Andreessen Horowitz Invests $50 Million In BuzzFeed

Tonight I’m tickled pink to be able to talk about our new investment in BuzzFeed! My partner discusses our new investment in BuzzFeed here.

We think of BuzzFeed as a technology company. They embrace Internet culture. Everything is first optimized for mobile and social. BuzzFeed has technology at its core. Its 100+ person tech team has created world-class systems. Engineers are first class citizens.

On top of its technology core, BuzzFeed’s reporting team is now routinely committing breathtaking investigative journalism.Here are a few examples.

We think the opportunity in front of , , , and their colleagues is effectively unbounded. We are very excited to work with everyone at BuzzFeed to help them realize their dreams of a profoundly important new media institution.

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12

 

Why We Live In The Golden Age Of Journalism

Something I believe that a lot of people I know believe is that, we live in the golden age of journalism as measured by the quality of the top contributors. I’ve collected 238 members of the press I most respect into this Twitter list. It’s a joy to read every day! As I’ve discussed before, the great unexpected side effect of the Internet is that the best journalists have a far broader reach now. I can’t resist singling out some who fall into the category of drop everything I’m doing to read anything they write.

It’s sheer delight to watch the impact and their colleagues at are having: I love being voxsplained! My inner engineer and math nerd marvels at — their quantitative lens adds tremendously to complex real world topics. Finally, it’s really remarkable watching bring back full-on gonzo journalism, including in the world’s most dangerous places.

Over the next 5-10 years, I think we’ll be able to build more tools/systems for reporters like these to maximize their scope and opportunity. The quality of work plus the explosion of journalism entrepreneurship plus the rise of 5 billion smartphones in the world plus new tools/systems equals interesting times!

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12,13,14,15,16

Outstanding Piece On What Today’s Economic Gloomsayers Are Missing

Outstanding new op-ed by the best living economic historian, Joel Mokyr at Northwestern: What Today’s Economic Gloomsayers Are Missing.

There is nothing like a recession to throw economists into a despondent mood. Much as happened in the late 1930s. The economic growth experienced through the 20th century, they tell us, was fleeting. Our children will be no richer than we are.

 

What is wrong with this story? The one-word answer is technology. The digital codification of information = reinvention of invention. [Terms] like ‘IT’ don’t begin to express the scope of the change [array of] tools that the digital age places at science’s disposal.

 

The consequences are everywhere, from molecular genetics to nanoscience to research in Medieval poetry. As science solves problems that were not even imagined, inventors, engineers and entrepreneurs are waiting in the wings to design new gizmos and processes based on the new discoveries that will continue to improve our lives.

 

The economy may be facing some headwinds, but the technological tailwind is more like a tornado. Fasten your seat belts. So: If everything is so good, why is everything so bad? Why the gloominess of so many of my colleagues?

 

[GDP and productivity] work for a steel-and-wheat economy, not [ours], as they mismeasure the contributions of innovation to the economy. Many new things are expensive to design, but copy at low/zero cost: They contribute little to GDP even if the consumer welfare impact is large.

I highly recommend Mokyr’s books: The Lever of Riches: Technological Creativity and Economic Progress, The Gifts of Athena: Historical Origins of the Knowledge Economy, and The Enlightened Economy: An Economic History of Britain 1700-1850. I also highly recommend Mokyr’s recent podcast with from Nov 2013, an hour of genius.

Source Tweets: 1,2,3,4,5,6,7,8,9,10,11,12,13,14

The 40 Year Collapse Of Trust In Print News

Something I believe that nobody I know believes: Woodward and Bernstein Watergate coverage precipitated the 40yr collapse of trust in print news. That long slow slide of trust can be seen, among other places, in Gallup polls over the years. After Nixon resigned 40 years ago this weekend, Washington Post Watergate coverage became exemplar for the entire next generation of reporters. The political press became obsessed with unearthing scandal, which metastasized throughout print journalism, gunning for Pulitzer bait.

There are clearly scandals that need to be unearthed, like Watergate, but endless scandal frenzy is exhausting and demoralizing. Particularly when applied indiscriminately across the news landscape, and particularly when extrinsic press motivations are so clear. Irony is we now know Woodward and Bernstein less reported Watergate than had the story fed to them by Mark Felt, a partisan in an internal FBI battle.

I think the 40 year echo effects of Watergate have more to do with the existential crisis of newspapers than anyone would ever admit. As news consumers, the endless barrage of scandal, tragedy, and conflict has real psychological effects. They make the world seem worse than it is.

Followup reading that provokes thought: Avoid News, The Information Diet, You Can’t Not Believe Everything You Read. Also the book “Breaking The News” by is thought provoking and recommended. Last but not least, Steven Pinker on the broad perspective of our era.

Source Tweets: 1,2,3,4,5,6,7,8,9,10

Lessons Learned From Large Institutions in Financial Crisis

Lessons learned by managers and shareholders of large regulated financial institutions for the next financial crisis: There is no risk of individual executive criminal prosecution whatsoever. Bailouts are guaranteed, particularly for bondholders, for all but the weakest members of the herd.

The one thing that will get punished is acceding to the government’s request/demand for stronger companies to buy weaker companies. Ultimate fines will be levied against your shareholder base eight years in the future, not your shareholder base when the sins are committed. “Too big to fail” institutions will be allowed to become bigger than ever, increasing their safety buffer for next time.

And for bonus points, regulatory barriers against new competition will be raised, not lowered, further entrenching incumbents.

AND: “Too big to jail” is real, according to the Attorney General of the United States.

AND: Regulators on whose watch the last crisis happened, will be allowed to become even bigger and more powerful.

AND: All three government branches — executive, legislative, and judicial — are out to lunch on oversight.

Followup reading, from US Federal Judge Jed Rakoff: http://www.nybooks.com/articles/archives/2014/jan/09/financial-crisis-why-no-executive-prosecutions/

Followup viewing: Both nonfiction “Too Big To Fail” film and fiction “Margin Call” film are excellent at capturing the 2008 crisis.

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12

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Lyft Line Launch

We @a16z are very excited about the launch of Lyft Line, and I want to explain why!

Lyft and Lyft Line are an archetypal example of how Silicon Valley is going straight at the hard problems, in this case transportation. A growing number of people know about the amazing consumer utility and convenience created by “a ride on demand whenever you want”. And in parallel, services like Lyft make it possible for people who may otherwise not be able to make car payments to keep their cars.

In many cities, this results in a triple win: Consumer convenience, driver economic benefits, and improved business/tourism environment. But beyond that, as Lyft and its peers grow, ride sharing becomes increasingly convenient and affordable as *alternative* to owning a car. This leads to environmental benefits: Fewer cars needed -> less natural resource utilization; Network efficiency -> fewer miles driven.

Online supply/demand matching eliminates the need for cars-for-hire to drive around & look for riders. Network optimization in bits not atoms. Lyft Line is especially environmentally friendly: Facilitates multiple people riding together on the same route, still with high convenience! Everyone in world wants equivalent to upper-middle-class American lifestyle. Services like Lyft make it possible without destroying planet.

Few new techs deliver so much to so many: riders, drivers, car owners, cities, environment. And to think it just looks like an app :-). Closing note: Lyft Line is the classic “peace dividend of smartphone wars” — not possible pre universal smartphones.

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12

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Pruning Brands and SKUs to Encourage Company Growth

Really interesting business experiment starting at Procter & Gamble: P&G “will sell or exit 90-100 mostly minor brands in bold attempt to refocus the business behind its 70-80 remaining best-selling brands. Less will be much more,” P&G CEO told analysts. “The objective is growth… We’re going to be much more agile and adaptable.”

I think a majority of big company CEOs think they should do this in their own companies. But few ever pull the trigger. It’s too scary. A common thing you hear at big companies is “SKU proliferation” — the sheer number of items for sale. It bloats the organization and makes action harder.

Steve Jobs legendarily used the strategy of cutting brands and SKUs for Apple’s turnaround. But few CEOs have followed suit in last 15 years. Like Steve, AG Lafley at P&G is one of the most respected CEOs in the world. If this works for P&G as well as it did at Apple, I think the odds go way up that many big company CEOs will pull the trigger on the same strategy. It could be transformative for business.

The stakes are high: Whether, and how, big companies will be able to grow their businesses and their number of workers in the future. Further, whether/how big companies will invest in new product creation in the future. Paring the old can be staging for creating the new.

Of course, Larry Page is busily ignoring Steve Jobs’ advice to do the same thing at Google! And Jeff Bezos is furiously expanding Amazon. There are no absolutes, but I think it’s very healthy for every big company to consider: How to best set up to grow and create new things?

Source: Tweets – 1,2,3,4,5,6,7,8,9,10,11,12

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