There's $20 billion a year in venture capital, and our last fund was about $1.5 billion. Our limited partners are 400-year-old universities, pension funds, and sovereign wealth funds -- literally countries -- and they have a 40-, 50-year time horizon with big payouts for pensions in the out years.
We take this money and route it into the craziest companies. We ignore the day-to-day and try to figure 10 years out what markets will look like.
For most of human history, this kind of money wasn't available, but we have this moment in time when there are very few places people can invest to get this return.
Today's startups don't take much money to start. A Series A round used to be $20 million, but now it's half a million. That's created a generation of seed investors that put a small amount of money in a large number of companies.
But when something works, it's more expensive to scale. GitHub raised $100 million because they had critical mass and needed to scale to host the world's software. They want to be the new place for source code control and software sharing.
On Microsoft buying Nokia's phone business:
I think we should all hope Microsoft is successful, because our industry does best when there is competition at the platform layer. It would be really good if Apple, Google, and Microsoft were all successful. Microsoft has a lot of smart people, and I hope they do well.
Not long ago, Apple was considered dead. When Netscape was coming up, no one thought Apple could come back. There's an inherent unpredictability in our business. Whatever we think is obvious today is almost certainly not the case.
By the end of the decade, 5 or 6 billion people will have smartphones. We have the opportunity to think about a world where everybody has a supercomputer in their pocket and is connected all the time.
We are seeing glimmers of the next set of platforms after the smartphone, too.
I'm seed funding apps companies for Google Glass because I think it has been underestimated. It's not just glasses, but a built-in earpiece with voice recognition and synthesis. There will be a wide variety of devices to augment the human body for many uses, including making us healthier.
On ARM servers:
The same processors in smartphones will power servers in the future. Apps in the datacenter are built in Java or PHP or Ruby. There are intermediate runtimes between the apps and the processors, so the apps generally don't know what the processor is.
Most of these apps are not CPU but IO bound. There are huge issues of heat and space in the datacenter. The new chips will save money, power, and space, and apps will be unaffected. They may even be able to afford to buy more servers and run their apps even better. I think this will happen really quickly.
The backend is changing very fast, and we think there are huge opportunities for technologies that power that. The cost of the backend for running a modern datacenter app is falling very fast, so the app developers can get a lot more creative and assume they will have a hundred or thousand times more performance behind them. It's going to be a completely different world.
Andreessen: You could hire Spielberg to produce university courses.
>> 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...