Key Takeaways
- • Marc Andreessen, co-founder of Andreessen Horowitz (a16z) and co-creator of the Mosaic browser and Netscape, argues in a Noahpinion interview that the private sector, particularly American technology, has outperformed public institutions during the COVID-19 pandemic.
- • Andreessen identifies housing, education, and health care as the priority sectors for new building, citing skyrocketing prices in these areas while technology drives down costs elsewhere, and says a16z has startup investments in all three.
- • He maintains that software will continue to "eat the world," describing software as a "lever on the real world" that reshapes transportation, real estate, and consumer products.
- • Andreessen says communication platforms such as Clubhouse and Substack are building new business models for online creators, and he describes incumbents as struggling to adapt to software culture.
- • He cites a gap in computer science talent: he estimates 50-70% of top executives at a typical tech startup hold CS degrees, versus roughly 5-7% at a typical incumbent.
Summary
In a Substack interview with economics writer Noah Smith (Noahpinion), venture capitalist Marc Andreessen, co-founder of Andreessen Horowitz with Ben Horowitz, discussed priorities for building new technologies and institutions. Andreessen, who helped code the Mosaic browser and co-founded Netscape, said the 15 months since his April 2020 essay "It's Time to Build" had been dominated by the COVID-19 pandemic, what he described as the systemic failure of public sector entities worldwide, and the success of the private sector and the American technology industry in managing the crisis. He pointed to his essay "Technology Saves The World" as expanding on that view.
On priorities, Andreessen argued that housing, education, and health care remain the central deficits of middle-class success. He said these sectors share skyrocketing prices at a time when technology is lowering prices for most other goods and services, and he called for new technologies, businesses, and industries in the next decade that would reverse those cost curves. He said his firm has startup investments in all three sectors.
On technology outlook, Andreessen reaffirmed his view that software continues to "eat the world," which he framed as a lever on the physical world, citing Lyft and Airbnb as examples. He argued that the real-world domains least touched by software, including housing, education and health care, offer the largest opportunity. On social platforms, he said Clubhouse and Substack reflect the importance of communication, and he described Substack as a business model that lets writers be paid for online work for the first time.
On the competitive dynamics of software, Andreessen outlined a three-stage model in which products shift to software, producers become software companies, and the best software company wins. He cited partner Alex Rampell's framing of incumbent-versus-startup competition as "a race, where the startup is trying to get distribution before the incumbent gets innovation." He said he is increasingly skeptical that most incumbents can adapt, given cultural barriers to retaining software talent. On artificial intelligence, he said that as an engineer he found it difficult to be as romantic about AI as many observers, while acknowledging it is an "incredibly powerful technology."
On priorities, Andreessen argued that housing, education, and health care remain the central deficits of middle-class success. He said these sectors share skyrocketing prices at a time when technology is lowering prices for most other goods and services, and he called for new technologies, businesses, and industries in the next decade that would reverse those cost curves. He said his firm has startup investments in all three sectors.
On technology outlook, Andreessen reaffirmed his view that software continues to "eat the world," which he framed as a lever on the physical world, citing Lyft and Airbnb as examples. He argued that the real-world domains least touched by software, including housing, education and health care, offer the largest opportunity. On social platforms, he said Clubhouse and Substack reflect the importance of communication, and he described Substack as a business model that lets writers be paid for online work for the first time.
On the competitive dynamics of software, Andreessen outlined a three-stage model in which products shift to software, producers become software companies, and the best software company wins. He cited partner Alex Rampell's framing of incumbent-versus-startup competition as "a race, where the startup is trying to get distribution before the incumbent gets innovation." He said he is increasingly skeptical that most incumbents can adapt, given cultural barriers to retaining software talent. On artificial intelligence, he said that as an engineer he found it difficult to be as romantic about AI as many observers, while acknowledging it is an "incredibly powerful technology."
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