Marc Andreessen on Timing

Marc says software is eating the world, but the deeper truth is that timing decides who gets to eat. Ideas are cheap and execution is table stakes. What matters is discovering the narrow window where an idea can move from impossible to inevitable—and acting decisively before it closes.

Marc Andreessen:

The strongest form is that, as a consequence of all this, Silicon Valley-type software companies will end up eating everything. The kinds of companies we build in the Valley will rule pretty much every industry. These companies have software at their very core. They know how to develop software. They know the economics of software. They make engineering the priority. And that’s why they’ll win. All this is reflected in the Andreessen Horowitz investment thesis. We don’t do cleantech or biotech. We do things that are based on software. If software is the heart of the company—if things would collapse if you ripped out your key development team—perfect. The companies that will end up dominating most industries are the ones with the same set of management practices and characteristics that you see at Facebook or Google. It will be a rolling process, of course, and the backlash will be intense. Dinosaurs are not in favor or being replaced by birds.

The big, almost philosophical difference goes back to the timing issue. For entrepreneurs, timing is a huge risk. You have to innovate at the right time. You can’t be too early. This is really dangerous because you essentially make a one-time bet. It’s rare are to start the same company five years later if you try it once and were wrong on timing. Jonathan Abrams did Friendster but not Facebook. Things are different with venture capital. To stay in business for 20 years or more, you have to take a portfolio approach. Ideas are no longer one-time bets. If we believe in an idea and back the company that fails at it, it’s probably still a good idea. If someone good wants to do the same thing four years later, that’s probably a good investment. Most VCs won’t do this. They’ll be too scarred from the initial failure. But tracking systematically failures is important.

But seriously—if you think you can execute on an idea that someone tried 5-10 years ago and failed, good VCs will be open to it. You just have to be able to show that now is the time.