‘How Tech Can Build’

Ben Thompson, following up on Marc Andreessen’s “It’s Time to Build”:

What it means to ask more of one another, at least in tech, is right there in the overlap between preferences and vision.

First, tech should embrace and accelerate distributed work. It makes tech more accessible to more people. It seeds more parts of the country with potential entrepreneurs. It dramatically decreases the cost of living for employees. It creates the conditions for more stable companies that can take on less risky yet still necessary opportunities that may throw off a nice dividend instead of an IPO. And, critically, it gives tech companies a weapon to wield against overbearing regulation, because companies can always pick-up-and-leave.

Second, invest in real-world companies that differentiate investment in hardware with software. This hardware could be machines for factories, or factories themselves; it could be new types of transportation, or defense systems. The possibilties, at least once you let go of the requirement for 90% gross margins, are endless.

Third — and related to both of the above — figure out an investing model that is suited to outcomes that have a higher likelihood of success along with a lower upside. This is truly the most important piece — and where Andreessen, given his position, can make the most impact. Andreessen Horowitz has thought more about how to change venture capital than anyone else, but the fundamental constraint has remained the assumption of high costs, high risk, and grand slam outcomes. We should keep that model, but surely there is room for another?

Software gives investors the biggest potential upsides, but software alone won’t get us to the future we need — not even close. To paraphrase Peter Thiel, we’ve focused too much on bits, not enough on atoms.

★ Friday, 24 April 2020