SAN DIEGO, Calif. — Top algorithm engineers at Google are drawing down tens of millions in stock, pushing up engineering salaries across Silicon Valley, according to Marc Andreessen, a legendary web enterprenur turned venture capitalist at Andreessen Horowitz.
Andreessen gave his views on the economics of startups, the app market, wearables, ARM servers, and massive open online courses (MOOCs) during an hourlong fireside chat at Qualcomm's Uplinq here this week. Here are a few outtakes from his rapid-fire, passionate musings.
On engineering salaries in Silicon Valley:
Engineers are now starting to get paid for their true value, which arguably has not been case for a long time, but it is now, and Google is at heart of this. Google discovered an algorithm change can generate another $100 million in revenue. So now companies are more willing to have superstars, and there are engineers at Goggle making tens of millions of dollars.
The vast majority of engineers are not getting paid that way. [But] average compensation is also rising behind what I call this Kobe Bryant effect.
On advice to the entrepreneur and investor:
It's really easy in this industry to think too small. Yahoo was initially run on a server on the Stanford campus, and they had to start a company because Stanford kicked them off the server. It became a $200 million company.
It's easy to dismiss these crazy ideas out of the gate, even if you are right in the middle of it. You almost want to have a personality defect where you assume everything you see will be gigantic. So I'd say be even more open minded that the idea that looks crazy will be the next big thing.
I'm a believer education online will be overwhelmingly better than in the classroom. Some of it has to do with the technology, and some with the economics.
Suppose 1 million people will sign up for Math 101, and each pays $200. You have this giant $200 million production budget. You could hire Stephen Speilberg to produce university courses. Imagine the best 3D effects and the best teachers in the world -- and amazing trailers. When everyone has a high-def screen and broadband connection, at some point they want to learn through it.
Jon Fortt of CNBC interviewed Marc Andreessen at Uplinq.
>> I think his point was MOOCs change the economics and the HD TV with broadband changes the delivery systems.
My friend has this nice app designed for a medical textbook. The problem is that the more you use it, the more you think to talk to a professor. The key challenge in MOOCs has to do with assumption. Education in a university is not about the courses. People connect and network and that seems to be the key driver to going to top schools. Why bother spending dollars to study History when there is wikipedia. You do because campus liberates minds!
On MOOCS, why can't I have my toddler watch Disney movies instead of going to Day Care. Does he think that the best education is about lectures. It is the ecosystem in the university that matters more than what the professor teachers. We have had good textbooks. Yet people do go to college to be taught. We will see.
Thanks for this wonderful article. I agree that education will continue to improve, but I do not believe that education online will be overwhelmingly better than in the classroom. This statement is absolutely unfounded and untrue. I have viewed many MOOC courses from around the country. The success of a face-to-face or online course depends on one thing: the quality of the instructor. Some MOOC courses are poorly designed and you can tell that the instructor just put something together. The MOOC course assignment instructions were not clear and no lecture videos were not available. On the other hand, there were some MOOC courses that I reviewed that was excellent. The instructor provided real-world examples that today's students (all ages) would have been able to relate to. With that being said, I still believe that some face-to-face courses are more effective for group projects and project-based learning . I think it would be wise to have educational options available for everyone to choose from and stop trying to compare which education option is best for everyone else. The key is to learn more about the topic. We are still in the early stages of MOOC and additional research is required.
@Rick: it looks like there is a typo: "By the end of the decade, 5 or 6 million people will have smartphones."I think he means Billion here, obviously!
That aside, I have long held the position that talented and productive engineers have been underpaid. A reasonable metric to address this would be to use the ratio of gross revenue per employee to that of employee salary and apply multipliers to this to individual employees matching their productivity.
Thanks for clarification Rick, in that light it makes a bit more sense. What is emerging is truly a seismic shift shaking Ivory Towers everywhere, unprecedented since Plato's school in Academus' grove.
@Harfang: You are right. I suspect Marc was exaggerating for effect. In fact there was a lot of joing interplay between him and the interviewer on this point, like suggesting Brad Pitt be hired to act in it.
I think his point was MOOCs change the economics and the HD TV with broadband changes the delivery systems. Something very different could emerge, not necessarily with Hollywood's help....but maybe...