00:00hi everyone welcome to the a 6 and Z
00:03podcast today's episode features a 6 and
00:05C co-founders Marc Andreessen and Ben
00:07Horowitz in conversations with economist
00:09Tyler Cohen who is chair of economics at
00:11George Mason University and chairman and
00:13general director of the Makeda Center
00:15there and also has a podcast
00:16conversations with Tyler the discussion
00:19originally took place at her most recent
00:20annual innovation summit and covers
00:23everything from talent and tech trends
00:25to software eating culture or the other
00:28you can also find other podcasts and
00:30videos from this event at a6 and c-calm
00:32slash summit thank you all for coming
00:35I'd like to start with the two of you as
00:38a couple oh yeah how was it you met at
00:41Netscape in 1995 yeah well mark
00:44interviewed me you know way back then
00:46and he interviewed me I think I was
00:48interviewing for product management role
00:49and he was the founder of the company
00:51and I had worked on a product called
00:54Lotus Notes and Mark had a fascination
00:57with Lotus Notes for a couple reasons
00:59one was it was kind of sort of the
01:01closest proprietary thing to the
01:03internet and then they had email in it
01:06and Netscape was looking at doing email
01:08she had all kinds of questions for me
01:10and I remember him just being absolutely
01:13shocked and flabbergasted that like 50
01:15percent of our code base and Lotus Notes
01:17was just making like all the lam
01:20protocols worked together IP acts and
01:22Apple talk and Ned Bui NetBIOS it was I
01:25you guys don't even know what any of
01:27that is anymore it was like literally
01:29just making the network talk to each
01:31other which he thought was like
01:32ridiculous given there was tcp/ip that
01:36was the very first conversation we had
01:37mark how did he do in the interview very
01:41good he had a giant asset he was the
01:44first employee from Lotus so he looked
01:46great in comparison to all the ones we
01:48so no he did great he was he was super
01:52knowledgeable and actually is actually a
01:53really big deal at the time because
01:54Lotus Notes was a big thing at the time
01:55and that would been just alluded to an
01:57architecture like it just it basically
01:59assumed that the internet was not going
02:01to work which was the dominant
02:02assumption at that time it's kind of how
02:04the whole thing was built and then most
02:05of the people working on it I think
02:06probably agreed with that yeah there
02:08were many many arguments that the
02:09internet couldn't possibly do what a
02:10system with Lotus Notes did them so Ben
02:12was I would say young enough and smart
02:14Mallos well enough to figure out you
02:15know very early among his cohort of kind
02:17of the professionals in the space that
02:19it actually was going to happen a
02:20different way and so we were a little
02:22fly-by-night startup so so we fast
02:25forward to 1999 you to do loud cloud
02:28why how'd that happen well so the big
02:31thing basically that happened was so it
02:33turns out the internet worked which
02:34turned out to be a big deal
02:35go figure and then basically what
02:37happened was basically people were
02:38unprepared for the internet to work at
02:40some fundamental level and then we saw a
02:42very specific kind of version of people
02:43being unprepared for that which is we
02:44sold that scape in 1998 to a AOL and so
02:47Ben and I had a bunch of us were working
02:48today well and then it all had this
02:50thing at the time AOL was a little bit
02:51like the Google of the error or
02:52something where it was just a they had
02:55like a firehose of traffic that they
02:56could basically steer wherever they
02:57wanted to steer it and so if you went on
02:59AOL and you typed in by clothes off the
03:01traffic on the internet went through AOL
03:02remember that it was a really big by the
03:05way and by the way almost all consumers
03:10right almost all consumers are on air
03:11well at the time so you type in but you
03:12know by closed on AOL and it would you
03:13know and then they would sell you know -
03:15like j.crew or gap or you know whatever
03:16that slot and then basically what
03:18happened is the advertising business and
03:20then a well would turn on that ad and
03:21then the basically to fire us a traffic
03:23would just blast the website to bits
03:25right if it's J could they just blast
03:27the Jaykar website to bits and then the
03:28j.crew people would spend weeks trying
03:30to get the website to work to actually
03:31take advantage of all this traffic and
03:32so it was sort of you know it just
03:34seemed kind of obvious and then we you
03:36know we were kind of in this business
03:37and so you go talk to people running
03:38these things and they just they didn't
03:39they were just unprepared for this kind
03:41of sophistication and so we sort of
03:43incubated this idea that boy what if
03:45there was a cloud right what if what if
03:47basically there was a system in which
03:49you could take your content and all your
03:50apps and you could run them and it could
03:51handle the load and you could you know
03:52it could load balance and it could spike
03:54up in response to demand and then all
03:55these companies instead of being in the
03:57business of running all your own stuff
03:58like why can't you just hand it over to
03:59the pros and say and this isn't the full
04:01flush of the dot-com boom and so I just
04:03seemed like an obvious opportunity and
04:04so 2009 comes along and why is it it
04:07seems to you both in that's the right
04:09time for a new venture capital firm what
04:11was the thought well you know it was
04:13really one of those ideas that just came
04:16out of our experience you know we were
04:18customers of venture capital and you
04:20know we had a couple of observations one
04:22was you know we had noticed over the
04:24years and and Mark really made the
04:26observation first that
04:28most of the really great companies they
04:30forget about successful but like great
04:32companies companies you admire in tech
04:34we're all run by their founders for a
04:35very long time so going back to Thomas
04:38Watson at IBM or Dave Packard and Bill
04:41Hewlett at Beulah Packard or you know
04:43Bill Gates or whoever it was all the
04:46really giant successes were run by their
04:48founders and the conventional wisdom and
04:51venture capital was set up to replace
04:53the founder and then in our own
04:54experiences as technical founders we
04:57knew why that was true because yeah well
05:00if you just took you know like nobody
05:02would have ever been able to fix loud
05:04cloud other than us like there was no
05:06way you could bring in a professional to
05:08do that and so getting to that next
05:10product after you get the first product
05:13getting to the next product market fit
05:14required an innovator and so if you
05:16wanted subsequent product cycles you
05:18needed the founder and so we just
05:20thought there ought to be a firm that is
05:22designed to do that and what is it that
05:24the two of you figured out what is it
05:27you two understood that other people
05:29didn't and how would you articulate that
05:30you know like we were just there was a
05:33bunch of things one differentiation feel
05:36like we came from a company so we're
05:37like first we're gonna tell a very clear
05:39sharp story about a real network that
05:41we've built out systematically we've got
05:43people are going on your board who know
05:45exactly how to build companies so
05:47sometimes it feels to some people
05:48there's a lot of money running around
05:49but talent is quite scarce what is it
05:52that you two in the company as a whole
05:54have understood about Talent Search that
05:56other people have not so we actually
05:58thought of it as a talent business and a
06:00lot of the reason for that is you know
06:01friend of ours Michael Ovitz who founded
06:03the talent agency CAA was a board member
06:06of ours adopts where and you know he
06:08always thought about talent in amazing
06:12detail and like an incredibly specific
06:15and one of his the biggest concepts
06:17about it was it was a network and you
06:20had to run the enemy it seemed simple oh
06:22it's a network okay great but like how
06:24do you build that Network how does it
06:26work how do you take a long view of the
06:28relationships with the talent so you
06:30know we really thought out very early on
06:32we're going to invest heavily in
06:35building this network and having the
06:38time the luxury of time to build real
06:42as opposed to transactional
06:43relationships with every single person
06:45that we run into be Dan engineer and
06:47entrepreneur a corporate partner or
06:50whomever and that all kind of came out
06:52of this original CAA concept if you take
06:55a long view of relationships you can
06:57build a network that's so powerful that
06:59nobody ever would be able to match it
07:00and that was kind of the original
07:02inspiration and and we were fortunate
07:04enough to just hire a really
07:06astoundingly good team to help us do
07:08that and Mark how do you think about
07:10talent assessment so I think you know
07:12the other side of it is the entrepreneur
07:13assessment right and so it's just one of
07:15those things where you know there is
07:16kind of this fundamental question I'm
07:17kind of how extreme are you willing to
07:19get right with some of these people
07:20because you know the kinds of people who
07:22start these companies are not normal and
07:25we can say that speaking from experience
07:26having done it ourselves and so and I
07:29would actually go so first argue like it
07:30may be that the founders are getting
07:32less normal as sort of society gets
07:33let's just say more interesting in
07:35recent years and so you know the ideas
07:37are getting bigger the technologies are
07:38getting more disruptive the companies
07:40that win are getting much larger
07:41technologies more central everybody's
07:42lives by the way there's more
07:44competition than ever there are more
07:45tech startups than ever and so the kind
07:46of very special person who's gonna
07:48conceive of an original idea and then be
07:49able to build a team and be able to
07:51prosecute the idea is gonna be a very
07:52extreme person so a lot of it is sort of
07:55this you know the discovery and then and
07:56then partnering with these really
07:57extreme people I'm gonna throw out a few
07:59questions about particular technologies
08:01and either of you feel free to answer
08:03blockchain what will be the breakthrough
08:06application for blockchain I'll take
08:08that so first of all like asking what
08:10the killer app is nobody ever gets it
08:12right like I remember the internet
08:13killer app it was never Facebook that's
08:15for sure but the way that we think about
08:17blockchain technology is that it's a new
08:20computing platform and like other new
08:23computing platforms that preceded it
08:24it's worse in every way but really a
08:28very few ways so if you think about the
08:30smartphone when it came out it was much
08:33worse than the PC at a tiny screen it
08:35was far less powerful etc etc people
08:38were like how am I gonna run my
08:40spreadsheet on that a little a screen
08:42like that there's no way it's gonna work
08:43but add a couple properties that you
08:45don't have in the PC it had a GPS it had
08:47a camera and so that you can now build
08:49things like lift you can now build
08:51things like Instagram that you could
08:53never build on a PC and you still can't
08:55see and it created a whole new world of
08:57applications blockchain is like that
09:00it's slower it's harder to use it's
09:02harder to program but it has a new
09:04feature and that feature is trust and
09:07Trust is really really an interesting
09:09feature because it means that you don't
09:13have to trust the government or a
09:15corporation or your lawyer you just have
09:18to trust the mathematical properties and
09:21the game theoretic properties of the
09:23system and then you can do things and it
09:25opens up applications such as you can
09:28program money you can program contracts
09:31you can create digital property which is
09:35you know if you just think about the art
09:37world it's an amazing kind of world and
09:39it's all virtual value you know bas gets
09:41150 million dollars but like the canvas
09:43is probably less than five dollars but
09:46because you know that's one of one it's
09:48got value while you can now do that
09:50digitally with blockchain so there's
09:51those kinds of things and then you don't
09:53have to trust companies so if you're a
09:55developer and you're building an
09:56application you you know you don't have
09:58to trust Facebook to not go well like
10:00you know we decided like we're changing
10:01our privacy policy you can't rent
10:03anymore or if your consumer you don't
10:05have to say okay like I've got to trust
10:06you with my data so that property of
10:08trust we think is very very powerful and
10:10there's a large set of applications that
10:12will come off of that but you know like
10:14it takes a while for developers to get
10:16used to it for the technology to mature
10:18and so forth so it's one of the things
10:20we're most excited about paint a picture
10:22for me 15 years from now retail and
10:25wearables what will tech do for me in
10:28those areas that it's not doing right
10:30I think retail will basically be gone by
10:33then I mean I can't go to the shopping
10:36mall and he wants to go to the shop I
10:37want to go to the shopping mall you can
10:39go okay they'll have special preserve
10:41shopping malls okay you in fact yeah you
10:51can drive there on a special road for
10:53your non self-driving car so entire
10:59horse about that so so I mean look there
11:03will be their expertise so the terms of
11:05exponential retail so like experiences
11:06like if it's look I mean if it's like a
11:08Gucci boutique annette soho expiry
11:09to go there it's an Apple store it's a
11:11you know it's got something where it's
11:12like there's like real magnetic appeal
11:13to the experience then fair enough right
11:15and there's there's actually bunch of
11:16companies were involved in that are
11:17doing things like that but like it you
11:18know the idea of we're gonna buy a bunch
11:20of stuff that other people make and
11:22we're gonna put it in a big box and then
11:23we're gonna make everybody drive to the
11:25big box like the problems that are kind
11:26of twofold number one is consumers don't
11:28actually want what you want is you want
11:30to Star Trek replicator right like what
11:31you want is like you press the button
11:32and like there's my stuff right
11:33like we're great on Star Trek we don't
11:35have that yet like we don't quite have
11:36that we don't actually have the
11:37materializer yet but we do have the
11:39ability press the button and stuff gets
11:40dropped off so and the logistics
11:42infrastructure to support delivery is
11:43getting built up right very very rapidly
11:45now and so the I think the consumer
11:47behavior is cutting over quite quickly
11:48and then the other problem is just kind
11:50of traditional it's a third party retail
11:51where you're not selling your own
11:52product you're selling somebody else's
11:53product is you just can't basically
11:55you're levered as a retailer right you
11:57you basically live on the basis of
11:59credit from the suppliers and the
12:01problem with that so you're kind of like
12:02an over levered Bank in a lot of ways
12:03and so the problem with that is you loot
12:04there's basically no retailer of other
12:06people's products where they could lose
12:0730% of the revenue and then they stay in
12:09business which is why you see these
12:10retailers just going bankrupt like all
12:12the time right it's like Toys R Us
12:13because that you know the most recent
12:15big one like it detonated and then it
12:16detonated so hard that it actually went
12:18into full liquidation right which
12:19everybody thought who obviously it's
12:20Toys R Us like people want toys like
12:22kids like obviously it's somebody was
12:24gonna buy Toys R Us and they there was
12:25just no way to make the math work and so
12:27I just I just think it's an over lever
12:29business and it's that part isn't good
12:30now what its gonna do is you're
12:32interesting it's gonna open up all the
12:33space right and so there's a whole
12:35revitalization of physical environments
12:36that's gonna happen right including you
12:38know you see that happening already in
12:39cities but I think it's gonna happen all
12:40over the place because a lot of this
12:41space is gonna open up for let's say
12:43more interesting uses so instead of
12:45going shopping I'm gonna do something
12:47with my wearables and what will that be
12:49what's the potential in wearable I think
12:51the really big one right now is I think
12:52audio you know audio is on the rise just
12:54just generally and particularly Apple
12:56you know what the earpods is just I
12:57think hit an absolute home run it's one
12:59of the most deceptively no thanks is
13:00it's just like this little product
13:01unlike how important could it be and I
13:03think it's like tremendously important
13:04because it's basically just like a voice
13:05in your ear anytime you want and so you
13:08have that well I'll just give you one
13:09random example there are now these
13:10YouTube you know there's these new kind
13:11of new kinds of YouTube celebrities and
13:12everybody's kind of wondering like what
13:14you know where are people getting all
13:14this spare time to like watch all these
13:16YouTube videos and listen all these
13:17youtube you know people you know in the
13:19tens and tens of millions and the answer
13:20is like they're at work right
13:23we got like a Bluetooth Bluetooth thing
13:26in their ear they've got a hat right
13:27that's 10 hours on the forklift right 10
13:29hours intro Rogen right and so like
13:31that's a big deal it's a voice in your
13:33ear all the time and then of course
13:34speech as a UI is rapidly on the rise
13:36and so I think audio is gonna be you
13:39know titanically important I would say
13:41the second thing I nominate for
13:42wearables is just generally the concept
13:43of sensors on the body right and so that
13:45here the Apple watch is clearly out in
13:46the lead with what they're doing with
13:47the heartbeat sensor but I think we'll
13:49have a full complement of medical-grade
13:50sensors you know on our bodies in a way
13:52that we have chosen to over the next 5
13:54or 10 years and I think we will get to
13:56the point where we're gonna be able to
13:57do things like predict heart attacks and
13:58strokes before they happen I thinks like
14:00you mean talk about like I've talked
14:02about a killer app like I'm gonna have a
14:03beep I'm gonna have a heart attack in
14:05four hours maybe I should drive to the
14:07hospital the survival rate for a heart
14:09attack in the hospital is like 99% the
14:11survival rate for a heart attack of
14:12homes like 50% like there's an
14:13opportunity for like a massive increase
14:15of quality of life with the sensor
14:17platforms people are going to have and
14:18then I think I think optics are coming
14:20right and it's gonna be a long road but
14:21I think air and Vieira are both gonna
14:22work and I think they're I think we're
14:24gonna have heads-up displays that
14:25honestly are gonna remove the need to
14:27you know what we have now which is kind
14:28of this little pane of glass that we're
14:29expected to kind of experience the whole
14:31world through right the whole world's
14:32gonna open up around us what are we
14:34gonna do with augmented reality and
14:37so I'm big believers in both I think AR
14:39has you know tons of potential
14:40applications both working at home we can
14:42spend a lot of time on that I think VR
14:44is gonna be like a thousand times bigger
14:45in the valley right now this is a very
14:47contrarian view because the the general
14:49kind of theme that you hear in the
14:50valley is air it's gonna be bigger than
14:51VR and it seems like obviously AR should
14:53be bigger than VR because obviously if
14:55you can do things overlaid on the real
14:56worlds that should be sort of inherently
14:58more interesting than having a construct
15:00sort of a synthetic world I just think
15:02that that's only true for people who
15:03live in a very interesting place in the
15:05real world which we all do but you know
15:08only you know something between my point
15:101 percent and 1 percent of people on
15:11earth live in a place where it's like
15:13they wake up every morning they're like
15:14wow there are so many interesting things
15:15to see right like most people don't live
15:17in a place like that right and so for
15:19everybody who doesn't already live on a
15:21college campus or in Silicon Valley or
15:23in a major city the new environments are
15:25gonna be able to create in VR are gonna
15:26be inherently much more interesting
15:28right through the physical environments
15:29and there's gonna be a lot more of them
15:31to choose from and so it's gonna be
15:33and there's a tweet I've been dying to
15:37two types of people in this world Fresh
15:39Prince of bel-air people and Martin
15:42people I'm a Martin person for what it's
15:46who's Martin that's funny I think Nate
15:48wrote that tweet and I replied to it so
15:50there were two kind of major African
15:53American television shows out in the
15:55early 90s The Fresh Prince of bel-air
15:58which was based on a rapper down as The
16:01Fresh Prince and his DJ DJ Jazzy Jeff
16:03The Fresh Prince was actually Will Smith
16:05him I know but the Martin is what
16:08puzzled me Martin is Martin Lawrence who
16:10is a comedian a genius convenien who was
16:14also incredibly crazy so crazy that his
16:16special was called you so crazy it's
16:19just like a very very crazy guy but
16:21Fresh Prince of bel-air was kind of like
16:23the hood Beverly Hillbillies it's kind
16:26of like you know you get the black
16:28people from the inner city and you put
16:31them in Beverly Hills and it's kind of
16:32funny and it's safe for you know
16:34everybody there's nothing to itchy you
16:37know they keep it kind of easy and
16:38whereas Martin was like just full-out
16:40like Martin was like actually the hood
16:42and he was nuts and like the whole thing
16:46was great and so as was my show now it
16:49could you recommend a rapper for people
16:52who think they do not like rap music
16:55Will Smith Will Smith
16:59and does Mark like Will Smith market if
17:06we think about television as presenting
17:08conceptual material to us and every now
17:11and then you'll watch TV shows what's a
17:15TV show you've been watching lately that
17:17has a lesson in it about venture capital
17:19and what's that lesson can i name three
17:24which actually recently ended after four
17:26seasons Alton catch fire when it came
17:28out it came out right after Mad Men and
17:29it came out as kind of people are like
17:30well it's kind of like Mad Men but it's
17:31like much more of like a potboiler it's
17:33like super like dramatic and they're
17:34like it's just all the emotionality of
17:36it like you know it's about this
17:37creation of basically throughout the
17:38creation of a compact the PC company
17:40made early 80s it's a thinly veiled kind
17:42of starts out kind of with that the
17:44birth of the PC and so all the critics
17:46were likely this is like too dramatic
17:47and like Ben and I watch it we're like
17:49you know no that's it's about right
17:50is exactly it was like literally going
17:53back in time exactly right and it really
17:56is like that dramatic and that stressful
17:57and that crazy yeah and so especially in
17:59the first season of that show I think
18:00it's it's the most accurate portrayal of
18:02what a tech startup is actually like
18:03that's ever been aired so that's one
18:05another one that I really like for
18:08founders to watch and they always think
18:09I'm crazy but I really really believe
18:10this there's a there was a great show on
18:12us eight years ago called Burn Notice
18:14which is a very fun show is about a spy
18:17who'd gotten burnt a CIA spy had gotten
18:19burned and had the whole of Miami try to
18:21clear his name and he took on all these
18:22odd jobs so trailer and we'll set up the
18:24conceit of the show was though he had
18:26every conceivable skill you could
18:27possibly have right and so he knew how
18:29to make like explosives on a bleach like
18:31he knew how to like you know I don't
18:32know like disarm somebody with a mouth
18:33handle like whatever circumstance he was
18:36in he had the and there was a voiceover
18:37he would explain you haven't hired him
18:39well we would love to hire them but but
18:41basically I look at him and it's like
18:42that's kind of that's that's a good
18:43founder like a good founder has to
18:45basically have every conceivable skill
18:46like you basically have to be good at
18:48product development and at marketing and
18:49at sales and at finance and quickly go
18:51and add HR and management and you know
18:53on and on and on and on and and there
18:55really is no substitute for actually
18:56being good at all these things and so I
18:58like that one and then the third one is
19:00succession which I just finished is one
19:03of the darker and funniest things I've
19:06ever seen and let's just say it's a it's
19:08it's inspiring for founder's because it
19:10I think pretty accurately shows the
19:11dysfunction that it's a certain kinds of
19:14larger companies it's a show about a
19:16succession battle at a major media
19:17company and I can't recommend it highly
19:20enough if you've got the stomach for bad
19:22words so been the company is starting
19:24something called a cultural leadership
19:27fund what are the strengths and
19:28weaknesses of applying the venture
19:30capital model to culture and
19:31entertainment I think we're trying to
19:33apply culture to the venture capital
19:35model so it's a little bit the opposite
19:37like you know you know back to your
19:39earlier question you know we rarely
19:40pride ourselves on being able to
19:42understand talent and talent of all
19:45kinds and you know one of the things we
19:48did very early is we built a lot of
19:50relationships with geniuses at moving
19:53culture and we thought this was
19:54important because Aztec was moving into
19:57much more kind of consumer oriented
19:59field when we started the firm that the
20:03really knew how to change and create new
20:06consumer behaviors would be interesting
20:09so we you know had a relationships with
20:11all these cultural geniuses like Quincy
20:12Smith and Sean puffy combs and NAS and
20:15and so forth but we were doing it kind
20:18of fairly went off and we thought you
20:21know be really great you know and it was
20:23a great advantage for us and Oprah had
20:25one of our entrepreneurs on her favorite
20:27things show but we thought you know it
20:29was a good thing to share with the rest
20:31of the industry and so we would have
20:34these cultural geniuses but you know
20:35geniuses but who didn't look like the
20:38geniuses our guys were used to like you
20:39know Mark Zuckerberg or Brian Chesky
20:41they kind of felt different but our guys
20:45were interested in working with them so
20:46we put them together they get to know
20:48each other which is good value on both
20:50sides and it also gives a lot of value
20:53to our CEOs because not only do they get
20:55to kind of learn how to move culture but
20:58they also get to learn about how a
21:00different kind of talent looks like
21:01which is very very valuable when you're
21:04kind of in the war for talent and then
21:07we invest it back in kind of young
21:10African Americans who are wanting to
21:12come into tech so we create a talent
21:13pipeline with the fund and we have
21:16straight access to the pipeline so I
21:18would just say we get a lot of credit
21:20for being nice but we're really just
21:22winning so it's gone great and I think
21:24it works well and look you know the main
21:27thesis is you know if you've got like a
21:29very small group of people that created
21:30every new musical art form in the last
21:32century from jazz to blues to hip-hop to
21:35rock and roll you know like that's a
21:38real thing I'd like to be able to do
21:39that and that's a real talent base that
21:42you know we need to figure out how to
21:44get to and we're here in Los Angeles
21:47we're very close to Hollywood what is it
21:49conceptually that Hollywood grasps about
21:52venture capital and talent
21:54identification where Silicon Valley lags
21:56behind well I think that you know I just
21:59think of their different kinds of talent
22:00so and this is the thing that I think
22:02people make a mistake on when they think
22:05about you know how diversity works or
22:07how inclusion works and so forth is
22:09there's talent that looks different and
22:11then if you don't have that talent you
22:13might not be able to see it and so you
22:15know in Hollywood they see certain kind
22:17of talent that they're used to because
22:19they know what that is they know how it
22:21pops on screen they know how like people
22:24emotionally connect to it and then in
22:26Silicon Valley we know another kind of
22:27talent you know talent for like systems
22:30thinking and engineering and this kind
22:32of thing but both are very valuable when
22:35you put them together in a company and
22:37so I think that you know in these
22:40endeavors what we try to do is to see
22:42talent that we're not and it's not an
22:44easy thing to do and it's a story I tell
22:46that Margit had in her profile one of
22:48the things she looked at in her
22:50employees was helpfulness and when I saw
22:52that it shocked me because I have been
22:54managing for like nearly 30 years at the
22:56time and I'd never interviewed anybody
22:59on that I couldn't even see it like
23:02there's a thing that's an important
23:04talent very important talent to a
23:06services firm like ours that I couldn't
23:08even see so how am I gonna hire it if I
23:10can't see it and so we spent a lot of
23:12time at the firm trying to see talent
23:16I'd also fir good that they start to LA
23:19the fact we're down here so I think it's
23:21also very interesting time because you
23:23know for basically from when I entered
23:24tack in the early 90s up through call it
23:27may be 2012-2013 it was just kind of
23:29taken as a given that the Silicon Valley
23:30companies we're never gonna figure out
23:32I'm never gonna figure out content and
23:33it was also taken as a given that the
23:34media companies were never gonna figure
23:35out tech and there were tons of attempts
23:37to kind of cross over but they basically
23:38didn't none of them worked and it really
23:40isn't the last like three years it feels
23:42like it feels like a bunch of the valley
23:43companies are really starting to decode
23:45culture a bunch of the big I mean that
23:47foods being definitely sort of you know
23:48sort of setting a new model but now
23:50being you know replicated by other
23:51companies Amazon being the most notable
23:53example you know becoming big forces in
23:55creating the formation of culture and
23:57entertainment a media and then and then
23:58also by the way the other is the
23:59flipside is the bunch of the big media
24:01companies now if we've gotten the point
24:02where they don't take protect incredibly
24:03seriously and have you know really sharp
24:04people working for them working on very
24:06interesting projects and then there's a
24:07whole tech thing obviously now happening
24:09down here in LA that's that's of a new
24:11level of magnitude than before and so it
24:13does feel like both of the kind of
24:14central hubs in California or developing
24:17you know quite nicely know a general
24:18question twenty years from now will
24:20location and being in the Bay Area
24:22matter more or less yes clearly both so
24:26on the one hand it is absolutely true I
24:29mean in 20 years you know the teleport
24:30basically telepresence technologies
24:32right so video conferencing in Viera and
24:33all these things like 20 years ago
24:35there's no question it's gonna be like
24:36much easier to run large distributed
24:38organizations large distributed efforts
24:39than it is today right we're gonna have
24:41such high fidelity video conferencing
24:42everywhere you can actually see this
24:44today if you see the super high end
24:45video conferencing systems it really is
24:47like you are there and then we have
24:49these robots that we love in our office
24:51some of you have seen the beams which
24:52are a prototype of what I think I think
24:54telepresence robots are actually gonna
24:55be a very big deal because they give you
24:56a sense of physical presence of somebody
24:58in a room that's even different than a
25:00screen and so like those technologies
25:01and collaboration technologies like
25:02slack and github right are becoming
25:04really good today and in 20 years
25:05they're gonna be you know just
25:06spectacularly amazing and so it's gonna
25:09be easier to run all these companies and
25:11be able to run all these efforts on a
25:12broad basis and then that's just gonna
25:13make it much more straightforward for
25:15people all over the world to participate
25:16so that's the one hand but the other
25:18thing though is just like ok that's
25:20gonna be a world that's much more
25:21connected right much more networks right
25:23it's gonna be you know past 5g we're
25:24gonna be like 9 or 10 or 11 G right it's
25:26gonna be bandwidth everywhere it's gonna
25:27be everybody's gonna be online all the
25:29time we're gonna have all these you know
25:30wearables being online it's gonna be
25:32part of everybody's daily experience all
25:33the time you know the economy's gonna
25:35reform itself around software or network
25:36effects and so the winning companies you
25:39know the winning entrepreneurial
25:40companies 20 years from now that win are
25:42going to be staggeringly large like
25:43they're gonna be like I don't know 10 or
25:45a hundred times the size and Google and
25:46Facebook and so the prize to have a
25:48startup that scales and wins is going to
25:50become so large that you're gonna want
25:52to hyper optimize every possible thing
25:54you could possibly do to have that extra
25:56chance that you're gonna be the one that
25:57wins right and that's gonna mean like
25:59people in the same room together right
26:01and so I think the valley is actually
26:03going to become more central not less
26:04central even though the technologies
26:06that we're building are making it
26:07possible for the world to distribute ban
26:09I love your book on management it's the
26:11only book on management I've ever given
26:13to my daughter yeah I knew I had one
26:16I picked yours in your view what is the
26:18best predictor not of innovation we've
26:20talked about that but if simple
26:22managerial intelligence how do you spot
26:24that and what does it consist of well
26:26you know it's interesting it's two
26:29skills that don't normally go together
26:32so it's these systems thinking which is
26:36you know I hadn't even noticed mark
26:39actually pointed this out to me many
26:41years ago which is most people are not
26:43systems thinkers meaning the
26:44not think about okay if I change this
26:47here then it's going to affect that over
26:49there and you know you know as an
26:51economist people always make these dumb
26:53mistakes like okay well move the minimum
26:55wage and nothing else will happen it's
26:56like well no no it's a system you have
26:58to think of it in terms of the system
27:00and so that's kind of part of it and a
27:03big part of it and but the other part
27:05which is can you actually see the people
27:09in your organization like do you know
27:11who they are as opposed to you're
27:12talking to them like they're you and
27:16meaning do you understand their
27:19motivation do you understand what they
27:20would think about something if they were
27:22in the room and you're making a decision
27:24can you interpret them well enough so
27:28that it's as though they're there and
27:30can you understand the implications
27:32through the eyes of the people who work
27:34for you and if you have those two things
27:36together those are the people who are
27:37really great but it's a rare thing and
27:39you can kind of see it because you'll be
27:41talking to them and like you might not
27:43be able to articulate something and they
27:44can articulate it for you the way you
27:45would have done it better like somebody
27:48who's that perceptive on people plus a
27:51systems thinker is really the those are
27:53the people aren't gifted and mark did
27:55you really invent the tweet storm and if
27:57so what's the general lesson about
27:59innovation we should learn from that
28:04inability to shut up but you did invent
28:10it I think there might have been
28:11sequences of tweets but literally I
28:12couldn't shut up so like I think it's
28:14kind of catalyst well look I mean the
28:15big lesson from it has been the big
28:17lesson actually have a lot of the a lot
28:18of the internet platforms which is
28:19emergent behavior is incredibly
28:20important right they're really
28:21successful platforms let the users
28:23surface the behaviors right that the
28:25creators of the platform could have
28:26never thought of and you know Twitter's
28:27had all kinds of issues over the years
28:28but like it always has been amazing
28:30most of the compelling ways in which
28:31people use Twitter have been invented by
28:32the users I mean I think it's true
28:34retweets were invented by users right
28:36like some very very fundamental features
28:37and that's not just Twitter that's also
28:39bench it was true of actually personal
28:40computers it was true smartphones it's
28:41been true of you know many of these
28:43platforms and so it's it's a useful
28:44principle of product design which is
28:46what the users innovate and Ben you're
28:48famous actually for your barbecue
28:50cooking viewed as a problem of
28:53management and also innovation what
28:55makes for the difference between good
28:57and truly excellent barbecue time say
29:00more time so you know it's funny I had
29:04an interesting conversation years ago
29:07with my wife's cousin Atlee you Kanye
29:09West which was just like a weird thing
29:11because a delese from Baton Rouge
29:13Louisiana and I happened to be in New
29:16Orleans and Kanye was there and we're
29:18all out to dinner and Kanye asked at Lee
29:21says what's the definition of luxury
29:23which is like if you're from Baton Rouge
29:25you just don't think of that word like
29:27you never hear the word luxury and so at
29:30lease is I just like to cook and Connie
29:33says well how do you cook he says well
29:34like I like to make red beans and rice
29:36and he's like well how do you do that
29:37he's like like take my time you know I
29:39cut the onions very slowly I boil it for
29:42make sure it simmers and kind he says
29:45time is luxury like that's why I make
29:50luxury records I take my time I was like
29:52yeah that's it so mark do you prefer to
29:57eat for-profit sushi or non profit sushi
30:01this is Tyler's favorite question to
30:03suss out whether people are actually
30:04pro-government Pro increased government
30:07services the idea of nonprofit sushi
30:09makes me so nauseous but I think I want
30:12to throw up onstage general question
30:15what's the one thing that Wall Street
30:18does not understand about technology
30:21that you would change if you could I
30:22think part of it is it's a 3,000 mile
30:24like thing I think a big part of its
30:25culture there's just a delay and there
30:27always has been and so you know if I if
30:29I wanted to fix that I would say like we
30:31you know we need to spend a lot more
30:32time and by the way the tech industry
30:34does need to spend a lot more time you
30:35know trying to tell people what we're
30:36doing but at the same time people from
30:37outside the tech industry need to spend
30:39more time in the valley and understand
30:40what's happening here
30:41and a lot of that is happening as well
30:43that's what I'm not sure I want to fix
30:45it yeah the question assumes I want to
30:47fix it like I don't think I want to fix
30:48it because that's a big part of the
30:49opportunity what's the one thing the US
30:51government does not understand about
30:53tech that you would change if you could
30:55so I think the first thing is something
30:56that a Negro said many years ago which
30:59is it's inevitable and so you know
31:01somebody had to ask him you know as the
31:03microprocessor good or bad he said well
31:05that's like asking is steel a good or
31:06bad it's like we got to deal with it
31:08like it's here and I think that you know
31:11biggest mistakes the government makes
31:12are assuming it's not so you know stem
31:15cells is a great one where the US
31:17government went to really hold that back
31:19they ant hold back stem cell-like
31:21development or research at all they just
31:23made it very inconvenient for people in
31:25United States and a lot of people died
31:26and you know missed out on cures and all
31:29kinds of things because of that and so
31:31they think that's number one and then I
31:34think the other thing is that technology
31:36has always had and always will have good
31:38and bad implications going back and the
31:41cotton gin the printing press you know
31:44certainly the Internet has had good and
31:46bad but if you look at it overall it's
31:49overwhelmingly positive and more than
31:53that we have to go back to our
31:55population levels in like 1750 if you're
31:59going to take away technology and take
32:01away technological advancement because
32:02the way the human population is growing
32:05there's no way we can you know live the
32:08way we want to live and have the lives
32:09we want alive without technology said
32:11they getting into these debates of
32:13whether we should hold it back is just
32:15you know there's one thing I would
32:17change it's like let's not have that
32:18debate let's have the debate how to make
32:20it great mark what's the last thing
32:22software will eat other than sushi sushi
32:28so I think it's fundamentally the term
32:31that you used actually called it I think
32:33project selection and so basically it's
32:35this question of like okay how do you
32:37organize a small number of people to do
32:39something new right and by the way that
32:41could be a startup company that could be
32:42many other kinds of efforts where you
32:44need a small number of people to do
32:45something new it could be a new
32:45political campaign a new activist
32:47movement whatever but a small number of
32:48people to do something new right and
32:50then how do you pick if you're gonna
32:51finance or donate or find those things
32:53how do you pick which was to donate to
32:54and then how are those things actually
32:56gonna run right and the new part that is
32:58really important like the little known
33:00fact for example about venture
33:01capitalists that the there's a term in
33:03venture capital and hedge funds called
33:04carry which is basically called carried
33:06interest which is the sort of profit
33:07participation that the VCS or hedge fund
33:09managers make the term carry actually
33:11comes from whaling in the 1600s off like
33:14you know the code the Atlantic Ocean
33:16like literally the term carry was the
33:18people who would finance the captain and
33:20the crew of the boat but the boat
33:21actually would run as a start-up there
33:23was actually like equity participation
33:25for all the people on the boat and then
33:26they would be pick a captain you'd raise
33:27money in town you'd raise capital and
33:29then the boat would go off and try to
33:31take down a whale right and about you
33:33know 3/4 the time the boat would come
33:35back the way I would win Moby Dick was
33:40it was not a joke and and so the boat
33:43comes back but 75 percent of the time
33:44and then and then literally Carrie was
33:45the portion of the whale that the
33:47investors got right and so if you think
33:49about it like the process if you're like
33:51in you know I don't know if whatever
33:52Boston wherever in like you know 1675
33:55and you're trying to say okay this ship
33:56this captain this crew this mission into
33:59these waters right with these weather
34:01patterns like and how are they gonna
34:03behave under pressure and what's gonna
34:04happen other things go wrong and it's a
34:06crew gonna mutiny and like gonna make
34:07any money doing this like the whole
34:08thing is just such an intricate kind of
34:10puzzle and it revolves around people and
34:12so sitting out the whaling expedition
34:15you know said you know the Nina the
34:17Pinta the Santa Maria likes the same
34:18kind of thing tech startups are the same
34:20way by the way you know green lighting a
34:22movie or a TV show and Hollywood is the
34:23exact same kind of process and it's just
34:25it's so intangible and it's so much
34:27based on the interaction of a small
34:29number of people who are gonna be under
34:30extreme pressure like if we could figure
34:32out a way to automate that like we'd
34:33find that company in the retire but at
34:35least we don't know how to do that for
34:37each of you what's an interesting book
34:39you've read lately so one of the most
34:41interesting books I read lately is
34:43Genghis Khan and making the modern world
34:45by Jack Weatherford and it turns out to
34:48be very unexpectedly the most
34:50interesting book on the topic of how you
34:53think about inclusion that I've ever
34:55read and genghis khan is not known for
34:57his thoughts on inclusion because he's
35:00mostly known for like being just
35:01ruthless but he really you know he was a
35:04guy who came from kind of the border of
35:07northern mongolia and siberia very bad
35:10part of the world had a very very hard
35:12life growing up he was from kind of the
35:14lower they had white bones and black
35:17bone kind of higher and lower caste as a
35:19lower caste person and you know a lot of
35:22his experience growing up led him to
35:24this idea that he should choose for kind
35:27of talent not the caste system and not
35:30even the tribe that he was in which was
35:32a huge breakthrough at the time you know
35:34nobody had done that and the way he
35:35thought about it and the techniques that
35:37he used for doing it
35:39breakthroughs today you know and and so
35:43I just found to be like a super
35:44interesting but definitely a great
35:46management book for anybody who's
35:48interested in that topic mark so the
35:51best book it looks at biggest impact on
35:53me it's incredibly well-written book
35:54it's of course out of print it's by
35:55actually a guy I think tell her you know
35:57Timur Quran sure you know quite well
36:00who's a economics i economist a Duke
36:03Duke but 20 years ago it's called
36:06private Troost public wise and it
36:09basically tells the story the theory
36:10that he basically has he calls
36:11preference falsification and it's
36:12basically the idea is it's a situation
36:14in which people believe something in
36:16their own head and then they feel for
36:17social reasons that they can't say it
36:18out loud and so it starts kind of with
36:21that as kind of an idea then it kind of
36:22extrapolates out kind of what happens as
36:24a society becomes the kind of society in
36:27which people feel like they can't speak
36:28the things that they believe and it
36:30turns out to be quite an elaborate
36:31process because basically right you can
36:34have these very interesting situations
36:35so you can have a majority people who
36:36believe something but then they all
36:37believe they can't say it but then as a
36:39consequence they all come to believe
36:40that there are many fewer people who
36:42believe it than there actually are and
36:43so you can kind of suppress a point of
36:45view artificially for quite a long time
36:47but then he describes in the book how
36:49there you can then kind of skip the
36:50reverse process kind of you can kind of
36:52get the whole thing to keno kind of the
36:53spring to expand which is if a few brave
36:55people start to speak up then a lot of
36:57other people who have had that seeker
36:58belief all of a sudden realize they're
36:59not alone and then you start a cascade
37:01right in which a lot of people start to
37:03speak up and he basically models in the
37:04book like that's where revolutions come
37:05from it's basically like an explanation
37:07explanation for the fall of the Berlin
37:09Wall it's an explanation for you know
37:10for political revolution if so happens
37:13to be I think highly relevant to what's
37:14happening both on the left and the right
37:16in the u.s. like right now like I think
37:18it's as you read the book you're just
37:19like okay that's the cleanest
37:20explanation of the Trump phenomenon I've
37:22ever seen and furthermore it's also the
37:24cleanest explanation of the Bernie
37:25phenomenon I've ever seen like I think
37:26it actually describes both quite
37:27accurately for the last question I'd
37:29like to return to Mark and Ben as a
37:31couple Ben what's Mark's biggest
37:33misconception about you and Mark what's
37:36biggest misconception about you so this
37:39is the sad thing is that he knows me so
37:42well that I wish he had misperceptions
37:45about me but like he actually knows who
37:47and so this is and manifest itself the
37:51worst like if something's going
37:52wrong at the firm it's always some
37:55combination of his in my fault and he'll
37:58know exactly the flaws that I have that
38:00have led us to that situation and like
38:02it's unbearable and you know and vice
38:05versa but I'll let him answer and Mark
38:08you have the last word man's biggest
38:10misconception to me is he thinks I'm
38:11gonna go to my room tonight and listen
38:12to Will Smith I thank you both very much
38:18for this dialogue thanks everybody
![How To Succeed As A NEW & YOUNG Realtor [Deals Every Month + Luxury Listings]](/_next/image?url=https%3A%2F%2Fi.ytimg.com%2Fvi%2FrtrRghgTayc%2Fhqdefault.jpg&w=3840&q=75)
