(2020-04-18) Its Time To Build: Andreessen Horowitz

Marc Andreessen: It's Time to Build. Every Western institution was unprepared for the coronavirus pandemic, despite many prior warnings. This monumental failure of institutional effectiveness will reverberate for the rest of the decade, but it’s not too early to ask why, and what we need to do about it. (Maker, Innovation)

Part of the problem is clearly foresight, a failure of imagination. But the other part of the problem is what we didn’t do in advance, and what we’re failing to do now. And that is a failure of action, and specifically our widespread inability to build.

We see this today with the things we urgently need but don’t have. We don’t have enough coronavirus tests, or test materials — including, amazingly, cotton swabs and common reagents

We also don’t have therapies or a vaccine

And even then, we’ll see if we can deploy therapies or a vaccine fast enough to matter — it took scientists 5 years to get regulatory testing approval for the new Ebola vaccine after that scourge’s 2014 outbreak, at the cost of many lives.

In the U.S., we don’t even have the ability to get federal bailout money to the people and businesses that need it.

Making masks and transferring money are not hard. We could have these things but we chose not to — specifically we chose not to have the mechanisms, the factories, the systems to make these things. We chose not to build.

You don’t just see this smug complacency, this satisfaction with the status quo and the unwillingness to build, in the pandemic, or in healthcare generally. You see it throughout Western life, and specifically throughout American life.

You see it in housing and the physical footprint of our cities. We can’t build nearly enough housing in our cities with surging economic potential — which results in crazily skyrocketing housing prices in places like San Francisco, making it nearly impossible for regular people to move in and take the jobs of the future.

You see it in education. We have top-end universities, yes, but with the capacity to teach only a microscopic percentage of the 4 million new 18 year olds in the U.S. each year

The last major innovation in K-12 education was Montessori, which traces back to the 1960s; we’ve been doing education research that’s never reached practical deployment for 50 years since; why not build a lot more great K-12 schools using everything we now know?

We know one-to-one tutoring can reliably increase education outcomes by two standard deviations (the Bloom two-sigma effect); we have the internet; why haven’t we built systems to match every young learner with an older tutor to dramatically improve student success?

We know — and we’re experiencing right now! — the strategic problem of relying on offshore manufacturing of key goods

You see it in transportation. Where are the supersonic aircraft? Where are the millions of delivery drones? Where are the high speed trains, the soaring monorails, the hyperloops, and yes, the flying cars?

Is the problem money? That seems hard to believe when we have the money to wage endless wars in the Middle East and repeatedly bail out incumbent banks, airlines, and carmakers

The problem is desire. We need to want these things. The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture.

Roots of Progress: A builder manifesto

I’ll add: The problem is ignorance. We don’t know how far we’ve come, and we don’t teach our children

The problem is complacency

The problem is fear. Every harm, large or small, actual or potential, real or imagined, becomes a rule, a regulation, a thread in a ribbon of red tape that has brought sclerosis to our institutions, public and private. We’ve bought safety at the price of speed, without debating or deciding it.

The problem is guilt

The problem is hatred.

The problem is entitlement

The problem is tribalism.

We need to learn to appreciate progress—both what we’ve already done, and why we can’t stop now. We need to tell the amazing story of progress: how comfort, safety, health, and luxury have become commonplace, and what a dramatic achievement that has been

We need to glorify the inventor, the creator, the maker—the builder

We need to inspire young people to take part in this story

We need to invest.

And then we need to get out of the way. Unwind the regulatory state.

Ben Thompson: How Tech Can Build

I expressed the same sort of frustration Andreessen opens with last month in Compaq and Coronavirus: There has been divergence between countries that acted and countries that talked.

Andreessen, who today is perhaps more well-known for his eponymous venture capital firm Andreessen Horowitz, is first-and-foremost a living legend for having created Mosaic, the first web browser with a graphical user interface; Mosaic became the basis for Netscape’s Navigator, whose 1995 IPO kicked off the dot-com era.

This perspective led to Andreessen’s most famous essay, 2011’s Why Software Is Eating The World

software is, as I have discussed previously, perfectly suited to venture capital: it has significant capital costs, and mostly zero marginal costs

This, as far as I can tell, is where the disconnect for some comes with It’s Time to Build. The sort of building Andreessen calls for is very much in the real world, costs real money both up-front and on a marginal basis, and would surely make the most sense anywhere but Silicon Valley.

Andreessen then states what he sees as the problems: The problem is desire.

This leads to the core question about Silicon Valley and its relationship to Andreessen’s essay: has tech — specifically the software-centric tech that Andreessen has done more than anyone to proselytize — been the primary source of American innovation because it represented the future? Or has it been the future because it was the only space where innovation was possible, because of things like inertia and regulatory capture in the real world?

Andreessen’s entire career, from Mosaic to Loudcloud to Ning, has been about creating space online, obviating the constraints of the real world, which wasn’t worth much anyways.

I agree with Andreessen that much of the software revolution is inevitable

What I also sense in Andreessen’s essay, though, is the acknowledgment that tech too has chosen the easier path.

First, tech should embrace and accelerate distributed work. It makes tech more accessible to more people.

Second, invest in real-world companies that differentiate investment in hardware with software

Third — and related to both of the above — figure out an investing model that is suited to outcomes that have a higher liklihood 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.

Venkatesh Rao: How, What, and Where to Build

Like most things Marc says, I agree broadly with his argument. If you’re an engineer, with any experience at all in building things, it’s kinda hard to see this essay as anything other than tautological. I mean of course building is good. That’s the starting point if you’re in technology. The devil is in the details.

unlike the SWEW, ITTB has had a very divided reception, which to me is an indication of the stage of the historical building cycle we’re in more than the specifics of what Marc is arguing.

In 2011, when he wrote the SWEW essay, we had just moved from what I call the alternatives stage to the disruptions stage. Now we’re moving from the disruptions stage to the macro-rebuilding stage.

here’s the theory. Building goes through cycles, with different kinds of building required at each stage of the cycle. Carlota Perez’s Technological Revolutions and Financial Capital is a good framework for thinking about these.

As it applies to building, the Perez model can be thought of as 4 stages. In the first stage you build tools, in the second stage, you build alternatives to existing things. In the third stage, you disrupt existing things via a bunch of isolated disruptions. In the last stage, you do a whole sale macro-rebuilding from foundations on up.

Somewhere along the way, there’s usually a big disaster

The last two were linked to World War I and World War 2, this one is obviously linked to the pandemic.

The disaster doesn’t always happen at a set phase of the cycle

For the Covid19 pandemic, the disaster has hit in roughly the same part of the cycle as it did in World War I, just as the disruption wave was going to give way to the macro rebuilding stage anyway.

There’s two other things to think about in relation to this building cycle. The first is how individuals change, and the second is how society as a whole changes. I like to think in terms of 4 degrees of change depending on the phase of the building: reorient, revalue, resituate, and regenerate, that apply to both individuals and society.

In reorienting, you change your mental models

In the revaluing phase you start valuing different things

In the resituating phase, you change how you exist in the world

in the regeneration phase, you change on the inside

if you make a graph with x-axis being how deeply you as an individual are changing, and the y-axis being how deeply society is changing, it gives you a two-dimensional space where individuals can be ahead or behind society, and being matched with the times, or not.

The ideal case is when the two are somewhat balanced, or when the individual is changing slightly faster, but not too fast, relative to the rest of society

Below that line, the individual is changing faster. The sweet spot is a cone slightly below the diagonal, which I like to call the builder’s cone

So right now, we’re obviously in a macro-rebuilding phase that’s gone way past simple disruption

You should be thinking at that scale of ambition. Like Marshall plan scale, or foundational rebuilding phase, based on the logic of software eating the world. You should be reading about those periods of history to get an idea of how to proceed.

The right must fight hard against crony capitalism, regulatory capture, ossified oligopolies, risk-inducing offshoring, and investor-friendly buybacks in lieu of customer-friendly (and, over a longer period of time, even more investor-friendly) innovation.

The left starts out with a stronger bias toward the public sector in many of these areas. To which I say, prove the superior model!

I think building is how we reboot the American dream

We need to demand more of our culture, of our society. And we need to demand more from one another. We’re all necessary, and we can all contribute, to building.

Every step of the way, to everyone around us, we should be asking the question, what are you building?