1/Although Marc's post has been generally well-received (as it ought to be), I've noticed some scattered criticism along the lines of "you're a VC, what do you build, it's not like the world needs another video chat app", etc etc.
2/First of all, the "Silicon Valley is useless" meme is looking mighty stale in a coronavirus shutdown world where Zoom is letting millions of people work from home and Amazon and delivery apps are a lifeline for tens of millions to get daily necessities.
3/But beyond that, I don't think people have a great conception of what VCs actually do.
We think of VCs as these powerful, rich moneymen, when in fact they are small potatoes in the world of finance...
We think of VCs as these powerful, rich moneymen, when in fact they are small potatoes in the world of finance...
4/Andreessen Horowitz, which I believe is the biggest VC in the U.S., manages $10 billion. A few other firms manage a few billion each.
That sounds like a lot of money, until you compare it to the rest of the finance industry.
That sounds like a lot of money, until you compare it to the rest of the finance industry.
5/The entire venture capital industry manages about $400 billion.
In comparison, Fidelity Investments, a large mutual fund, manages $2,459 billion - 6 times as much as all of VC combined.
In comparison, Fidelity Investments, a large mutual fund, manages $2,459 billion - 6 times as much as all of VC combined.
6/What does Fidelity invest all that money in?
Big-company stocks, government bonds corporate bonds, etc. etc.
Big-company stocks, government bonds corporate bonds, etc. etc.
7/Marc Andreessen's job is to siphon off a small amount of that money that would otherwise be invested in mature organizations or financial trading, and direct it toward people who are trying to build utterly new stuff.
So of course he's focused on "building".
So of course he's focused on "building".
8/BUT, there are plenty of things VC just can't build. Government agencies. Capital-intensive manufacturing companies. Political coalitions.
And Marc knows this. He correctly realizes that the world needs to build lots of things that he himself can't possibly build.
And Marc knows this. He correctly realizes that the world needs to build lots of things that he himself can't possibly build.
9/So it's natural and good for Marc to call for other people to build all the things he can't. He recognizes the value of institutions other than what he himself does. But he knows his place, and recognizes that he can't do everything that needs to be done in society.
10/People who think that "tech" (meaning VC-funded startups) can substitute for every social institution -- disrupt government, disrupt universities, etc. -- are nuts. They're off in la-la land.
Marc is not one of these people. He realizes he can't save the world on his own.
Marc is not one of these people. He realizes he can't save the world on his own.
11/To rebuild our society and our institutions, we must all do our part. We must all be humble and work together in our own corner of the world, while supporting and cheering on the people working in other corners of the world.
We're all in this together.
We're all in this together.
12/The idea that society's institutions -- government agencies, big business, tech startups, political movements, the courts, the media -- are engaged in a zero-sum war for influence and power is STUPID.
Each one of these has its part to play. Each must do its job.
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Each one of these has its part to play. Each must do its job.
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