Text by Pyr Marcondes, journalist, publicist, consultant, publisher, author, investor, M&A Tech Advisor. He is a Senior Partner at Pipeline Capital.
I strongly believe in two premises for the evolution and development of companies and businesses in the future:
- It will be startups that will continue to lead the disruptive and fundamental changes of the future, while classic companies will continue to reproduce models that have high difficulty in adapting to changes;
- The web3/blockchain/crypto ecosystem is here to stay and will be disruptive. A belief that today goes against most of what is read in the specialized press and in the opinion of leaders in the financial world and even in technology. Because I continue to believe that, despite recognizing that a lot still needs to be adjusted in the system, which tends to concentrate, over time, more power in the hands of those who already have it.
All right, I’m not alone. Obviously, a lot of people agree with me. Or rather, I agree with many people who think the opposite of the mainstream.
One of those people I agree with, and who thinks the way I do, is Marc Andreessen.
Mark created the web GUI and it changed our lives. He created Netscape, and it changed the way we surf the internet forever. Then he created Andreesen Horowitz, one of the most disruptive and daring (and assertive) investment firms in the world.
Well, Marc’s curriculum qualifies him and historically he continues to be a reference, for what he says and for the investments he makes.
I quote below excerpts from the interview he gave to McKinsey content editors, Tracy Francis and Rick Tetzeli, on these two topics I mentioned above. Let’s go.
On classical companies and their relationship with technological evolution.
The problem that the big, classic Fortune 500 companies have is the same problem they had 20 years ago. I thought the problem would go away with time, but I’m not sure if it did. That problem is that the real tech professionals inside so many large companies are not the core people in the company. They are not treated like first-class citizens.
Just look at the org chart. For too long, companies have put their technology people in the IT department. So segregated and isolated was the IT department that there are entire TV shows, like the great British comedy The IT Crowd, built around the idea of nerds in the back room. Then, about 20 years ago, big companies got the message that maybe all their technologists shouldn’t be in the IT department. So they created what’s commonly known as a digital division, typically led by a VP of digital. The good news is that programmers run the digital division and are taken seriously there. But it’s still a division. It’s still a unit. This is a problem.
I’ll give you an example: at Tesla, the engineers who work on self-driving cars are the most important people at Tesla. Elon talks about them all the time, he talks to them all the time, and they’re basically the leaders of the company. The people who work on these things at traditional car OEMs aren’t. Perhaps they should be, but they are not. They’re still into that “back room” kind of thing. The people who have been running the business for 40 years are the same kind of people who are running it now.
This is the default. Tesla is run by the technologist who envisioned the whole thing and knows every aspect of how a self-driving electric car works. The big auto companies are run by people who have more classical business training, who are not inherently technologists.
When tech stocks get hit like they do right now, a lot of big companies basically say, “Oh, thank God, we don’t have to take these things so seriously.” That happened in a huge way after 2000. One of the reasons Amazon took off is because all the traditional retailers after 2000 said, “Oh, thank God, we don’t have to worry about this e-commerce thing anymore. .” And they just left the field.
The exact same thing is happening right now in this tech stock slump. So Netflix stock is down 70%, 75%, 80%, and it seems like whatever. Before, you had all these stories talking about how Netflix was this permanent, new, dominant force in Hollywood, even a possible monopoly, now you see all these stories saying, “The Netflix model is broken, it will never recover”, with big, classic media companies saying, “Oh, thank goodness, this streaming thing isn’t going to be ‘the thing’ after all”.
No matter what the big, classic Fortune 500 companies say, they still don’t think of themselves as technology companies, and that’s their cardinal sin. Big companies tend to go in and out of technology this way, and it hurts them over time. They still feel a palpable sense of relief when they think they don’t have to do those things anymore. I mean, the things that are disruptive and are actually going to shape the future. Including themselves.
We are living a kind of cycle of madness, where they keep doing the same thing they did 20 years ago, expecting different results.
About web3/blockchain/crypto
We see this pattern over and over again. Right now it’s happening with crypto, blockchain, Web3 stuff. People have all these criticisms: performance, speed and so on – the sites are dedicated to listing all the things that still need tweaking.
This is important because when many new technologies are released into the world, commentators subject them to all kinds of criticism: this new technology has all these problems! Can’t succeed with all these problems!
There is something about cryptocurrencies and Web3 that triggers responses that go far beyond “I wish we didn’t have to do this”. I would describe it more as fear and hate. Something about this triggers an overwhelmingly negative response.
Even in the tech industry, a lot of established tech companies are just, “This stuff is stupid, it’s fake.” It’s far beyond the initial negative reaction to the internet, far beyond the initial negative reaction to almost any other area of technology. This is visceral, and I think there are two possible explanations.
One possibility, of course, is that they are right. You always have to admit that the critics might be right. There is a possibility that the future of the economy is not blockchain.
But maybe cryptocurrency has people on edge because it involves money. When people think “it’s this new form of money” or “it’s these new theories about money”, or even “it’s this new form of technology involving money”, they get emotional. This is perhaps the most obvious observation in the world: money makes people emotional.
As people invested in contrary ideas, this reaction makes us excited at Andreessen Horowitz. We view reviews as an incredible gift to our founders and our company. If all these other people rule something out, and we’re sure it’s a big deal, then entrepreneurs who are focused on that have a magical opportunity.
I think this is a fundamental technology shift, a new architecture for building an entirely new generation of computing systems. We are convinced that Web3/blockchain/crypto is fundamental. It’s as fundamental an architectural shift as mainframes to PCs, PCs to the web, web to mobile, or traditional software to AI. It’s a fundamental shift and building that is a 25-30 year process.
It’s like the other half of the internet that we didn’t know how to build when we built the first half. When we built the first half of the internet, the whole idea was that the internet is an unreliable network, right? As an untrusted network, it is a permissionless environment where anyone can connect to it, anyone can create a website, anyone can have their computer online.
This unleashed enormous creative potential. There were computer networks before the internet, but they were all highly controlled and contained by individual companies. The internet was the first unreliable, open, permissionless network where all kinds of people could create on it. That triggered all the excitement.
But there’s a second half to this, which is that you can’t trust an unreliable network environment. If you want to do business, you have to establish trust, right? You want to send someone money, sign a contract with someone, come together and form a business, have a concept of where assets and ownership can change hands. You want all these concepts that we’re used to in the real world, like identity, contract, money, title and trust, the mechanics of a trust economy. The internet has none of that. We’ve always wanted this, but we just didn’t have the native Internet technology to do it.
Blockchain/Web3/crypto is the second half of the internet. It places trust on top of the unreliable net. And as you put trust on top, you get to get every other economic activity online that you couldn’t get online. That’s the big thing.
Text by Pyr Marcondes, journalist, publicist, consultant, publisher, author, investor, M&A Tech Advisor. He is a Senior Partner at Pipeline Capital.
Follow news through the website https://pipeline.capital
and also from LinkedIn
and Instagram
