Chris Dixon on competing with Internet giants for budding AI and VR talent

Screen Shot 2016-04-12 at 3.11.50 PM VC Chris Dixon of Andreessen Horowitz thinks it’s a lot harder to predict financial cycles than it is to see a new computing platform coming down the pike. As he noted in a recent post, new cycles tend to begin every 10 to 15 years; assuming the 2007 introduction of the iPhone kicked off the last wave, we’re fast heading toward the Next New Thing. Or things, technically,… Read More

Autonomous Delivery Vehicle Company Dispatch Drives $2M in Seed Funding

Dispatch wants its autonomous vehicles to make on-demand delivery available to the masses. The company announced on Wednesday it has grabbed $2 million in seed financing led by Andreessen Horowitz. This is the second investment Andreessen Horowitz partner Chris Dixonmade this week in autonomous vehicles, following the investment in Comma.ai he announced Sunday. “I’m really excited about autonomous vehicles in general,” Mr. Dixon said. “Machine learning and deep learning is only recently at the point where you can really make a high-quality, highly autonomous, safe vehicle. It’s going to open up all sorts of vehicles.” Dispatch develops a vehicle it nicknamed “Carry” to travel on sidewalks and pedestrian areas. The robot, which looks like a large cooler on wheels, can carry up to 100 pounds and travels at the same speed humans walk. It has four compartments that users unlock with their smartphones when it arrives. The founders, Continue reading "Autonomous Delivery Vehicle Company Dispatch Drives $2M in Seed Funding"

a16z Podcast: The Future of Food – With Rob Rhinehart and Chris Dixon

[soundcloud url="https://api.soundcloud.com/tracks/234433038" params="auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=true" width="100%" height="450" iframe="true" /]   Rob Rhinehart, like most startup entrepreneurs, was strapped for cash and time as he hacked together his ideas and ultimately a company. What stood out to Rhinehart in that all-consuming (and ongoing) process was the contrast between all the things in his life that technology made more convenient and cheaper -- basically everything powered by his smartphone -- and what he felt was a process still trapped in our agrarian past: sitting down for a meal. MORE

Lessons from the PC Video Game Industry – by Chris Dixon

The subtitle to this post ("The future of media is here --  it’s just not evenly distributed") is a variation of William Gibson’s famous remark that “The future is already here  --  it’s just not very evenly distributed.” An obvious follow up question is: if the future is already here, where can I find it? There is no easy answer, but history shows there are characteristic patterns. For example, it’s often useful to look at what the smartest people work on in their free time, or things that are growing rapidly but widely dismissed as toys. Another clue to the future is to look for communities that embrace rapid, Darwinian experimentation. Even if you have no interest in video games, if you are interested in media, you should be interested in PC gaming. Over the past decade, PC gaming has, for a variety of reasons, become a hotbed of experimentation. These experiments have resulted in a new practices and business models  --  some of them surprising and counterintuitive  -- that provide valuable lessons for the rest of the media industry. MORE

a16z Podcast: Advertising vs. Micropayments in the Age of Ad Blockers – with Chris Dixon and Benedict Evans

[soundcloud url="https://api.soundcloud.com/tracks/225571829" params="auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=true" width="100%" height="166" iframe="true" /]   Apple included support for ad blocking in its recent iOS 9 update, and for many that prompted discussions around an age-old question: Is traditional advertising a viable business model for content -- and if it isn’t, what has a shot at replacing it? MORE

Performance Data and the ‘Babe Ruth’ Effect in Venture Capital – by Chris Dixon

“How to hit home runs: I swing as hard as I can, and I try to swing right through the ball… The harder you grip the bat, the more you can swing it through the ball, and the farther the ball will go. I swing big, with everything I’ve got. I hit big or I miss big.”  –Babe Ruth One of the hardest concepts to internalize for those new to VC is what is known as the “Babe Ruth effect”:
“Building a portfolio that can deliver superior performance requires that you evaluate each investment using expected value analysis. What is striking is that the leading thinkers across varied fields  —  including horse betting, casino gambling, and investing — all emphasize the same point. We call it the Babe Ruth effect: even though Ruth struck out a lot, he was one of baseball’s greatest hitters.”  –The Babe Ruth Effect: Frequency vs Magnitude [pdf]
The Babe Ruth effect occurs in many categories of investing, but is especially pronounced in VC. As Peter Thiel observes:
“Actual [venture capital] returns are incredibly skewed. The more a VC understands this skew pattern, the better the VC. Bad VCs tend to think the dashed line is flat, i.e. that all companies are created equal, and some just fail, spin wheels, or grow. In reality you get a power law distribution.”
The Babe Ruth effect is hard to internalize because people are generally predisposed to avoid losses. Behavioral economists have famously demonstrated that people feel a lot worse about losses of a given size than they feel good about gains of the same size. Losing money feels bad, even if it is part of an investment strategy that succeeds in aggregate. People usually cite anecdotal cases when discussing this topic, because it’s difficult to get access to comprehensive VC performance data. Horsley Bridge, a highly respected investor (Limited Partner) in many VC funds, was kind enough to share with me aggregated, anonymous, historical data on the distribution of investment returns across the hundreds of VC funds they’ve invested in since 1985. As expected, the returns are highly concentrated: about ~6% of investments representing 4.5% of dollars invested generated ~60% of the total returns. Let’s dig into the data a little more to see what separates good VC funds from bad VC funds. (For all the charts shown below, the X-axis is the performance of the VC funds: great VC funds are on the right and bad funds are on the left.) Home runs. As expected, successful funds have more “home run” investments (defined as investments that return >10x): homeruns-fromhorselydata_a16z   Great funds not only have more home runs, they have home runs of greater magnitude. Here’s a chart that looks at the average performance of the “home
powerlaw-fromhorsleydata_a16z
strikeouts-fromhorselydata_a16z
dollarweighted-fromhorselydata_a16z
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Exponential curves feel gradual and then sudden

“How did you go bankrupt?” “Two ways. Gradually, then suddenly.” ― Ernest Hemingway, The Sun Also Rises The core growth process in the technology business is a mutually reinforcing, multi-step, positive feedback loop between platforms and applications.  This leads to exponential growth curves (Peter Thiel calls them power law curves), which in idealized […]

Andreessen Horowitz’s Chris Dixon Predicts 10 NYC Unicorns In A Half Decade

chris-dixon2 Today at TechCrunch Disrupt NY 2015, our own Ryan Lawler sat down with Chris Dixon of Andreessen Horowitz to dig into the investor’s strategy and how successful the New York technology scene will prove in the next few years. According to Dixon, New York, a technology scene that can’t be called ‘up and coming,’ will create 10 $1 billion companies in the next three to… Read More

Chris Dixon Is Coming To Disrupt NY To Talk About All The Weird Shit He’s Investing In

chris-dixon Today we’re pleased to announce that Chris Dixon, a venture capitalist at Andreessen Horowitz, will be joining us at Disrupt NY. This is great news, and let me tell you why. Usually venture capitalists are pretty boring. They generally wear khakis while on the hunt for whatever the next Uber-for-X or Airbnb-for-Y will be. They know what all the hot new messaging apps are, and have… Read More

Improbable: enabling the development of large-scale simulated worlds

Over the past decade, computing resources that were previously available only to large organizations became available to almost anyone. Using cloud-scale development platforms like Amazon Web Services, developers can write software that runs on hundreds or even thousands of servers, and do so relatively cheaply. But it is still difficult to […]

“It all blossomed out of this tiny little seed”

Steve Jobs in 1985: I felt it the first time when I visited a school. It was third and fourth graders, and they had a whole classroom full of Apple II’s. I spent a few hours there, and I saw these third and fourth graders growing up completely […]

The idea maze for AI startups

An “idea maze” is a map of all the key decisions and tradeoffs that startups in a given space need to make: A good founder is capable of anticipating which turns lead to treasure and which lead to certain death. A bad founder is just running to the […]

Come for the tool, stay for the network

A popular strategy for bootstrapping networks is what I like to call “come for the tool, stay for the network.” The idea is to initially attract users with a single-player tool and then, over time, get them to participate in a network. The tool helps get to initial […]

Stack Exchange

Today we are announcing that A16Z is leading a $40M investment in Stack Exchange, along with earlier investors USV, Bezos Expeditions, Spark, and Index.

Stack Exchange is a network of 133 sites (and growing) where people can ask and answer questions about topics related to engineering, science, hobbies, and more. The biggest site on the network is Stack Overflow, which alone gets over 40 million unique visitors per month. The other sites cover a very wide variety of topics, including: math, gardening, English language usage, graphic design, physics, cryptography, chess, astronomy, Buddhism, data science, martial arts, home improvement, photography, bicycles, board games, economics, to name a few. Most likely, you’ve used Stack Exchange without even knowing it —the network had over 300M unique visitors last year. Many users come in through Google, get

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