Tag: a16z

Host: Chris Dixon, a16z partner
Guest: Brian McCullough, author and podcaster

Just published the book “How the Internet Happened, From Netscape to the iPhone” (Amazon)
covers Netscape (1993-ish) to announcement of first iPhone (~2007)
2007-today is the smartphone era

Technology infiltrated every facet of our lives

Bad idea cards – “internet grocery delivery”, “pet foods” – almost every bad idea later became a huge company

Dot com bust was like the meteor hit, the dinosaurs died, but then it all came roaring back

In early 2000s, general sentiment was that internet was cool, useful, but you couldn’t really make money – until the Google IPO, which shocked everyone how profitable they were

In early days, there was a centralized version of the internet called the “Information Superhighway” being pushed by large companies like Disney, Microsoft, etc
The decentralized / distributed network was the underdog
The centralized version / participants thought they had more time, but they lost. What’s the lesson?
“Just good enough technology IS good enough”
Need to excite enough people, reach critical mass
Lots of them were developers who could build
HTML was simple enough, lowered barriers to entry – launch of Mosaic browser
Bill Gates had the vision, but bet on the wrong horse (the centralized version)

eBay – they were one of the most influential early products, even though they aren’t as massive today
1. trained normies to trust strangers online
2. power of self organizing masses to build reputation and relationships
Omidyar didn’t want to settle the disputes between users, so built a reputation and ratings system to let users self organize
“Our business model is whatever our users are doing on our platform”

Napster – today media world is unlimited selection + instant gratification – Napster built that in 1999, but picked fight with wrong industry (music industry literally had mob ties)
turns out key value prop was the convenience, not the price
can’t convince an industry at height of its success to change

Google’s business model was 2 miracles
1. The search engine
2. Overture’s ad model (which Google acquired)
As advertiser, you pay LESS per click the better (more relevant) your ad!
Users actually PREFER having ads
Before that it was all banner ads
Larry & Sergey stuck to principles, were betting that a biz model would come
Initially tried to sell a box for Google Enterprise Search

Turns out on-demand delivery needed smartphones – which came later
Smartphone is perfect for both creation and consumption

We’re in a lull today
No new “wow factor”
Lot of low hanging fruit has been picked by mobile + social
To become the new IG, need to create a qualitatively better experience
Can’t just show up and acquire 1B users

Tech is interplay of infrastructure + applications
iPhone + App Store was infra unlock, which lead to explosion of apps
what’s next infra wave? or are we at end of history?

Founders doing same playbook as 2004
Maybe need new builders to have cultural shift / strategic shift

Is it dangerous because the top companies today have become too big, and just buy the small innovative cos?
Alex Rampell – startups try to find distribution faster than incumbents try to find innovation
Snapchat is great example – invented new media type (vertical short video, ephemeral messaging) – but growth was limited by FB / IG copying
Etsy – Amazon copies them
Tivo – great idea, but Comcast eventually copied it (took 5 years)

PC industry was literally created by hobbyists
Find the spaces where people do it for fun
Most businesses operate on a quarterly or yearly cycle
No one invests in 10 year cycle except maybe academics and hobbyists – which is why often the breakthru innovations comes from these sources

So much of it is just feeling around in dark, fake it til you make it
Even Bezos, Amazon was a test to prove it to himself – once he proved it, then he went all in
Even FB, Zuckerberg thought Wirehog would be bigger, took others to tell him to believe in FB and double down on it