The Exchanges

Q That is very kind of you, but I want to start with a little bit of context. So, you know, you're at Andreessen today, and I want to start with, in your words, how did you make your way to be a GP at Andreessen today before we dive in?

A Well, the quick story is, um, I'm a failed physicist. So in undergrad, I did computational physics, worked at a national lab, decided that computer systems are much more accessible. And so I moved into systems, ended up doing a PhD at Stanford, started a company based on the research. Ben Horowitz joined my board. Uh, this is, by the way, this was in, you know, I started the company in 2007. So 2008 was a great recession, almost went out of business. Mark and Ben saved the company. We ended up selling that, um, about four years later to VMware. Uh, I ran that business for a while and then, you know, I decided that I'm super in love with innovation. I love startups. I love infrastructure and systems. I spent 10 years doing the operating thing, built a billion dollar business, and it was time to kind of move to a different abstraction level. And so I joined and I just focused on infrastructure at Andreessen Horowitz. So that is the crooked Path I took.

AI assessment note: “joined and I just focused on infrastructure at Andreessen Horowitz”

Q I, the thing that I think is fascinating is like the state of storytelling state is I think pretty poor. Um, and I think in market creation and category creation, it's more important than ever. How do you feel about the importance of storytelling on the founder perspective with regards to category creation?

A So I think it's very, very important and not just for educating the market, but even like leading a team. Um, I would say the two best people on this who both should write books are McJanet and Steve Mullaney. So Dave McJanet is CEO of Hashi. Steve Mullaney, he's a CEO of Aviatrix. Both come from marketing, product marketing backgrounds. Both are like iconic world-class CEOs. And what they'll tell you, I think is exactly right is, you know, It's very important at some point in time, like, you know, kick everybody out of the room, sit there for three days, and then write down the very lucid, very description vision of the company, like why it matters and what you're doing in a way that you deeply believe in a way that outlines the future and outlines kind of the why together. It doesn't have to be the path, just the future. And then you use that to kind of drive everything about the company from like recruiting to culture setting, to, you know, early sales, to marketing, to speaking to an analyst, et cetera. And so I do think that in early categories, it is just like Crucial exercise to do.

AI assessment note: “I think it's very, very important and not just for educating the market”

Q I, the thing that I think is fascinating is like the state of storytelling state is I think pretty poor. Um, and I think in market creation and category creation, it's more important than ever. How do you feel about the importance of storytelling on the founder perspective with regards to category creation?

A So I think it's very, very important and not just for educating the market, but even like leading a team. Um, I would say the two best people on this who both should write books are McJanet and Steve Mullaney. So Dave McJanet is CEO of Hashi. Steve Mullaney, he's a CEO of Aviatrix. Both come from marketing, product marketing backgrounds. Both are like iconic world-class CEOs. And what they'll tell you, I think is exactly right is, you know, It's very important at some point in time, like, you know, kick everybody out of the room, sit there for three days, and then write down the very lucid, very description vision of the company, like why it matters and what you're doing in a way that you deeply believe in a way that outlines the future and outlines kind of the why together. It doesn't have to be the path, just the future. And then you use that to kind of drive everything about the company from like recruiting to culture setting, to, you know, early sales, to marketing, to speaking to an analyst, et cetera. And so I do think that in early categories, it is just like Crucial exercise to do.

AI assessment note: “So I think it's very, very important and not just for educating the market”

Q We do a show every week with Rory O'Driscoll and Jason Lemkin and Rory very aptly, I think just said, listen, with the transition to AI, every investor's just accepted a willingness to go massively up the risk curve on investing. Do you agree with that?

A Well, I think it's, I think it's the requirement of the game. It's like, these are very capital intensive Uh, companies to build, you know, they have to get the capital from somewhere. They're also the fastest growing companies. And so, you know, for the winners, it's justified. And so I think it's not that, that investors are willing to go up. I mean, we'd be very happy not to, I mean, I know you would, right. And it would be great to have great returns with low risk. Um, but the, the, the, the nature of the system and the game, which we're playing requires it. And that's just what this is. By the way, this is the dissonance in all of this. It's just so important to call out. Which is on one hand, you do have these great businesses that are very fast growing and zero sum thinking has been tremendously wrong. I mean, NVIDIA is continuing to grow in value. The hosting providers, which everybody wrote off as being kind of non-defensible business continued to grow in value. The model companies, which I can't tell you how many investors wrote off the models. I mean, this, this, this question has been around for three years. They continue to grow in value. So every layer of the stack continues to grow in value. So on one hand, you're like, It's all working. You should be in the leaders on every, you know, in every layer of the stack. On the other hand, we've seen tons of wipeouts al…

AI assessment note: “it's not that, that investors are willing to go up... the game, which we're playing requires it.”

Q Is that not, is that moronic? No, I learned from eating.

A No, no, no, no, it's not. I, no, I just think it's, I just think it's philosophically different on the approach, right? And so, I actually don't believe You can predict the future of technology adoption. It's a very tough thing, right? I mean, you don't know what a big company is going to do, can wipe out an entire market. You don't know what innovation will wipe out entire markets. This happens all the time. I mean, you could argue that AI is really invalidating tons of markets, and I don't think anybody could have seen that happen. But if you have, say, 10 companies that have some traction, and you can talk to the, you know, the founders, you can diligence the teams, you can diligence the market, you can diligence the project, you can diligence the technical approach, I think you could just say something a lot more concrete than, you know, is some future innovation going to wipe out this entire market?

AI assessment note: “No, no, no, no, it's not. I, no, I just think it's”

Q do a quick fire. Do you enjoy it as much as you did before? It is a much faster landscape. The money is much bigger. Do you enjoy it as much as you did before? I spoke to many of your founders and they said, they, they said that they didn't think you enjoyed the administrative work that you now have to do with the size and scale of Andreessen.

A Oh, well, those are two different questions. I love, I love, I love the investing. I mean, the investing is great. Um, it's just the most exciting time in the industry since the late nineties. It's great to be part of a super cycle. I love it. Um, actually, you know, I, I love the, I actually really like the, the firm building side. It's, it's, um, you know, I mean, frankly, I could do without, you know, endless meetings, but I've actually been pretty, I've actually been pretty good at, at, at limiting those two. And so no, no, I, I think this is actually the most exciting time to be in the industry and adventure. I, I candidly, I'm not trying to, I'm not trying to bullshit.

AI assessment note: “I love the investing... I actually really like the firm building side”

Q Going to your zero sum thinking, if you were to put a bet on which future is more likely, which future do you think is more likely?

A Oligopoly. This is how the cloud, well, this is how the cloud played. I think probably the best analog we have is the cloud, right? You know, the other companies that are behind models can subsidize these things arbitrarily. I think about Gemini and they don't have to do this in a way, um, you know, where they have the same economics as an independent company. And so if you look at how the cloud, remember the cloud, AWS was like, 70 or 80% market share early on. Nobody thought they could ever catch up to them. You know, they were the massive market leaders that created the category. I mean, they had way more dominance than Anthropic has now. And Microsoft and Google are like, you know, that's an important big market. We have to be in it. And they just basically spun their way into it. And then you ended up with an oligopoly on the clouds. I see no reason. I mean, Gemini 2.5 is a great model. It's a great model. And if you actually look at it, you know, on the price performance, I would say in many use cases, the one that I actually use as my standard model, it's better than Anthropic. For some use cases, if you actually, you know, take into account price performance and, and Google can arbitrarily subsidize that too. Never, you know, count out open AI. I mean, they, they, they, they, they started the party. Uh, they haven't had a major model release in a while, certainly around…

AI assessment note: “Oligopoly. This is how the cloud, well, this is how the cloud played.”

Q Crassy. Crassy. When you like, honestly, why did I do lovable for the exact same reason that ChatGPT wins? I thought it was the consumer brand that would win.

A A hundred percent. And I just think these markets are so large brand effects work. I mean, let's talk about mid journey. Mid journey was the first that got above the quality bar. It's taken zero investment from, from institutions. It's still the market leader. Um, and it continues to do great. And, and, and this is meanwhile, a bunch of other people have entered, uh, entered the market. And so I do think it's not unreasonable to assume that these markets are very large. Leaders are going to have brand monopolies and brand modes, uh, and they'll be able to maintain them until things slow down. And in general, I've found markets do this, which is, When markets are expanding, so markets tend to expand and then contract, right? Think about cloud, right? It's, it was kind of like this funny thing and it became very massive. And then of course it slows down. And when it slows down, then you have the consolidation, um, and then, you know, competitive dynamics come in. I mean, we're clearly in a massive market expanse phase. It's just very clearly the case. And in which case the leaders are going to continue to have, you know, a distribution advantage just through brand recognition.

AI assessment note: “A hundred percent. And I just think these markets are so large brand effects work.”

Q simple. There's a European player that does like medical transcription for nurses. They went from one to eight million in a year, and we're looking at leading their A, and I'm thinking exactly the same. You're going up against Abridge because you're going to need to compete in the US if this is going to be a big business. Is that a losing game where you are a European competitor?

A This is a great question. So another very interesting thing that we haven't seen in a very long time is we do have geographic biases showing up with AI and the regulatory environments are, are quite balkanized. You know, there's language and cultural biases that are also balkanized. And so we're actually seeing a lot of regional players show up. And so I think it's very legitimate. Now, the thesis cannot be European company X wins the American market. But I promise when it comes to AI, the European market is large enough. I promise that. And so I think a very legit thesis is, you know, this becomes a regional player in Europe, and then maybe a portion of the US market.

AI assessment note: “thesis cannot be European company X wins the American market. But... European market is large enough”

Q Is that not, is that moronic? No, I learned from eating.

A No, no, no, no, it's not. I, no, I just think it's, I just think it's philosophically different on the approach, right? And so, I actually don't believe You can predict the future of technology adoption. It's a very tough thing, right? I mean, you don't know what a big company is going to do, can wipe out an entire market. You don't know what innovation will wipe out entire markets. This happens all the time. I mean, you could argue that AI is really invalidating tons of markets, and I don't think anybody could have seen that happen. But if you have, say, 10 companies that have some traction, and you can talk to the, you know, the founders, you can diligence the teams, you can diligence the market, you can diligence the project, you can diligence the technical approach, I think you could just say something a lot more concrete than, you know, is some future innovation going to wipe out this entire market?

AI assessment note: “No, no, no, no, it's not. I, no, I just think it's”

Q like, I loved Venture 12 years ago when I first saw it in the social network, which, like it or not, was my first exposure to it. But I just feel we have this, like, a different class of VC now, where it's not that love of innovation, where it's not that love of working, where it's more about being seen. Do you feel that same feeling that I do?

A Uh, I, I actually don't actually don't. I actually think, I actually think now VCs becoming very real. So yeah, I hate to be the old guy, but like, you know, when I, when I raised money, every VC was like, You know, show up late and like we're on their fucking phone, like all of them on the phone. They're all generalists. None of them were specialists, really. Um, they mostly had like random backgrounds. They didn't treat it like a discipline. I mean, it was like, you know, it was like, you know, like the, the classic Sand Hill, you know, dude, there's always a dude at the time. And I think now there are people That you can talk to that really view this as like a, a real discipline on the order of taking over all of finance. And they think about it in very, very structured ways and they work incredibly hard and they understand the spaces very, very well. Um, and I don't think that existed. 15 years ago, it just didn't exist. Um, and, and, and, and, and they really believe in, in value accrual To innovation and applying money to that problem. Now that said, we're at the tail end of a decade long bubble. So of course, you know, you've just got, you know, a bunch of people that just want to get the spoils. And of course you run into them the most because they're the most flamboyant. But I think with this downturn, we'll see a lot of the tourists go away. And I think what will be l…

AI assessment note: “I actually don't actually don't. I actually think now VCs becoming very real.”

Q like, I loved Venture 12 years ago when I first saw it in the social network, which, like it or not, was my first exposure to it. But I just feel we have this, like, a different class of VC now, where it's not that love of innovation, where it's not that love of working, where it's more about being seen. Do you feel that same feeling that I do?

A Uh, I, I actually don't actually don't. I actually think, I actually think now VCs becoming very real. So yeah, I hate to be the old guy, but like, you know, when I, when I raised money, every VC was like, You know, show up late and like we're on their fucking phone, like all of them on the phone. They're all generalists. None of them were specialists, really. Um, they mostly had like random backgrounds. They didn't treat it like a discipline. I mean, it was like, you know, it was like, you know, like the, the classic Sand Hill, you know, dude, there's always a dude at the time. And I think now there are people That you can talk to that really view this as like a, a real discipline on the order of taking over all of finance. And they think about it in very, very structured ways and they work incredibly hard and they understand the spaces very, very well. Um, and I don't think that existed. 15 years ago, it just didn't exist. Um, and, and, and, and, and they really believe in, in value accrual To innovation and applying money to that problem. Now that said, we're at the tail end of a decade long bubble. So of course, you know, you've just got, you know, a bunch of people that just want to get the spoils. And of course you run into them the most because they're the most flamboyant. But I think with this downturn, we'll see a lot of the tourists go away. And I think what will be l…

AI assessment note: “I actually don't. I actually think now VCs becoming very real.”

Q How do you factor that into your thinking when investing today?

A Well, you just try to invest in the leader, and it's worth, and it's worth paying up for the leader, honestly. I mean, it's, You know, so I think for me, I ask two questions. Question number one is like, for, for, for the, the, the area that it's focused on, is it the leader? If it is, it's definitely worth paying up. And then the second one is the story actually has been that, that in a competitive space, almost everybody just found kind of a new niche white space. So let, let's just take the example of OpenAI. I mean, OpenAI was the first to code, right? With, with, with, with GitHub Copilot. I mean, they provided the weights. As far as I know, and they lost that. And they were first to image with Dali, and they lost that. And they were the first to video with Sora. And as far as I can tell, they lost that. And yet they're still the massively dominant player in language and, and continue to be so and will be so. And, and arguably that was the right thing for them because that's by far the largest market by far. And so open AI acted totally rationally and has the largest market, but that gave the ability for mid journey to take image or BFL to take image. Um, you know, Google seems to have grabbed video with VO three, uh, code. I mean, on the model side, anthropic has, you know, turned that into, you know, this wonderful business. And so when markets expand, not only do you ha…

AI assessment note: “Well, you just try to invest in the leader, and it's worth paying up”

Q I'm diving right in, but this is like a lot of people have fun and you said about kind of, uh, disruption of software development. There is a ton of players in the vibe coding space. They are predominantly all sitting on top of Anthropic. Claude code is gaining more and more dominance. How do you think about these providers reliance on a tool that could eventually shut them off?

A There are two futures to code in one future. You've got Anthropic as a monopoly. And another future, you have, let's call it an oligopoly, or maybe even a bit more of a market of, of these coding models. And they're just very different futures. And I think when you answer this question, you have to consider both of these. I will say the timing of this conversation you and I are having right now is like, pretty soon after CloudFour launched. And that's It's like a major model launch, and these models are so episodic. Every time one launches, everybody's like, it's the future. Everything's gonna happen. Like, remember, like, the whole Ghibli OpenAI launch, and we're like, oh, image is gonna change forever, and then it comes, we're excited, and then it kind of, you know, passes. Um, and maybe that'll happen here. Maybe that won't. I don't know. But like, for sure, like, our perception is colored by that launch. So let's consider both of these. I'm gonna consider the first one. So historically, Models don't really keep much of an advantage because they're so easy to distill. And so we've even in the last week have seen launches of models, um, you know, Quinn and I forgot Kimmy, uh, that came out and they're great and people like them and they adopt them. And in that world where you continue to have new models from different providers, you know, I would never count out Google. Their…

AI assessment note: “you need to have a consumption layer that's independent”

Q Do you agree with the playing the game on the field sentiment? You know, when we look back at 21, you know, I remember everyone saying playing the game on the field. I wish I hadn't played the game on the field to be transparent, Martin. Do you agree that you have to play the game on the field in venture?

A I think, I think behavior should follow business. It shouldn't follow marks. And I think in 20, 21 behavior was following marks, right? It was like the public. Marcus just decided these companies were valued a whole bunch. You know, Tiger came in with a ton of money and deployed it a whole bunch. And so like, I think behavior following investment in Marx is, is, is, is a bad idea. But in this case, you have some of the fastest growing companies we've ever seen by users, by revenue. I mean, the amount of value that's kind of shifted to this is so significant. And so I think investors behavior should follow that. If not, I mean, what are we doing?

AI assessment note: “I think behavior should follow business. It shouldn't follow marks.”

Q So what's changing then? Cause dev productivity is going up. So is the quality of product going up if the product release cadence isn't?

A I just think the things that are hard remain really hard. And so, you know, like, let's just talk about like creating a model. So, So let's say I'm creating a new model, a new frontier model, right? And to create that new frontier model, I've got to collect data, and I've got to run a pipeline, and I've got to, like, sit with my, you know, my Jupyter notebook, and I've got to, like, look at the lost curves, and I've got to rerun it, uh, and, like, that's just a lot of kind of experimentation and, and so forth. You know, there's no coding model that's going to do that for you, but, but if I wanted to run, create tests, or a test suite, or, you know, Or visualization. Or, right, documentation. It's actually really good at that. And so I would say that probably in the long run, having more robust maintainable code bases with less bugs is, is just as likely to be the impact as feature velocity. Because, you know, in startups, again, I'm an infra, I'm an infra guy. This is probably different for the apps. Like, I've always thought apps had no Technology to begin with. Like every time I look at vertical SAS, I'm like, why do we even care about the technical team? It's fucking crud, man. It's like, crud is like create, you know, read, update, delete. It's like, they all do the same thing. They all just kind of look like a web app. They're all like, who cares about the technology? The …

AI assessment note: “having more robust maintainable code bases with less bugs is, is just as likely”

Q I totally agree with you in terms of kind of doing your run. Can I ask, I spoke to so many of your founders and partners before, and they said Martine is on so many boards. Um, how do you manage your board load, Martine?

A Well, there's a few things to, to, to consider here. So the first one is like, I honestly don't know what VCs do with their days. I mean, you know, it's just wild how many don't work in evenings or gone on Fridays or don't work over. It's just unbelievable over weekends. I just don't know what they do. I mean, you know, if you step off of having a, you know, listen, I grew up, I grew a business from basically zero to six hundred million globally. I mean, I was working a hundred hours a week. And I was flying all over the place. And like, you know, that's what I spent 10 years doing. And so it just turns out there's a ton of time in the week. So I think one thing is, is like, listen, I mean, you know, if you put in the time, there's an awful lot of time in the day. And even if you're on a lot of boards, it's nothing, nothing compared to running, you know, a 4000 person team to hundreds of millions of runners in, in, in, in my experience. The second thing is I'm very lucky at Andreessen Horowitz to work with basically the best You know, junior partner team on the planet. Like many of them could be GPs at other firms and they know their areas very, very well. And so they have tremendous help. And I literally couldn't do what I do without them. And so I think a lot of times I get credit unfairly for the work that my team did. Like they're like, like, for example, you know, Jennifer…

AI assessment note: “if you put in the time, there's an awful lot of time in the day”

Q Unpack that. Why and how does he do found a market fit that's the best?

A He will find a market that he really likes. And sometimes it's like even a fast follow market, right? Like, you know, um, and then he will find who he thinks is a great Founder for that market. And so he's very good at like this kind of boy band construction based on the market. The primary point I want to make is, is very much in his investment cycle. The founders have always mattered any of this. He's followed on deals. I've done a followed on deals. He's done. We've done a bunch of deals together. I've never I've never gotten the impression. I mean, I actually always got the impression that they actually, the founders, the primary decision, um, once he's chosen the market. So I would, I would say it's a primary concern for him.

AI assessment note: “He will find a market that he really likes... then he will find who he thinks”

Q What's your biggest miss and how did it impact your mindset?

A I've missed so many and they're all huge. I've missed so many, I've missed so many, I've missed, you know, whole, whole areas, right? Like we, we don't, we don't, um, we don't even have a bet in cloud security posture management, right? Like the laceworks and the orcas and the whizzes, right? And so, I mean, you know, I mean, here's my, here's my biggest takeaway is like, we still have the men, like the starvation mentality of the early 2000 of like, oh, the market's limited. We should only deploy a little bit of money, blah, blah, blah. Like the reality is you can't deploy money. Fast enough in the current market, even with the downturn, and there's more opportunity out there, and it's bigger than any of us know about it, and it's time that we all kind of mature and believe that.

AI assessment note: “we don't even have a bet in cloud security posture management”

Q What's your biggest miss and how did it impact your mindset?

A I've missed so many and they're all huge. I've missed so many, I've missed so many, I've missed, you know, whole, whole areas, right? Like we, we don't, we don't, um, we don't even have a bet in cloud security posture management, right? Like the laceworks and the orcas and the whizzes, right? And so, I mean, you know, I mean, here's my, here's my biggest takeaway is like, we still have the men, like the starvation mentality of the early 2000 of like, oh, the market's limited. We should only deploy a little bit of money, blah, blah, blah. Like the reality is you can't deploy money. Fast enough in the current market, even with the downturn, and there's more opportunity out there, and it's bigger than any of us know about it, and it's time that we all kind of mature and believe that.

AI assessment note: “here's my biggest takeaway is like, we still have the men, like the starvation mentality”

Q What does that look like? Does that look like, you know, Tech innovation investors in public markets. Is that post going public?

A Oh, I think it's everything. And that's, that's the whole point, right? It's like, you know, if you know, it's, it's the entire life cycle of a company. I think one way to think is step back. Think about the entire financial industry, everything from like private equity to the big banks, to venture capital, et cetera. And if you pull a dollar at random from that pool. Right. So it's quite likely that that dollar is going to come from, you know, a large bank or private equity or whatever. And like, what is their goal? Well, let me tell you, it's not innovation. It's just not, you know, it's, it's predictable returns. It's arbitrage. It's shorts. It's all of this other stuff. And like kind of the top of the value chain is, is, is this cohort of people that, that, you know, they, they, they're, they're not interested in, in, in building companies and backing founders. Like, it's funny. I mean, I, I remember speaking with a private equity person. I'm like, ah, you know, I was just talking to myself. I'm like, you know, You know, we're just having a conversation, idle conversation. Like, you know what, you know, if, if there's a public company and like the founder's still running it, I'm bullish just cause it's the founders and founders can weather transitions and they can weather market transformations. Like look at Reed Hastings, look at Jensen, like founders are amazing. And this…

AI assessment note: “Oh, I think it's everything... it's the entire life cycle of a company.”

Q To what extent does this actually require the what are we going to do versus another for fuck's sake? Don't we see the pattern?

A Yeah. So I'm very sympathetic to concerns around job displacement, and I think we should take them very seriously as a society. Like, I'm in no way libertarian. I think that this is kind of where governments do step in, and we do help out. But first, we have to understand, and it's actually very unclear. So let me tell you just a quick anecdote. So I, um, you know, my cousins are all pretty, like, I think high end is the wrong term, but they're, they're, they're pretty established translators. Uh, and they have been for a long time, multiple languages. And, you know, they visited recently. This is a husband and wife pair. And they're like, listen, like, you know, we have to change jobs because translation is all going to AI. And, um, and I asked, I said, you know, so the jobs are going away. And they said, well, no, they're, they're shifting. And now instead we've got to like spot check these AIs. And the only way we can, Hold it up to our standards if we rewrite the entire thing, but they won't pay for that. And I don't, you know, by the way, these are Italian, so they speak this way, but they're like, you know, I can't work on something without a soul, right? And I think that their dilemma is a good microcosm for the broader dilemma, which is One thing that's very unique about AI is that it actually requires today a, a human handler. I mean, they're just so unpredictable, you…

AI assessment note: “their dilemma is a good microcosm for the broader dilemma”

Q So what does that actually mean in reality? Cause that was going to be one of my questions. Cause I've heard you say before that really the winners in venture, a scale ups are the ones who scale is your Andre's in the world. You, you enjoy the benefits of scale. Why? And what does that mean for like grow up for venture?

A Well, let's, well, yes, let, let, let's, so I actually think It's not the winners, their scale up. I actually think it's a barbell. I think that You know, either you're operating at scale and, you know, you can help a company everywhere from seat through public. I think that's one end. Um, and let's, we'll talk about that because that's your specific question. I think, or there's a lot of alpha in, in relatively niche plays, right? Like you're just focused in a certain area or a certain stage and you build out operating around that. So I think both of those, so boutiques will continue to fare very, very well. And I think, you know, the, the ones at scale will continue to Very, very well. I think it's in between where it's kind of a little bit more difficult because you've got pressure on either side of these. So what does it mean to scale up? So here's the way I think about it. You know, if you're A founder building a company, you're going to need pools of capital, right? And today the largest pools of capital either come from public markets, which they don't care about innovation. Clearly having been in a public company, they just want like repeatable learning, or you can get it from large debt providers. They don't care about innovation. They just want to get their money back. Or you can get it from large, large finance years, like private equity. They clearly don't care abou…

AI assessment note: “I actually think It's not the winners, their scale up. I actually think it's a barbell.”

Q to me layoffs. I hear that I need to do them and I'm told, you know, do them, do them hard and do them once, but I don't know what's going to happen. I don't know what the right amount is. How do you advise founders on like layoff strategies? And you've been through it in 2007, 2008, I'm sure. Like, how do you advise them on this challenge now?

A I tend to be very top down on these sorts of things. You know, the goal Is to keep the company solvent and successful, you know, protect common and as many employees as possible. And so I think the right approach is to Create an operating plan given the current economic environment and ask the question is like, what is the right company in order to do that? Given whatever risk profile that you're comfortable with as a board and like new boards are very different. Some boards are like, Hey, listen to hell with it. Yeah. This is a time to build like this. Go ahead and accelerate into it. Like I, I a hundred percent, uh, work with companies that are like, this is amazing. Fuck it, man. We're now we're going to win. Like, it's like higher, you know, pull out the machetes. Like, you know, we're going to war type thing. Right. So it's, The level of response is all over, but like, you know, you have to force discussion in the board. The board has to be aligned. I do think you have to do a top down replanting of what is the right posture for the company. And then everything falls out of that. And it, it may or may not be layoffs, you know, you know, it, it could be all sorts of stuff, right? I mean, you know, you could decide to like, you know, reduce cloud contracts or, or whatever, but like, again, like the top down plan is everything. What, you know, I do definitely sit on boards or…

AI assessment note: “I do think you have to do a top down replanting of what is the right posture”

Q Is that not the joy of being at Andreessen? You can take a five percent ownership on first check because you can size up into the next and size up into the next. Is it not my challenge that I have to get as much as possible on the seed or the a.

A So the way that I view it is a bit different, which is, I think there's, I think there's, there's two legit ways of investing now that have emerged. One of them is you're very much a specialist and you've got a special network, special value. You understand a specialist. Sorry. You understand. Sorry. You understand the special size of the market. Like, like, You're very, very much a specialist. Um, and that is kind of how you win deals, get the ownership, keep the ownership, and then make your company successful. The other one is, and I wouldn't say it's like an AOM thing, but it's like you have all of the products so that you can be adaptive in the market. Because, you know, I've been doing this for 10 years. The strategy that works has shifted this entire time. Sometimes it's early, Sometimes it's mid-stage. Sometimes it's collaborating with growth. And so if you don't have, honestly, sometimes it's credit. Sometimes, which we don't have a credit fund, but I can understand why people do it. And so the market is competitive. And everybody's scrambling for deals. And if you don't have the different funds or products to offer, then often that's kind of where people are going to squeeze you out or get alpha, et cetera. And so I think that for, for the game that we play, it's very, very important that you have all of these funds and the ability to enter at all stages for exactly t…

AI assessment note: “I think you play a very different game than we do.”

Q So what's changing then? Cause dev productivity is going up. So is the quality of product going up if the product release cadence isn't?

A I just think the things that are hard remain really hard. And so, you know, like, let's just talk about like creating a model. So, So let's say I'm creating a new model, a new frontier model, right? And to create that new frontier model, I've got to collect data, and I've got to run a pipeline, and I've got to, like, sit with my, you know, my Jupyter notebook, and I've got to, like, look at the lost curves, and I've got to rerun it, uh, and, like, that's just a lot of kind of experimentation and, and so forth. You know, there's no coding model that's going to do that for you, but, but if I wanted to run, create tests, or a test suite, or, you know, Or visualization. Or, right, documentation. It's actually really good at that. And so I would say that probably in the long run, having more robust maintainable code bases with less bugs is, is just as likely to be the impact as feature velocity. Because, you know, in startups, again, I'm an infra, I'm an infra guy. This is probably different for the apps. Like, I've always thought apps had no Technology to begin with. Like every time I look at vertical SAS, I'm like, why do we even care about the technical team? It's fucking crud, man. It's like, crud is like create, you know, read, update, delete. It's like, they all do the same thing. They all just kind of look like a web app. They're all like, who cares about the technology? The …

AI assessment note: “having more robust maintainable code bases with less bugs is, is just as likely”

Q Do Trump's cuts to university's research labs not impact your ability to do what you just said? Are you not actively going against what you should be doing?

A I am very pro investing in, I am very pro investing in academia and in the national labs. I think the, there's always a political shift in money. Depending on what they view is in line with administration politics. Like I've, I still, I can't tell you, you know, I, you know, I did my PhD at Stanford. I've done a bunch of NSF grants. I don't remember ever somebody saying we like indirect costs. Every researcher, every professor, every single one was like indirect costs are terrible. Obama, Obama tried to get rid of indirect costs. He's like, you know what? Universities, they have a tax exempt status. So why don't we just have them, you know, spend five percent of their endowments Like any other tax exempt organization. Um, and you know, that will cover a lot of indirect costs and he couldn't get it through. So this is a bi kind of partisan issue that is long standing. And I, and I mean, I would say that like a change is needed now to the extent that, you know, um, You know, I think these things are very hard to implement, but I would say concretely, yes, we should invest in these things. Yes. We need a shift in how funding happens. I do think that like indirect costs have gotten way out of hand. And until, until it was like Trump doing it, everybody that I know in academia totally agreed. Um, but yes, of course, change and shifts in funding will be disruptive. And so I think all…

AI assessment note: “I don't want to redo this to a simple, like Trump does bad things.”

Q Is that not the joy of being at Andreessen? You can take a five percent ownership on first check because you can size up into the next and size up into the next. Is it not my challenge that I have to get as much as possible on the seed or the a.

A So the way that I view it is a bit different, which is, I think there's, I think there's, there's two legit ways of investing now that have emerged. One of them is you're very much a specialist and you've got a special network, special value. You understand a specialist. Sorry. You understand. Sorry. You understand the special size of the market. Like, like, You're very, very much a specialist. Um, and that is kind of how you win deals, get the ownership, keep the ownership, and then make your company successful. The other one is, and I wouldn't say it's like an AOM thing, but it's like you have all of the products so that you can be adaptive in the market. Because, you know, I've been doing this for 10 years. The strategy that works has shifted this entire time. Sometimes it's early, Sometimes it's mid-stage. Sometimes it's collaborating with growth. And so if you don't have, honestly, sometimes it's credit. Sometimes, which we don't have a credit fund, but I can understand why people do it. And so the market is competitive. And everybody's scrambling for deals. And if you don't have the different funds or products to offer, then often that's kind of where people are going to squeeze you out or get alpha, et cetera. And so I think that for, for the game that we play, it's very, very important that you have all of these funds and the ability to enter at all stages for exactly t…

AI assessment note: “for the game that we play, it's very, very important that you have all of these funds”

Q Was making money or having money what you thought it would be?

A You know, I had to play all of these tricks. I actually borrowed one, which was very helpful. Um, which was, uh, so I just have had a hard time spending money just cause like, I mean, I mean, like for me, like, you know, when I got into like the Stanford PhD program, this is so embarrassing, but like, um, we always thought like, 20 dollars was like a lot of money growing up. Like, you know, and we'd call it like the yuppie food stamp. Cause it was like 20 bucks. And, and, uh, I remember I was like, I was gonna go to Byte's Cafe and I was gonna pay with 20 dollars. Like a 20 dollar bill because like, that's kind of like some like stamp of like having money. So I was just, you know, I was just so naive to all of these things. Um, and so like, it was just very hard for me to like, you know, like, like once, you know, I made enough, you know, generational, you know, I made generational wealth to do it. And so I talked to a friend of mine who went for similar things like, you know, I did. He said, I came up with, let's, you know, let's call him Brad. I came up with a Brad coin and the Brad coin, let's say I'm worth, you know, 10 times more than like an average rich person. So my, the Brad coin is worth, you know, 10 times more. So I buy thing in Brad coins. And so if it's a, you know, let's say it's a business class flight, right? I mean, that's 10,000 dollars, but in Brad coins, it…

AI assessment note: “I was just so naive to all of these things. Um, and so like, it was just very hard”

Q Dude, I freaking hate these. How did you get into venture intro questions? So I just want to dive right in. It is a freaking nuts time. So starting off, how do you evaluate where we're at today in the AI investing landscape, peak hype cycle, Great. Super excited. Both. How do you evaluate it?

A So I'm kind of of two minds of one mind is I do feel like my intuition doesn't really work like it has the last 20 years. Um, it's just the future is very uncertain. And, and, and one of the reasons is, is because, you know, this is really the first time like software development and software creation is, is being disrupted. And so on one hand, I was like, I don't really know what to think. On the other hand, observationally, there's only been one sin, and that one sin is zero sum thinking. We always worry about like, oh, is this defensible? Oh, will this layer get margin? Will this layer get value? And the answer has kind of been unilaterally yes. The answer has been every layer has gotten value. Every layer has winners. Uh, things that we thought were silly are making money. It's been solved. The, the, these, there's profitable companies. I mean, the business case is there, et cetera. And so I, I think the one sin is, is not, is not playing the game.

AI assessment note: “the one sin is not playing the game.”