What future is Andreessen Horowitz building?
Gigification, part 2, or let's look at "expressed preferences," Marc.
So, where were we? Oh yes, gigification and Andreessen Horowitz' call to action to "build."
A refresher (or read the whole of part 1 here):
Venture Capital is fueling wholesale changes in how our economy and society works - they're funding what is effectively a political campaign.
One of the political campaigns VC's are waging is the "Gigification" of America - turning every sector of our economy toward gig work, companies into platforms for the "passion economy" (this phrase always makes me laugh out loud - do we really believe the fundamental factor at play here is individuals desperate to monetize their passions by abdicating all semblence of privacy and stability? And do we truly believe that, say, uber drivers are "passionate" about welcoming strangers into their car to drive them for 6-8 miles?)
In that context, Marc Andreessen of iconic (and massively successful and influential) VC firm Andreessen Horowitz - one of the earliest and most prolific of the funders of the gigification campaign - wrote a call to action in April 2020, excoriating all the major systems failures in preparing for and responding to COVID, from the availability of testing reagents to the federal government's inefficiency at distributing relief money to taxpayers.
He said, "Every step of the way, to everyone around us, we should be asking the question, what are you building? What are you building directly, or helping other people to build, or teaching other people to build, or taking care of people who are building? If the work you’re doing isn’t either leading to something being built or taking care of people directly, we’ve failed you, and we need to get you into a position, an occupation, a career where you can contribute to building. There are always outstanding people in even the most broken systems — we need to get all the talent we can on the biggest problems we have, and on building the answers to those problems," and changed the Andreessen Horowitz website subhead to "It's time to build."
Well said, and fair enough, Marc! The last eighteen months was significantly harder for significantly more people than it needed to be because, as you stated, "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*."
So I think it's fair game to take a look at Andreessen Horowitz and ask the very question Mr. Andreessen posited: what are you building?
The first quarter of this year was the firm’s most prolific in its history in terms of the number of investments made (50, the previous high was 34 in Q2 2013.) These are the 33 investment rounds Andreessen Horowitz led so far this year:
StarStock is a marketplace for sports fans and card hobbyists to buy, sell, and invest in their favorite athletes.
Mem Labs - an advanced note-taking/"Second Brain" app.
Firefly Health is a virtual-first health care company that provides primary healthcare services that redefine high-quality patient care.
Formation is a remote fellowship for ambitious software engineers looking to land the next step in their career.
Tomorrow Health is a technology-driven home healthcare company changing the way individuals and families manage their care.
Clubhouse is an audio-based social app that allows users to spontaneously join group chats. (Andreessen led two rounds of investment into Clubhouse in the first 4 months of this year.)
Aleo is building the world's leading developer platform for enabling absolute privacy on blockchains.
Deel is a payroll and compliance platform for international employees and contractors.
Current is a financial technology company that offers mobile payments, online banking, and financial services.
Greenlight is a fintech company that provides a debit card designed to help parents monitor their child's spending habits.
Element Finance offers BTC, ETH, USDC, and DAI at a discount, introducing high fixed yield income to the DeFi market.
Capitolis is a technology provider addressing capital market constraints in equities and foreign exchange.
Substack is a subscription-based newsletter publishing platform for independent writers.
AnyRoad is an ERM platform that helps companies create brand loyalty, change consumer behavior, and understand their brand associations.
OpenSea is a peer-to-peer marketplace for crypto collectibles and non-fungible tokens.
Wrapbook provides digital profiles that facilitate onboarding, paying and insuring project workforces compliantly.
Tackle.io operates as a cloud marketplace subscription platform that helps software providers generate revenue.
Hopin is a live virtual events platform where users can learn, interact, and connect with people from around the globe.
Whatnot is a live stream platform and marketplace that enables collectors and enthusiasts to connect, buy, and sell verified products.
Instacart is an online grocery platform that offers same-day delivery and pickup services for retailers and consumers.
Skydio uses artificial intelligence to create flying drones that are used by consumer, enterprise, and government customers.
Patch develops a carbon removal platform.
Optimism - Instant transactions and scalable smart contracts on Ethereum.
Reforge offers selective growth-focused programs for experienced professionals in marketing, product, data, and engineering.
Labster is an e-learning company that offers virtual laboratory simulations based on mathematical algorithms.
BigHat Biosciences is a protein therapeutics company that develops an antibody design platform guided by artificial intelligence
Bold - Empowering exercise programs designed just for you, so you can chase the life you want at any age.
Valon - A modern, secure, and homeowner-first approach to homeownership.
Trunk - Redefining developing software at scale
TripActions provides a platform to help companies streamline elements of business travel like: payments, rentals, and bookings.
Lowkey - The home for watching and creating short gaming videos
Starburst Data is a data access and analytics company developing an SQL query engine.
Let's revisit what Marc (again, correctly in my view) noticed:
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. We also can’t build the cities themselves anymore. When the producers of HBO’s “Westworld” wanted to portray the American city of the future, they didn’t film in Seattle or Los Angeles or Austin — they went to Singapore. We should have gleaming skyscrapers and spectacular living environments in all our best cities at levels way beyond what we have now; where are they?
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, or the 120 million new 18 year olds in the world each year. Why not educate every 18 year old? Isn’t that the most important thing we can possibly do? Why not build a far larger number of universities, or scale the ones we have way up? 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?
You see it in manufacturing. Contrary to conventional wisdom, American manufacturing output is higher than ever, but why has so much manufacturing been offshored to places with cheaper manual labor? We know how to build highly automated factories. We know the enormous number of higher paying jobs we would create to design and build and operate those factories. We know — and we’re experiencing right now! — the strategic problem of relying on offshore manufacturing of key goods. Why aren’t we building Elon Musk’s “alien dreadnoughts” — giant, gleaming, state of the art factories producing every conceivable kind of product, at the highest possible quality and lowest possible cost — all throughout our country?
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?
Can I get an AMEN!? (Mostly. I’d quibble with some of what Mr. Andreessen holds up as ideal, but in general… Amen.)
So.... did Andreessen Horowitz turn its immense resources toward the "builders" of ideas and companies to address these deficiencies?
So far in 2021, Andreessen Horowitz has led two massive funding rounds for Clubhouse - the invitation-only audio chat app. And a round for Hopin, a similar app solving a similar "problem." They've led rounds for a variety of fintech apps. They led rounds helping hobbyists of various sorts - collectors, gamers, blockchain artifacts - connect and monetize. They’ve invested in cryptocurrency-serving companies. They've invested in gigifying delivery services. They've invested in gigifying news (or news-ish content development? Substack.)
If we're being generous, so far in 2021, Andreessen Horowitz led investment rounds for 7 companies (out of 33!) that could plausibly claim to be building to fill the gaps Marc so forcefully identified: a telehealth company, a home health care company, a drone company, a carbon removal company (Marc didn't specifically list addressing the climate crisis, but I'm going to give this one to him anyway), two education-adjacent companies, and a data analysis company that I'm including because good problem solving demands excellent data analysis, so... it's in. Again, I'm being generous.
If I hadn't shared Marc Andreessen's call to action and just showed you the list of companies his firm had invested in, would you guess that the firm was running a campaign to, as Marc put it, "get all the talent we can on the biggest problems we have, and on building the answers to those problems?"
Unless you're convinced that the solution to healthcare, education, transportation, housing, and cities is more interactive real-time podcasts (my clunky summary of what Clubhouse is ) or better communities for gamers and collectors, or crytpocurrency ... I think you'd guess that this firm isn't all that concerned with funding a future that works better for more of us.
And you'd be right. AZ16 cares about investing in what will make the firm and its investors massively wealthy. They're good at it, and that’s what they’re continuing to do.
And they do it at such a scale that the major disconnect between what they say they're building and what they're really building matters a lot.
This isn't to pick on Marc Andreessen, Andreessen Horowitz, or any of the good people who work there. They're emblematic of their industry, and of one of the alarming dynamics of the present moment - there's a massive amount of money funding a very specific version of the future, one that benefits a very few, while the people directing it are often 1) profiting at historic, extraordinary levels, giving them even more resources to fuel their de facto campaign, and 2) loudly proclaiming priorities and values that don't match up to their actions.
Way back in the before times, September 2019, I wrote an article, Stop Building the Future, calling on VCs to get clear:
Take a position. Have convictions, and communicate with all of your courage in those convictions.
What future are you building? What’s the future you see emerging, and how is your work shaping it? Or even, how are you investing to profit from the future that is emerging?
Who is winning in that future? Who is better than they are today, and how? Why should we trust your judgment, and what you’re doing to influence the world our kids are going to inherit?
Are you investing in the founders, systems, technologies, and companies that will make our future better, more interesting, more connected, more sustainable, less terrestrial, healthier, more equitable, more mobile, more beautiful, more efficient?
So Marc Andreessen and I are in agreement, it turns out. It's time we ask more and better questions of the people funding the campaigns for the future. And we need to go a step further, clarifying whether they put their money where their mouths are.
When I was a kid I loved the idea of keeping a diary much more than I loved actually keeping one. I know this because I was recently decluttering a closet and came upon one half-filled diary after another, each one an interesting (and often hilarious) window into my 6- to 12- year-old self. I can report that, 1) my handwriting has evolved nicely, and 2) I started every entry with a version of "I'm sorry it's been so long since I've written" and a quick catch up of the 2-3 months since the last entry. (Who was I apologizing to, I wonder?)
I bring that up because I have an urge to apologize to you, dear readers, each time my weekly-ish posts turn out to be more monthly-ish. It appears I love the idea of publishing a weekly musing more than I love actually figuring out how to find time for it every week.
So here's my blanket apology and admission that these things won't likely be weekly, or even weekly-ish. I am truly very sorry. And aware that you probably don't care.
Since it might be another few weeks since I write and I desperately want to unpack these things with y'all, some recommended reading:
Charlie Warzel (formerly of the NYT and now of... Substack. Womp.) on a more nuanced and probably better way for social media platforms to think about how they deals with bad actors (a la Trump.) The best part of the article is where he breaks down the actual services these platforms provide (i.e. free storage, free broadcasting, free analytics, advertising and *frictionless* sharing and re-sharing of content) and how thinking about those services separately when it comes to bad actors would probably result in better outcomes. (My thought bubble: but tuning those levers all have an impact on profit, so... ¯\_(ツ)_/¯)
Casey Newton (formerly of The Verge and now of... Substack. Oh dear.) with a behind-the-scenes look at a super political company, Basecamp, declaring that it's a politics-free workplace. Interesting on its face, but also an incredibly clear example of what these companies often look like - mirrors of their (usually young, wealthy, white, male) founders.
A very specific kind of VC reality-distortion field - Coinbase. Read this quick news item for some food for thought. "Coinbase CEO Brian Armstrong, for instance, earned $60 million last year and is now worth about $16 billion. But that's not because the grand visions for crypto's potential are anywhere close to becoming a reality."