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A look at innovation through an Internet pioneer
If you missed Marc Andreessen on Charlie Rose last week, here it is. Andreessen is one of those guys who speaks a mile a minute and has a lot of opinions on everything innovation. As a board member of Facebook, he has a lot to say on that topic too. Watch the one-hour interivew. It's certainly worth it.
But here are some highlights from Andreessen's answers:
Facebook is deliberately not taking normal brand advertising. Facebook has made a strategic decision not to fall back on normal advertising. If it turned on the spigot of advertising, it’d be making a lot today. It could sell out the homepage and it could make a lot o money.
Facebook's goal is to connect everyone on the planet. It has 175 million users on it today, and the market is probably 3 billion (not counting for the millions who can't get connected). But not to fear, Facebook isn't taking over our lives. People have a lot of control.
Ning is crossing 20 million users and about to cross 1 million social networks.
Social networking is here to stay and its potential is just beginning.
Viacom should be taking advantage of YouTube as a distribution channel. It should sell stuff on YouTube by putting a "buy this" button by the videos. These are distribution vehicles of all time. When Napster had 20 million people going to the site to listen to music, the music industry should have embraced that and taken advantage of the audience. They should have put a "buy" button on the music.
On the notion of how many networks do people really need to belong to? Andreessen responded back, "How many things do you care about? That's where social networks are going." Social networks are the same as groups or affiliations you're part of in real life. They don't have to be huge. Andreessen belongs to dozens, he said.
The hottest idea in
Silicon Valley is that innovation is alive and well. There are a lot of
people who are arguing that innovation is dead, or these things can’t
be turned into a business. What he sees is an endless series of
innovation, in many ways due to Amazon. Amazon's cloud service has
allowed startups to emerge and upload everything to the cloud and pay
by the drink. "Every kid out of Harvard thinks he can be the next
entrepreneur," he said.
Mobile has arrived. The Internet took off in 1995, but was being built for 25 years prior. Now there are many things colliding - 3G networks, app developers, content available.
The iPhone is a template that every mobile phone will copy. The iPhone has a full operating system. It has a software development kit. “It’s a full general purpose computer." Now the iPhone paves the way for another set of companies to create new devices. "When it [iPhone] landed, it was beamed from five years into the future."
Andreessen is creating his own venture fund. "I'm crossing into the dark side," he said. His partner is Ben Horowitz, one of the early employees at Netscape, the company Andreesen founded. The fund will focus on early stage. Andreessen has done 36 deals in three years, or one a month. The fund will invest between $200,000 to $500,000.
Newspapers need to just kill the print addition. "You have to kill it," he said, twice. "The game is up... I'd recommend newspapers take their losses... How many years of chronic pain do you want?... Build for the future."
Newspapers are playing defense
Biggest surprise in the last 15 years is the commercialization of the Internet. It looked like an academic exercise. "Every day you go to the Internet , it gets better and better... it colonizes and eats different industries."
Of these people, Andreessen, Sergey Brin, Larry Page, Bill Gates, Andy Grove, who is the most important? Andreessen says Grove because without the silicon chip, software couldn't be written.
Amazon's Kindle is huge.
Amazon's Jeff Bezos is a great entrepreneur because he didn't give up. He was misunderstood, but stuck to his vision.
Many industries are being obliterated by the Internet. Companies innovating are playing offense. Companies catering to their legacy customers and revenue are playing defense. Be Andy Grove, kill your mainstay business if you have to. Grove stopped producing memory chips (a significant portion of Intel's revenue at the time) to focus on microprocessors. In the mid-80's, Intel "killed their main business to get from out of the overhang [Japanese companies were undercutting Intel] and they bet the company on the microprocessor. Then Intel became gigantically successful."
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