OK, now I’m worried. Here’s why:
Lo these many years ago, in the long-gone spring of 1996, I set out to San Francisco to make my software fortune, armed with a freshly minted degree from Canada’s finest technical university. The second of the interviews I’d arranged via email–itself a radical notion, then–consisted mostly of playing Doom with my potential employers, but during the little time devoted to talk, I asked them: “Do you think this whole Internet boom is getting a little overhyped?”
The company’s CEO looked shocked, and said: “No way. First, my grandparents in Florida have still never heard of the Internet. Second, when they do, that’s when things are really going to boom.” He leaned closer, with the wide, wild eyes of a true believer. “Because the Internet changes everything, for everyone.”
They didn’t hire me. (I’ve never been good at first-person shooters.) Instead I wound up doing consulting work at the investment bank that led Netscape’s IPO, and rode the subsequent boom several times around the world. It was the best of times, it was the worst of times, it was a giddy crazy time a lot like now. Because, you see — → Read More
A few months ago I was giving a talk in my hometown of Memphis, TN, and someone asked what the city could do to ignite more entrepreneurship among inner city kids. My immediate answer was teach coding– even basic app building skills– along with English and Math in every public school.
I was surprised that my brother– an engineer who worked for many years in Silicon Valley before relocating to the Midwest– didn’t necessarily agree. “That depends on whether there are still enough coding jobs for them, or they’ve all gone overseas,” he said.
It was then that the great American panic of a few years ago came rushing back to me. → Read More
If you are reading TechCrunch you probably already realize this fact: Flavor-of-the-month consumer Internet companies have a way of hogging the spotlight. If you didn’t, we conveniently published some evidence of it yesterday.
But that reality predates us by at least a decade. In 1999 when the world talked about Silicon Valley, they usually meant sexy dot coms. In 2005 when people were writing headlines about “the return of Silicon Valley,” a lot of people working in technology were justifiably irritated. After all, tech behemoths like eBay, Yahoo, Oracle, Intel, Hewlett-Packard never exactly left.
That focus on the sexy, social, consumer Web over everything else has only gotten more pronounced as those many of those one-time flavors of the month like Facebook, Zynga, Twitter and Groupon have become bonafide giants. The difference is that now the divergence in attention actually makes sense. → Read More
I guess $1 billion under management just wasn’t enough. Andreessen Horowitz has just announced a new growth fund of $200 million. The fund with co-invest alongside the firm’s most recent $650 million fund, providing more capital for the kinds of late stage deals that have been raging in the Valley of late. (Check out our three part series on the trend here, here and here.)
That “co-invest” part is makes this announcement very different from other firms’ late stage funds, says general partner John O’Farrell. “This is not Fund III. This is a completely discretionary fund that gives us more firepower to invest in great high-quality, high-growth companies along with Fund II, but there is no obligation to do so,” he says. In other words, the firm may invest all of the $200 million, none of it or somewhere in between. At the end of Fund II, it goes away no matter how much is left.
And this may be the biggest distinction from other growth funds: Andressen Horowitz is not charging investors any management fees associated with this fund. → Read More
(Editor’s note: This is the third installment in a series about the late stage, secondary investing craze sweeping the venture capital business. For the first two installments go here and here.)
On May 26, 2009 Mike sat down with Yuri Milner, Mark Zuckerberg and a Flipcam to talk about the then-scandalous $200 million investment DST made in Facebook, at a price that valued the company at about $10 billion. The camera-work is Blair-Witch-Project-like at best. You can barely hear the audio, and Zuckerberg can’t for the life of him figure out whether to look at the camera or Mike. It doesn’t really matter because, just after he asks, Mike proceeds to cut off half his face anyway.
But shoddy production aside, this may have been one of the most pivotal moments TechCrunch has ever captured on camera.
We didn’t know it at the time, but this was something more than an unexpected investment by an unheard of investor in a seemingly overhyped social network. It was a moment we’d been waiting for for more than a decade. Something we’d been obsessing about. It was the moment when a Web startup fundamentally broke all the normal rules of gravity that govern all Web startups. It was the moment that would eventually spawn a new, unchartered frenzy of late stage dealmaking. In my opinion, it was nothing short of the Web 2.0 generation’s answer to “the Netscape moment.” → Read More
The firm is keeping the name, but Andreessen Horowitz is officially no longer just the Ben and Marc show. It has added a fourth general partner (the third was John O’Farrell), and astoundingly, he didn’t come from Opsware. The new dealmaker is Scott Weiss, an experienced entrepreneur who may not be a household name, but like Ben Horowitz and Marc Andreessen has serious entrepreneurial chops, having built consumer and enterprise companies to large scale. The most recent was IronPort, the often forgotten PayPal mafia hit that Weiss co-founded with Scott Banister, selling the company to Cisco for $850 million. Before IronPort, Weiss was employee number 13 at Hotmail.
Some people may view the choice as a strange one, given Weiss’s absence from the current Web 2.0 frenzy. Then again, not too many years ago some of the press considered Andreessen and Horowitz has-beens of the bubble era. → Read More
First it was distribution. Then it was monetization. The next generation of Web entrepreneurs’ make-or-break challenge will be localization and a big part of that is language.
The Web is so powerful today and the valuations are so high, because it is a billion-person-audience and growing. But more of them speak Chinese than English, and critical masses are developing around Spanish, Portuguese, Russian, Bahasa Indonesian and other languages. The problem will only get worse as opportunity on the Web grows. Good translation can be incredibly expensive and just slapping Google translate on content isn’t going to be the answer.
ViKi has an interesting, open-source-like solution for video, that could have implications for other kinds of content online too. → Read More
It’s a strict rule in the venture business that you don’t fund two direct competitors, for obvious reasons. There’s a massive difference between the valuation of the number one player in the market (think YouTube) and the number two player (think any of the other hundreds of online video companies launched in the mid-2000s). It’s in a venture capitalist’s best interest to make his presence on a board of directors a competitive advantage, otherwise he’s just a checkbook and checkbooks are interchangeable in an industry with too much money floating around. Two companies can’t very well have the same competitive advantage.
So yesterday’s announcement that Andreessen Horowitz was following up a seed investment with a venture investment in Dalton Caldwell and Bryan Berg’s new company Picplz was a bit of a surprise, given the firm’s existing investment in Halloween-costume-capturing-darling Instagram. The two are essentially direct competitors. I asked Marc Andreessen about it today, and he was quick to point out that’s not how the two started, and if they had the firm wouldn’t have invested in both of them.
What’s more– now that the firm has made the decision to do a venture capital round in Picplz, it has essentially picked between the two. Without another pivot, the firm will not make another investment in Instagram, he said. → Read More
Just 15 months after Marc Andreessen and Ben Horowitz officially jumped to the venture capital darkside with the close of a $300 million fund, Andreessen Horowitz is announcing the close of a second $650 million fund. In less than two years, the firm has rocketed up to a whopping $950 million under management, an investment staff of 18 people and a portfolio that includes everything from Skype to Zynga to Foursquare.
What’s more? This fund closed in three weeks time. “It was a busy three weeks,” Andreessen offers to those VCs struggling to raise money. (I have a feeling some haters are gonna hate for that quip, Marc…) → Read More
I used to cover enterprise software for BusinessWeek. You’re probably not impressed by that, and you shouldn’t be. That beat is a combination of a punishment and proving ground because despite being a huge market, most enterprise software purchases are ones that IT managers grow to hate and one that few everyday readers care much about. One thing has made enterprise software an interesting beat: Larry Ellison.
Whether it’s his love of the ladies, his yachts, his mysterious lack of eyebrows, his strategic brilliance, his quick-witted jabs at competitors, random musings that he may buy Apple, or declarations that software is done as a category and he’d just buy everyone up, Larry Ellison has long been the software reporter’s gift that keeps on giving. Tony Stark in IronMan was reportedly based on a hybrid of Larry Ellison and Elon Musk, and I recognize way more Ellison than Musk in the depiction.
It looks like Larry has a new foil: HP. Hallelujah, enterprise software is getting interesting again. → Read More
Let me start off by saying that I don’t think this is going to happen. And a number of people I’ve spoken with today don’t think this is going to happen. But it’s something interesting to think about and discuss nonetheless. Following HP CEO Mark Hurd’s resignation today, what if the Board were to appoint former Palm CEO Jon Rubinstein to be their new leader?
Again, it seems a bit far-fetched simply because there are a range of other candidates out there who are probably more qualified to run the company as it is currently constituted. But that’s the thing. From what we’ve been hearing, HP is very interested in reinventing itself. From what we’re hearing, they’d like to be more like Apple. Only a bigger Apple. One with webOS at its core. And you know the funny thing? They may have acquired the perfect guy to do that when they bought Palm this past April: Rubinstein. → Read More
Andreessen Horowitz celebrates its first birthday with a number of new hires, including its third general partner – John O’Farrell – who joins founding general partners Marc Andreessen and Ben Horowitz. O’Farrell was most recently a vice president at Silver Spring Networks.
We covered the launch of Andreessen Horowitz a year ago here.
The company has also recently hired two partners – Margit Wennmachers to run marketing and Jeff Stump to help portfolio companies recruit executive talent. → Read More
Legend has it that when Cortes landed in Mexico in the 1500s, he ordered his men to burn the ships that had brought them there to remove the possibility of doing anything other than going forward into the unknown. Marc Andreessen has the same advice for old media companies: “Burn the boats.”
Yesterday, Andreessen was in New York City and we met up. We got to talking about how media companies are handling the digital disruption of the Internet when he brought up the Cortes analogy. In particular, he was talking about print media such as newspapers and magazines, and his longstanding recommendation that they should shut down their print editions and embrace the Web wholeheartedly. “You gotta burn the boats,” he told me, “you gotta commit.” His point is that if traditional media companies don’t burn their own boats, somebody else will. → Read More
I did interviews with most of the TechCrunch50 experts backstage and there was a common gripe about the companies launching there: Not enough passion, not enough swinging for the fences, not enough trying to change the world. There were too many people building safe businesses, too many companies just trying to make existing things slightly better, and too many people wanting to be the next Mint.com, not the next Google. Nothing against Mint, but Silicon Valley wasn’t built on $170 million exits. → Read More
Getting a meeting with Marc Andreessen isn’t easy so I made sure I cornered him and shoved a camera in his face backstage at TechCrunch50 to ask him about his new life as a VC. It’s been seven weeks and one day, and so far, he says he loves it and it’s fun. Of course, as he notes, seven weeks in there’s no expectation that companies will have exited and it’s not enough time for any of them to fail yet either.
Andreessen also reiterated what Ron Conway said earlier: There’s no dearth of funding for good start-ups in the Valley. More on why he did that Skype deal and what he’d rather hear TC50 companies talk about in their pitches on the clip. → Read More
Every social investing site wants to turn the insights of its trading members into financial products that people can actually link to their brokerage accounts. Finding the few brilliant stock pickers in the crowd and then letting everyone else follow their portfolios while taking a cut of the management fees is the business model. KaChing, which is the most popular investing application on Facebook (previously called FSX), just took a major step in that direction by becoming a registered investment adviser with the SEC. Sometime in the second half of next year, it will allow its members to link their brokerage accounts to the portfolios of the elite managers on the site and automatically follow their trades.
The company has raised an angel round from some heavy hitters in Silicon Valley, including Marc Andreessen, OpenTable CEO Jeff Jordan, Benchmark Capital partner Andy Rachleff, and Kleiner Perkins partner Kevin Compton. Bruce Dunlevie of Benchmark, Doug Mackenzie of Kleiner, and former Opsware CEO Ben Horowitz are also investors. (All the VCs invested individually). The size of the round was not disclosed. → Read More
