Disclosure
Dixon: a16z funds operating teams with management fees rather than partner salaries
“The traditional structure is basically that VC funds charge fees and then most of those fees go to the partner salaries. We don't, instead we put our fees towards these operating teams. So for our competitors to copy us, they'd have to kind of dramatically cha…”
Assertion Supported
Dixon: Top-performing VC firms have higher loss rates than lesser firms
“There's a lot of data in the VC industry that actually, interestingly enough, the best firms actually have a higher loss rate, meaning they lose money more frequently than the less.”
Prediction Not checkable as stated
Dixon: Virtual reality will be the next computing wave after mobile
“I think it will be, like, when we look back on the history of computing, it will be, the key milestones will be, I mean, I'm, this is, I'm at the extreme end of excitement here, but there'll be, you know, the PC, the Macintosh, or something like this, then the…”
Prediction Didn’t hold up
Dixon: By 2025 remote conversations will probably occur in VR
“I think, you know, in 10 years, we'd be probably having this conversation in virtual reality, and we'd be, you know, looking at each other across the room, and it would feel like we're in the same room.”
Insight
Dixon: Basic highway autonomous driving is easy; edge cases are the challenge
“So like self-driving cars are another good example where if somebody tells you, oh, I saw a self-driving car, and it was able to drive on the highway during daylight, that's actually not very impressive, and that's actually something that almost anyone can bui…”
Assertion Contradicted
Dixon: a16z employs over 100 non-investor operational staff
“We have over a hundred employees who are not investors at our firm, whose sole job it is to help companies do things like recruit employees you know build their, you know, their customers base.”
Assertion Supported
Dixon: Traditional public mutual funds are driving late-stage private venture rounds
“It's actually what you, what is happening is firms that are, that historically had been public investors. So for example, Fidelity T. Rowe Price, like a whole Wellington, all of these kind of well-known public market investors. Have now moved to invest in priv…”
Assertion Not checkable as stated
Dixon: Modern VCs do not take control or hold rights to fire founders
“That, that's not something that we do. We really just don't even take control for the most part. Most of us do now. We don't, we couldn't fire the founders if we wanted to. Not that we do want to, but we couldn't.”
Insight
Dixon: It is easier to teach a technologist business than vice versa
“We kind of make the assumption that that's easier to learn than the opposite. Like it's easier to teach your computer science business and vice versa. You're never going to teach a business person computer science on the job, right? You have to go to school fo…”
Insight
Dixon: Great startup founders anticipate and traverse an 'idea maze'
“We have this concept we call the idea maze and the idea maze is the, is sort of the idea that That the startup ideas aren't really just kind of a static thing. It's kind of like, you know, you see the TV or the movies and they have the way they kind of, you kn…”
Assertion Not checkable as stated
Dixon: Using data science to predict startup success yields poor results
“People have tried many, many times to use data science and other things to try to quantify these kinds of questions you're asking and the results have been pretty, pretty poor. It's very, it's been very hard to predict these things.”
Insight
Dixon: Venture capital operates on a manager schedule instead of maker flow states
“And VC is very much a manager, so it's sort of one hour scheduled meetings as opposed to kind of, you know, eight hours of getting into a flow state and thinking about a topic. So the good, the bad part is it's sort of a lot of state switching and kind of jump…”
Assertion Contradicted
Dixon: VC invests only $10B–$20B yearly, smaller than big tech R&D budgets
“This industry is actually, you know, it gets a lot of attention in the press venture capital, but it's actually a very small industry. So, you know, they're probably, there are a few dozen kind of firms that most people, you know, that, that, that constitute t…”
Prediction Not checkable as stated
Dixon: Newer venture firms will increasingly adopt a16z-style operating models
“I think you will see more and more of our kind of style. I think it will probably come from newer firms.”
Disclosure
Dixon: Andreessen Horowitz generally avoids late-stage mega-rounds
“Actually, I mean, we don't, like, we don't do those kinds of investments for the most part.”
Insight
Dixon: Series A investing is 90% about people, not the business plan
“I think it's series A, it's definitely, certainly people is 90% of it, and the idea is also important with the proviso that the idea will, at that point we know it will change so it's kind of more like You're investing in the general direction of the idea.”
Assertion Supported
Dixon: The best VC funds lose money on at least half of investments
“The best VC funds lose money at least half the time, which means half of our, If we're doing a good job, half of our investments will fail.”
Insight
Dixon: AI is simply human expertise embedded into regular software
“A lot of automation,
Doesn't really look like automation.
It looks like just regular software.
That's a lot of ways what AI really is.
It's sort of taking what smart people do and embedding it in software and giving that software out to lots of people.
and so…”
Prediction Not checkable as stated
Dixon: In 20 years people will be stunned by today's food
“So we think that when you look back, 20 years from now, people will just be stunned by the kind of foods that we ate today.”
Disclosure
Dixon: a16z focuses on Series A and B over seed due to fund size
“At an, you know, at a, 16 Z it's, we do, we don't do much of that anymore. We do some of that, but not, not as much because we have a bigger fund and we tend to focus on what's called series A and series B.”
Disclosure
Dixon: VC calendar is split roughly 50-50 between new deals and portfolio support
“I think, I guess I would divide my calendar somewhat between, I guess, two broad categories of things. One would be meeting with entrepreneurs who are starting companies and raising money. And coming to us to talk about potentially investing and then the other…”
Disclosure
Dixon: Curated Twitter feed of 2,000 experts is a primary work tool
“I'm a huge fan of you know, Twitter, for example. I use Twitter constantly, and For me, it's a, it's probably one of my most important work tools in that I've, you know, have a carefully curated list of people I follow who essentially I have whatever it is, 20…”
Chris Dixon