Andreessen Horowitz How to disrupt Silicon Valley?

Absrtact: In the depth analysis of the Andreessen Horowitz effect before Krypton 36, we have uncovered a unique network of relationships, and the following sections will show you more details about the network, as well as rookie A.H. is how to shake the Silicon Valley wind to cast the old forces, such as Dragon Roll

In the depth analysis of the Andreessen Horowitz effect before Krypton 36, we uncovered a unique network of relationships, and the following sections will show you more details about the network, And rookie A.H. is how to shake the Silicon Valley of the old forces, such as tornado-like disrupt the entire Silicon Valley (the original written by Peter Sims, published in Medium).

Over the Dune Road, in a group of seemingly humble buildings, located in the Andreessen Horowitz (hereinafter referred to as A.H.) 's Office. Stepping into it, multiplexing is the library's hall with the company founder Marc Andreessen's favorite books, Rich books, both obscure programming books, as well as Jim Collins's "evergreen" such a classic bestseller. In the core office area, there are many modern works of art, including Robert Rauschenberg's paintings, which embody the corporate culture everywhere.

And almost overnight, A.H. One of the top VC companies in Silicon Valley is its continued growth thanks to superior marketing skills-a new marketing model different from traditional VC companies. This model is not only more creative, but also more beneficial to the entrepreneur.

So when it comes to marketing and PR, one thing is recognized:

There are no tradition in Silicon Valley that are more aggressive and radical than A.H when doing marketing.

Star founder

As a Silicon Valley idol, Marc Andreessen's history of Netscape's creation has been hailed as a classic by countless people. After Netscape, he co-founded Loudcloud (renamed Opsware) with the then-Netscape executive Ben Horowitz, and finally sold it to HP in 2007 for 600 million dollars. Then two people in 2009 jointly founded Andreessen Horowitz venture capital company, successfully transformed into a venture capitalist.

Since its inception, A.H has invested nearly 90 companies, including Skype, Zynga, Digg, and Foursquare, Airbnb, Twitter, Facebook, Groupon, Pinterest, and box. In just 5 years, A.H has accumulated capital of $4 billion trillion, becoming the hottest VC company in Silicon Valley. On the homepage of its official website, hangs the classic famous saying of Andreessen: "Software eats the World (Software is eating"). The Andreessen on Twitter is also a daily must-read for Silicon Valley people.

As a legendary entrepreneurial leader, Horowitz in his recently published "difficult Pioneering road" (The Hard Thing about Hard things) a book detailing its venture experience before VC, the book by the Silicon Valley of the Hot and The Economist magazine (the Economist).

the decline of the old forces

About 10 years ago, when I was engaged in venture capital analysis (Editor's note: "I" Here is the original author Peter Sims's self-proclaimed, he has engaged in the VC industry), the hottest company is Kleiner Perkins,sequoia Capital,benchmark and Accel. All of these companies have a charismatic leader with a marketing flair. In fact, when everyone goes into the VC industry, it's pretty quick to understand that marketing skills are even more important than any other skill, such as expertise, because you need to get a deal by getting the entrepreneur's favor. If you're in the VC industry, but you don't sell, you're sure to lose.

When I entered the core of the industry, the first time I heard the phrase:

The second is the Biggest Loser (second place is the top loser)

In addition to the fierce competition, the rapid pace of industry upgrading is also staggering.

In the venture industry, only the latest deals can represent your level.

John Doerr, partner of Kleiner Perkins (Kleiner), had been selling at Intel before becoming a VCs investor. In the first wave of the internet, Kleiner brought hundreds of millions of of the proceeds for investors and cutting-edge technology companies – the companies it invests in include AOL, Google, Amazon, Juniper NX, Symantec, Genentech, Intuit, Sun Microsystems and Electronic Arts and so on. So as long as can become Kleiner investment company, it means to have a strong endorsement, Kleiner for these companies have brought good reputation, very good trading flow and so on Halo.

Now, Kleiner is still a gold-plated brand, and John Doerr is still widely respected, especially in Silicon Valley. Despite the success of countless businesses, it is hard to kleiner the headlines in Silicon Valley today. I'm sure even John Doerr admits that Kleiner is no longer a hot VC company.

Because the main ideas of venture capital in the past are:

Build a company's brand and reputation through a huge portfolio

Hire a partner with a strong personal reputation

Charging a high management fee for each fund (the industry standard for managing annual fees is 2%-2.5%, which is a huge amount for a billions of-dollar fund). In my experience, company executives take most of the management fees.

At the same time, the venture capital industry has shown poor performance in asset management groups and has been s&p in standard Poole's 500. (Extended reading Diane Mulcahy's article in the Harvard Business Review blog "Venture capitalists get Paid OK to Lose")

The alternating

of the new and old forces

In a white paper on the contrasts between the new and old forces, the Executive director of the Henry timms,92y community (a 139-year-old Jewish Cultural Community Center in New York), #Giving Tuesday (a public advocacy initiative sponsored by the White House and the Gates Foundation), And the founder of the Purpuse Foundation, Jeremy Heimans, wrote in the white paper:

The old forces in the hands of a few people, is top-down, hierarchical, it controls everything. The power division of the old forces is fixed, as in Washington, D.C., or Hillary Clinton in the 08 U.S. presidential campaign.

On the contrary, the new forces are diverse, liquid and open, and there is no hierarchical difference, emphasizing collaboration and participation. The power division of the new power is meshed and is able to expand more nodes on the perimeter of the network, like Twitter or Airbnb or Barack Obama in the 08 U.S. presidential race.

Now, the new power of Silicon Valley clearly belongs to an angel investment agency like YC or A.H, not just because of their excellent marketing skills, but also because of A.H. The team downplayed the concept of hierarchy, eclectic, and extended nodes to their network perimeter. A.H: Everyone is the potential contributor to this network, I have contacted the A.H. Team members have emphasized to me

The energy of the interpersonal network comes from its external nodes (weak relationship, i.e.distant acquaintances) and expanding demand.

A.H's strategy is what today's entrepreneurs most want organizations to offer. (Extended reading venture capital company Andreessen Horowitz three years of financing 2.7 billion dollars behind the reasons and stories)

Silicon Valley's emerging generation of entrepreneurs is well aware of the fierce confrontation between founders and VCs. Nick Bilton, a prominent columnist for the New York Times, described in detail the fierce clashes between founder Jack Dorsey, Evan Williams and Twitter's board in his latest book, Hatching Twitter (hatching Twitter).

Smart entrepreneurs naturally want to avoid conflict, a mainstream approach is to choose such a VC company:

The VC company is either headed by a former entrepreneur or the model is good for the entrepreneur.

In simple terms, investors are nice enough to understand the brutal reality and the inevitable rise and fall of the entrepreneurial process, while A.H's corporate mission and PR strategy are precisely the same camp as the founders.

The secret of

is the ecosystem

Of course, VCs will try to advertise that they are very friendly to entrepreneurs, but A.H. The difference is that it leverages customer relationship management (CRM) software as a foundation to build one of the world's largest, most interconnected, and most powerful ecosystems. This surprisingly simple idea is shaking the old forces of the venture, like tornadoes, to disrupt the entire Silicon Valley.

I've got a A.H from a woman who specializes in building A.H. The ecosystem. The detailed instructions for the software system are as follows:

Suppose you're an entrepreneur who wants to sell to General Tepco, A.H. The customer service Manager simply enters "GE" into the system and can immediately find out how many GE employees are contacted in A.H, including Beth Comstock, Senior Vice president and chief marketing Officer of General Electric. The software system will also mark the current A.H. Team, who is primarily responsible for maintaining this relationship, and the most recent contact time. That is, all interpersonal contacts, even emails, are tracked down by the system, which makes A.H. Everyone can review the history of the relationship. A.H. While building this ecosystem, the team is increasing its energy.

It started to sound a little bit, and when I thought I was just A.H. One of the links in the ecosystem is obviously a bit too much of a deal. But the ecosystem is not as closed as Oz, the Wizard of Oz, who ruled everything. a16z team, from top to bottom, to A.H. The ecosystem and its network of interpersonal relationships are all open to the outside world. Many of the business elite, including GE's Comstock, have kept a close eye on A.H's ecosystem, and Comstock is working on a similar ecosystem within GE.

Some entrepreneurs focus only on the ability of a risk investor to help hire good people and connect with customers. Ron Conway, once seen as the most powerful network in Silicon Valley, uses Excel tables to record all of their team's key interpersonal relationships and to send them to his responsible founders to introduce them to potential talent or customers. By contrast, A.H. The company has brought the interpersonal management system into a new phase:

A.H. Think of yourself as a broker, and their talent management model comes from a place in the valley of Out-Hollywood.

When Andreessen and Horowitz co-founded Opsware in 2009, they borrowed the CAA (Creative artists Agency) model created by Michael Ovitz to create a new talent management approach. Unlike traditional venture-capital firms, a16z employs a number of people to build networks of people who can help companies. In Hollywood's Ovitz talent management model, brokers spend a lot of time trying to build their artists and give them their talent.

The focus of their work is to make full use of all kinds of interpersonal relationships for artists to gain maximum benefit. A.H. This model is used to help entrepreneurs find investment, provide development and support. A.H. Send a lot of people in various social occasions to build relationships, for A.H. Ecosystems add a variety of interpersonal links to better serve entrepreneurs.

In A.H's software system, they added further descriptions for each contact. For example, Ben Comstock, vice president of General Motors, mentioned earlier, could be portrayed as having and entrepreneurial buying power (i.e. tyrants), willing to tasting or more conservative, which can help A.H. Team members judge how this person can help the entrepreneur better.

It's like A.H. Team members often stress, A.H. The biggest value of ecosystems comes from the edge of the web-you never know when the next Zuckerberg will appear, so they take the entrepreneurial people they invest in every year to find potential shares in more than 20 universities, Extends A.H. The edge of the ecosystem.

Unlike most VC companies, small and fine, hierarchical team, A.H. There's a whole bunch of "partners" in the team: 26 partners focused on investing, 16 partners focused on marketing and business development (that is, helping build sales teams), 12 partners acting as "headhunters", In charge of finding and recruiting the top technical talents in the industry, 7 partners are responsible for recruiting administrative personnel, 9 partners are simply as marketing experts, 5 partners focus on the strategic development of the enterprise (that is, the final acquisition and listing of startups), and 22 partners focus on the company's operations.

Of course, not all "partners" are equal, except Andreessen and Horowitz, the company has 7 GP (general partner), exclusively man: John O ' Farrell, Scott Weiss, Jeff Jordan, Peter Levine, Chris Dixon, Lars Dalgaard, and Balaji Srinivasan. They are trying to find a female GP who has tried to woo VMware's CEO and founder Diane Greene, but she seems less interested in becoming a VC. And there are so few successful entrepreneurs like Diane. With a growing number of women-led risk funds separating from big companies and young female entrepreneurs growing into the stage of leaving the company they started, A.H will become more and more female GP candidates.

Maybe A.H. Ecosystems have traded relationships, but I think this is the trend:

Most innovative enterprises in the future need such a high degree of interconnection and can develop into larger ecosystems.

Steven Jobs has only one, for other companies, the driving force for innovation and Development comes from the incorporation of the best talent and the best ideas into the company's ecosystem. GM could be seen as an example of this. Last year, after the "Big Data" conference held by GM, a large group of entrepreneurs, industrial thought leaders and venture capitalists have a clearer idea of GE's assets and needs, and if they suddenly have any inspiration, they will naturally call Beth Comstock to communicate. Unsurprisingly, GM has set up its own VC company, GE Ventures, to make better use of these relationships.

If all companies learn to turn themselves into a platform for innovation, like Apple and Facebook, these companies will burst into more creativity and A.H. It is an innovative interconnected platform that helps entrepreneurs and customers quickly seize opportunities and accumulate capital.

Of course, despite today's A.H, it has leapt into the first echelon of VCs, but has his business model been successful? As the team grows and the shop spreads, how can entrepreneurs profit from it? These all take longer to test.