From my Forbes.com blog The New Persuaders:
Few venture capital firms have been more aggressive in recent years than Andreessen Horowitz, which has invested in dozens of the hottest companies from Facebook to Groupon to Pinterest. It has become one of the largest VC firms in just the three years since it was formed by onetime Netscape cofounder Marc Andreessen and his longtime partner Ben Horowitz, former CEO of Andreessen’s company’s LoudCloud, later sold as Opsware to Hewlett-Packard for $1.6 billion.
Today at the TechCrunch Disrupt conference in San Francisco, one of the year’s largest conferences for tech entrepreneurs (streaming live here), Horowitz was interviewed by legendary Silicon Valley VC and adviser Bill Campbell, known in these parts at “Coach.” Here, paraphrased at times, is what Horowitz had to say about how best to build a company today:
Q: What do you mean by “Software eats the world” as your basic investment thesis?
A: Weak form: Software is eating the technology industry. The stronger form of the hypothesis is that software will eat every industry eventually. Retail, movies, radio and music. We see software eating every industry from agriculture to finance.
Historically, the technology industry has been sized at a certain size. Only so much new technology could be absorbed. But as software eats other industries, technology will actually expand.
Q: Apple defies some part of that with software and hardware integration. How do they do that?
A: Increasingly, such as with Amazon, it’s software, hardware, and content.
Q: Why did you go over to the dark side–venture capital?
A: I’m considered a much better CEO now that I was when I was a CEO. Venture capital had become too abstract when it came to building a business–it was about business models. When you’re building a business, it’s about the struggle and the horror. I thought it would be good to have a firm that knew how to actually build a company. …
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