My notes from Marc Andreessen’s appearance on Tim Ferriss’s podcast.
1/ Read history books. “I got a lot of my education from history. Rather than reading a lot more about the contemporaries I would go back and read about; Ford, Rockefeller, Edison, Morgan.”
Andreessen does mention some modern books he likes – like cofounder Ben Horowitz’s book The Hard Thing about Hard Things, which we’ve touched on – but for the most part he learns mostly from history. David Chang and Ezra Klein both said the same thing. Forget management books, said Chang, “I can learn more from a history book or autobiography about someone that made a ton of mistakes.”
2/ What’s the right shade of grey? “You want to fail fast, but you also want to be determined and can’t give up. How do you possible reconcile those? That’s where you get to strong views weakly held.”
Andreessen is known for the expression “strong views weakly held,” and this mindset is a tool for deciphering spectrum locations.
We’ve seen a number of spectrums; ecologists to engineers, skill to luck, and baseball scouts to statiticisans. These are good models for thought, but we can’t use them the same way every time.
“No man ever steps in the same river twice, for it’s not the same river and he’s not the same man.” ― Heraclitus
Andreessen provides a switching mechanism. “Strong views weakly held.” We can find our footing in some part of the spectrum, and hold that position until it’s time to flee.
3/ Alternative histories. “Do you have the judgement to make that call, knowing by the way, that either way can be a big mistake. Nobody’s going to tell you that you made the right call. If you change and then succeed, that’s great, but you might have succeeded at the old thing even better.”
We touched on alternative histories in podcast episode #02, but Andreessen points out a challenge. We’ll never be sure about the range or intensity of the different outcomes.
4/ Opportunity cost. “The investors in Friendster were more likely than not, unable and unwilling to invest in Facebook when it came along because they were conflicted.”
Andreessen said investments have three costs; money, time, and opportunity. Of these three, money is the cheapest. When a partner at a16z has to work on a project, it means they can’t work on another. When they choose a drone or cryptocurrency it precludes them from another chance to invest in that sector.
This mindset about choices means the a16z team has to proceed slowly. Daniel Kahneman said, “when things get really big and you’re really not sure, slow down.” Warren Buffett put it this way:
“I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches – representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all. Under those rules, you’d really think carefully about what you did, and you’d be forced to load up on what you’d really thought about. So you’d do so much better.”
Dan Ariely found that we have trouble with the mental accounting of opportunity costs. Andreessen and his team have recognized where it is highest – and presumably move slowly.
5/ Red teaming. “It’s the responsibility of everybody else in the room to stress test the thinking. If necessary we’ll create a red team. We’ll formally create the countervailing force and designate some set of people to counter argue the other side.”
Bob Seawright said much the same thing; “Institutional red teams are not the same thing as real disagreement… you need people to become empowered if they are to become a red team.”
At a16z they do exactly this, Andreessen said, “whenever he (Ben Horowitz) brings in a deal, I’ll trash the shit out of it.”
Stanley McChrystal recalled being in a red team meeting where a commander who was role playing the bad guy used all his forces to attack at once. That won’t happen, someone said. But that’s the whole point, added another. Good red teams – much like the good culture we looked at in the Shane Parrish post strive for an objective understanding of the issue.
6/ Toys are for children. “These things look like cult and fringe activities until they break mainstream.”
Things we think are toys can become much more. Bill Bryson wrote:
“When Henry Ford built his first Model T, Americans had some 2,200 makes of cars to choose from. Every one of those cars was in some sense a toy, a plaything for the well-to-do.”
7/ Competition. “We don’t foreclose the possibility that there will be another mobile killer or social killer app but it’s getting harder and harder and harder because more and more people have figured out that you can do these things and the winners have gotten very established. One of the ways to think about it; first you had Facebook and then Twitter and then Instagram and now Snapchat, and those all became big winners. What would it take to make the fifth one? You only have so many icons on the home screen of your phone. It has to knock one of the other ones off.”
Investor Burton Malkiel said, “The problem is, as the market gets more and more professional, when people are better trained, when people have better sources of information…it’s then harder and harder to actually beat the market.”
Biologist Terrt Burnham wrote, “with high population density comes competition for resources, and with competition comes conflict.”
Auren Hoffman said that investing is such a challenge it can’t be anything but a full time job. Jack Bogle said that Vanguard succeeded because there was no competition. Jim Chanos also found a niche with limited competition. Peter Thiel wrote in Zero to One, “the best place to look for secrets is where no one else is looking…every great business is built around a secret that’s hiding from the outside.”
Thanks for reading, I’m @mikedariano on Twitter. If you liked this post, I’m looking to do more research work like it. Get in touch.
Hey-
My life is a lot better because of your emails and podcasts.
I have found so many good podcasts (especially one off podcasts that I would not subscribe to and would have never found) and books from your recommendations.
I really love the way you connect your ideas and show your work (Austin Kleon).
Thank you for all the hard work.
I appreciate you.
Sid Olympia, Washingt
LikeLike
Which podcasts are you referring to?
LikeLike
“Mike’s Notes”
LikeLike
[…] 7 lessons learned from Marc Andreessen. (thewaiterspad) […]
LikeLike
[…] Walk out of bad movies. Put down unexciting books. Turn off awful podcasts, especially mine. Take Marc Andreessen’s advice; have strong views but weakly […]
LikeLike
[…] picked up the book, Walt Disney by Neil Gabler, after Marc Andreessen recommended it. The book is good, but it’s […]
LikeLike
[…] Marc Andreessen explained the idea this way: […]
LikeLike
[…] call this idea pattern recognition. It’s why Marc Andreessen and David Chang suggest people read biographies. They want to see patterns in successful decision […]
LikeLike
[…] it’s not just money. Marc Andreessen pointed out that the biggest cost isn’t money, it’s time and the missed opportunity to […]
LikeLike
[…] boy. Ben Horowitz and Marc Andreessen joined Sonal Chokshi on their home turf, the a16z podcast to talk about the future of the world. It […]
LikeLike
[…] Isdell red teamed as Pepsi when he was running Coke. Marc Andreessen red teamed his partner Ben Horowitz. Bethany McLean red teamed stock salesman by talking to […]
LikeLike
[…] instilled it at his venture capital firm a16z. He did such a good job this is how his cofounder, Marc Andreessen put […]
LikeLike
[…] succeed because they bust cognitive biases, they find new facts, they understand history. When Marc Andreessen says he trashes the shit out of Ben Horowitz‘s arguments he does so to test them. […]
LikeLike
[…] default “no” is valuable because it limits what you get into. This removes what Marc Andreessen said is a the biggest cost – […]
LikeLike
[…] wrong (but you better have your facts right). It was Isdell’s idea to dress in Pepsi clothes. Marc Andreessen and Ben Horowitz push back at each […]
LikeLike
[…] Marc Andreessen said that the biggest cost of an investment isn’t money or time, but opportunity. He told Tim Ferriss, “The investors in Friendster were more likely than not, unable and unwilling to invest in Facebook when it came along because they were conflicted.” […]
LikeLike
[…] Anson Dorrance gets pushback from assistant coach Bill Paladino. Ben Horowitz gets pushback from Marc Andreessen. The Wright brothers got pushback from each […]
LikeLike
[…] encourages his assistant coaches to disagree. Great CEO’s compare meetings to wrestling matches. Marc Andreessen push against the ideas his partner […]
LikeLike
[…] Marc Andreessen said that opportunity cost is something he thinks about in his investments. It wasn’t that smart investors missed Facebook, he told Tim Ferriss, but that some couldn’t invest because their financial and professional commitments were elsewhere. […]
LikeLike
[…] argue well you need the right culture. It’s why Marc Andreessen takes the opposite side of Ben Horowitz in arguments. That creates an environment (read: culture) […]
LikeLike
[…] can implement this if they argue well. Marc Andreessen says that he “trashes the shit” out of ideas that his partner Ben Horowitz brings in. […]
LikeLike
[…] drivers to test the app. Gentlemen and women in Silicon Valley call this a ‘pivot.’ Marc Andreessen (naturally) put it more colorfully; “When I was a founder, we didn’t have the word pivot. We […]
LikeLike
[…] and [Marc Andreessen](https://thewaiterspad.com/2016/06/10/marc-andreessen/) both have people take the other sides of their arguments. Jeff Bezos has a “combative” […]
LikeLike
[…] successful entrepreneurs, such as Marc Andreessen, use concepts like having a “red team”, that is created for the sole purpose of shutting down one’s latest idea. Even if they think the […]
LikeLike
[…] combine the advice of Peter Thiel and Marc Andreessen; the future is somewhere already, be curious and start […]
LikeLike
[…] good it is. Healthy arguments should be inherent in the culture. We’ve seen this advocated by Marc Andreessen, Charles Koch, and Bill […]
LikeLike
[…] without ego. It can be uncomfortable noted Dan Egan but it’s a good way to make decisions. Marc Andreessen and his partner Ben Horowitz seem to have followed Ike’s lead. Marc said he takes the other […]
LikeLike
[…] investing in obvious things. Meb Faber said that “me too” funds will often fail. Marc Andreessen said to look beyond the […]
LikeLike
[…] Jason’s advice was earned the hard way. When he was pitched on Airbnb he passed, imagining that only broke college students and serial killers would use the service. Errors of omission – like this – are the worst warned Bill Gurley and Marc Andreessen. […]
LikeLike
[…] arguments are hard but worthwhile. Marc Andreessen has […]
LikeLike
[…] about their relationship and asks how Horowitz and Andreessen argue so well. It was Marc’s interview with Tim Ferriss that first suggested we argue well. Horowitz explained it like […]
LikeLike
[…] it’s not just money. Marc Andreessen pointed out that the biggest cost isn’t money, it’s time and the missed opportunity to do […]
LikeLike
[…] Do you intuit the devil’s advocate position / have you stress tested your ideas? (see the concept of “red teaming“) […]
LikeLike
[…] Marc Andreessen has talked in the past about the importance of stress testing your thinking before making a big decision. He once said, “If necessary we’ll create a red team. We’ll formally create the countervailing force and designate some set of people to counter-argue the other side.” […]
LikeLike
[…] Marc Andreessen has talked prior to now in regards to the significance of stress testing your considering earlier than making an enormous choice. He as soon as mentioned, “If necessary we’ll create a red team. We’ll formally create the countervailing force and designate some set of people to counter-argue the other side.” […]
LikeLike
[…] Marc Andreessen has talked in the past about the importance of stress testing your thinking before making a big decision. He once said, “If necessary we’ll create a red team. We’ll formally create the countervailing force and designate some set of people to counter-argue the other side.” […]
LikeLike