Jan 2, 2019 · 34m · a16z
a16z Podcast | High Growth in Companies (and Tech)
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of the a16z Podcast, host Chris Dixon interviews investor and author Elad Gil about scaling late-stage technology startups and exploring key technological frontiers. Their discussion spans operational leadership, executive hiring, product management, M&A dynamics, cryptocurrency, machine learning hardware, and longevity science.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. The host holds 2.7% of the talking time here. How this is scored →
The host as informed peer 4.4 Guest teaching 4.2 Guest disagreement 1.0 The host pushing back 1.5
speaking balance: gold is the host, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 18:34 Elad dismisses half of unicorn valuations
Elad directly challenges private market sentiment by asserting that 50% of billion-dollar unicorn startups are not actually worth a billion dollars.
Hardest push from the host ▶ 21:32 Chris presses on cyclical vs secular M&A shiftsChris reframes Elad's explanation of M&A slowdowns by asking whether the shift is merely cyclical or a fundamental secular transformation.
Biggest teaching moment ▶ 30:05 Elad explains biological longevity pathwaysElad delivers an authoritative breakdown of aging biology, citing C. elegans DAF pathways from his PhD research along with clinical data on rapamycin and metformin.
The host holds their own ▶ 20:42 Chris explains how big tech pay broke acqui-hiresChris uses specific knowledge from Waymo court disclosures to demonstrate how tech giant compensation packages altered startup acqui-hire economics.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | The host as informed peer | Guest teaching | Guest disagreement | The host pushing back | Why |
|---|---|---|---|---|---|---|
| The Transition from Product-Market Fit to Late-Stage Scaling | 4 | 3 | 1 | 1 | Chris frames the interview with an insightful analogy comparing Silicon Valley's unique advantage to a 'second-stage rocket' capable of executive scaling. Elad elaborates on the organizational complexities that emerge when moving beyond product-market fit. | |
| Strategies for Hiring Unfamiliar Executive Roles | 5 | 3 | 1 | 1 | Chris demonstrates strong VC expertise by sharing Andreessen Horowitz's 'calibration' process of introducing founders to top CFOs to demonstrate role excellence. Elad outlines practical steps for interviewing and onboarding executives in unfamiliar domains. | |
| Managing Executive Trajectories and Early Employees | 4 | 4 | 1 | 1 | Chris highlights the delicate interpersonal tension between founder loyalty to early employees and the need for VP-level upgrades. Elad provides actionable advice for early employees facing shrinking roles during hypergrowth. | |
| Evolution and Professionalization of Product Management Orgs | 3 | 5 | 1 | 1 | Elad educates the host on how Jonathan Rosenberg professionalized Google's product organization through APM programs and active mentorship. Chris adds context regarding how org design empowers product managers. | |
| Defining the Role and Responsibilities of a Product Manager | 5 | 5 | 1 | 1 | Chris articulates the structural tension PMs navigate between sales demands and engineering focus in enterprise software. Elad then provides an overview of late-stage financing traps like ratchets and participate preferences. | |
| M&A Dynamics, Corporate Development, and Compensation Shifts | 6 | 4 | 1 | 2 | Chris offers a sharp insight using Waymo legal disclosures to show how inflated big tech compensation crushed the acqui-hire market. He also asks if the slowdown in M&A is cyclical or secular. | |
| Overview of Major Tech Trends: Mobile, Crypto, ML, and Longevity | 4 | 4 | 1 | 1 | Chris sets up a macro discussion on tech platform cycles across mobile, cloud, crypto, and AI. Elad neatly categorizes four major emerging technical frontiers. | |
| Deep Dive into Crypto and Infrastructure Development | 5 | 4 | 1 | 1 | Chris references the 2000s board game 'Dot Bomb' to illustrate how early 'bad' internet ideas eventually succeeded once infrastructure matured. Elad draws parallels between the late-90s dot-com era and current crypto developments. | |
| Machine Learning Hardware and Semiconductor Opportunities | 6 | 6 | 1 | 3 | Chris clearly distinguishes between cloud data center ML training and edge inference constraints. Elad demonstrates deep scientific expertise outlining PhD research on C. elegans DAF pathways and longevity drugs like rapamycin. | |
| Societal Implications of Lifespan Extension and Conclusion | 2 | 4 | 1 | 3 | Elad explores Kuhnian scientific progress and societal risks of longevity. Chris offers a mild counter-perspective by reminding that extended lifespans apply to positive societal figures as well. |
Statements from this episode (29)
Gil: Startup success requires cash, co-founder harmony, and product-market fit
“If you think about it, the surface area of an early stage company is actually really simple. It's don't run out of money, don't fight with your co-founder, and find product market fit, and that's all you have to do, and you'll be successful to some extent.”
Dixon: Silicon Valley's edge is late-stage executive talent, not engineers
“And one of the advantages of Silicon Valley, I think people talk about how there's more engineers and there's more Investors, but those are frankly everywhere. But the big difference is VP marketing, VP sales, VP engineering, and then all the product managers …”
Gil: 100-person startups have two to three management layers
“If you're a hundred people, there's two to three layers between the CEO and every other person.”
Dixon: Technical programming skills are generally incompatible with top enterprise sales ability
“I've heard multiple times engineer founders wanting sales people who know how to program or something, right? Which is probably not compatible with generally great enterprise sales skills.”
Gil: Founders should hire executives for 12 to 18 month horizons
“You should always be thinking of the person as the right person for the next 12 to 18 months, not the person for the next five years, and so I think a common mistake is that people will end up hiring, you know, they'll have a twenty-person engineering team, an…”
Gil: Startups tolerate good executives for too long instead of finding great ones
“Second, people tolerate good versus great hires for too long. And so they'll have a good VP marketing versus the person who's truly exceptional and a great fit for what they're doing.”
Gil: Early startup employees must accept temporary shrinkage of responsibility
“And the other thing you should expect as an old timer is your role is gonna shrink and then it'll expand. And you need to be okay with that shrinking period. And you need to be okay with you losing responsibility before you suddenly gain tons of responsibility…”
Gil: Silicon Valley has very few truly strong product organizations
“There's very few, very strong product organizations in Silicon Valley. Google has a great product org. Facebook has a great product org. There's a handful of them.”
Dixon: Org design drives Google and Facebook product success
“Facebook and Google, they obviously are hiring great people, but I think it's also the way they empower those people and design the organization that makes them great product organizations.”
Gil: Enterprise product managers act as buffers between engineering and sales
“There's typically a natural tension between product and other organizations. And a sort of a second role that they often play, particularly in enterprise companies, is they're almost a buffer between engineering and the rest of the world, but they're also a co…”
Gil: Structured late-stage venture deals are debt masquerading as equity
“On the late stages, some companies start building in very complicated structures and because they want that very high valuation, and a firm may be willing to give it, but then they build in extra preference or participation for the investor, or things that eff…”
Gil: Half of private unicorns are not worth $1 billion
“I would posit that about half of the unicorns are not worth a billion dollars or more. In other words, 50% of the companies that are valued in the private markets as being worth more than a billion shouldn't be worth more than a billion.”
Dixon: Soaring Google salaries have hurt the startup acqui-hire market
“But now you look at the salaries of companies like Google, some of this came out in like the court documents of what they were paying, like the Waymo engineers, and it's like, you know, it's like the price of an annual price of a startup acquisition or somethi…”
Dixon: Building a startup with the goal of acquisition is bad strategy
“I think the takeaway, though, for founders, I think it was probably never a good idea to build a company to sell, but it's even more so not a good idea today. You need to first hit product market fit, and then you need to figure out how to scale, and you just …”
Gil: Machine learning is the only active sector for tech acquisitions
“So maybe the only area where people are very aggressively buying right now is machine learning, and so maybe there's a lack of why now.”
Gil: Coinbase made five to six acquisitions under Emily Choi's leadership
“And so Coinbase is a good example where over the last, you know, 12 months, I think they've made five or six acquisitions and in part that may be driven by them hiring Emily Choi to come in and You know, really drive that function in a smart way.”
Dixon: Tech sector is consolidating around the big five companies
“We do seem recently to be headed for this kind of consolidation around the big five tech companies.”
Gil: Semiconductor layer provides the best way to index machine learning
“It's a way to effectively index machine learning, because I think it's very hard to invest in, quote, unquote, a machine learning company.”
Gil: Biopharma drugs extending human lifespan are a key investment focus
“I'm personally very interested in sort of longevity and anti-aging technologies. And by that, I mean true biopharma, which is translating existing science that's existed in labs for 1020 years, and is trying to turn it into drugs that can extend lifespan prett…”
Gil: Dozen billion-dollar companies will be created by API-ifying internal software
“I still think there's a dozen billion dollar plus companies to be created where you're just taking something that everybody's building internally over and over again, and you're just turning it into an API.”
Gil: Nobody is currently building scalable apps on Ethereum
“Nobody's really building scalable apps on Ethereum right now.”
Gil: Most current crypto projects will go to zero
“Most crypto projects from today are going to go to zero. There's a few that are going to be incredibly valuable and already are, and that's going to grow, but I think most are going to go to zero.”
Gil: Premature crypto ideas will become amazing within 15 years
“Yeah, I think we're going to see the same thing in crypto where there's all these ideas that are early and there's no infrastructure and in 15 years they're going to be amazing.”
Gil: Every major tech wave produces a major silicon company
“Every major technology wave also had a major silicon company created in it, and right now to some extent that's Nvidia for not only graphics processing but also for machine learning purposes.”
Gil: Custom ASICs can outperform GPUs by 1,000x in machine learning
“There is room to create things that are 1000 times better or faster or more performant from a power perspective by creating custom ASICs for ML.”
Gil: Rapamycin and metformin extend organism lifespans by 5% to 30%
“There's at least two FDA approved drugs that in multiple organisms will extend lifespan between five and 30%. One of them is rapamycin, which in mice, for example, extend lifespan 10 to 30%, and it also extends lifespan And flies and worms and other organisms.…”
Gil: Biopharma's focus on specific diseases creates longevity market opportunity
“Biopharma in general tends to be focused on oncology or cancer and a few other areas. And they're not really thinking about how can I push disease back in general, you know, with a drug. So I do think there's a big market gap, which creates a really interestin…”