer to transportation, transportation to massive fraud in the US you just name a problem in the headlines and we're like, oh yeah, we can solve that. And so it's kind of the reinvention of everything. So like all our, our entire way of doing everything as humans we think is going to change. **[16:57] Speaker C:** And so, you know, I would view it as 15 billion to start for us because there's so much to do and there's so many things that are going to get built. And you know, like, some of it is just timing with the entrepreneurs, but we think the number of entrepreneurs is going to multiply as well. **[17:16] Speaker C:** Kind of the ease of going from an idea to a really fantastic solution and a fantastic product is just going to be so much simpler. Because one of the things that AI is best at, of course, is kind of building stuff. And so, yeah, it's just a very unique time in kind of the history of the world. **[17:40] Speaker A:** Yeah, the out of body experience I have with AI on a regular basis now is it's like, okay, I think about the way Ben does and then I'm like, all right, how might you apply AI to solve? **[17:47] Speaker A:** Yeah, for example, the fraud scandal, the kind of fraud that we're seeing play out or anything like that. And it's like, oh, okay, I need to think and think about how to have AI solve this. And I'm like, well, wait a minute, why don't I ask the AI? **[18:01] Speaker A:** And then I go in there and I'm like, da, da, da, how should I do this? And it's like, oh, well, here it's obvious how you would do it and here's the 18 steps that you would take. And then I tell it, well, you know, okay, like, you know, interview me, you know, interview me on all the open questions in the topic, you know, to get my thoughts on them. And then, and then it starts, you know, it starts interrogating me, right? And then I'm like, okay, now give me your point. You know, and so anyway, it's just like, you know, as, you know, like if you had tried to do that with A normal computer in the old days, it'd just like, stare at you, right? Like. So, like, this is really, really, really different. And then, you know, pack. I think the venture lens I would put on this is, you know, in terms of the mechanics of venture capital, you know, the sort of classic, you know, venture capital triangle is team, product and market. **[18:39] Speaker A:** And you're always trying to kind of evaluate all three of those. And people have always had, you know, different theories over the years of which those is more important than the others and how they, how they interact. But the thing that basically every investor, public market, investors, private investors, the thing that we're all trained to do is basically market sizing. Like, we're, you know, for, you know, we're trained to do technology analysis. We're trained to do, like, you know, background checks on people. And then we're trained to do market sizing. Like, you know, okay, how big is this market? Because, you know, the classic adage, right, is if you put a huge amount effort into going after a small market, you still get a small outcome. But there's a presumption in there, which is that you can actually predict market sizes on these things. And the problem with that, again, is this sort of, this presumption that you can predict market sizes based on the dynamics that exist in the market today. **[19:23] Speaker A:** But if there's a fundamental change on the supply side, if there's a fundamental breakthrough, a fundamental capability that doesn't exist yet, you're not going to be able to accurately model the market size because you can't see it yet. You've changed one of the major variables and you can't do that. And, you know, and then you could call that the leap of faith or whatever, but it's like, okay, if you, if you make the change in the supply side, then all of a sudden the market gets 10 or 100 or a thousand times larger. Like, you can almost never validate that with math at the time of the investment. But that's the thing that makes the outperformers, you know, really go. And, and I just, I just think like, as. As Ben and I kind of go through our careers, we just see more and more examples where the mistakes that we or others make is, oh, this must be a, you know, the market for Uber and Lyft must be the market for taxicabs. **[20:04] Speaker A:** Right. Or, you know, the market. **[20:13] Speaker C:** Must be the market for people who like to play games. **[20:16] Speaker A:** Yes, exactly. And we just keep seeing example after example after example where the significant enough technology change, product change on the supply side, unlocks much larger markets. And I think that's going to be, I mean, frankly, that's going to be like the single dominant trend in investing for like the next 30 years. I think that's just going to telescope way out. **[20:34] Speaker B:** The The AI thing is so interesting, right? Because from a technology perspective, it feels like you can build products pretty immediately that are going to win. And then a 16Z starts to make a lot more sense in that context where it's like all of these other things. It's how do you do go to market, how do you do policy, how do you set the conditions for the actual best technology to win as quickly as possible? How do you think about all the different things that you do there? And is that the right way to think about it? The best technology should win, and the platform is there to make sure that that happens. **[21:02] Speaker C:** You know, the way we always thought about the firm was what can a partner do for an entrepreneur that will not only help them ensure their success, but help them kind of build the company they want to build and the way they want to build it with the people they want to build it with and the culture that they are proud of. And to do that, there's many, many pieces. And a lot of it, you know, some of it is just like very fundamental, like, can you do your business in the United States of America? Can you do it in the world? And so that, that's where the, the policy comes in. It's just like a very basic question. And look, governments have a huge interest in technology these days. So like it's a, it's a necessary one. A lot of the other things come down to, you know, how do you go from being an inventor to being a competent CEO? **[21:53] Speaker C:** And that really is a confidence gain, for lack of a better word, in that, you know, it's very difficult to run an organization when you don't know what you're doing, which nobody does when they're an inventor. And you get tremendous amount of advice and advice that's often extremely bad and almost the opposite of what you should be doing. And there are very few, like the people who've actually built things don't have time to talk to you. They're often away building things. So you get these like advisors and, you know, Silicon Valley people who tell you how to run your company, who to hire this and that and the other. And then those things turn out to be wrong. And you get into this confidence spiral. And so we, you know, the whole firm is built to put you in a kind of a virtuous confidence cycle as opposed to a vicious confidence cycle. **[22:44] Speaker C:** And that means like, oh, I need to call somebody who's hard to get to, like an important CEO or like, you know, I've got to recruit a top end engineer or I have to figure out how to market my product, or I have to get to somebody important in the government. If I can do that, my confidence builds. If I can't do that, my confidence sinks. And so then, you know, once you're confident, you can make decisions faster, you can, you know, build the company more effectively. You can go for what you actually want. You can have confidence that, okay, what I want is the right thing as opposed to what somebody's whispering in my ear, who is whatever a CEO, coach or a VC or this or that or the other. And so the whole firm is designed to kind of enable that inventor to become a CEO and run their own company and put their mark not just, you know, locally but in the world by being able to kind of network to anyone. **[23:45] Speaker C:** And so that's, that's a lot of what we're about. **[23:49] Speaker A:** Yeah, and I just add the sort of macro kind of outside inlines on that is, it's just like, you know, we, we, we, we get these, you know, super geniuses, but they're specifically, they are super geniuses at building products, building technologies. You know, to be a super genius at building technologies generally requires you to have been sitting in a lab and you know, in front of a screen for, you know, 10 or 20 years. You know, they, they just, they, they have, they, they are, you know, these folks are fully capable of understanding everything about the world at large. They just haven't, they just haven't done it yet. They just, they, they just haven't been out then, they haven't met all the people and they haven't dealt with all the issues in the real world. And, and, and so that, that leads to this kind of recurring, you know, kind of, I would say misimpression sometimes that, that, that people have, which is like, well, if you just, if you build the right breakthrough, whatever, XYZ Widget, like, it's just, the world is obviously going to adopt it, everybody's going to use it. **[24:33] Speaker A:** It's just obviously going to kind of sweep things. And you know, if, and basically if it doesn't, the answer is the product's not good enough. And you know, there's There's a little bit of truth to that. Like, obviously, the better, the more breakthrough the product, you know, the more there will just be organic traction. But what virtually everybody finds, you know, up to and including Elon Musk, right. What everybody finds is the real world is just like really, really big and really, really messy. Right? And there are, you know, 8 billion people out there with, like, opinions that are not necessarily, you know, your opinions. And, you know, many of them have a real vote as to what is going to happen with your product and with your company, you know, including whether anybody buys, you know, your thing or, you know, all of the X factors that kick in, you know, all the different ways that, you know, people are going to come and try to, you know, cripple what you're doing or, you know, or maybe even worse than that, you know, just ignore you. **[25:18] Speaker A:** Right. And so there is this. There is this just. There is this really big world out there. It's really complicated. It's really messy. It's not necessarily in favor of new ideas. In many cases, it really, really doesn't like them and wants to reject them. And there's real art and science, you know, to. Yeah, yeah, to Ben's point, to building the company around the product and the founder to be able to take the breakthrough and be able to take it successfully into the world. And as far as we can tell, as far as I can tell, like, that that process is getting, you know, hairier and more complicated over time. Right? It's not getting easier. It seems like it's actually getting significantly harder. And so, yeah, that's a big part of what the firm is built to do, is really help founders work through that. **[25:58] Speaker C:** And one of the things that Mark said in the past, which is really true, is like, look, as an inventor, you're looking for power, like a power boost. So how do I go from little old me with my invention to, like, I'm the important company in the space, in the world. I can build momentum, I can get the best engineers, I can get the customers faster. And that turns into a snowball, and I'm rolling downhill. And so the whole firm is designed as a very power entity that you can just tap into and, you know, take our brand, take our connections, take our expertise, and become extremely powerful very fast. **[26:36] Speaker A:** Yeah. And by the way, this, this, this, you know, this. This is the solution of the puzzle that people have had about us for a long time, which is, wow, it seems like those guys are, like, you know, awfully promotional. You know, they're. They're you know, they do all this marketing stuff. They, you know, they're doing all this politics stuff. You know, they, they must be doing this for ego reasons. They must be really full of themselves. You know, this must be about, you know, so much touch on shit like the whole thing. And at least, you know, and maybe, maybe, maybe it's possible, possible we talk too much shit. I'll let other people judge that from time to time. Maybe. However. However, from the beginning, the goal was to build the, the purpose of building the dominant venture brand was precisely to be able to have the companies be able to borrow that at, at the most critical points in their development so that the companies could, could kind of use, use, use our forest in the world to slingshot, to basically build their own forest. **[27:21] Speaker A:** And I think that's worked really well and that's why we don't shrink back from a lot of these things. **[27:25] Speaker B:** Yeah, I wanted just squeeze something in and then get right back in this conversation. Talking too much shit is so interesting, but I really love, I think the thing that impressed me the most when I started working with the crypto team was seeing never take the negative in person and never talk shit on a technology, never talk shit on a founder, never talk shit on a company. **[27:46] Speaker C:** Well, we train for that, that, we train for that. So we have a culture that is written culture that you cannot join the firm unless you sign a document, the culture document, and says you will adhere to this culture. And then you must sit through one hour with me understanding the culture and fundamentally on that. You know, our whole point is if you want to do something larger than yourself and make the world a better place, we are 100% for it and we do not care, you know, like, if in the moment we think you're making a mistake or like the idea isn't good enough. It doesn't matter if we invest in you or don't invest in you. We're for that. We are dream builders. We're not dream killers. We're not here to be like the analytical smarty pants who makes ourselves look smart by making somebody else look stupid. **[28:45] Speaker C:** And that's just, that's fundamental to how we think about the world. So like, anybody who's trying to push the world forward and make it better, like, whether we agree with their method or not, like, we're for it. And so we just ask you to sign up to that idea before you ever join. **[29:07] Speaker B:** Catherine said that we believe in the future and Bet the firm that way should actually be the number one kind of value in the culture doc. **[29:14] Speaker C:** By By the way, that was Mark's. I did the wording, so I give myself a little credit, but that was Mark's idea. **[29:22] Speaker B:** Do you think that should be number, do you think that is number one in practice? Do you think first class business in a first class way is if you were to rewrite the doc today, what is the most important thing in the firm? **[29:33] Speaker C:** Well, look, I mean, the culture document is seven things that you know, and the culture is more than that. Every culture is more than seven, seven ideas and kind of seven sets of behaviors. But those are the ones that all seven of them that we really expect everybody to live to. So I, I don't know if I rank them in that sense because they all go together. They're part of a single thing. So, you know, we believe in the future means that we believe in the people who build the future, which means we're not going to criticize them, which means, you know, we're not going to, we're not going to be on the attack side of that. We're never going to attack the future. We're going to try and make, you know, there are going to be problems with how we build the future, but we're going to try and make it the best future we can. **[30:19] Speaker C:** We're not going to try and live in the past. And so that you can't do that if you're attacking entrepreneurs all the time. You can't do that if you show up, you know, an hour late to meet with somebody who's trying to build a company. You can't do those kinds of things. And so every part of the culture I think is in support of we want to build a better future. Like that is. That's why we're here. **[30:45] Speaker B:** Haber, in his piece Firm Kind of Greater than Fund, talks about, you know, a firm as something that tries to build a compounding competitive advantage. And he points to one thing for Apollo, one thing for Goldman. If you had to pick a thing, what are you compounding? What is the competitive advantage that you're building over time, do you think here? **[31:02] Speaker C:** Reputation. **[31:06] Speaker C:** Mark and I talked about that from the day we started the firm, by the way. There were times when it was like, well, we're investing an awful lot in reputation and it's taken a while, but that's what we compete on. When we talk to an entrepreneur and they're comparing us to another firm, we say, find an entrepreneur that's taken an investment from both firms. See what they say, like, that's our answer to everything. **[31:34] Speaker C:** We build reputation, Every relationship matters. Everybody who we touch, we try and touch as many people as we can and we try and represent in the very, very best way possible to build reputation over time. And that compounds and compounds and compounds across entrepreneurs, across industries, across sectors, across, you know, everybody from, you know, people in the government to, you know, people in companies that we don't invest in anybody who is anywhere in the world of technology. We want them to know us and we want them to think of us as the best firm to do business with. **[32:13] Speaker A:** Yeah. And then that transfers, of course, that transfers from us, that transfers to the portfolio companies. Right. So which is the goal of it? Which is that then as a consequence, when a company takes investment from us now, they're basically able to use our reputation to get themselves through those kind of key growth phases with potential customers and with recruits and with downstream investors and with regulators and with all these different forces in the external society. So the reputation pays off, not just for us, but it pays off in the form of what our portfolio companies are able to do as a result. **[32:45] Speaker B:** So having done this for 16, 17 years, are there things about building and transferring reputation that you've learned that are non obvious? Because to me, like, it would almost seem that it's a battery and if you give it to one company that messes it up, then the whole thing kind of falls apart. But actually maybe it's like love to be like super cheap. Like it just grows the more you give it. Are there other things like that that you've learned? **[33:06] Speaker C:** Well, look, I do think that that's a correct insight in that, you know, one mistake is much more powerful than, you know, one good deed. So, you know, one person being obnoxious who's in the firm or lying to an entrepreneur, doing something like that is. Causes much more damage than you can do by doing that correctly, you know, five or 10 times, which is why you have to be so vigilant about it. Like, you cannot tolerate that kind of behavior. **[33:44] Speaker C:** But I think that. But the biggest thing that I've learned is it takes a long time to build a reputation, but once you do, it's the most powerful thing. It really does compound. And just to give you an example, look, when Mark and I raised fund one, it was a $300 million fund. I think it took about six months to raise. We had a lot of meetings. I can't count how many meetings. Some people did not treat us very well. As Trump might Say they didn't treat me well at all, very badly. And this raise, which was $15 billion when we actually raised the fund, I think Mark did one ama and I did one ama, and I don't know that I took another meeting on this fundraiser and it was done on the reputation. And so that's a heck of a change, you know, and look, a lot of. **[34:50] Speaker C:** Not that we don't. **[34:51] Speaker C:** We talk to our investors all the time. I mean, I've been all around the world building relationships and so forth, but when we came to ask for money, it was raised entirely on the reputation. **[35:03] Speaker A:** I think Paki. I think the external environment has changed enormously. And so, you know, we've lived this as you have and many others, you know, this incredible transformation. Transformation where tech both is like, much, much, much larger and more central now than it was in 2009 when we started. But also, you know, the level of, let's just say, engagement on the. On the part of the world on tech is, you know, the level of intensity on everything from, you know, you know, attacks, you know, criticism, you know, by the way, you know, completely justifiable questions, you know, impact on society. You know, the intensity level is, you know, I don't know, it's like a. I don't know, it's like a thousand X of what it was 16 years ago. And so I think. Yeah, you know, I think to your question, I think we've really tried to kind of rise to that on both sides. **[35:42] Speaker A:** Like, we're really trying to help these, you know, these companies get to levels of scale that nobody ever thought was possible before. **[35:52] Speaker B:** Yeah, you seem like you uniquely. Maybe if anybody that I know have fun taking, you know, like, engaging in these conversations, and I wrote about it a little bit in the piece, but, like, kind of stepping outside the situation and viewing it. I don't know, like, what goes on in your head in these situations? Like, are you having as much fun as it looks like? Does it take a toll ever? Kind of like taking the arrows. What does it feel like? **[36:10] Speaker C:** Like in this. **[36:13] Speaker A:** Yeah, Ben, what? Yeah, why don't you. Yeah, Ben will give the rational response. I'll. **[36:18] Speaker C:** I would say it's. I mean, it gets emotional from time to time. Right. Because you, you know, what goes into building these things and, you know, the intentions of the people building them and, you know, like, the kind of impact they have on the world, and then to just get like, you know, and a lot of them, the attacks tend to be in the form of character assassinations and so forth. And now everybody thinks Mark's Jewish. **[36:48] Speaker B:** You. **[36:48] Speaker C:** Know, Know, just so they can attack him more. It turns out people love to attack Jewish people, so I welcome him into that. **[36:57] Speaker A:** My new name, Paki, is in certain political circles is Andy as Andy Horowitz, because people think that people think. And as swamp fringe as the Internet, people think Andreessen Horowitz is a Jewish person. **[37:08] Speaker C:** Yeah. **[37:09] Speaker A:** And so I now introduce myself as. I did have that in my Twitter bio. I did have in my Twitter bio. My real name is Andy Hurwitz, but. And I am Jewish, but I took it down. Yeah. **[37:18] Speaker C:** But But I would say mostly it's just like. It's an amazing. **[37:26] Speaker C:** It's just like an amazing thing, an amazing privilege to kind of be in the center of it all and, you know, look, and then the responsibility that goes with it that you. You have to kind of try and help drive the world to the right answer. **[37:45] Speaker C:** But, like, it's. I don't know if fun is the right word, but, like, it's special. It's like we've gotten to a very special position, and I think, you know, both of us try and take it as seriously as we can, and, you know, look, things happen, and we have very, very long discussions about how we should react to certain things, how we should not react to certain things, what we can take a position on, what we shouldn't take a position on. And, you know, just to have. Just to be, you know, at this stage of life, to be able to be talking about that as opposed to the things that we had to talk about when we were building Netscape or opsware, like, it's. It's amazing. And, you know, I definitely went trading. **[38:31] Speaker B:** Yeah. **[38:31] Speaker C:** And. And look, we're. We've been through. We've been criticized so much at this point that, like, it really. The. It bothers, interestingly, which I never thought I'd see, is it kind of bothers people inside the firm much more than it bothers Mark or me. **[38:46] Speaker A:** And I am, just for the record, studying for my bar mitzvah. **[38:49] Speaker C:** Yeah. Yeah. **[38:50] Speaker A:** Yeah. **[38:51] Speaker C:** The hav Torah. **[38:52] Speaker A:** You. You. **[38:52] Speaker C:** You You need to learn your. Your Haftora tropes. **[38:54] Speaker A:** Yeah. **[38:56] Speaker B:** How do you avoid, at this point, becoming a big company? Like, this is becoming a big organization. How do you avoid being a big company? Google wanted to avoid that. Like, everyone wants to avoid that. How do you actually do that? **[39:08] Speaker C:** Yeah. So I think a lot of that is organizational design. I mean, so if you look at the companies that didn't feel like big companies for a long time, they. They had very, very, very thoughtful design to the organization. And if you look at that, the firm, you know, the crypto group or the infra group or the, you know, the apps group or the American Dynamism group, they. They all feel like small companies, and they're small companies with a kind of. Very specific kind of support, you know, in terms of the brand, in terms of fundraising and other kinds of things. But, you know, the, the fundraising team is a small group. And so the. Every. And every group is very autonomous from every other. There's integration points, but they're. They're very simple. And so, yeah, for the most part, there's some that are more complicated than others. **[40:04] Speaker C:** And so, you know, that's what makes it, you know, the beauty of a, of a small place is you can just get shit done. The beauty of a big place is you're very powerful. And so we try and kind of blend those two. We tuck a lot. Mark and I borrowed a lot of. Early on, we really studied Hewlett Packard, which the, the original Hewlett Packard, before the computer business kind of swallowed the company was very much like this. They had. They were like a series of companies inside a company. And that's a lot how we are. **[40:39] Speaker B:** How do you vet gps or like, it seems like you have to put a lot of trust in the people that are running the different teams if the whole thing is reputation. But you need to be able to scale by having these kind of decentralized teams. Is there anything that you do there that's. That's unique or, or weird that ensures that kind of like, no one group can infect the whole. **[40:58] Speaker C:** I think, look, first of all, in order to lead one of those groups, you just have to have been here and performed for a long time. So that, that, that's kind of the first thing. So we just know you extremely well. We're not, we're not interviewing people for that job from the outside. Like, you can't get that job from the outside side. And then, you know, I would say, because our culture is so different than other venture firms, you know, for better or worse, we're just different that we don't hire a lot of outside GPS anymore. We generally try to hire people at an earlier stage of their career and kind of grow them into what we do. And that's where much, much better for us, I would say, in general, although we had like, all of us came from the outside at one point of the original cast. **[41:51] Speaker C:** That makes sense. **[41:53] Speaker B:** Kind of winding down here. But Mark, you said that I think you got shit at one point for saying that VCE was going to be the last job in the world. You know, if the vision of the future that you believe is true and this is going to be an institution that lasts for a century. Like, like what does a 16Z look like and do a century from now? **[42:13] Speaker A:** Right, yeah. So I start with. I, I believe I was misquoted. I, I believe it was a, it was one of these hypothetical thought experiment things that kind of got. Got overly extrapolated. But I, I guess I shouldn't just defend myself. So I, the, the point of what I was trying to get across in that discussion which we, you know, I think if you pull up the original, it's, it's a longer form discussion on it. I, it is, goes back to what, what Ben said early on, which is there is this repeating pattern in history. I mean we can find examples of it for sure. Going back 500 years. Is this repeating pattern which is basically a person with a dream, a person with a deep level of domain knowledge and a dream operating in a domain with asymmetric payoff with risk and reward, where by the way, the dream may be wrong, they may not be able to do the thing, but if they can do the thing, it will have to disproportionately high returns. **[43:04] Speaker A:** You know, the traditional institutional, you know, places people go to get support and funding, you know, for the dream, you know, for, for, for, for new projects, just turn it down. Because, you know, a bank can't finance, you know, a bank, A bank can't issue a loan against something with a 50%, you know, 50% chance of a 10x and 50% chance of failure. Like a bank just can't underwrite that. So a bank won't do that. Big companies, you know, for the most part won't do that. You know, almost nobody will do that. **[43:29] Speaker B:** That. **[43:31] Speaker A:** But somebody has a dream and then when the dream works, and especially if you can construct a portfolio of those dreams and of those people, then the expected value on that is going to be very high. That's a very special thing. I've had long conversations with Tyler Cohen, who's particularly very thoughtful on this, and he has a term, forget the exact term they use, but it's like some combination of talent picker, project picker, and it's this thing, it's like we were talking about earlier about market size. It's this thing where there is an analytical, scientific component to it, but there's also an art to it and there's some intangible because you're dealing with human beings at a very kind of primordial level, kind of very early in the process of doing something that hasn't been done before. And quite honestly, an early example of this was Queen Isabella with Christopher Columbus. **[44:16] Speaker A:** And I was just like, I was trying to picture the pitch. Christopher Columbus rolls in and he's like, all right, I'm going to find a new route to India. By the way, there's, I don't know, whatever, 50, 60% chance that you'll never hear from me. And you know, you know, you know, maybe, maybe I've, you know, died 2,000 miles away from Spain. Maybe I, maybe by the way, maybe I just like ran away with the money. It's not like they had Interpol in those days. And I'm going to go do that. And then, and by the way, the fact that that bet paid off. But like, that, like the whole idea was wrong. But the whole, the whole idea was wrong. The whole idea was wrong. He discovered a completely different continent and he himself did not believe that he had discovered a completely different continent. **[44:57] Speaker A:** Right. And I don't even know this. Spain was the main beneficiary of that in the long run. Right, like, and so, like, like, but like, you know, like she funded it and like, wow. Right. And then there's. There's gold. Yeah, yeah, exactly. Yes, they did, they did find some gold. There's very similar story, by the way, the Puritans have a, you know, the Plymouth Rock, that whole thing, the Mayflower, they have a very similar story to that. It took I think 20 years to raise the financing to be able to make the, make the Mayflower expedition. And they needed, they needed, you know, backers like that. You know, we always talk now about, in the adventure industry, you know, the whaling industry 400 years ago, you know, operated in a very similar way. The movie industry has always worked this way. The book publishing industry has always worked this way. **[45:34] Speaker A:** By the way, politics has always, you know, worked political campaigns work this way that, you know, any, any, any new, you know, future president starts out as a long shot, somebody bets on them. And so there's, there's this intangible that has to do with making, making these long dated bets with very uncertain outcomes and with high failure rates. And I mean like if, yes, like I think what I said in the original interview is like, look, if we can have AI do that, like, God bless. Like, I'm gonna. Like I'm gonna hit the beach and like, it's all good. But, you know, like, I guess maybe make the following claim and see, Ben, what you think of this, the intangible seem to be becoming more important, not less important, over time. It seems to be becoming more like an art and less like a science as we go. **[46:11] Speaker A:** Would you agree with that? **[46:12] Speaker C:** I definitely think that's right. Because history is a bad guide. So you can't. Like, the interesting thing about vc, for me, probably the biggest lesson is, is you gotta be very careful about a highly trained neural net, because that's when you make the mistakes because things change. And I would say things have changed more rapidly. Like the thing that we never thought would ever, ever, ever go away is the mythical man month. **[46:46] Speaker A:** With software, it's a metaphor for software. **[46:50] Speaker C:** It's It's a metaphor for software. Yes, exactly. Sorry, sorry, sorry. So in the old days, right, like, no matter how many engineers you put on a team, you still more engineers would actually slow down the project as opposed to speed it up. But now, so you couldn't throw money at a problem, you couldn't throw money at somebody's technological lead. You'd have to do something different. Now you can throw money at it. You know, Elon did an amazing job of throwing money at the foundation model problem, and he caught up very, very fast. And that's something that in the whole history of our industry could never have happened before. So if you had asked an AI if Elon had any prayer of catching OpenAI or anthropic, they would have said, no way. And so that's where you're getting into. I mean, maybe if the AI was smart enough, I suppose, but there are these. **[47:43] Speaker C:** A lot of it has to do with how much did you believe in the person. **[47:47] Speaker A:** Yeah. And then. And then the other part is what we talked about already, but it's. It's the long and twisting path. You know, the investment's just the beginning. Right. And it's the long and twisting path that that person, that company take over time and all the different ways that we, you know, we try to try to help them succeed. And so I think that. Yeah, I. Yeah, if. **[48:04] Speaker C:** Yeah, you could imagine an AI who could do it all. Of course, if an AI was smart at a human about Every single thing, including human psychology. That and certainly could be. **[48:15] Speaker B:** You're tasked with training this AI. What are the things that you've learned on this art that you can put into words if it is. And this is the most optimistic view of the future I can think of. The tools are getting better, but the human piece really, really matters. What have you learned about the art that you can describe? What do you look for in a Christopher Columbus? **[48:32] Speaker C:** Well, I mean, I think that the first thing, and I hesitate to name things in some sense because they're all so different. Right. Elon is really not at all like Mark Zuckerberg, who's not at all like Ali Goetze, who's not like at all like Brian Chesky. So like they're all different. **[48:54] Speaker C:** But the things that they all do, I would say is they all think for themselves. They're not people who read the room and try and like figure out what people want them to do. They have original ideas. So original idea is probably the thing that every great entrepreneur has. Their original thinkers and then, you know, they, they all also have some combination of enough charisma, they're interesting enough that people want to follow them because, you know, ultimately you kind of need people to go, okay, that is the leader and that's somebody who I want to work with, work for and so forth, forth. **[50:03] Speaker B:** Close us out, I guess. From each of you, what is the thing that you're personally most excited about in the next kind of couple of years of a 16Z, but just tech more broadly. **[50:12] Speaker C:** Well, I mean, I mean Mark had a great line like, well, this is on the order of the steam engine or electricity. This is such a big invention that we're going to end up in a different world. And the thing that's most exciting to me about it is, you know, I wouldn't want to live in the pre electricity world. Like, I like this world way, way, way better. And so I think that like odds are we're going to get to a world that's just way, way better than we can even. Like we can't even get our heads around it, which is why it freaks people out. Like all these Stuff that we have to do and so forth that we've just learned to live with that sucks isn't going to be required anymore. And so, you know, what does that mean? What do we think of then? **[51:00] Speaker C:** Like, what does life become? It could be, you know, super exciting. Now, the one thing with humans that's a little messed up is, you know, if that takes us too far away, like one of the, you know, too far away from some grounded purpose about, you know, and beliefs and spirituality, then, you know, you can attach onto some dumb stuff. So, you know, that would be actually my only worry. But I think life, just the quality of life for everybody is about to get, like, way, way better than it's ever been. **[51:36] Speaker A:** I'm excited about the Zoomers. **[51:41] Speaker A:** I am psyched for the Zoomers. I was with a founder team the other day and who are Zoomers? And I was explaining to them, you know, why the Zoomers are so much better than the Millennials and why they're going to save us. And, like, the whole thing is going to be great. This is so great. And of course, they're just, like, staring at me like I'm speaking Greek, because, like, they did. You know, they're, you know, they experience. You know, they just think like, millennials are like, old farts that are, like, completely out of touch. And of course, you know, us, Ben and I are Gen Xers. We might as well be, you know, Stone Age. And I was like. But I was like. But I was like, this is what's so great about these rumors. Like, they, they just, like, they're. They're. It's. It's the, it's. **[52:13] Speaker A:** The post. I would describe it as 2015 to 2024 was just. It was a very, very strange period. And a lot of just things got really weird. And the Zoomers are the generation that basically was. End of that. And I. They're, at least for the Zoomers, we get to deal with, like, they're just not having it. And they're not walking around feeling guilty about everything all the time. **[52:43] Speaker C:** Lot of things like that, too. Gen X kind of let go of all the craziness of the 60s and early 70s. **[52:49] Speaker A:** Yeah, that's right. That's right, exactly. Gen X was the reaction to the boomers in the Same way the Zoomers are a reaction to the Millennials. And so the zoomer founders that we get to deal with, I. My is like, it's the best. It's the best. It's the best. Most competent, most capable. By the way, they're just, like, incredibly well. They come in all just incredibly well trained. Indicated because they grew up online. You know, they've seen, you know, a thousand hours of YouTube videos from all the great, you know, people in tech talking about how to do everything. You know, they just know so much more than previous generations of founders did. And, you know, they're. By the way, they're now, they're all AI native. You know, they all, you know, basically learn AI from scratch and, you know, in college and, you know, they're coming out and they totally understand it. **[53:26] Speaker A:** And so. And they're just, like, tremendously fired up and like, completely, you know, completely, you know, they wear their. You know, they wear the heart of their sleeve. They're like, they're. They're going to build something. They're going to build something great, and they're completely unapologetic about it. They're very forceful. They're very determined. Yeah, I just think it's fantastic. I've been waiting. This. Eric and Ben will tell you. I've been waiting for this for a long time. **[53:47] Speaker C:** We may have to edit this out, but one of the things I do really like about the Zoomers. I have ever heard anybody say anything like, I'm going to do well by doing good. **[53:57] Speaker A:** Exactly. **[53:58] Speaker C:** Never Never fucking say that. **[53:59] Speaker A:** Bullshit. Bullshit. No, no, none of that stuff. **[54:01] Speaker B:** Sense Sense of humor, too. They're funny. **[54:03] Speaker A:** Yes, yes. They're extremely funny. Well, they're extremely funny. They get it. They live through. They were on the receiving end of just a tremendous amount of bullshit. And they're just like. They're just not having it. And so it's just. I find it just, like, tremendously exciting to be able to work with them. And if I had total control over my time, it would be 100% spent with Zoomers. **[54:20] Speaker B:** Well, I appreciate you spending an hour with a Millennial. This was a ton of fun. Thank you for letting me write about a 16Z. And thanks for the conversation. **[54:29] Speaker A:** We're talking about all your future guests. Exactly. **[54:33] Speaker B:** Vaki, this was an excellent piece. Thank you so much for writing. **[54:36] Speaker A:** Yeah, Yeah, my pleasure. 100% good. **[54:43] Speaker B:** Sam.