The Problem With Marc Andreessen
blogs.reuters.comI don't understand.
The man created the web browser, built multiple billion dollar companies, angel invested and sits on the board of Facebook, and is now one of the most well known VCs in the world - and this is saying what - that he's not as good as Felix thinks he could be?
What the hell has Felix Salmon ever done?
I'm seeing more and more of this: pundits and armchair entrepreneurs online who just can't help but tear down people who went in the arena and worked their asses off and built something.
Shut up and go build something people want.
Felix Salmon is a journalist. He provides value to the world by reporting or critiquing -- in this case, critiquing the notion that Andreessen and his business practices are worth venerating or emulating.What the hell has Felix Salmon ever done?That he has not built a successful start-up is entirely unrelated to that point, much in the same way the fact Roger Ebert isn't a director is unrelated to his critique of films.
>Felix Salmon is a journalist.
Exactly. Not being a successful VC does not preclude you from criticising a successful VC.
However, Salmon's incentives aren't aligned the same and regardless of his desire to show a lack of bias to be a "good journalist", there is a point that he stands a lot to gain if his critique of Andreessen becomes popular.
Sure, he makes good points, but I'd take this type of critique a lot more seriously if a successful VC said it. Journalists are good at writing and doing a job of disseminating information. Given their role, they will never be completely accurate when it comes to making predictions of an industry in which they are often on the periphery of "the trenches".
I think there is a point in the original article that is perhaps overstated but nonetheless mainly true - Andreessen is being hailed as one of the great entrepreneurs of our time by Wired. But really, his main skill is building companies that don't make much money and selling them to other companies. He has never really created anything of long-term value. He's no Warren Buffet or Bill Gates.
> He has never really created anything of long-term value
Except HP Server Automation[1], HP Operations Orchestration[2], HP Network Automation[3], and that's just Opsware products. That doesn't touch on the lasting transformational aspects of his work at UIUC, or Netscape.
[1] http://www8.hp.com/emea_middle_east/en/software/software-pro... [2] http://www8.hp.com/emea_middle_east/en/software/software-pro... [3] http://www8.hp.com/emea_middle_east/en/software/software-pro...
Opsware is a freaking joke.
Do mind elaborating?
In fact, Opsware created products that (still) play an important role in large, private, datacenters. Hell, for what it's worth, their 3 main products were actually created to manage their own infrastructure. Which part of that is the joke?
The deployment attempts I've seen have been spectacular failures. This goes back a few years (~2008), some things may have changed.
Lack of a CLI accessible on managed nodes being a huge issue for datacenter work.
Staggeringly deficient database performance.
My recent experience has been with Puppet/Chef. They're still crufty in their own ways, but far more appropriate than Oopsware.
> He has never really created anything of long-term value
if the question is 'value' vs 'dollars'. Netscape was the enabler to the creation of trillions of dollars. That's value. He saw the opportunity and created it.
I don't think he needs to be an innovator to be a VC. He needs to be smart and recognize opportunities when they come to him. He's shown a knack for that.
And as for " I’ve never met anybody who thought that Netscape was a good acquisition for AOL": Netscape could have been a great acquisition for AOL if we had any idea how to properly acquire a company. It brought years of true, native Internet experience at a time when we were just starting to transition away from being a proprietary thick client.
Sadly, we made the classic mistake: Let's acquire this brilliant team that works well together, and then let's split up the team and sprinkle the individuals around our existing organization in the hope they'll influence our old-school thinking.
That's like trying to get a vaccination from a homeopath.
And why is this a bad thing? I don't see why it makes a difference if the company continues to exist on it's own or as part of another company.
True. I think the point is more that these companies made no profits while they were independent and then continued to make no profits after they were acquired; thus in retrospect the acquirers must have overpaid.
Except that this line of reasoning assumes that the people who run the acquiring company are morons. This is quite a strong assumption to make without any further evidence. I think neither of us knows enough about HP's fiances to make that claim (I presume you were talking about Opsware).
Because it's a zero-sum game.
I agree more with Felix than with you. Probably many other people built the same "unsuccessful" companies but can't only sell those companies if they are well connected.
I'm sure this article keeps Anderson up at night thinking could be as amazing as Felix. Perhaps Anderson could have created the next great thing himself, instead he chose to help other people bring their ideas to the market place. Mentors have a greatly under appreciated roll in the success or failure of companies.
The article presents an interesting point of view that I think is probably goes too far. It's not Marc's fault if the giant lumbering behemoths that buy companies don't know what to do with them. That's almost intrinsic in their natures, actually, that they'll screw it up. Even the best tech companies do it time and again, and with very good properties.
But this line in particular stands out- "...buy its stake in the shadowy secondary market instead."
Come on. Shadowy? Really? Making it sound like he's buying plutonium or something.
A recent WSJ article uses the same terminology [1]. Also, it's common to refer to things as shadowy in financial markets. Shadow banking system, dark pools of liquidity, etc. Calling something a shadow market is a way to describe a market characterized by asymmetric information, basically.
[1] http://online.wsj.com/article/SB1000142405274870389970457620...
Fair point, though I do think there's a notable difference in implications of "shadow market" and "shadowy market", more than the one extra letter would indicate.
From the point of view that public markets are accesible to everyone - the secondary market is like a grey market: there's limited information, likelihood of anonymity and weak controls. With that in mind, I would call it "shadowy".
Also, I think making money on timing the market is not a bad thing. To each his own. However, timing the market does not create value. It is merely displacing value or what they call a zero-sum game. I don't think the article goes too far in displaying MA as someone playing that game. In fact, makes the point so valid that it's hard to argue that he has created some sort of permanent value. Other than netscape, the FB board seat is just a fancy chair...
Actually I think it is quite normal for almost any kind of transaction not to get broadcasting publicity. I fail to see how that is shadowy.
Anyway, why would staring Netscape not be enough value already? After all he himself wrote the Mosic browser that became the basis for all of today's browser. I think very few people have produced more "value" in their lives.
I also don't like the tone of voice of the article. It's pretty much a personal attack only based on the fact that he makes a lot of money.
>Anyway, why would staring Netscape not be enough value already? After all he himself wrote the Mosic browser that became the basis for all of today's browser. I think very few people have produced more "value" in their lives.
No, he was a part of the team that wrote the Mosaic browser. Eric Bina was the other major contributor. Mosaic was not a solo project like the first version of Linux. It was a team effort.
Netscape's core was reborn as Firefox. Netscape invented the image tag, along with much of what we consider essential to what the internet is today. Most here would probably attest that it was also the superior product in its day, only losing out to IE thanks to questionably legal monopoly muscling from MS.
Opsware was purchased for $1.6bn by HP, hardly a failure...
Andreesen has a strong history of execution and value generation and Netscape was a pioneer, not a cheap shareholder exploitation vehicle. This article is grasping at straws.
Edit: Clearly HP the thought Opsware was extremely valuable at the time of purchase and the author provides no evidence to support his claim that it was not a good purchase for HP. According to comments on the article, Opsware's product still exists and has simply been rebranded.
Opsware was purchased for $1.6bn by HP, hardly a failure...
The thesis of the article is that Marc has been very successful at selling things, but that these things have not been so successful for the people who bought them from him. I don't think you are at odds with the author if you're saying that Marc has been successful at making money.
The article didn't actually give any evidence as to why Opsware was a bad purchase for HP, and according the comments in the article the product still exists and has simply been rebranded.
I suppose I was trying to imply with the $1.6bn price tag that clearly HP thought the product was immensely valuable and I thought "who is the author to say that they were so wrong without a shard of evidence?" Admittedly, I failed to actually draw this line of reasoning in the post at all and have no reason to suppose others would infer it as well.
Regarding Opsware, I think the author of the article is pointing out that a company's acquisition price does not necessarily equal its true value. In other words, the seller of a tulip at the peak of a market bubble hasn't created as much value as you'd think.
Netscape != Andreesen
they’re primarily interested in buying into any company,
no matter how flash-in-the-pan, where Andreessen Horowitz
can exit its investment for a large multiple of whatever
it bought in at.
This also makes me wonder if this type of attitude might be hurting the long term prospects of our economy.
Yes, it is.
I had similar thoughts while reading the article. If the market is rewarding people who are not creating long term value, where does that leave innovators that do?
You don't see something...Ponzi-scheme-ish about the industry? I may not be especially familiar with this, but it sounds like:
1. Man makes short-lived company that makes him rich quickly. 2. Man makes money investing in other short-lived companies that make their founders rich quickly. 3. Successful founders grow up to make money investing in still other short-lived companies.
Maybe I'm totally misinterpreting this, but if there's any truth to this version of the story, it seems like it's heading for disaster. I've already met a lot of startup founders who insist that profitability doesn't matter. How on earth is that attitude sustainable?
It's more "greater fool" or possibly multi-level scheme than Ponzi.
In a true Ponzi scheme, payouts come from either investors' own deposits or those of additional investors. There's no investment income in the fund itself.
In Andreeson's case, he's been surfing on the wave of success or perceived success, by inflating subsequent hype bubbles and cashing these out. There's not a strict connection between his ventures, investment funds, and cash-outs, though arguably there would be very little market value if he were perceived as no longer being the golden boy.
I've found myself increasing unimpressed by what he's had to say about the value and credibility of his activities over the past decade or so.
Because there's the occasional hit to pay for all the ponzi schemes. So it ends up being not ponzi because it really does generate cash.
I have no idea if Marc actually has done anything at all with his life after mosaic apart from make a lot of terrible companies that sold well. The article seems to imply he's a total fraud. But I'll tell you who has.
Microsoft, Google, AOL, Yahoo, etc.
They all made lots of money and they're the ones paying silly sums of money to buy companies that they then almost consciously let rot, fester and die.
I think mainly so that no-one can accidentally get bigger than them and take them out. Imagine if someone bought facebook 5 years ago. It probably would be dead by now.
> I think mainly so that no-one can accidentally get bigger than them and take them out.
You're underestimating the "made man" effect. Once you have a really enormous hit, you become a Made Man; someone will always be willing to throw some money at you for future worthless businesses you found, because the people with the money know you and want to stay on your good side on the off chance lightning strikes a second time later on. So they're willing to throw some money away to keep you happy. (And not just you -- it lets them do a solid for the people who invested in your company, too, by letting them walk away without taking a loss. Why do that? Because the investors are usually also Made Men.)
It's not just Andreessen who illustrates this. Look at Google's recent acquisition of Milk:
http://money.cnn.com/2012/03/20/technology/startups/Google-D...
Milk only ever shipped one product, Oink, which was a total flop. But Google spent a reported $15-30 million dollars to acquire them.
Why?
Because Milk was founded by Kevin Rose, and Rose's hit with Digg made him a Made Man; and it had gotten ~$1.5 million in angel funding from a veritable Who's Who of other Made Men (see http://techcrunch.com/2011/04/26/milk-completes-1-5-million-...).
If you had the same company, with the same team and track record, and subtracted Kevin Rose and the plugged-in investors from it -- the same company, just staffed in some podunk Midwestern town and funded by no-name investors -- I doubt Google would have spent a plugged nickel to buy it. But Milk was very plugged in, so Google bailed them out.
In other words, it's classic logrolling (see http://en.wikipedia.org/wiki/Logrolling). You bail me out when my venture tanks, and I'll bail you out when yours does. It's a pretty sweet deal. But it's a deal that's only available to Made Men.
People seem to use the word Ponzi-scheme quite loosely these days, but this is not one. I don't know if this is news to you, but it is not a secret, that VCs do invest in companies under the premise that they get sold or they do an IPO (sell to the public). This is because they need to get a return on their investment.
However, these companies get bought by bigger companies, who drive some real value from buying them. If the big company screws it up or decides to integrate the product in their own, that does not make it a Ponzi-scheme.
I probably phrased it too strongly, but I'm legitimately confused. Something seems...unsettlingly short-term here. I shouldn't have called it a "Ponzi scheme." But perhaps "speculation."
I guess you're right in a sense, but I think it's quite harmless compared to other things people call "investment" (simply because of it's size). Capitalism is all about the short-term and capitalism is system we live in.
I think the problem is with publications like Wired and Fast Company. They tend to gush and over exaggerate the achievements of their subjects while glossing over real problems. Everything is 'world changing', 'revolutionary' and 'disruptive'.
Fast Company is the worst offender. They rarely critically analyse anything.
It's interesting to me how tangential comments tend to rise to the top so much on HN.
Your opinion is fair and all, and I'll believe you follow those publications and have a basis for making the claim. But you could have easily written this comment without having read a word of the article - is that really the best comment for the top of the page?
I'm not looking to get the top comment, it's just an observation. If you feel it doesn't belong here down-vote it.
I don't think my comment is tangential. It helps explain why the original WIRED article didn't offer legitimate criticism of Marc Andreessen.
Another way of looking at it, and probably what WIRED people would say, is that they don't run badmouth stories, ergo if the story was going to have a negative tone they simply might not run it at all.
Critical Analysis and badmouthing aren't the same thing. Plenty of publications get good interviews with polarising figures while critically analysing their achievements.
Right. I'm speaking of WIRED specifically.
My point is WIRED can critically analyse without badmouthing.
They could, but they don't.
As long as we're being accurate:
> His single greatest achievement — the creation of the world’s first web browser, Mosaic — took place under the auspices of the National Center for Supercomputing Applications at the University of Illinois.
All correct, except for "first". The world's first web browser was WorldWideWeb[1], written by Tim Berners-Lee. But I suppose it is true that Mosaic was the first browser that got noticed by anyone other than the Chosen Few.
If we want to really get pedantic, Mosaic was a "first" -- the first WWW browser to support embedding inline images in Web pages. Previous browsers were text-only; you could post images, but they could only be linked to, not displayed directly inside a page. That made the WWW too similar to Gopher (http://en.wikipedia.org/wiki/Gopher_%28protocol%29) to really break out in popularity. Mosaic's support for inline graphics is what caused the Web's first real wave of general interest outside academia.
More here: http://www.wired.com/thisdayintech/2010/04/0422mosaic-web-br...
The modifier you're looking for is "first graphical WWW browser".
Not really; that would include any WWW browser with a GUI interface (like the original WorldWideWeb on NeXTSTEP).
Notepad is a GUI text editor.
MS Paint is a graphical editor.
An application can have a GUI without being graphical. I'll confess to never having used WorldWideWeb on a NeXT box, though vids suggest it didn't do much in the way of typesetting or graphical rendering.
I'm seeing something very similar happening in SV as happened in Wallstreet prior to when the big mess began in 2008: the media generated cult of personality for people who make money, not successful lasting companies.
I have no problem with making money (even lots of it), but I agree with you that building personality cults is a bad practice by elements within the media. Nothing wrong with deflating personality cults, however, I don't think this article accomplishes that task. This piece smells of a hit piece and typically makes the author looks worse than the intended target.
The problem with Andreeson is he doesn't aim to build anything that is built to last.
Having his creations be acquired for substantial sums by nervous corporations (who proceed to let them die) serves no one but Andreeson himself and his investors.
As a consumer, I value programs like netpbm, feh, ffmpeg and mplayer far more than Netscape and all the monolithic browser crap that has followed. I can rely on the former programs year after year.
By contrast, Andreeson offers little to consumers. His best programmer at Netscape was put out of job and now runs a nightclub. I think that says it all. Andreeson is not improving the world of software and technology. He has no intention of building things that last. He's in it to make a quick buck. Quality and consumers be damned.
That's selling jwz a little short, my friend. A better way to say that would be "got rich as fuck and bought a nightclub", but that doesn't really fit your angle.
IF you apply the high standards that the author is applying to andreesen than there may not be more than a handful of entrepreneurs who meet that criteria. When apple eventually loses its luster 20 yrs from now, you could write an article saying what did Steve jobs achieve? It's the most idiotic article I have read about a person who started 3 really great companies.
Marc.
Marc kicked off an information sharing revolution the likes of which humanity has never seen prior. Even if someone had come along a year later and made a browser the masses could use, that's still tantamount to a civilizational change delayed a year. Felix the Hater should reconsider.
Page view journalism. "Hmm...that article on how AH should have made more from the Instagram deal blew up. What other negative angle can I take on these guys while their 'hot' to juice some page views?"
Anyone know what the p in pmarca stands for?
At his old company everyone had a public email address which was their first name + last initial, and a "private" one that was the public one preceded by the letter "p".
I believe it's 'private', it was his private blog at some point.