00:00welcome to the a 16z podcast I'm Michael
00:03Copeland and we have with us today both
00:06a and Z Marc Andreessen and Ben Horowitz
00:10hey all right thank you Michael ah so
00:13right about now it's been five years
00:14since the firm was founded since you
00:17guys founded the firm and we thought it
00:18was a good time not to look back but to
00:20sort of take stock and talk about some
00:23tech trends that you're seeing now and
00:25then spin things forward so one of the
00:29pillars that this firm really rests
00:32itself on is software eats the world and
00:35Mark just to refresh us we sort of use
00:38it as shorthand around here but what is
00:40the thesis explain a little bit and then
00:43let's get into where we are in that
00:44thesis yeah so the thesis is that you
00:47know the computer itself is only about
00:4975 years old right the computer was
00:51originally invented to crack codes
00:52during World War two and then you know
00:55God adopted by governments and big
00:57businesses in the 60s and 70s and then
00:59the PC arrived and then sort of you know
01:01rich people the developed world us
01:04Europe we're able to get pcs in the 80s
01:06and 90s you know leading up to basically
01:08about five years ago you lived in a
01:10world in which maybe a billion billion
01:11billion and a half people had had pcs
01:13and then some of those pcs were on the
01:15internet and then at some point all
01:16those all those pcs finally got on the
01:18internet and that's all fine and good
01:20but that sort of meant that most people
01:21in the world didn't have access to
01:23computers and most of the people in the
01:24world weren't on the Internet nothing
01:25till the cut was up until few years ago
01:26and then you know starting in 2007 with
01:29the iPhone the smartphone comes out and
01:31the smartphone finally packages
01:32computers in a form where everybody in
01:34the planet can have one this is a thing
01:36I've been talking a lot about that
01:37people occasionally get angry about
01:38because they think it won't can't
01:39possibly come true but I'm convinced
01:40it's gonna come true which is I think
01:41everybody in the planet by the end of
01:43the decade is gonna have a smartphone
01:44effectively everybody almost everybody
01:47including in places where it's still
01:49hard to get electricity or water people
01:51are gonna have smartphones in fact the
01:53big thing this year is the rise of the
01:55$35 smartphone in countries like Andy in
01:57Pakistan that are just exploding and
01:59just giant volume so I think we're going
02:02to live in a world by the end of the
02:03decade in which there's five six seven
02:05billion smartphones in people's hands
02:07which means five six seven billion
02:08people in the world connected
02:09the internet with kind of what we would
02:10consider modern tools and technologies
02:12and and an access and so that's the
02:17world we've never lived in all right
02:18that's the world where everybody's
02:19connected that's world where everybody
02:20has access to to the kind of technology
02:22that we take for granted today and so in
02:25that world you can start to think I
02:28think you can you can think sort of very
02:29profound thoughts about like okay so
02:31like what happens in many different
02:33fields and businesses and industries as
02:34a consequence of that so what happens in
02:37the media business is an example when
02:38everybody has the ability to consume you
02:40know news online what happens in the you
02:42know TV business when everybody has
02:43ability to get video streams straight to
02:45their cell phone what happens to retail
02:48when everybody can engage in e-commerce
02:50what happens to education when everybody
02:52can take classes online through their
02:54smartphone and so I think it's basically
02:56you know now the next five years it's
02:58basically prime time to think about
02:59every business every industry every
03:00field and say well how can we reinvent
03:01it now knowing that basically software
03:03software can basically play such an
03:05important role in everything so where
03:07are we and what what are you guys seeing
03:09in terms of the verticals that are being
03:10eaten and then I want to get at what
03:13it's like to be eaten to pleasure
03:15whatever the verticals that sort of
03:17fallen is the wrong word but it felt
03:19first to software eats the world and and
03:21well I think it's a it's it's built
03:23characterized as building weird weak
03:27laugh glass half-full people and we
03:29think there's huge opportunities that
03:30kind of flow from this so you know media
03:32has been an obvious one financial
03:34services software is you know taking
03:37over at a very very fast pace and then
03:40retail e-commerce you know has been a
03:41profound revolution over the last 10
03:43years and that and that will continue I
03:46think the three big ones that we think
03:48of a lot about for the next you know
03:49five or ten years are and they're really
03:52you know domains and so these these are
03:54long term projects but healthcare
03:56education and then ultimately government
03:58so those three that you mentioned have
04:00been the most intractable it seems and
04:02we've been promised there's you know did
04:04you know electronic medical records you
04:07Obama's got a great website but but
04:09that's not software eating government
04:11like why now and what makes it different
04:14well why not because you can because
04:16it's possible because they can't be done
04:18because everybody's gonna have a
04:19smartphone because everybody's gonna
04:20have to be online these are very very
04:22big fields very big entrenched interests
04:24lots of regulation like there's nothing
04:26easy about it but because they're so big
04:28also makes them so important right so
04:30I'll just give you my perspective which
04:31is health care and education like one of
04:33the things you always look at is you're
04:34like well health care and education is
04:35something that you want everybody in the
04:36planet to have access to but at the same
04:38time if you just if you if you try to do
04:40that with sort of conventional ways of
04:41delivering those services you'll
04:43bankrupt everything right you look at
04:44the US fiscal situation of the next 50
04:46years and you look at this massive debt
04:47on a very large amount it is geared
04:49towards health care about paying for
04:50people's health care and a lot of it
04:51then it's geared towards education in
04:53this huge crisis we have around things
04:54like student loan debt and so software
04:57health care and education suffer from
04:59something the economists call almost
05:01cost disease after an economist named
05:04Obama and the cross disease basically is
05:06technology steadily drive down prices in
05:09sectors like media and in financial
05:11services but technology is not yet
05:14driving down costs in health care and
05:16education but it should and so if you
05:19can bring revolutionary technology into
05:21those fields you could basically break
05:23the back of the so-called cost disease
05:24and then you can bring the same kind of
05:26cost reduction you see in other fields
05:27into those fields which then means you
05:29can really open up access and that's the
05:31critical thing is we need to get every
05:32kid on the planet access to what we
05:34consider today to be a top end Ivy
05:35League education we need to get every
05:37person on the planet to have access to
05:38what we would consider to be a modern
05:39health care capability the only way to
05:42do that is to apply technology otherwise
05:44we'll let you do bankrupt the planet
05:45trying to do it with with the current
05:47techniques Ben I want to bring you into
05:49the conversation software eats the world
05:52it's great if you're sort of on the on
05:54the side of the coding keyboard where
05:56you're out there and you feel empowered
05:58to go after health care or government
05:59government or whatever else it is but
06:01what if you are on the other side and
06:03you were sort of being eaten how do we
06:06how do you sort of view that and and
06:09then how do we bring those folks along
06:11well I think in the first place
06:14kind of misunderstanding of it is that
06:17those jobs get eaten in there are just
06:19fewer jobs so I think kind of the
06:22history of the country in the history of
06:23the world has been the jobs fifty years
06:27from now are not going to be the same
06:28jobs that we're doing today although we
06:30had a very long time when most of the
06:32jobs were farming and thankfully most of
06:35the jobs are no longer farming because
06:36that farming is hard work yes but you
06:40know most of the jobs today aren't jobs
06:41that were around before I mean there
06:43were all kinds of jobs like for example
06:44delivering ice was a big job making
06:47vinyl records used to be an important
06:49job there were a lot of jobs that are no
06:52longer here so the challenge isn't kind
06:55of the absolute number of jobs is but
06:57rather the transition from one kind of
06:59you know one set of jobs to another and
07:02this is where I think I would just come
07:05you know add to what Mark is saying that
07:07like it's really important to apply
07:09technology to bring down the cost of
07:11things so that you can make policy
07:13decisions to create a kind of both
07:17safety net and education system that
07:19enables people to not like starve to
07:22death or hit the streets or become
07:24homeless or really lose their dignity in
07:28the meanwhile but then also be in
07:30position where they can go be productive
07:32again as quickly as possible and that
07:35kind of thing is not really affordable
07:38if all the money is going to technology
07:42unable education in healthcare right and
07:45so they kind of go together I think that
07:47if software doesn't eat the things that
07:50the government pays for then we run into
07:52trouble and and you could imagine you
07:55know completely government-funded
07:57awesome education enabled by things like
08:01oculus where you could put kids from
08:03anywhere in the very best classrooms in
08:04the world as though they were actually
08:07there to be clear virtual reality
08:10goggles that allow you would you allow
08:13well basically enter a virtual classroom
08:16with virtual other kids and virtual
08:19teacher which you know might not sound
08:22that great if you're at Harvard but it
08:24sounds awfully good if you're in an
08:27that's very dangerous to go to with
08:29teachers that maybe no longer that
08:33interested in teaching for all kinds of
08:34reasons and so by applying technology to
08:38the things of Cosmos you can both
08:39improve the services and reduce the cost
08:41a lot which also frees up money for
08:43things like a really robust social
08:47safety net which basically gets you and
08:49you ought to be in you know 2014 we
08:53ought to be at the point where everybody
08:54can get kind of basic shelter
08:56transportation education and other
09:00services without bankrupting the country
09:03does that social safety net come from
09:05private industry via taxes I mean is it
09:08government Ron how who pays for it yes I
09:11think the social safety net ideally
09:14would be with the money would come from
09:16the government and would come from taxes
09:17and I think it would be smart you know
09:19as a taxpayer I'd say smart to do that
09:22but it only works if if there's real
09:26technology behind it because otherwise
09:28it right now we can't even afford kind
09:31of health care and so without the
09:35application of technology where we're in
09:37this kind of halfway point where
09:38software is eating lots of jobs or
09:41transitioning lots of jobs but yet the
09:45big government services have not yet
09:46been transformed I see we talked about
09:50this transition point mark you mentioned
09:52you know billions of cellphones in
09:54people's hands soon or smartphones I
09:55should say computers essentially in
09:58what is our evidence that we're at this
10:00transition point in and I want to talk a
10:02little bit kind of about an accelerating
10:04innovation and kind of it in your
10:05careers how now looks different than
10:09maybe it did in the mid late 90s or
10:12early 2000s even yeah I mean little
10:14things look really really different so
10:16there's sort of this kind of running you
10:17know it sort of this running thing in
10:18the in the valley that like it's another
10:19bubble my people have been kind of
10:21saying I'm calling another bubble now
10:22this is your 10 of people calling a new
10:23bubble started in 2005 so maybe at some
10:26point they'll be right but sort of this
10:29thing of like is this is this the 90s
10:30all over again the thing that has
10:32changed so much as the industry the
10:34industry in the world are so much
10:35further along than they were in the 90s
10:36and so we built net Netscape the company
10:38we were at in the 90s we built Netscape
10:41over 90% you know market share for all
10:42people in the internet using our using
10:44our browser and it turned out there were
10:4650 million people on the internet like
10:47it 50 million people around the world
10:49we're on the internet by the way 25
10:51million of them are on AOL and so to say
10:53that they were on the internet would be
10:54a slightly generous statement the other
10:5725 million were directly online but that
10:59was it you get a 90 percent market share
11:01and you'd have less than 50 million
11:03users and that was it
11:04like and that was all that was all that
11:05we could do and by the way those 50
11:07million people were all coming in for
11:08the most part over dial-up and so
11:10they're coming very slow they were on
11:11you know these I mean they were on PCs
11:13it today if you saw these pcs initially
11:15they're not making TV shows like halt
11:17and catch fire they're making now TV
11:18shows in which like the period in which
11:20you have like these old PCs like was
11:22like they now look retro like it's like
11:24times have changed you know freaking
11:26hurry and so the world was just a the
11:29technology world was a much smaller
11:30place and the number of people who had
11:32access to technology was just a much
11:33smaller place fast words that today you
11:36know more than two billion people online
11:37rising very fast so you know market
11:39expansion new we think about things in
11:41terms of market sizes market market
11:42expansion on the order of 40 50 60 fold
11:44over the course of 15 years which is
11:47just absolutely amazing which is why you
11:48have these companies like Google on
11:49Facebook now that have more than a
11:50billion users I like to work with you
11:53know we're good I work with Mark
11:54Zuckerberg and Facebook and I like to
11:55tease him of like what a special
11:56position Facebook is in because how you
11:59a billion users you know a year to ago
12:01and it's like well how many how many
12:03businesses or human organizations and
12:05institutions in history have ever had a
12:06billion anything and it's like you're
12:08basically it's basically the Catholic
12:09Church from the coca-cola company and
12:11that's basically about it and then like
12:12Google on Facebook they're like number
12:13two and three you know three and four
12:15and then like whatsapp is gonna do it
12:16and then there's gonna be a whole bunch
12:17of others and I've you know iPhone it's
12:19gonna do it in Android is gonna do it
12:21and so the world has really opened up
12:23and expanded very fast we invest in all
12:27kinds of things here software based
12:28mostly but drones Bitcoin 3d you know
12:31virtual reality oculus how do you guys
12:34keep up if you know sort of things are
12:36different and the pace is different how
12:40do you guys personally keep up and then
12:42how should the rest of us think about
12:44keeping up if even that's the right
12:46thing to think about well I think it's
12:48like a lot of things that are extremely
12:50complex if you don't have kind
12:53is some kind of unification
12:56understanding of what's going on then
12:58that it does get very complicated but
13:00one of the things one of the tenants
13:02when we started the firm was we were
13:04only going to invest in things that we
13:06understood and that meant things that
13:09we're software was the core intellectual
13:11property and if you look at what's
13:14happening across all of those things
13:16there are different manifestations of
13:18software becoming kind of more powerful
13:22a more powerful force in the world due
13:25to all the things that kind of mark
13:26talked about the improvement in the
13:28underlying platforms the improvement and
13:29the programming languages and the
13:32connectivity and all these things and so
13:35whether its software eating money or a
13:38software eating entertainment it's all
13:40kind of comes from the core root
13:42phenomenon and so these things are
13:44relatively easy to understand quickly
13:47now some of them you know that the
13:49details of every one of them is complex
13:52but you know it is the nice thing is
13:55it's our favorite thing to do in the
13:57world so like it's a great job in that
13:59way we've talked about sort of software
14:01eating what one could imagine are sort
14:03of mostly software based or digital
14:05based industries it's moving into the
14:08physical world where do you see that
14:11most starkly and and does it look
14:14different as software eats you know
14:16manufacturing robotics etc yeah so yes
14:20so basically I think the key assumption
14:22I the key assumption I make is basically
14:23every physical thing is going to become
14:25smart over the next you know 10 or 20
14:26years this one's going to take time but
14:28it will happen so basically every
14:30physical thing whether it's a toy or a
14:32light bulb or a doorknob or like you
14:34know building or you know you're
14:35desperate whatever you take your pick of
14:38they're all gonna become smart and by
14:39smart I mean they're all gonna have
14:40chips built into them and they're all
14:42everything is everything's gonna have a
14:44chip in it everything is gonna be on the
14:46internet everything's gonna be connected
14:47everything is going to have data
14:48everything is gonna be responsive you
14:51know to human beings and by the way I
14:53mean like everything like one of the
14:54most very exciting trend that we're not
14:56yet invested in but I'm very excited
14:58about is like I think I'm convinced in
15:00the future pills are all gonna have
15:01chips in them so for example like every
15:03pill you take is gonna have a
15:04biodegradable chip in it but we've been
15:07refrigerators for a long time why do I
15:09want my refrigerator to be smart because
15:11he might refrigerator to know for
15:12example when the food in it has boiled
15:14so that you don't get like Salmonella
15:15like I mean you know very fundamental
15:17like you might like to know you might
15:19like to know you're at the grocery store
15:20you might like to know like what you've
15:21actually got like what you actually need
15:22to reorder and it's just been you know
15:25this the the nature the the criticism of
15:27the stuff is always so interesting
15:28because basically you know these
15:30products come out and they're basically
15:31experiments and some people basically
15:32try different kinds of things and you
15:34know some of them work and some of them
15:35don't and there's always this kind of
15:36criticism of like oh the designers of
15:38these products like didn't think
15:39everything through as if there's some
15:40like magic process where you can send a
15:42bunch of geniuses off to a like remote
15:44island and they could like design
15:45everything perfectly and then build it
15:46right the first time
15:48but like that never happens what ends up
15:49happening are tons and tons and tons and
15:51tons of experiments right out of which
15:53you finally then get the things that are
15:54going to go abroad and so people
15:56experimented with how to bring computers
15:57to consumers for ten years before you
15:59know the IBM PC went brought people
16:01experimental you know smartphones the
16:02smartphone concept does not new it goes
16:04back to 1997 it took ten years to get
16:07you know to the I to the iPhone to the
16:08to the actual product people want the
16:09Internet the internet was in existence
16:11for thirty years before we made the web
16:13browser and finally figured out how to
16:15make the internet accessible to
16:16everybody so so this way I say this this
16:18part of it is sort of Internet of
16:20Internet of Things concept are kind of
16:21making the real world smart is a long
16:23term thing it doesn't just
16:24instantaneously happen but it will
16:26happen and it will happen through the
16:28kind of process of experimentation that
16:29we see happening right now let's switch
16:32gears a little bit you guys started the
16:34firm now five years ago in the teeth of
16:38the worst recession and you know since
16:41the depression is that fair to say well
16:43the worst it was the worst economic
16:44crisis for venture capital in 40 years
16:46is what everybody told us so that's what
16:48they said seemed like a good idea at the
16:53time in terms that it was but the
16:57venture capital industry has been
16:59shrinking you know ever since so
17:02describe for us where we are in the VC
17:04industry and then I want to get at how
17:06building companies and venture capital
17:08relate to each other too
17:10and as you see it going forward yes so
17:13the shrinking and the number of the
17:14firm's has really been a wonderful thing
17:16and very healthy for both the industry
17:19and very good for entrepreneurs so one
17:21of the aspects of venture capital that
17:24bothered us a great deal when we started
17:27the firm was that it was a an industry
17:29that really was in the dark and what I
17:32mean by in the dark it was completely
17:34invisible to kind of what was going on
17:36what was behind these firms and so forth
17:38and like anything that's in the dark it
17:42tends you know that's where like the
17:43nasty business happens in terms of you
17:46know things everything from you know
17:49kind of bad things growing in it to
17:50ethics and everything whereas things in
17:53the sunlight that's when everybody
17:55behaves and is at their best and I mean
17:58it was just the nature of how it evolved
17:59and so forth and it kind of stayed it
18:02was a kind of shadowy a relatively
18:03shadowy industry and as a result it was
18:05very difficult for an entrepreneur to
18:07figure out what was what you know at a
18:09very basic level and so there were like
18:12these phenomenal firms like Sequoia were
18:15benchmark or Greylock but for an
18:18entrepreneur to really understand the
18:20nuances between the ones that work
18:23really great to work with or just people
18:25who like simply had money and had no
18:27idea how a start-up should get built was
18:30really impossible to tell and I think
18:33one of the kind of contributions that we
18:36made was just the way we went about
18:39things you know partly because it was
18:40counter-programming is we put a lot of
18:42light on it and that also combined with
18:45what was going on with social networking
18:48and was going on with the internet and
18:49going on with a real entrepreneurial
18:51community kind of made entrepreneurs
18:54really aware of what they should expect
18:56and what they should want from a venture
18:58capital firm and you know most venture
19:01capital firms as you would expect just
19:02in stand that test then at the same time
19:05a kind of new tier of venture capital
19:08emerged angel investing or seed
19:10investing and this enabled for the
19:13experimental things where you really
19:15just needed capital and maybe a little
19:18there was a whole new kind of
19:20functionality at that layer so you kind
19:23of had the landscape bifurcate into seed
19:25investing where you need a little money
19:27in a little help right or venture
19:29capital investing where you need a lot
19:31of money and a lot of help and the whole
19:33kind of middle like we don't know how to
19:35help and we don't have that much money
19:37like that big set of hundreds of venture
19:39capital firms became no longer
19:40interesting and so the result of the
19:44landscape I think is it's way better
19:46time to be an entrepreneur now raising
19:48money than it's ever been before
19:50it's it's easier to raise money in small
19:52amounts and then if you raise money in
19:55large amounts you get likely a much
19:57better investor than you would have
19:59gotten in the past we're seeing large
20:01rounds raised but I want to have you
20:03guys answer the question of you know why
20:05do if I can myself and three of my
20:09friends and virtually no money in just a
20:11credit card and Amazon Web Services if I
20:13can build a company and start on my way
20:16why do I need though then the
20:19traditional venture capital at the high
20:21end like that big money why is that
20:23still necessary cheaper to start more
20:25expensive to grow so what's that it goes
20:28back to the quarter talked about before
20:29so the market market sizes are much
20:31larger so the prize is bigger the market
20:34is larger and it takes more money to be
20:36able to build a company in the market
20:37and so yeah you can start a lot of these
20:38companies without me know with three
20:40laptops and you know three lattes a day
20:41and you're off to the races
20:42yeah three kids you know living in ramen
20:44noodles but at some point you need to
20:46build the company and you need to build
20:48the company that is then going to go
20:49take the market and the market is big
20:51and the market is a global and you're
20:54going to need a company around that you
20:55need a sales force you're going to be
20:56marketing you're gonna need a big
20:58development organization you're need a
20:59customer service customer support you're
21:01gonna have a big recruiting campaign
21:02you're gonna need partnerships you're
21:04gonna be expansion capital all these
21:06things kick in and so these companies
21:07almost never I mean almost never stay
21:09small it's extremely rare that you see
21:12any kind of company that does anything
21:14big in tech that doesn't end up raising
21:15doesn't end up number one raising money
21:17in the number two if you're gonna raise
21:18money raising money from venture capital
21:19you mentioned global and I understand
21:22global markets venture capital has done
21:24very poorly as a global you know
21:27enterprise is that kind of changed you
21:30they're changing it all well I think it
21:33will change but not in the way a lot of
21:35people are expecting and to some extent
21:37it is changing already in the sense that
21:40some really large companies are coming
21:42out of China right now like really big
21:44Alibaba is a monster in a good way so it
21:51will change I think that people expect
21:53kind of sort of expected that oh well if
21:56we just focus on building software
21:58companies like Silicon Valley we can be
22:00like Silicon Valley and that's been
22:02largely a mistake in that you can apply
22:05you know policy and tax breaks and even
22:07have a good university but Silicon
22:10Valley is a network effect and if you're
22:13competing with a Silicon Valley company
22:14without the level of engineering talent
22:17without the level of executive talent
22:18it's still rather hard mark had a really
22:22good again remember I think it was a
22:24series of tweets rather than a post a
22:27really good series of tweets which just
22:30said look there should be 50 Silicon
22:31Valley's not one or actually that was an
22:33article 50 Silicon Valley's not one but
22:37they should not be Silicon Valley's they
22:38should be things that are doing other
22:40areas of technology other areas of
22:42innovation and some of that can be
22:44facilitated rather than kind of tax free
22:48zones more like regulatory free zones
22:50where things that are very difficult to
22:52build here can be built elsewhere and
22:54the world will certainly be a better
22:56place if there are you know lots of new
22:59companies coming from lots of places all
23:01over the globe and and I think that
23:04Silicon Valley set such a great example
23:06of what's possible that that's gonna
23:08happen do you I mean juicy evidence
23:10already mark of those kind of zones and
23:13and Silicon Valley's as it were yeah so
23:16there's there's two kind of ways to come
23:17at it one is on the zone side so there
23:19is actually a long history of this sort
23:20of concept of a special economic zone in
23:22actually countries like Hong Kong you
23:24know one point and actually China has a
23:25very aggressive user of special economic
23:27zones actually also the Prime Minister
23:28of Japan Ave is not proposing especially
23:31like an economic zones in Japan to be
23:32able to restart growth and so you know
23:36you certainly have like a long history
23:37with that kind of approach and then you
23:39have examples today where that kind of
23:41thing is playing out and so one very
23:43interesting example is South Korea South
23:45Korea has sort of famously been much
23:47more liberal in terms of you know
23:49legalizing new stem cell based health
23:53projects and you know which looks t'aime
23:56cell or research for regenerative
23:57medicine looks incredibly exciting it
23:58looks like we might be able to grow new
23:59organs and do all kinds of things that
24:01research has historically been difficult
24:03to do in the US for regulatory reasons
24:04and so you see more examples of that but
24:07I'll tell you the other thing you see is
24:08just an explosion of entrepreneurial
24:11energy and enthusiasm all over the world
24:12you just see and you know we see it all
24:14over the fleet you see it all over the
24:15place you see it all throughout the US
24:16like 20 cities in the US now you see it
24:18and they see it all over the world the
24:20most vivid example is a good friend of
24:22mine Chris Schroeder wrote an entire
24:24book over the last three years called
24:25startups rising which is a story of high
24:27tech entrepreneurship in the Middle East
24:28and he basically traveled all through
24:30you know Jordan and Syria and Egypt and
24:32all these countries going through all
24:34these dramatic changes and in every
24:35single country he found high tech
24:37entrepreneurs and startups you know
24:39building unbelievable new companies and
24:40products and most significantly he
24:42actually just got one of those like 15
24:44visas a year for business travelers to
24:46Iran and so he just went to ram after he
24:49wrote the book and he just came back and
24:50it turns out in Tehran there's a
24:52thriving sort of underground
24:53high tech startup scene and there's all
24:56these entrepreneurs I want to start all
24:57these online businesses in you're gonna
24:59meet you know a 22 year old who's
25:00incredibly frustrated by the fact that
25:01his entire country has been embargoed it
25:03isn't the Tehran high tech scene and so
25:06even in countries where you were you you
25:08sort of the most concern from a
25:09geopolitical standpoint there's enormous
25:11energy and often youth energy towards
25:13building these kinds of businesses
25:14and as a firm do you do you need to tap
25:17into that directly or indirectly or is
25:19there how do you plan on that going
25:21forward if if you do it all yeah so one
25:24thing about investing is it's important
25:26to keep in mind that you don't want to
25:28try to do every opportunity you know
25:31every firm doesn't have to be in every
25:33deal and if you try to unlike kind of
25:36running like say an enterprise software
25:38company where you absolutely do want to
25:40have get every customer in investing you
25:43want to stick to the things that you're
25:46best suited to do where you're the very
25:49best firm possible and for us
25:52you know that's primarily software-based
25:54things and primarily Silicon Valley just
25:56because this is what we know we
25:57understand the culture we understand the
25:59technology and you know what different
26:02cultures are different head the world
26:04the world may be getting flatter but
26:08it's certainly not flat in terms of
26:10culture in terms of motivation in terms
26:11of what stock options mean and the
26:13difference between beer-drinking
26:15countries and wine-drinking countries
26:16and you have to know all these things to
26:18invest effectively globally so it's not
26:21you know we we can have a very good
26:23business investing in Silicon Valley and
26:26then you know whether we expand that or
26:28where we expand that I think as TBD but
26:31it's not critical for a survival and the
26:33way it would be if we were say a
26:35software company I think it's a lot of
26:37our company's actually buried directly
26:38on this right and so companies like
26:40Facebook and Twitter as platforms for
26:41global communication you know
26:43entrepreneurs are communicating on
26:44Facebook and Twitter every single day in
26:46incredibly beneficial ways or you know
26:49another example is a startup that we've
26:51seed funding called teleport that's
26:52making it you know much easier for
26:54engineers to consider relocating like
26:55where to locate a new company or how to
26:57get talent to be able to move to new
26:58location and so or you know for that
27:01matter Airbnb which makes it or you know
27:03lifts which make it much easier for
27:04people to travel and be able to have you
27:05know temporarily live in other places as
27:07they kind of you know go around to where
27:08the different opportunities are and so
27:10we've you are one of the things we view
27:11ourselves as doing is funding the
27:12platform companies that are kind of
27:14building this world in which there's
27:15gonna be a lot more entrepreneurship
27:17that's part one of the Benham ark
27:19podcast check out part 2 where the
27:22discussion enters the realm of
27:24disruption theory and how that helps the
27:26firm decide what not to invest in as
27:29well as how large companies innovate and
27:31what Ben and Mark wished they had been
27:33told as young entrepreneurs and more
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