a16z Podcast: Earned Secrets

Key takeaways

Criticism of large acquisitions, like Microsoft's purchase of GitHub, can be misleading; profitable opportunities can exist despite initial negative perceptions.
When choosing a company to join, it's crucial to assess its stage and trajectory rather than simply follow generic advice.
The tech landscape constantly evolves, with emerging trends expected to revolve around AI, crypto, and additional computational innovations.
Successful startups often arise from 'earned secrets' rather than conventional market analyses or generic ideas.
The dynamics between founders and investors should prioritize support and guidance in challenging times over ease during periods of success.

Summary

Moral of Microsoft's Acquisition of GitHub

In this segment, Ben Horowitz discusses the controversial acquisition of GitHub by Microsoft. He reflects on the initial criticisms regarding the hefty price paid for the acquisition, emphasizing that such deals might be deemed foolish by some, but they can still yield profits. Horowitz points out the shift in the tech industry, noting that cloud computing is where the real battle lies among giants like Amazon, Google, and Microsoft. He highlights the rising significance of developers in determining cloud usage, which in turn is transforming investment opportunities in developer-centric companies.

Career Decisions in Tech

Ben shares insights on how new graduates can make informed decisions about which company to join. He stresses the importance of assessing a company's stage and trajectory when making career choices. Horowitz warns against seeking advice from individuals whose experiences may not resonate with one’s unique path. Rather, he encourages young professionals to seek guidance from mentors who have achieved success in the relevant field, rather than those who may simply wish to dispense advice.

The Evolving Landscape of Silicon Valley

Reflecting on the evolution of Silicon Valley, Ben acknowledges the rapid changes while pointing to the historical relevance of cloud computing, social networks, and mobile tech. He suggests that the next big trends are likely to involve AI, crypto, and other computational advances. With the proliferation of computing devices, he envisions a future where many more devices, including wearables and smart home devices, will become integral to new technological developments.

Starting a Startup: Insights and Recommendations

Ben emphasizes that the success of a startup often hinges on the idea and its origins. He outlines the advantage of possessing an 'earned secret'—insightful knowledge derived from personal experience—which can distinguish a truly groundbreaking idea from a generic business plan. Advice is given regarding the importance of selecting co-founders and the psychological support they provide during tough times. He believes having one or two trusted co-founders can alleviate the pressures of entrepreneurship.

The Good Founder-Investor Relationship

He contrasts the typical investor perspective with what founders should seek in their investors. Horowitz underlines that founders should assess how investors behave during downturns rather than in times of success. He highlights the importance of an investor's experience and willingness to assist when challenges arise, promoting the idea that good investors should be there to support startups through difficulties.

Show notes

with Ben Horowitz (@bhorowitz) and Sharon Chang (@sychang)

What does it really take to start a startup (or work at one)? In this episode of the a16z Podcast -- based on a Q&A with Ben Horowitz as part of an event hosted by a16z's Technical Talent and People Practices team for a16z portfolio company summer interns 2018 -- Ben shares quick thoughts and advice geared towards those early in their tech careers.

The conversation covers everything from how to know what kind of company to join early (or when to strike out on one's own); the major platform shifts we should anticipate going forward; and founding (as well as exit) stories, like Microsoft’s acquisition of Github. What was the moral of that story for him, and for the industry?... this short a16z Bytes episode shares a glimpse into (some of) those "earned secrets".

The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation.

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments and certain publicly traded cryptocurrencies/ digital assets for which the issuer has not provided permission for a16z to disclose publicly) is available at https://a16z.com/investments/.

Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.

Stay Updated:

Find a16z on YouTube: YouTube

Find a16z on X

Find a16z on LinkedIn

Listen to the a16z Show on Spotify

Listen to the a16z Show on Apple Podcasts

Follow our host: https://twitter.com/eriktorenberg

Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see a16z.com/disclosures.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.