Transcription
Today, we're excited to share an episode of Turpentine VC, a podcast about the art and science of building venture capital firms, hosted by Eric Tornberg. Guests on the show include Venode Kosla, Alfred Lynn, Sarah Tavel, Mike Maples, and more top GPs of the world's top venture firms. Unlike other shows in the space, Terpetime VC digs into the nuts and bolts of firm building, covering fund construction, governance, talent strategy, and decision-making.
Up ahead is Eric's interview with Ben Horowitz, general partner and co-founder of Andreessen Horowitz.
Ben, we're just talking off-camera. There's some firms that are great for 10 years and then struggle. There's some firms that are great for 30 years. Multi-decade. What separates the firms who can do that, and what enables them to be great?
Yeah, I think it's a combination of, um, kind of the lasting parts, like the culture, and then the parts that change, like the leadership. And so I think that, you know, if you just have a couple of smart investors, um, but no culture to speak of, uh, then you're probably not going to do a great generational handoff. And you know, that's probably 10 years is a kind of 10 years is a pretty good run for investors. You know, like maybe you stretch that out, uh, then you know, if you can transition it, like you know, Sequoia transitioned it from Don Valentine to, you know, Mike Moritz and Doug Leone and Jim Goetz, and that worked. You know, that transition worked well, so they were able to kind of take the original culture and build on it and uh, kind of grow it. You know, 20 years for the original guys, 20 years for the successors, and that kind of thing. So, um, that goes pretty well.
You guys are no spring chickens—almost 15 years. How do you think about it for your firm?
Yeah, so we're a little different in that we are organized in such a way where uh, it's not like Mark and I can have like very significant contributions without picking the investments, um, because you know, we have I would just say more scale and more job functions uh, at Andreessen Horowitz, because we're kind of a product first and then a team of investors second, whereas every other firm I think is the opposite. Product meaning uh, the product to entrepreneurs, so like what are we offering is where we start, um, and then the team of investors, um, is kind of goes with that as opposed to we're a team of investors, and then like we'll uh, figure out what our product is as we go. Um, so it's very kind of different orientation. I've always thought of Y Combinator is another example of a product firm in the sense that you could replace a lot of the investors, and they have over time, and yet it still seems to work to some degree.
I think that's right. Like I think they're probably, you know, the closest analog to us kind of spiritually.
Yeah, so they're spiritually close to you, but they're much earlier, and they dominate kind of like uh, company creation, whereas you you do a lot of seed of course too, but you play all all stages.
Mhm. Have you thought about going after that space like pretty hardcore? How have you thought about where you situate in the ecosystem?
Yeah, you know, it's funny because uh, we Paul and and us started, you know, around the same time. He started a little earlier, um, and you know, we talked to him quite a bit during that phase when he was running Y Combinator out of his house with Jessica, um, and you you know, I have to say we we never really thought about kind of being Y Combinator. And I think look, a lot of it has to do, you know, my philosophy of business is you have to start with okay, what can you contribute that's going to be important in the world that nobody can do better than you. And you know, for us a big thing that we had done is we had scaled companies, built them to very large size, that wasn't really kind of Paul's experience, um, but he had thought super deeply about like the very initial kind of part of it, um, so I think that was the right thing for him to do, and we did the right thing for us to do, and I think the world was better with us doing our thing and him doing his thing. But like he's got a great business, totally.
And so you're you're a product, you're not like he and his success totally. The um, most venture firms are a collection of investors. Some you're a collection of venture firms in some way where you have these distinct, you know, uh, American dynamism and bio and crypto and uh, games and these different practices. Should other firms think are you guys ahead of a curve, and other people other firms will follow you or talk about the evolution to that structure and why that made so much sense?
Yeah, so it's interesting. So when we started the firm, uh, there's a lot of conventional wisdom in venture capital, like there are only 15 deals a year that are going to make it to $100 million. You know, it's a cottage industry, you know, done by like you can only learn it through apprenticeship and all the, you know, a lot of concepts which I think were probably correct at the time, but the thing that we believed then and Mark kind of encapsulated in a piece he wrote in 2011 called "Software is Eating the World" was the software industry was going to grow a 100-fold, um, and so 15 companies going to be 150 companies, and like things were going to change. And so in order to kind of be the pre-eminent venture capital firm, you were going to have to be a lot bigger, so we we kind of saw that from the outset, and so we set ourselves up, um, to be able to kind of organize, reorganize, evolve. And if you look at the firm now, what it is is it's right, it's a collection of the original Andreessen Horowitz where every market, um, has a platform that's appropriate to that market and an investing team that is focused on that market. And I think that that's the future of venture capital. Like when we think about who's really an interesting competitor, it's the pure crypto firm, the pure games firm, the pure AI firm more than the generalist firm that's trying to cover all of that with the old structure. I think that's going to be harder for them.
Speaking of the future of venture, will venture firms consider going public, or should they consider like a Y Combinator or like you guys or firms that achieve such a level of scale?
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Yeah, so there's a real interesting alignment problem uh, with going public if you're a venture capital firm, and it's as follows. So if you look at Apollo or, you know, Blackstone or any of these guys, private equity companies that have gone public, um, the public markets value them on their fee stream much more than on their investment returns. Um, I think that's a safer in, you know, kind of alignment between the investors and the firms in private equity than it is in venture capital. I think in venture capital that can get super dangerous because the even at 100x what it used to be, the entire venture capital market is not that big, uh, and is, you know, like the the amount of capital versus the amount of great ideas, like we're already have more capital than great ideas. And as we saw, I think with both Softbank and Tiger Global, if you try to change, um, that demand-supply imbalance, you end up creating a mess, uh, and so if you were public, you'd have a strong incentive to create a mess.
Well, so they went big and created a mess, but you you guys went as big in some ways, right? Your your volume was was very high, your, you know, uh, funds raised is very high. You went big in a much better way, is is the would you disagree?
We didn't go hundred billion dollars, but and then I think Tiger was raising 12 billion a year, uh, so they they were bigger than us just technically. So yeah, look, we've scaled to basically size our funds to the market opportunities. So the way we look at it is look, in a two-to-three-year time frame, how many great deals will we see in a category, um, and then try to size the fund to basically cover that time period is is kind of roughly how we do it. And that's certainly increased uh, fund sizes, both fund sizes and the number of uh, funds over the years, um, but it's still really contained compared to what you do if you were just scaling assets, um, like so we I think it's still like way smaller than like what Apollo or Vista or somebody would do do in that kind of business, um, so yeah, so I think that misalignment is pretty tricky for venture capital to overcome. Like I haven't figured out a way where you would overcome that yet.
Right. So a firm like uh, a firm that stayed diligent like a USV or diligence on fund size, um, you know, a Benchmark or kind of stays 500 or 250 respectively, um, they believe that they can get better multiples on on that, you know, much smaller fund size. What do you believe that they don't believe that in terms of justify why go so much bigger?
Yeah, so I think the market's just gotten bigger. So I think the way to think about it is if you believe the market was fixed at 15 companies, then that's exact right strategy, right? And you know, we don't believe that, and I think that you know, I'm not allowed to talk about our fund returns because we're an RIA, but you know, if you look at our funds, um, I think our larger funds uh, have at times like way outperformed our smaller funds, um, and that's just kind of a function of look, if there were 15 companies and now there's 150, then if you had a $400 million fund, then maybe you need a $4 billion fund, um, and to do the same deals, uh, or to win at if you win the same percentage of them, uh, and, um, you know, like that's just a simple math. And I think that there look, there are different beliefs. I think Benchmark believes what they believe; we believe what we believe, um, and again, look, our mission isn't to isn't necessarily fund returns, right? We have a a mission to kind of help the best entrepreneurs in the world build the best companies that they can. And so you you know, we generally come at like the whole structure of what we do from that perspective. I think also look, I could we could all get much higher salaries if we didn't organize the firm the way we did, uh, but you know, like our mission isn't to maximize the number of money per partner. Our mission is to kind of uh, kind of be the resource for building great technology companies. So it's just like a different point of view.
So how do you recruit such amazing partners if at other firms because they don't have these resources, maybe they can get higher salaries, or um, you know, there's certain perks of being at one of those firms. How do you think about recruiting the best talent at Andreessen?
Yeah, well, I think that, um, you know, people here it's actually helpful that we kind of pay lower salaries to me because we get people who are on mission, uh, and you know, look, there's a lot that goes into that, um, you know, like there's a for example, there's this kind of thing in venture capital that a lot of venture capitalists will say, well, spend all your time with your winners, um, like we don't believe in that at all. Now, like if you look at a spreadsheet, that's exact right thing, right? Like because the the whatever three winners are going to produce all the returns, um, but the way we look at it is, you know, several one, we're not so confident that we know who the winners are for a long time, um, the other thing is that you know, we kind of have the philosophy is look, we knew the job was dangerous when we took it. If we're going to if you're going to take us as your partner, we're going to be there till the bitter end, and like that's, you know, having been very close to the bitter end myself, um, from time to time, like you really do need kind of support or at least somebody to talk to when you're in that situation. And because our, you know, just from a competitive standpoint, our whole idea is that we sell on reputation.
Yep. And that's fundamentally important to our competitive advantage is to have the best reputation. So all those things kind of cause us to behave differently, and if you're not into that, if you're into the spreadsheet view of venture capital, then like you would hate that idea, uh, so so it actually works for us in that sense.
And because you've spent the last, you know, decade plus building this brand reputation, there's lots of other things that you could do, um, you can get into things beyond venture, right? Um, different firm, you know, some firms get into, um, sort of more public investing, get into wealth management, they get into other products that serve, you know, kind of adjacent, um, customers or serve their customers in adjacent ways. How do you think about, um, what makes sense to get into versus what doesn't make sense to get into given that your brand enables these opportunities?
Yeah, so our the way to think about like what we'll we've done so far and what we'll do in the future is the customer is the founder for us. So we start with the founder and the, you know, the initial promise is, you know, we're going to help you raise money, we're going to help you develop into a CEO, we're going to build you a network that's as good as Bob Iger's, we're going to like help you train you into the job, um, and we're going to support you in every way that we can, you know, through our financial network to help you kind of build this company, um, and you know, in our view, we'd like to extend that through the founder's entire life, from the time they found the company to the time they become a philanthropist, um, and so anything in that realm, we feel like is, you know, kind of things that we ought to at least consider doing, um, and you know, which ones we do in which order we'll see, you know, depending on, you know, where the gaps in the market are and what makes sense for us.
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The thing we've talked about off-camera is that one thing that enables you to take such big swings or make these changes when the market changes is your unique approach to, um, sort of governance or control. Why don't you talk about that relative to other venture firms?
Yeah, it's interesting; it's a it's kind of an a concept that we got from a couple of people. One was Herb Allen, who who you know, I think, and then the other was Mark's father-in-law, and they both kind of gave us the same idea, which so in traditionally in venture capital, I think it looks a little like a law firm or, you know, kind of a lot of these partnership structures where you have shared economics and shared control, and like from a partner standpoint, there's a lot, you know, that makes a lot of sense in a lot of ways. We have a different structure where we're shared economics, but we've kind of centralized control, um, and that enables us by not having shared control, we can change the structure of the of the firm very easily. And if you want to grow, like so you know, if you want to go, you know, in an integrated way, like you could have oh, that's the Chinese subsidiary or whatever, and that's a whole another entity, and we talk to them you you know, once every six months, or that's that's not what I'm talking about. But if you want to grow it in an integrated way with a kind of single culture, single offering, um, then you have to be able to change the organizational structure, you know, as you get bigger, um, so like the structure that you had of 50 people is just not going to work at 500, and that's for any organization, um, but in order to do that, somebody's got to be able to make that decision with no politicking, no arguing, no, you know, like there will be tears, uh, because whoever loses power is going to like be upset about it, but you have to be able to make those tough decisions to get to the structure that you need to be maximally effective, and that's just really hard to do. I think with I I don't know how you would do it with shared control.
Let's get back to the the future of venture. Let's say we're having this conversation 10 years from now or 15 years from now, um, does venture kind of look is it does the trends that are happening now continue to happen where there's just this bifurcation, you know, multi-stage firms become even more multi-asset firms, terms that just get bigger and bigger, bigger, and this sort of, uh, you know, solo GP or small specialists on on, you know, kind of this barbell, or do new models come into play, like venture studios really take off, or do emerging technology like Web3 or AI really change the change how venture works or say more about the the future of venture?
Yeah, no, like I all possibilities. I mean, look, I think the kind of classical venture firm, um, that is just like a collection of smart, you know, investors, like I think that's probably run its course.
Mhm. So I think you have to be like a top-end like serious brand that can marshal resources and money and, um, considered smart money, and people want to follow, um, you know, I put us in that category, Sequoia, um, you know, there's that class of thing, and then there's people who are very specialized in a very kind of specific part of the market and know that network and have really great specific expertise, and they'd probably be, you know, more early stage, I would think, um, and those two things seem pretty solid at least for the next 5-10 years. Everything else a little more questionable, I think, you know, with the studio model, the the to me the big problem with that historically, um, and you know, Bill Gross was probably the probably the greatest practitioner of that historically, um, is that it's not an idea; it's an idea maze. And so, uh, and it's very hard to run through the idea maze if it's not your idea. And so like that's a I I think that tends to be problematic. That's kind of it's a little bit of a design for the head of the studios' lifestyle and kind of capabilities as opposed to what's going to make a great company. And so I don't know that that's ever going to work. And I thought Paul's genius was the ideas weren't his, um, and that's was the difference between an incubator and an accelerator, uh, and that I think, you know, just proved to be the right model. And the reason it's the right model is because whoever's building the company, it better be their idea.
Yeah. When you identify an emerging trend, whether it's Web3, whether it's AI, whether it's companies that get big in a really big, really fast in a certain, you know, during the pandemic, let's say, and some people are more uh, prudent about it, some people are more bullish, and I put you guys more in the the bullish camp, smart bullish but bullish, and is the logic there that hey, not everything's going to work out, but the things that work just work so much that it just really makes sense to be extremely bullish? Or I guess when you reflect on the past, you know, few years and things that you went really hard on, if you were to do versions of again going forward in the future now this AI wave of course, how do you think about riding trends and how hard to to ride them?
If you look at, um, the history of technology, almost everything eventually worked.
Yeah, right. All the stuff go back to 1999-2001, all the dot-bombs. Oh, that's the dumbest haha, Pets.com, how stupid, you know, like all that stuff, you know, and then Diapers.com sells for 800, you know, million dollars later. It was just a little ahead of its time.
Yeah, um, and I think the beauty of venture capital is you can make the bet, and if you're too early, you can make the bet again. So if the clean energy if the clean energy craze happened again, you know, if you guys were around during that time, do you think you would have bet big there and just said, "Hey, we're 10 years earlier."
Well, well, that one is a little different in that that was like a politically motivated market, which is a different kind of a thing. I mean, I think so we're we're big believers in software, and if there's like a massive software breakthrough that has new applications or new models or or these kinds of things, and we'd certainly be all on on that. Anything like AI or or crypto or, you know, or like, you know, what's going on in games, like we'd bet that every time, um, I think climate was a little different; it wasn't software; it was material sciences, which uh, has a different market dynamic, um, so it's kind of like uh, like there eventually became a small number of auto companies, um, there never eventually became a small number of software companies, despite what Larry Ellison and all those guys said that there were only going to be three software companies and all that thing because it's kind of like it'd be like there's only going to be three novelists; it's a creative art form; it's got a very big design space. And so, um, you know, we think there, you know, if there is like a big change in how you can write software, which AI is probably the biggest change we've ever had, um, that's going to yes, that's going to produce things, and we bet that all day, all the time, every day. And I think that's also the kind of value of being able to evolve the firm is, um, look, people who knew smartphone network effects may not be the ones who really get AI, may not be the ones who really get crypto, etc.
I know Mark is spending a bunch of time in AI right now.
Yeah, um, talk about the AI strategy at or how you're approaching AI in terms of uh, this both how you think about it from an investing perspective, but also does it change things at the firm more broadly?
Yeah, well, like it it does change things at the firm broadly. You know, from an investing perspective, it's kind of like oh my god, we have non-deterministic computing, like holy cow, uh, you know, like it's it's a whole every problem we couldn't solve with deterministic computing is now for grabs, and that's uh, like you know, we've never seen anything like that. So from a from a firm perspective, I think, you know, we end up needing okay, different expertise, um, we need uh, kind of access to different networks, we need, um, kind of different kind of help for entrepreneurs, like it's amazing so many of the AI entrepreneurs are actually they're not even engineers; they're like researchers, um, so this is a totally different type of cat to be starting a company, uh, and you know, what do they need to succeed, and and that kind of thing. So it's a it's a very big tidal wave kind of running through the firm and running through the industry, but we're we couldn't be more excited about it. I mean, the other thing is like we're in this phase where it's such a profound change that anything you do like will work at least for a while, and so it's kind of hard to pass on any deal in that way. So it's exciting. Thank you.
For listening to join our community and to make sure you do not miss any future episodes, please click the follow button above to subscribe. Well, and that was true also of of of web 3.
For a moment when you when you when you think about web 3, do you think, hey, it's just in a momentary lull, partly, you know, sponsored by markets? And developer activity is higher than ever. I I've been struck just by how far ahead AI is, uh, of web 3, just on terms of use cases and products. And yet I I've been ignoring AI up until the last year or so, and I was spending more time with web three. Like what did I, you know, was the financialization a distraction? Or I guess reflect on that a little bit, or what's your perspective on that?
Yeah, so there's there's a few things. So one is like, um, AI happened overnight. Like this AI model started in 1943, so it was a long time coming, and it was like working really well. I think with uh crypto, it started like in earnest in 2008, um, like that was the 1933 moment. So it's a lot younger than AI. And like I think in fact, so and there have been um there have been kind of a variety of use cases. Some of them have been so there's like this what we call web 3, and you know, a new world way to build networks that's fair and and not like doesn't tend towards these like very dangerous monopolies that control all information and all these kinds of things. Um, but there's also kind of like a because you can create uh money, there's a casino aspect, um, which you know, needs regulation, uh, and we've been kind of working with the US government to try and get the correct regulation. And so, you know, in its current state, I would say there's two things: one is we need uh performance to improve a lot, you know, and kind of gas fees to lower and performance to improve so usability can improve and that kind kind of thing. And that we're really on the verge of, I mean, like I I think we're going to see a 100x improvement of the kind of base infrastructure in the next turn in the next year. Um, so that's awesome. Uh, the other thing though is the kind of regulatory regime and like what's possible and can we get clarity and so forth. And we're working on that both kind of domestically and internationally. Um, but those are kind of things that in order to get very broad adoption, that's going to have to overcome. Like AI is already getting broad adoption because like it works now. The regulators are now moving in and uh, you know, very ironically oddly bizarrely talking about uh trying to ban open source, which is probably the safest thing that could possibly happen in AI because um, you know, the last thing if AI is this all-powerful thing, uh, then the last thing you want is it in the hands of one person or one company. Like that would be horrible and dangerous. Uh, whereas if it's open source, universities can work on it, we can understand it, it can be deployed. I mean, like I often remind people like the last nuclear bomb that was launched was when only we had the nukes. Like that that's a dangerous world with one person having the nukes, and now everyone has nukes, and a bunch of people have nukes, and we haven't had we haven't had any nuclear activity. And and there's a very very specific ific reason for that because everybody's got nukes and nobody wants to get nuked. And I think that AI is, you know, to the extent that AI is a super weapon, um, that will also be true there. And so if you believe that, then I think what you want is open source. And I think if you want regulatory capture, monopoly for yourself, you want to shut that down.
You mentioned earlier that you consider your peers as the best kind of specialist firms, and you compete with those firms. Do you also see your peers or competitors, firms, other multi-asset firms that are not even in venture, like as get bigger and bigger AUM, you know, um, are there firms that you see yourself as veering into their their space? Or uh, no, so like, you know, it's funny because I I've spent some time uh with both kind of the folks at like uh BlackRock and the and at Apollo, just trying to understand their structure and why they're public and these kinds of things. And I would say they are culturally, philosophically, operationally the opposite of us. So like they're very very price-focused, they're optimizers, they're, you know, efficiency experts. Um, like we don't care about any of that. Um, what we care about is like is it a real breakthrough and how big can we help make it? You know, can it win the market? Like those are the things that drive us. So there the there's nothing about what they do that would make them good at what we do, and there's nothing about what we do that would make us good at what they do. So like I think, you know, we'll never get into that realm.
Yeah. And when people focus so much on returns, it also it's important to think about just the LP product. Like my understanding of the SoftBank thesis was that this is a place that LPs could plow a ton of capital and get some like consistent, you know, uh return. And there's not that many places where you could just plow all that capital into into one place and get that kind of diversification. Is is that how you think? Like how do you think about the LP product that you're offering?
We think about LPs differently. Um, so we think about LPs or the way we like to think about them is the same way a company would think about its VC. So um one uh so we're not building a product for them; we're building a product for founders, and you know, they can invest in that product. Um, and then there's a couple things we think about there. One is we want to have the kind of investors that we want to be in business with for a very long time, so we choose them very carefully. And two, we want to treat them like investors. Yeah. Uh, and I think, you know, sometimes uh venture capitalists make the mistake of not doing that, um, which you know, what does that mean? It means well, like you shouldn't have them invest if you don't respect their opinion or an interest in what they have to say. Um, don't want to keep them up to date on what you're doing. Like then then you're not treating them like investors if you don't do that. And I think what we're going to find out in this kind of particular uh interest rate change environment is that like the VCs who didn't treat their LPs like investors are going to be in for um what that means in bad times.
Does macro inform your your your your firm strategy? Or no? No, like I I think we got to be very careful about that. In fact, so one macro in our view is highly unpredictable, right? So that's the first thing. Um, and so we don't try to predict it. Yep. And then secondly, uh we have a 10-year horizon on exits. So if we invest in a company today, we're expecting it to come out in the environment in 2033. And so in 2033, the idea that we could predict that macroeconomic environment is like pretty absurd to me. Like even to talk about it sounds weird. So like getting caught up in that I think is really dangerous. And we saw a lot of so there were a lot of hedge funds that you know attempted to do venture capital in 2021, um, and I think all of them had massive reactions to the macroeconomic environment. I think that's really really dangerous, you know, particularly for the early-stage stuff that they did where they're now, you know, like not only are they not doing the follow-ons, like they won't even return the call. Um, and so you get into that kind of situation, it's like that's not even smart for you. Like you know, it's kind of like you're a bad person for not calling back somebody you invested in, but like that's not even smart for you. Like what are you doing? Like you don't know what's going to happen in 2033, right?
Makes sense. When you started the firm, people like Michael Moritz and others gave you advice on how to think about the firm in a different way based on the market at the time. I'm curious for the next Ben Horowitz and Marc Andreessen out there who are 20 years or 30 years younger, whatever they're just starting out, um, but want to build the next a16z, but they're identifying, you know, thinking the market at looking at the market at 2023, and let's say they're coming to you guys for advice, and you wanted to give them advice, how would you think about creating next a16z, you know, starting in 2023 given where the market is today? There already is a16z. There's that's yeah, the Uber for X is Uber now. If they wanted to create a Hollywood talent agency and see, um, then I would have plenty of advice for them.
Maybe fair enough. You've coined the term, you know, wartime CEO, peacetime CEO. I'm curious if we could think about um, you know, wartime VC, because right now it's a tough time in in markets, tough time to get a firm off the ground. You know, people are more skeptical about venture, people are skeptical of tech more broadly. It's an anti- time of anti-tech. What it's like to be a wartime VC or to be a technoptimist in a world that is uh increasingly pessimistic?
Yeah, so like I think the biggest kind of um war kind of issue that we have is actually probably with the you know the regulatory environment and some of the ideas uh of the kind of current administration where they they have become anti-innovation. And and look, we've already seen like a pretty large percentage of the crypto uh venture capital go overseas. So like the idea that the United States would forfeit the internet of property rights and money um at such an early stage in its life, yep, it just feels so absurd. You know, it doesn't even feel like America in that way. Um, and like the the like literally fake things that they're blaming it on, like, oh, crypto is funding fentanyl. I read that today. I was like, the hell are you talking about? It's like literally the most transparent form of uh payment that there is in the world, like more than Visa, more than dollars, more than anything. And like for somebody, you know, a senator to come out and say some just completely something that she no doubt knows isn't true, uh, you know, to kind of push innovation overseas is like that's a real wartime kind of situation for us in innovation land. And I think we're seeing the same thing in AI. We certainly have, you know, struggles for a different reason in in bio and uh, you know, that kind of technology. But like so I just give you on on bio, the FTC recently, you know, sued uh to break up a deal between a bio startup and a kind of big pharma company. Like it's pretty impossible to do drug to fund drug development if there's no M&A market. Um, so to literally like outlaw new science for health, um, new financial technology, new uh kind of property rights in the virtual world is like a really hard stance for us to understand. So we're we are, you know, working with policymakers and trying to understand, okay, you know, because it's not all like, you know, bananas. Like some of it is uh, you know, certainly makes sense. Um, but to kind shape that for like a a future that's prosperous for America is right like a big effort from from the firm, and we're working hard on that. Um, but that's that feels like wartime. That feels like, okay, now we have an actual threat, uh, existential threat to innovation in America, um, you know, in terms of being a tech optimist. I I always like to go back to a quote from Andy Grove, which I absolutely love, uh, which he said in the 90s, um, and somebody asked him, they said, Andy, is the microprocessor good or bad? And he said, well, that's a not even the right question. That's like asking is steel good or bad? It is. And so it's our job to make it good. And that's you know a lot how I feel about um kind of all these technologies is they are going to exist. Like like you cannot you can't get rid of the wheel now. Like it's over. Like it's here. Uh, you can't get rid of AI now. It's over. It's here. Like you can't outlaw math. Um, you can't like like that paper's already out there. Like you're not going to stop it. Like the whole idea that you're going to stop people from doing it is just so crazy. Um, so then the real question is like, okay, what do we have to do to make it good, positive for society and so forth. And by the way, without new technologies, like how are we going to deal with pandemics or climate change or any of the real, you know, issues facing the world? Like it's not even possible without technology. Like it's like we're like lockdowns didn't work. Now the policy stuff worked. You know what works? Paxlovid. You have COVID, you take that; like you're good. That works. Um, so we need technological solutions to these very very daunting problems that we have with you know more and more populous earth and all these kinds of things. So um, you know, that's how we remained optimistic.
Yeah. And um, maybe gearing towards closing here, um, so as I mentioned to you, you guys have been very helpful to us. You know, we're seeking to create this new kind of tech media company that's more driven by insiders that has more of a pro-tech approach. Um, what advice would you have for us? Or when you look at the kind of media ecosystem, what uh what more do you want to see?
Yeah, well, I think you're on like a really good track, which is, you know, what I want to see is, okay, I'm a young person, and I want to understand where the world is going and what's happening and how I can get involved and make my contribution. What do I need to know? And I think that's, you know, like how does AI work? What is this new computational model of the universe? How can I learn about it? How can I kind of push things forward? Um, which is like largely absent, I would say. I mean, I think you're walking into a vacuum is the good news, uh, but you know, when I was a kid, there used to be like Dr. Dobb's, you know, and uh Wired magazine was that way for a long time, but you know, now it's just like these weird politically charged, you know, uh whatever criticisms of how things are run or how things are built or what they're going to do or every negative consequence of everything. You know, the internet had so many negative consequences, but like I don't think, you know, if we got rid of it, then like if you're in Bangladesh, like you now have no access to any of the information that people in the rich world have. It's it's done amazingly great things. Um, but like yes, there's cybercrime, yes, there's porn, yes, there's a lot of things that you know probably are not a general positive for society. I think people over uh abstracted from the uh um Elizabeth Holmes or Theranos situation, identified, hey, I could make a career there's or think, you know, finding more of these and there's got to be more of these thinking that over abstraction and then another over, you know, abstraction was around um sort of defending democracy, you know, because Facebook somehow people's minds contributed to Trump. Well, the funny thing was like if you go back to 2008, all the stories on how Obama Obama got elected with Facebook, like he he mastered Facebook, he got elected on Facebook. Facebook's the greatest thing; it's making the world more democratic. Arab Spring. Wow, this is so awesome. And then Trump gets elected, and it's like this is a threat to democracy; we're all screwed, got to shut down the social network. So you know, like it's it's interesting, you know, when things get political, they get very weird very fast. I and what's funny now and we'll get to is AI is it's now coming from within the house in terms of some of the people who are most active are like are within tech in terms of and maybe it's regulatory capture, maybe it's something else. It's regulatory capture. I mean, some people are true believers. It's the Google guy or like some people look there are people who are genuinely worried about how powerful the technology is, and I think look those are good worries, y but the idea that um the way you deal with a powerful technology ology is you put it in the hands of a few is the most craziest idea. Well, like look, power in the hands of the few has never turned out well, right? Like with the best intentions, right? People love Karl Marx's intentions, but Stalin, Pol Pot, you know, Mao, like everybody died. That's what happened. Everybody died. And like all those guys didn't start out to be like singularly uniquely evil people, but they had too much power. Because you take all the power of the private sector and put it in the hands of a few guys in the government, doesn't matter what the political philosophy is, that's bad, y. And similarly, if you take all the power of the industry and you put it with two companies, that's going to be bad. I can guarantee you that like I don't know what else is going to be bad, but I know that's bad.
I think it's a great place to to wrap on the uplifting note of power to the people uh and decentralizing power. Ben, thanks so much for coming to the podcast. This yeah, no great Eric, this is good. And and then great luck and the best of luck. We're all excited about um about what you're doing and and its impact on the world. Hey everyone, hope you enjoyed the Turpentine VC episode, Ben Horowitz. Make sure to subscribe to Turpentine VC at the link in the show notes or search for Turpentine VC on Apple, Spotify, YouTube, or wherever you get your podcast.