Crisis in Higher Ed & Why Universities Still Matter

Welcome to “The Ben & Marc Show”, featuring a16z co-founders Ben Horowitz and Marc Andreessen. In this latest episode, Marc and Ben tackle the university system – a hot topic that’s been dominating the news over the past few months. As Marc states at the top of the episode, universities matter tremendously to our world, but they’re currently in a state of crisis. In this one-on-one conversation, Ben and Marc take a “structural” look at higher education, diving deep into the twelve functions of the modern university. They also unpack the numerous challenges that universities face today – the student debt and the replication crisis, among them. As colleges face an existential dilemma that could have long lasting repercussions, how can we find ways to improve these institutions, while being open to new entrepreneurial opportunities in education? Enjoy! ** Watch Part II of the discussion: https://youtu.be/EeIdalo2huI ** Topics Covered: 00:00:00 - Teaser 00:00:34 - Introduction 00:05:59 - Evolution of the modern university 00:13:39 - Marc's Twelve Functions of the University 00:19:22 - University as a credentialing agency 00:37:55 - The student loan crisis 00:45:26 - College tuition inflation vs. overall inflation (US CPI) 00:46:32 - Which college? Which degree? 00:51:24 - University as a research bureau 00:54:00 - Replication crisis 00:57:31 - Research and government funding 01:00:42 - Policy Think Tank 01:05:12 - Ben on the Roland Fryer case 01:09:07 - University as the moral instructor 01:11:29 - DEI and its side effects 01:25:27 - Student athlete scam 01:31:47 - University as adult day care 01:32:57 - Reverse CBT 01:34:55 - Campus justice systems 01:38:56 - The truth about accreditation 01:41:23 - The current existential threat to universities 01:49:50 - Key questions and entrepreneurial opportunities 01:55:43 - Sign off #education #university #college #school #history #podcast #technology #tech #entrepreneur #highereducation #learning Listen to Us! - Apple: https://bit.ly/3SdsfNt - Spotify: https://spoti.fi/3SclPOr Resources: Marc on X: https://twitter.com/pmarca Marc’s Substack: https://pmarca.substack.com/ Ben on X: https://twitter.com/bhorowitz Books mentioned on this podcast: – “The Case Against Education: Why the Education System Is a Waste of Time and Money” by Bryan Kaplan https://amzn.to/47HOSOO – “Public Opinion” by Walter Lippmann https://amzn.to/48uY3m5 Article mentioned on this podcast: – “Why Most Published Research Findings Are False” by John Ioannidis https://bit.ly/3RZnqWa Stay Updated: Find us on X: https://twitter.com/a16z Find us on LinkedIn: https://www.linkedin.com/company/a16z The views expressed here are those of the individual personnel quoted and are not the views of a16z or its affiliates. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors and may not under any circumstances be relied upon when making a decision to invest in any a16z funds. PLEASE SEE MORE HERE: https://a16z.com/disclosures/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Ben Horowitz?

  There is no incentive for an instructor to give a hard grade. And then, once one professor starts taking that easy incentive, then everybody kind of does it.

• 0:14Marc Andreessen?

  The classic tension is the political scientists absolutely insist that they're scientists, just like the physicists.

• 0:18Ben Horowitz?

  Yeah.

• 0:19Marc Andreessen?

  And the physicists insist, no, absolutely you're not.

• 0:22Ben Horowitz?

  You have to create a work environment, and this is where the universities go horribly wrong.

• 0:27Marc Andreessen?

  Well, not surprised anybody who's been in a college environment that you have professors who maybe are better at research than teaching.

• 0:32Ben Horowitz?

  Yep.

• 0:33Marc Andreessen?

  As the student, sometimes you wonder, who got the good part of the deal?

• 0:37Ben Horowitz?

  It's fully professional sports. Like, there's no hiding it. You've got some guys getting paid, you've got a transfer portal and so forth, but not everybody gets paid.

• 0:45Marc Andreessen?

  Are all of these degrees and all of these institutions actually generating graduates who can actually command market wages that actually make this entire thing a basically economically and politically viable proposition?

• 0:57Steph Smith?

  Hello, everyone. Welcome back to the A16Z Podcast. This is Steph, but as you just heard in our intro, today you'll be hearing from A16Z co-founders Mark and Ben. And you'll get to hear them tackle a hot topic that's been absolutely dominating the news over the past few months. That is, of course, the university system. As Marc states at the top of the episode, universities matter tremendously to our world, but they're also currently in a state of crisis. Now, a lot of people are covering this topic, but Mark and Ben take a different approach, a structural approach to higher education, by actually breaking down the 12 functions of the modern university. They also start by taking us back in time to the origins of some of these elite institutions,

• 1:41Steph Smith?

  all the way through to today, unpacking the numerous challenges that universities face, from student debt to the replication crisis, and also other topics ranging from DEI, tuition inflation, and grade inflation, student athlete admissions, accreditation, and so much more. So, as colleges face an existential threat that could have long-lasting repercussions, the question becomes, how can we find ways to improve these institutions while still being open to new entrepreneurial opportunities in education? And, of course, if you do like this episode, don't forget to subscribe to the Ben and Mark Show wherever you get your podcasts, so that you're the first to receive new episodes. Enjoy.

• 2:22Steph Smith?

  As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com/disclosures.

• 2:51Marc Andreessen?

  Hey folks, welcome back to the Mark and Ben Show. Today, we are going to tackle one of the hot topics of the moment, which is the topic of the university system. Very hot topic, it's been in the news a lot lately. Couple of things we wanted to say upfront. So first of all, I think we're in general, we're going to have a very kind of American perspective. So when we talk about the universities and colleges we're most familiar with are American. So, you know, assume we kind of have a, maybe a little bit of a parochial view just in terms of what country we're talking about. But look, the most important thing is kind of why we want to talk about this. And I guess what I would say is like, look, like universities, and I would say especially the really good ones, they matter tremendously, and they matter tremendously to the world and to the country and to everybody in the country. And they matter a lot to us. And I just want to say upfront, like they matter a lot to me. I'm where I am because I got a modern university education

• 3:36Marc Andreessen?

  at the University of Illinois. They matter a lot, I know to Ben, who can talk about his own experiences. And so, so they really matter. They're obviously in some state of sort of crisis right now. I think our opportunity is to talk about them not so much in terms of like the topics that are like super hot in the news. So we're not necessarily going to weigh in on the same stuff that you've been reading about, if you've been following the last couple of months of drama. But, you know, we're going to do kind of what we do, which is we're going to, we're going to talk about it structurally. So we're going to think about sort of universities as an industry, and as a business, and as a form of organization, and as something that has customers and has constituents and has a structure and has an industrial logic and incentives, right? So, you know, thinking about this a little bit more structurally, more for a business standpoint. And then the other thing is, there's two specific reasons we want to get into this today.

• 4:22Marc Andreessen?

  So one is, both Ben and I have a lot of friends and colleagues all across the country that are trying to basically make universities better. And some of these are people who are on boards or are running university presidents or endowment heads or other people, alumni, professors, people who have been kind of scrubbing in hard to try to make universities better. And so we hope maybe sharing some of our perspective might help them. And then the other is, since we are venture capitalists, there is always the possibility, but higher education is an industry and there's always the possibility of startups. And so one of the interesting questions always is, when an industry is going through kind of structural transitions and when sort of a lot of things are flying, there's always this question of like, well, should there be new, should there be new competitors in the industry or actually should the structure of the industry itself change? And maybe things that have been bundled in the past should be unbundled and so forth.

• 5:07Marc Andreessen?

  And so we'll, we'll, we'll get into that a little bit as well. And there, there may be entrepreneurs listening to this who may, may have ideas coming out of it. So Ben, let me, let me let you, let you also add introductory thoughts.

• 5:15Ben Horowitz?

  Yeah, I'll just add, I was a trustee at Columbia University. I'm a trustee emeritus now, I think they call me. So I have a huge interest in, in kind of helping the system improve and kind of get over its current issues. The other thing I'd say about American universities in particular is they are, to a large extent, the envy of the world in that when I travel the world, many countries, the, the government officials and the, the highest ranking people in the country send their children to American universities to study, even if they're going to come back and kind of literally run the country at a future date. So it's really been an amazing system and produced an awful lot of good.

• 5:57Ben Horowitz?

  So we're going to do a lot of dissecting, deconstructing, criticizing of it, but it's in that context.

• 6:03Marc Andreessen?

  A great case study of that, Ben, is I think Xi Jinping's daughter goes to Harvard, I believe.

• 6:08Ben Horowitz?

  Yeah.

• 6:09Marc Andreessen?

  And then of course, particularly when we talk about the top universities, right? Which are of course the ones that draw most of the press coverage, but you know, they, they have what economists call an externality, which is their graduates end up running a lot of the country.

• 6:19Ben Horowitz?

  Yeah.

• 6:20Marc Andreessen?

  Right? And so like basically like almost every Supreme Court justice either went to one of a very small number of, of super elite law schools, usually Harvard or Yale. CEO, if you look at the CEOs, the Fortune 500, if you look at top politicians, presidents, I think Harvard alone is responsible for eight presidents. And then there's this, we'll talk about this later in the, in the, in the session, but there's this policy setting function that they play where the expertise at the universities and the form of the professors and the research is used to set a lot of public policy. And so the, the decisions made at these places basically, basically, basically end up determining a lot of the future of the country.

• 6:53Ben Horowitz?

  Which are, I mean, they are, they are elite universities that produce the elites.

• 6:59Marc Andreessen?

  Yes, that's right. And the elites end up running a lot of things. So yeah, so anyway, so that's why we want to, another reason we want to talk about this is that the implications of sort of what's either going right or wrong at the top universities matters not just for the universities and for the people who go to those universities or teach at those universities, but also the citizenry as a whole was sort of very exposed for better or for worse to the, to the implications of what happens at these places. So certainly a topic that I think everybody should at least think about somewhat. So the structure for what we're going to do today is so I've made my list of the Dirty Dozen or 12-step program. I made a list of the dozen sort of key functions that I think are kind of most central to what modern universities are. And let me start by saying, basically, like, where did the modern university come from is actually quite an interesting story

• 7:42Marc Andreessen?

  in and of itself. The very short form of it is that the original universities, well, the original universities started in like England like 800, 900 years ago. The American universities actually started 400 years ago. American universities are actually, in some cases, older than the country. And so Harvard in particular is sort of the leading case study on this is, and I think Harvard's, I think the oldest current one, Harvard is, I think, 400 years old. And, and then, and basically what happened is the, these institutions have been evolving for hundreds of years. And so what they basically are today is they're sort of a bundle of functions and products and services and staffing and economics that's sort of been evolved over the course of literally hundreds of years, right? And so, and I'll just give you a sense of the evolutionary steps quickly. Just take

• 8:25Marc Andreessen?

  Harvard as a case study. Harvard started as a, as a religious institution, started out basically training, religious training for, for basically for Protestant, Puritan religious leaders in the US.

• 8:33Ben Horowitz?

  And that was the knowledge at the time, right? The Bible was the best source of knowledge in the world.

• 8:38Marc Andreessen?

  Yeah. If you read, if you read, yeah, if you read the original charter of Harvard, this is all right there on their Wikipedia page, it basically was, it charted as actually an actual religious instruction, right? Religious institution, a religious training. They kind of, it went hand in hand with sort of the, the sort of creation of the, at the time, what became known later as sort of the WASP, sort of Anglo-American aristocracy, that sort of colonized New England and ran, basically, and basically ran, ran the country and basically conducted the Revolutionary War ultimately. And that was very kind of heavily Protestant, Puritan. And Harvard was sort of a keynote in the propagation of those values and of that culture and of that religion. So it ran that way for a long time, but then broadened it and its peers then broadened out and they basically through the course of the last 150 years or so, they basically

• 9:21Marc Andreessen?

  threaded in two foreign models, elements of two overseas models. So one was the sort of classical education model from the English universities. And so particularly Oxford and Cambridge, right? And so the idea of basically teaching sort of a classic classical politics, history, economics, basically the philosophy, literature, kind of the key topics that in England for a long time have been viewed as sort of the way that you train leaders. Like basically every leader in England, every prime minister basically essentially came through this particularly program they have, I think at Oxford called PPE, which I think it's like, it's like politics, philosophy and I forget what economics, I think are the three. And so the sort of classical education role of these places kind of came from the English model. And then more recently, starting about 100, I don't know, 100, 120 years ago,

• 10:04Marc Andreessen?

  the influence started showing up much more also of the German model. And the German model was for technical education, right? And so the German model was for basically training scientists and engineers. And so most, most, most elite universities in the US now, at large universities, they sort of famously have both a sort of liberal arts component to what they do, but they also have a, what we now call STEM, science, technology, education or engineering, mathematics. And so the, the modern American university is sort of a hybrid of, it's sort of a hybrid of a religious institution, a classical education institution, their humanities education institution, and then a technical education institution. And at least like the place I went to University of Illinois and like, it was actually very interesting. And so there were actually two physical sides to the campus. There was the liberal arts side, and then there was a street that divided, and then there was the engineering campus the other side.

• 10:49Ben Horowitz?

  Now, at Illinois, were the STEM buildings kind of much less nice than the liberal arts building? Cause that was the case at Columbia.

• 10:56Marc Andreessen?

  So at Illinois, the engineering buildings were much nicer.

• 11:01Ben Horowitz?

  Oh, they were nicer. Okay. Interesting. So it depends who gave the money. Yeah.

• 11:05Marc Andreessen?

  Yeah, so this was, and this was actually a big deal, at least at Illinois, this is a very big deal, because I can tell you the liberal arts people were very mad about this. Liberal arts people, the liberal arts buildings were just collapsing. They were ancient and collapsing, and there had been this building frenzy at the, at the, at the engineering department over the preceding 10 years before I got there. There are all these just incredible, shiny, spectacular buildings. And people, I remember people, and people on the other side of the street were like, super mad about this.

• 11:28Ben Horowitz?

  Oh, that's really funny, because when I was at Columbia, and Columbia has built a gorgeous new campus now, so it's, it's a little different. But the old buildings were gorgeous. They were from when Alexander Hamilton days. And the new building was just like, the ugliest thing you could ever see, and that was the engineering building.

• 11:47Marc Andreessen?

  Yeah, maybe that tells you, maybe that's a different, difference between a land grants, fundamentally, Technical University.

• 11:51Ben Horowitz?

  Yeah.

• 11:52Marc Andreessen?

  The sort of tacked on liberal arts versus liberal arts legendary institution.

• 11:56Ben Horowitz?

  Tacked on.

• 11:56Marc Andreessen?

  Kind of maybe at some point, tacked on, tacked on technology, right?

• 11:59Ben Horowitz?

  Exactly.

• 12:00Marc Andreessen?

  Yeah, that's right. And so, yeah, so these are good examples of kind of this hybrid, this hybrid that's emerged. And then, of course, we'll, we'll talk about this some, but since the 1960s in particular, the universities have kind of taken on a sort of, you might call sort of a more potent set of like, kind of social, political, ideological roles, which we'll, we'll talk about as we get into. So there's a modern take on this too. But, but anyway, the, the point of this is, as a result of how these institutions evolved, is they're bundles, right? And so if you look at it as an industry, they're, they're bundles. They do a lot of different things. And the, the bundle evolved. So the good news is, the bundle evolved. And in general, in business, that's kind of a good way to kind of figure out what you should do, is to like, let evolution work on your side, and figure out what works and what doesn't, and add to the things that work, and subtract the things that don't. But the other thing that happens is, sometimes you just like, inherit the bundle. And sometimes

• 12:43Marc Andreessen?

  as a leader, you want to kind of relook at the bundle, and whether this actually is the bundle that makes sense, or whether things should be split out, or whether things should be added to the bundle. And so we're going to kind of talk about it in terms of the current bundle, and then we'll talk about the potential on bundling.

• 12:54Ben Horowitz?

  Yeah, and I would say like, one of the very interesting things with regard to the bundle, and you can think of the bundle as like, the cable bundle, where you get your ESPN and HBO and all the things in one, is that the, the bundle was, of course, created pre-internet. And when you and I went to school... That was significant because there was this thing where you could only get knowledge, like the best books, the best information was all, you had to go to school to get it. In fact, if you wanted access to the internet, when we went to school, you had to go to university. It was the only place that had the internet. And so we're in a really different world than we were even 35 years ago.

• 13:37Ben Horowitz?

  Which is, and, and so that puts tremendous pressure on the bundle.

• 13:42Marc Andreessen?

  Yeah, that's right. Yeah, a great example is Illinois had a famously huge library. And I remember it was like in the marketing material for both recruiting students and professors was the quality of the library because if you went there, you could do certain kinds of research that were not possible if you didn't have access to the library.

• 13:55Ben Horowitz?

  Yeah, yeah. Which is very different world, but like the cable bundle, right? Like you could only get HBO if you had cable. So that made the bundle very different than if you can get the HBO app. Like, those are not the same worlds. And I think the university is in that same situation, but people don't point it out as much.

• 14:15Marc Andreessen?

  Yeah, that's right. So let's dive into the bundle and I've identified my dozen kind of things in the bundle. And then Ben, you can, we can, we can add things as we go. There are actually many things we could easily think we just thought of one, the library. I didn't even have in my list, but there are many, I'm sure there are many, many more kind of elements of the bundle that I haven't even prioritized here, but these are kind of the dozen that are top of mind for me. So, and actually Ben, let me just run you through, I'll just give you the headlines on these real quick. So people can have a roadmap to what we're about to talk about.

• 14:39Ben Horowitz?

  Yeah.

• 14:40Marc Andreessen?

  And then I'll just come back to the first one and we'll dive in. So number one credentialing agency. So credentialing students, graduates for employers. Number two, the actual courses themselves, the education. Number three, I call the research bureau, right? Which is the research component that most modern universities have, right? Most universities are also, they're also a hybrid of teaching and research.

• 14:59Ben Horowitz?

  Yeah, huge, huge charter is to create new knowledge. And often how the kind of technical part of the university distinguishes itself from industry. They, they kind of refer to industry as applying knowledge that was created at the university, although not always true, but it's a, it's the paradigm they love.

• 15:18Marc Andreessen?

  Yeah, that's right. And we'll talk about this, but professors become professors get hired and get tenure in large part of the basis of their research in contrast to their to their teaching. It's not uncommon to have professors. It will not surprise anybody who's been in a college environment that you have professors who maybe are better at research than teaching.

• 15:34Ben Horowitz?

  Yeah.

• 15:34Marc Andreessen?

  As the student, sometimes you wonder who got the good part of the deal.

• 15:40Marc Andreessen?

  Fourth, what I call the policy think tank. So this is the role of universities and sort of setting public policy, which we'll talk about. Number five is what I call the moral instructor. And this is the sort of legacy of the fact that these institutions actually started, the original one started as religious institutions. And so kind of and I think today in most mission statements in most universities, they might not outright say that they're teaching religion or morality, but they'll say things like that they're trying to inculcate values, right? Or they're trying to basically foster citizenry. They'll use terms like that. And that's basically all code for moral instruction. Number six is what I call the social reformer role. And this is the role where they not just they not only instruct morality, but they also try to implement it themselves directly. And this is where this very hot topic of DEI in particular comes in that well, we'll spend a little bit, a little bit of time on. Number seven, what I call the immigration

• 16:23Marc Andreessen?

  agency. And so this is the key role actually played by foreign students, which is actually really critical and not not talked about enough because it turns out that foreign students at universities generally pay full freight. And so it's a it's a big deal. International recruiting of students now is a very big deal and very core to the economic structures of these things.

• 16:41Ben Horowitz?

  And there's another aspect that we'll get into when we talk about credentialing, which is they pay full freight and they don't always go to the actual university. They've the universities have set up these parallel universities with different criteria, which is very interesting.

• 16:55Marc Andreessen?

  Yeah, that's right. And this actually turns out to be very important to the economics of these places because it's not clear that these places work without these kind of, kind of, let's just say, associated programs we'll talk about. Number eight, sports league. And I'm not the sports guy, but Ben very much is. And so Ben will weigh in very heavily on that. And there's been a lot of controversy around college sports in recent years. Number nine, the hedge fund, which is to say the endowments, which have become a very big deal over the last 30 years in particular. Number 10, what I refer to, and I went to college, so this was me, I was referred to as adult daycare or young adult daycare. And so this is sort of where you send the 18 to 24 year olds as sort of a substitution for just like going out and getting a job.

• 17:31Ben Horowitz?

  Yeah, they get them out of the house. Exactly.

• 17:33Marc Andreessen?

  And then number 11 is what I call the dating site, right? Which is the role that the universities have played, actually both in being a place where people actually date and choose mates, but also they also get the credential for future choosing of mates. And we'll talk about that because that turns out to actually matter quite a bit. And then we'll close on what I call the lobbying firm, which is basically the role the government plays in all this, and in particular, the role that government funding plays in all this, and then what that means for the relationship of the government and the universities. And of course, that's a very hot topic. There's a very, there's a, there's a, there's a current, you know, very active congressional investigation going on into the universities right now over all this recent drama. And so there's always this kind of question in the back of everybody's heads in academia, I think, which is like, okay, we really do, we at academia really

• 18:16Marc Andreessen?

  do run on federal funding and what would, what would ever happen if that ever got compromised or cut off?

• 18:20Ben Horowitz?

  Yep. Yeah, no, and it's a freak out whenever it pops up. It popped up a little during the Trump administration. I cannot, I was a trustee at the time, and like, it was a fairly scary situation.

• 18:37Marc Andreessen?

  Why don't you describe what happened? Because that gives you, it gives people a sense of the stakes of what we're talking about.

• 18:41Ben Horowitz?

  Yeah. So while Trump was talking about a variety of things. One was an endowment tax, and then there were kind of other things to kind of change the way the research, research grant process worked and the amount of money that got allocated to various schools. And that just has huge effects on the economics. I mean, it's, you know, universities rarely, you also have to understand, almost never do layoffs, so they only get bigger. And so a kind of... What you would kind of regard as like a kind of run-of-the-mill business downturn is like something that they're not really equipped to handle at a university. I would just put it that way.

• 19:25Marc Andreessen?

  Yeah, okay, we'll come back to that. So let's start with a credentialing agency. And so this is a very interesting topic. And actually, a lot of what I know on this, I learned from, there's an economist named Brian Kaplan, who's written a book called, he's a tenured university professor at George Mason University. He spent his life in academia, so he's not exactly a bomb thrower. But he gave his book a very provocative title called The Case Against Education. But it's a very kind of comprehensive walk through the economics of education and how the system works. And I was very struck by, I'll just sort of relay the argument that he basically makes in the book, or at least what I, how I interpreted it, which really stuck with me, which is, the sort of default view of sort of the value of a college degree is the learning, right? So you go to four years or whatever, and you get the learning that you get. And that gives you the learning, sort of translates to employable skills.

• 20:10Marc Andreessen?

  And then you get a job, and employers recruit kind of on that basis, evaluate on that basis. It actually turns out, it's actually very hard to validate empirically the value of the learning. And the reason for that, the evidence for that is there's something called the sheepskin effect that economists talk about. And the way the sheepskin here refers to the diploma. The actual, right, the actual, you graduated, you actually got the diploma. And the observation is that if you go to college X and program Y, and you go for eight, you know, you go for four years, you go for eight semesters, say, two semesters per year, and you graduate, you make whatever, say, you make $100,000 a year, or whatever, coming out the other side is an average salary. It turns out, if you compare those graduates to students who go for seven of the eight semesters,

• 20:55Marc Andreessen?

  it turns out, like, on average, it's something like, they'll get something like half the salary.

• 20:58Ben Horowitz?

  Yeah.

• 20:58Marc Andreessen?

  So for those graduates, they kind of zero in at like, if the full graduate amount is 100,000, they'll commit at like 50,000 or something like that. And it varies by field, but it kind of roughly correlates to that. And so what argument I think Brian Kaplan has made is if you if you basically if you look at that, if you stare at that, there are two possible explanations for it. Right. Because what you'd expect is if the if it was this is just all about the education, the graduate who the person who didn't graduate but took seven of the eight semesters should get seven eighths of the income. Yeah. Right. Instead, they get half the income. And so there's two possible explanations. Either a full half of the actual valuable information is delivered in that last semester. Yeah. Right. The senioritis semester. Yes. And anybody who's been through college knows that's not true because that's the semester everybody slacks off. And so if anything, the opposite is true.

• 21:43Marc Andreessen?

  Or the sheepskin effect, which is the actual value is more in the diploma. It's more in the fact that you actually graduated. Right. And so the way that I think the economist view on this basically is the the main credential of a university degree is basically in two parts. It's in the fact that you were admitted, and then it's in the fact that you were that you graduated. By the way, on the admissions thing, you can see that same thing in Silicon Valley, where there's this credential in Silicon Valley that's become very popular, which is I was admitted to MIT, but I didn't go. Yeah.

• 22:13Marc Andreessen?

  Right. Or I was admitted and I went for a year and dropped out. And it turns out like there's no penalty like for for for VCs like us, like it actually the fact you got admitted to MIT is itself a credential. Yeah. Even if you never went, right? Even if you never actually completed the thing. So so it links back to the sheepskin effect. Anyway, so so basically, like the the sort of objective clinical view of the value of the credential basically is that the education plays some part, but there's these two other really critical things. There's the admission, the fact you got admitted, and then there's the fact that you graduated. In psychological psychological testing terms, so they call psychometrics, what that basically means is that the admissions process is basically an IQ test. Come back to that in a second. And then the graduation, actually getting to the diploma, is a conscientiousness test. Yeah.

• 22:56Marc Andreessen?

  Right. And so and the reason we can be confident in saying that admissions is an IQ test is that traditionally admissions was based on standardized testing, which is like tests like SAT, ACT, GRE. And those tests from a from a from a from a just a clinical standpoint, like the in sort of clinical psychology, psychometrics, those tests are all proxies for an IQ test. Those are all sort of those are all sort of roughly equivalent to just a straight IQ test. Highly correlated. Highly correlated to an IQ test, 0.8 or more kind of correlation. To an IQ test. So basically, historically, the fact that somebody got whatever 1,400 or 1,500 on the SAT and that correlated to an IQ of 130 or something, and then therefore they were qualified to go to a certain tier of university. Like, as long as that standardized

• 23:39Marc Andreessen?

  testing component's in there and those tests are real, like that's a real signal of basic intelligence. And then the fact that they completed the four-year degree is a real signal of conscientiousness. And I think there's a really kind of fundamental thing that's breaking right now that's not getting enough attention that employers are starting to really think about. But I think a lot of people who run universities are not thinking about enough yet, which is

• 23:59Ben Horowitz?

  We're thinking about it.

• 24:01Marc Andreessen?

  We're thinking about it. Yes, both. Yes, we're thinking about this both for ourselves and then also for all of our companies who hire, which is, I think, a lot of universities, number one, they are voluntarily ending the use of standardized testing for admissions. And there's a whole political, social kind of overlay as to why that's happening. But at a lot of even the top institutions now, they very deliberately are not doing admissions based in any sort of standardized testing, which means they're not applying the IQ test, which means, which means, by the way, maybe that's the right thing for them to do. But what it means is they're giving up on that as part of the credential, like that IQ component of the credential is being voluntarily surrendered. And then the other thing that's happening, and this is very clear, and the data is just great inflation. And so the trend over the last 50 years has been increasingly that just everybody gets

• 24:44Marc Andreessen?

  A's in everything. And of course, if you just get A's in everything, of course, it's a lot easier to graduate, right? You're much less likely to drop out or get forced out. And so I think what's happening is colleges, universities in the US right now are voluntarily surrendering both the admissions IQ component of the credential and the graduation grading component of the credential. And I think the implication of that in terms of what that credential means in terms of future employment is, I think, very underestimated.

• 25:09Ben Horowitz?

  Yeah.

• 25:10Marc Andreessen?

  So Ben, over to you.

• 25:11Ben Horowitz?

  Yeah. And what do you think drives the great inflation the most? I've been thinking about that quite a bit.

• 25:19Marc Andreessen?

  Do you have a view on that from what you saw at Columbia?

• 25:21Ben Horowitz?

  Yeah, I mean, I think that a lot of it has to do with incentives, right? So if you're an instructor, you get, you know, the, the, the big new thing is they have these student evaluations of teachers and they get published in these books and then you get, if students don't like you, you, you're regarded as a crap professor or whatever. And the easiest way to get a high student evaluation is to give them an A.

• 25:45Ben Horowitz?

  And so like, and the amount of stress and just bullshit that you have to deal with if you give somebody a D because they're going to come to you and complain and harass you and so forth. Like, why do it? You don't have to. So just give everybody an A, you get a high evaluation. So like the incentive, there is no incentive for an instructor to give a hard grade. And then there is a kind of, once one professor starts give, kind of taking that easy incentive, then everybody kind of does it. And we see this in companies where, you know, you have a soft manager promotes a bum employee.

• 26:27Ben Horowitz?

  Then every manager goes, every other employee goes, well, that bum got to be a vice president. Why not me? And then that, that takes off. So I think it's kind of like a natural organizational evolution. If you don't have some very strict standard on grading. And so like, I think it just naturally went there, but I'm not sure.

• 26:50Marc Andreessen?

  Well, I'll give you two other, I think that's right. And like the role of like, I think it's like rate my professors.com. Like, I think it's, it's pretty central now. But I'll give you two other incentives, I think, I would suspect. One is development, donated future donations, right? Which is the, the other constituency here is the parents.

• 27:05Marc Andreessen?

  And then, and then by the way, these students and then these students later, later on becoming donors. Right?

• 27:09Ben Horowitz?

  Yeah.

• 27:10Marc Andreessen?

  And like.

• 27:12Ben Horowitz?

  I think that the professors, most professors are not that directly connected to the fundraising process though. I think, but yeah, that, that could be certainly.

• 27:20Marc Andreessen?

  But it also, but there, here you go to like, here would be a reason for the administrations to not be holding the line on, on.

• 27:25Ben Horowitz?

  Oh, for sure.

• 27:26Marc Andreessen?

  Right on.

• 27:26Ben Horowitz?

  Yeah, angry parents. Like the last thing you want to deal with is an angry parent who donated a fuck ton of money. That's like, that's no fun at all. So, so in that way, definitely the same thing.

• 27:36Marc Andreessen?

  Yeah. And then the third is, look, the other version of this, I've heard, I've heard this from professors is like, look, if you could, you could, for bad grades, you can be hauled in front of administrative proceedings, you can get in trouble, right? Because you can open the door to fairness, right? Equity, classroom conduct, complaints, like the, the students and their parents can complain and they can

• 27:53Ben Horowitz?

  Right, right. They can give you a false harassment complaint or something.

• 27:57Marc Andreessen?

  Yeah.

• 27:58Ben Horowitz?

  Because you can be D, right?

• 27:58Marc Andreessen?

  Yeah, yeah. Hostile classroom, like, so the HR, the sort of HR, HR policies basically provide an avenue. And by the way, there's avenue for legitimate complaints, but also if you're a professor, you must, you must be thinking about, boy, I, what, what's the last thing I need in my life is to open the door to somebody saying something like that. And so, yeah, I think that's, to me, that, I think that's my analysis is just, and then this is the thing, the great inflation thing, like, the great inflation thing has been, it's been like a 50-year trend, like, the charts there are like, actually, pretty linear.

• 28:24Ben Horowitz?

  Yeah.

• 28:25Marc Andreessen?

  And so, this, this has been going for a long time. People have, people have known about this. And it's just, it's not a problem as long as the credential is still intact.

• 28:32Ben Horowitz?

  Right.

• 28:33Marc Andreessen?

  But I think it's at the point now where I, I think it's damaging the credential.

• 28:36Ben Horowitz?

  Right. It's slip, slip, slip, all at once. Yeah. And I think that, well, so there's another thing, which I got in a huge kind of argument about when I was a trustee, and to Columbia's credit, they, I, they did the right thing in that case. But all of the schools, so there's kind of whatever Harvard College, Columbia College, like, these things are almost impossible to get into. They accept a thou, on the order of a thousand students a year. Every, you know, high school graduate in the world wants one of these slots. They're very hard to get. And that's the credential. But there's also a, these things, the extension

• 29:16Ben Horowitz?

  schools, which are not taught by professors. They're taught by, like, whatever, somebody from Goldman Sachs who's wanting to do a little side education work or this and that. And they can let in tons of people. They're far larger than the actual university kind of college program. And they all have them. Harvard has it, Columbia, et cetera, et cetera. And

• 29:42Ben Horowitz?

  They are mainly foreign students, so it's mainly like Chinese students. And then they purposely, and this is where I got into the argument, they purposely labeled the degree, so it's very hard to tell that it's not the credentialed one. So it's Columbia University Masters in Statistics was the big kind of debate that we kind of got into at the extension school, because the people in the engineering school were like, what the hell? Like, that's the same degree that we're giving out in title. Like, how is an employer going to distinguish? And the truth is, the Chinese employer cannot distinguish. Like, that's like, really hard for them.

• 30:23Ben Horowitz?

  And so you do that enough, and it ultimately waters down the degree. Now, in the United States, like, we can distinguish, we got a student coming from Harvard, we like, talk to other Harvard students, make sure they knew him, like, it's possible to sort, but it's not possible to sort for everybody. And they're purposely obfuscating it, because it's a huge moneymaker. These schools, everybody pays full freight, there is no scholarship, there is no financial aid, there's none of that. And so, and then it's very scalable, because they can let in as many students as they want, because they're not taught by professors, and there's no, none of this credential idea. But it ricochets back into weakening the credential.

• 31:09Marc Andreessen?

  Yeah. And a lot of this, you alluded to it, but I'll just focus on it for a second, a lot of this is, a lot of these are then international students.

• 31:14Ben Horowitz?

  Yeah.

• 31:15Marc Andreessen?

  And the core of a lot of this, as you said, is this is, yeah, if you're, if you're a Chinese employer, you might not understand the gradations here.

• 31:21Ben Horowitz?

  Yeah.

• 31:22Marc Andreessen?

  Now, having said that, Chinese employers can use the internet just like everybody else, or at least in this, I'm sure for this, for this purpose, they can.

• 31:28Ben Horowitz?

  Yeah.

• 31:28Marc Andreessen?

  And so that's the kind of information asymmetry that the internet historically has been very good at demolishing.

• 31:33Ben Horowitz?

  Yep, yeah, yeah, I know, and I think that that is, I mean, which kind of is going to be thematic in this discussion, which is, a lot of the things that the university kind of could rely on, get undermined by the internet. And that, which is causing things to come to a head, I think. Maybe not right now, but certainly soon.

• 31:55Marc Andreessen?

  Yeah, coming. And then Ben, on the overall credentialing point, so yeah, what's your view? We deal with both a lot of tech companies and also a lot of non-tech, a lot of big, big non-tech companies also. Like, where are CEOs and hiring managers in corporations on this topic of like, the value of the university credential now versus 10 years ago? And then where's it going?

• 32:14Ben Horowitz?

  It hasn't changed materially yet, in my view, but for the first time in my career, people are really discussing it. And you hear CEOs going, wow, the kids coming out of college this year are not what I'm used to. They're not. And I'm getting kids from weird places, not Harvard, not MIT. Like, it used to be in Silicon Valley, I think, Facebook, you're on the board of Meta, they used to only hire people from Stanford, MIT, I think, or Harvard, Stanford, MIT. Like, they had, like, Stricker. Nobody has that role anymore. Like, that role's gone. Like, I don't know any company that you have to be Stanford,

• 32:56Ben Horowitz?

  Harvard, or MIT to, like, be an engineer there. And more and more people are not finished school, coming straight out of high school. So, so I would say the aperture, which is really great, by the way, has opened. But the other thing is, that I, I am hearing a lot, just anecdotally, is, you know, Stanford students aren't what they were. Like, I got an engineer from Stanford, but they're not, they're, they're, they're not ready, they're not ready to go in the way they were before. And so I think that it's already, there's definitely a credential degrading that's already occurring with this, first time, though,

• 33:37Ben Horowitz?

  with this class coming, that just came out. So, it's pretty nascent, and it's not, I don't think it's really changed hiring practices, much other than people are casting a wider net, but they're not, like, still, like, a Stanford degree is very powerful. But you could kind of see, it's like, a glimpse of the future, for the first time. Like, I've never, never heard that before. I mean...

• 34:01Marc Andreessen?

  And if we project forward, if nothing, if current trends continue, like, what do you think will be the, the take among the sort of leading edge employers in five years?

• 34:09Ben Horowitz?

  Well, I think, look, I think if you take out the SAT...

• 34:15Ben Horowitz?

  That's a pretty big change. And so it's a little unpredictable because, okay, what are they admitting people based on? Like, you know, do you have to have high scores on the AP exams? Do you, do you have to have very rigorous curriculum? I know at Columbia, it really mattered the quality of the high school that you went to, even when they had SATs. So the question is, is that whatever rubric of criteria that they're using to replace the SAT as good at identifying very gifted students? Or is it not? As it were, and I think we don't know that yet.

• 34:59Marc Andreessen?

  Yeah, but like, would you predict in five years that employers are still just basically deferring to the degree, the question of a candidate of a recruits IQ and conscientiousness? Or they feel like they're going to have to validate that otherwise?

• 35:10Ben Horowitz?

  I kind of think they're going to have to validate it. I mean, I just because it's different. And on kind of entry level jobs, you can do some like fairly rigorous testing, particularly for an engineer or something like that in the interview process.

• 35:31Ben Horowitz?

  But, you know, look, Stanford, you had just a huge benefit of the doubt. I mean, look, I think Meta at one point took any engineer from Stanford, you know what I mean? Like, because they were

• 35:44Marc Andreessen?

  It was that good of a signal.

• 35:46Ben Horowitz?

  Yeah, yeah, it was amazing signal. So I don't think they'll do that anymore.

• 35:51Marc Andreessen?

  I think Google, just to close on the topic, I think Google now formally does not take college degrees into account, or at least they've said they're neutral or ambivalent or don't care. They'll equally rank people without degrees. They do their own testing. And they go on those tests.

• 36:05Ben Horowitz?

  Yeah, yeah. So I think that I think that's going to become much more of the norm, where companies do their own testing. And it won't be, it's not legal, at least for sure not in California, to do a general IQ test for a specific job. But you can do pretty rigorous job specific tests that certainly kind of include something that's going to ability to process information quickly, et cetera, et cetera.

• 36:32Marc Andreessen?

  Okay, well, I'm sure this will come back up again, so we'll move to number two. So the actual education, the actual education, the courses themselves. So here, I was just saying, one lens on this is actually the, again, part of the bundle here. There's actually a bundle of four different kinds of sort of education and coursework, at least four, but I would say there's four big ones. So there's the sort of classic humanities, liberal arts, which, as I said, is sort of derived from the English model. There's what we now call STEM, science, technology, engineering, math, which is, as we said, originally derived from the German model, and that's physics and everything from physics to engineering and so forth. Then there's social sciences, which is a bit more of an American innovation, which was social sciences are like a hybrid of humanities and STEM. And so these are fields like psychology, sociology, economics, public health, education,

• 37:16Marc Andreessen?

  that were kind of developed as quote unquote "sciences."

• 37:19Ben Horowitz?

  Yeah, anything that has science in its name isn't science, is the joke, right? Like, there's no physics science or chemistry science. It's only political science.

• 37:31Marc Andreessen?

  Yes. So the classic tension is the political scientists absolutely insist that they're scientists just like the physicists.

• 37:37Ben Horowitz?

  Yeah.

• 37:37Marc Andreessen?

  And the physicists insist, no, absolutely you're not.

• 37:40Ben Horowitz?

  No, you're not, because it's not science, right? Like, it's not like I have a hypothesis that's testable. And I could run an experiment and find out if my predictions come true. Like, so if it's not that, it's not science, but whatever.

• 37:53Marc Andreessen?

  Capital S science. And there's a whole digression, we could go on about where this all came from. But yeah, they're in the middle somewhere. And then, and then there's what I would call the trade school, which is basically law, medicine, business, and performing arts, which is basically like, if you go to one of these places specifically for a law degree, like, that's very specific, obviously, set a course as a credential, or for to become a concert pianist or something like that, or a doctor. And so there is this kind of bundle, even within the bundle, overall bundle, there's this bundle within the educational courses component of it, which is these are actually four, I would say, four quite different kinds of curricula.

• 38:24Ben Horowitz?

  Yeah.

• 38:24Marc Andreessen?

  And then that basically takes us to sort of the problem here. So one problem here is the sheepskin effect we already talked about, which is basically at least a very strong suggestion that at least for, at least for some degrees and some institutions, the education is not as important as people might think, or let's just say the market, the market of employers certainly doesn't, doesn't think it is, because you just look at the compensation data and it shows that. But then there's this other monster problem. And again, this problem has been discussed at length for decades, but it feels like it's also coming to a head here, getting much more politically potent, which is the student loan crisis, which is you just have a very large number of graduates of American colleges universities where they're carrying these large amounts of student debt. And in the really bad case, it's actually debt because of the high interest rates, it's actually debt that compounds and kind of grows indefinitely

• 39:09Marc Andreessen?

  over the, over the life of the students.

• 39:10Ben Horowitz?

  And you can't get rid of it with bankruptcy.

• 39:13Marc Andreessen?

  Well, so that right. Well, so this is very interesting. So, so, so on the one hand, there's been this big controversy. There's been a lot of heat around this question politically, which is for a long time, student loan debt, federal student loan debt specifically cannot be discharged through bankruptcy. And it's the one form of debt that can't. On the other hand, though, you now have direct bailouts. So in the last three years, right, the current, the current US administration has been doing a series of bailouts where they've been doing arbitrary top down erasure of the debt, which of course they call it, they call it forget, they use this very clever word forgiveness, which makes it sound wonderful. Of course, what it just means is it means other taxpayers, right? Other people are going to, are going to put, foot the bill for it. And that's always sensitive in the American system at least, because of course, the American polity is composed in part of people who went to college and in part who didn't. And so people who didn't go to college might not be so

• 39:57Marc Andreessen?

  keen about having their tax money getting used to forgive student debt for nonproductive degrees. And then, and then honestly, there's also moral hazard issue that comes up, which is among people who took on college debt, there's the people who paid it off versus the people who didn't. Yeah, the people who paid it off don't get forgiven. And so then there's a sorry, there's this thing, there's this weird incentives thing where it's like, well, okay, if this is the new way that it goes, then I'm a sucker if I pay off my own student loan debt because in the future, there'll be another bailout. Yeah. So anyway, so this has become like a pretty potent political issue. But I think underneath this is this question of like, okay, like, are all of these degrees and all of these institutions actually generating graduates who can actually command market wages that actually make this entire thing basically economically and politically viable proposition?

• 40:39Ben Horowitz?

  Yeah, but I think that's the exact, that's the question that.

• 40:45Ben Horowitz?

  Is the thing we should be debating because the the whole forgiveness thing is insane in the sense that you're not actually addressing the real issue. It's the ultimate bandaid. Yes, you're buying votes. Yes, you're giving some people relief. But the fundamental issue is it's now become clear that for a large swath of the population, college is not worth the money. You would not have a college student loan crisis if whatever you paid for college paid you back in the form of a job that was worth far more than the degree. But what's happened is for a huge percentage of the degrees, the degree is worth less

• 41:27Ben Horowitz?

  than than the job. So it's basically we as a society are running a scam and ripping off a huge percentage of our young people who are going to college with the clear expectation that they're going to get a higher quality job and being able to pay for college. But that's absolutely not the case. And that's the real issue. And if we don't address that, it doesn't you can forgive this batch, but what about the next batch and the next batch and the next batch and the next batch? It's still not worth the money. And I think that's the great thing that has to be reckoned with. And that's a big, big issue because tuition,

• 42:09Ben Horowitz?

  the quality degree has got to be pretty hard to pay back $300,000. That's a lot of money for even in the kind of in today's inflationary world to go make back up working for a living, which I think kind of gets into the student customer. Right? There's many customers which we'll get into, but like as a student, what do I want? Well, there are maybe 1% of the students want to become scholars. And then 99% of the student want jobs. And for that set, the value proposition is getting extremely shaky, I think, across

• 42:52Ben Horowitz?

  the university system, which is why we have the student loan crisis. And there's been an amazing inflation of tuition, which has grown at, I think, tuition rates have grown at two or three times the general inflation rate, which is insane in the face of technology that ought to be able to reduce the cost of education dramatically, as we've kind of talked about, like, it's all on the internet and it's all in ChatGPT. There is no knowledge that you can't just, like, get from your smartphone very cheaply and easily. And so, why am I paying $300,000? And it is for, like, the credential. But the credential itself,

• 43:35Ben Horowitz?

  depending what you get your degree in, may not be worth $300,000 at all. And it's clearly not worth $300,000 at all. And that's a big problem.

• 43:43Marc Andreessen?

  Then I add a couple of things to that. So one is this inflation thing, and maybe we could post a chart to go with this that shows this, but the cost of the degree rising faster than inflation is a continuing process.

• 43:53Ben Horowitz?

  Yeah.

• 43:54Marc Andreessen?

  And so, and compounding here really gets you, right? And so, if you compound forward, like, $300,000, $350,000 is like the cost of a four-year private college degree right now in the US. But if current trends continue, and there's no reason right now to expect that they won't, that's on its way to a million dollars.

• 44:10Ben Horowitz?

  Yeah.

• 44:11Marc Andreessen?

  Like, and relatively quickly because of the compounding.

• 44:14Ben Horowitz?

  Even if you work for us, that's hard to pay off.

• 44:16Marc Andreessen?

  Exactly, exactly. And so, like, there's a, is, right now, it's a one-way treadmill. And we'll talk, we'll talk later on at the end about the overall fiscal structure of these, of these places. But like, the, the, the financial structures of these places generally assume that this kind of sort of superinflation of, of cost is going to continue, and, and they're building cost structures that kind of assume that.

• 44:36Ben Horowitz?

  Yeah. And that's starting to show up, right? That's trying, starting to show up in the application rates of the kind of percentage of kids applying to school already, I think.

• 44:47Marc Andreessen?

  So then this also goes to this thing, and we've been, I've been guilty of this already. It's just so easy to do, which is it's so easy to talk about whether kids should go to college or not.

• 44:55Ben Horowitz?

  Yeah.

• 44:56Marc Andreessen?

  And then whether kids should get a degree or not. But of course, underneath both of those is like which college? And then which degree? Right? And if you dig into each of those, if you dig into which college, of course, there's a tiering in the college system where there's four, five, six different tiers of institutional quality and, you know, quality of the credential. And then corresponding income, kind of job offers coming out the other side. And then degrees, as I was, you know, kind of walking through, a computer science degree and an English degree. And like they just, the English degree may be as like spiritually valuable as the computer science degree, but it just doesn't carry the same economic kind of opportunity out the other side. And those are two very different financial propositions as a consequence.

• 45:33Ben Horowitz?

  Well, and they, and they cost the exact same amount. They, which is part of the weird thing. And it, and it also gets into, again, to the customer question. One of the very interesting things for me in being involved in universities, about that Columbia and UCLA, is that the way that the slots got allocated. So the demand for computer science degrees is extremely high compared to the demand for, you name it, anything that ends in studies degrees. But that's not how the resources at a university get allocated necessarily. They get allocated based on this, and it's sort of a function of the way they're run.

• 46:18Ben Horowitz?

  But there's the student demand thing, but, you know, a lot of it is fundraising. Can you get an alumni to give you like, grant you a professorship or whatever? And then can you politic your way into more resources within the university system? Which is at that level extremely political and who gets what? And so you end up with generally a shortage of engineering slots and a plethora of other slots. So now you want to go to Harvard, but you can't. Or you want to go to particularly like UC Berkeley or UCLA, the public schools. You want a computer science degree, you can't get into computer science, but you can get into Berkeley. But you got to pay the same amount. And this is where it gets really wacky.

• 47:04Marc Andreessen?

  Yeah, so I think there's, I think there's pressure building and we could, we could spend a lot longer on this topic, but I think there's pressure building to kind of disaggregate the question of college into like what tier of college. And then I think there's going to be growing pressure to disaggregate, okay, what exact kind of degree. And there's really, it's really a man, there's really a matrix, there's really a two dimensional matrix there. And the economics of, of both the student view on this, as well as the institutional view on this, actually vary a lot depending on where you land in that two dimensional matrix. And that's, and that's not, that's not generally how this stuff is discussed or analyzed.

• 47:33Ben Horowitz?

  It really gets to, you've got a huge bundle that you provide to a huge, very diverse, weird set of customers. Not, not diverse racially, but you have to satisfy students, donors, faculty, sports fans, everybody.

• 47:51Marc Andreessen?

  Right.

• 47:51Ben Horowitz?

  And so it's a, it's a pretty hard product to build.

• 47:54Marc Andreessen?

  Yeah. And then some state systems have started to carve back on some of the degree, they're starting to cancel some of the degree programs that they think don't pay off.

• 48:02Ben Horowitz?

  Yeah.

• 48:02Marc Andreessen?

  Economically. And that, that's been, in those states, I know that's been controversial because of course that's going to tend to hit humanities, liberal arts the hardest.

• 48:08Ben Horowitz?

  Yeah.

• 48:09Marc Andreessen?

  And then that becomes very controversial, which is are these institutions walking away from kind of their core education mission if they're only focused on the economics? And so I, I think there's a lot of potential future pressure here.

• 48:18Ben Horowitz?

  Yeah, that's kind of a little bit, what is the purpose of the university, right? So through the lens of the student, they really want a job. And if they're going to fork over that kind of money, they really need to get a job. Whereas like if the university was free, then it would be a different story. And then what is its function in society? And to build the right morals to well-rounded people, all these kinds of things come up. And there's been a lot of criticism of us in our world that we're not well-rounded enough and this kind of thing, right? Like that's been a, a pretty steady criticism from the press that if we had majored in humanities, then we would have designed social networks in particular to be better.

• 49:02Ben Horowitz?

  Not sure about that, but that's a criticism anyhow.

• 49:06Marc Andreessen?

  Yes, exactly. I will, I will not take the bait.

• 49:11Marc Andreessen?

  Okay, number three, number three, Research Bureau. So, and this is sort of the research, this is sort of the research that's done. I mean, again, here, there's a, there's sort of a tiering, or there's a set of different things, but this is the sort of university level of research that happens for sure in the hard sciences, but like physics and chemistry and math, and then also computer science, then also in the social sciences, and the social sciences, whether the physicists would agree with it or not, the social science scientists think, think that they're doing the same kind of research. And then even in the humanities, that same research approach, that same, the humanities professors, grad students write papers and, you know, publish in journals and get evaluated in a very similar way. So that same kind of, at least the workflow and form of the product is basically the same. This, this concept of the research university, like I said, is somewhat derived from the German model, but particularly the American research

• 49:56Marc Andreessen?

  university is heavily based on the thinking of a, of a guy named Vannevar Bush, who was famously FDR, he was actually a character in Oppenheimer, Matthew Modine, I think, played him. He was FDR's science advisor, and he was sort of the FDR's main guy at the level of the federal government overseeing the Manhattan Project and science policy in the US. And then he basically, he and his kind of colleagues basically designed the modern research university, as we understand it today, coming out in 1945, and created the sort of modern federal funding complex of things like the National Science Foundation, National Institute of Health, DARPA, and so forth for funding, funding research.

• 50:29Ben Horowitz?

  Yeah, and those, those are very important. We need to get into that because that, that's corrupted some things itself.

• 50:35Marc Andreessen?

  Exactly. So the, the sort of, the sort of way I think of looking at sort of how is this going? Because this is so central to the model, is right now globally, there are 3 million published academic papers a year.

• 50:49Ben Horowitz?

  How many are read?

• 50:51Marc Andreessen?

  This is the thing. So 3 million, specifically published in journals. Right? And so these aren't like PDFs on the internet. These are like published in journals. Right? So they go through an editorial process, a peer review process, like they go through that full process. American universities famously have this process for, for, for new professors, they call publisher parish. You start out as assistant professor, full professor tenure, and then at some point, maybe an endowed chair. And the way that you kind of climb the ladder as professor is through your research. And the way that you demonstrate your research is by publishing papers. And so if you talk, if you talk to professors, actually, they complain about this a lot, which is there's just a lot of pressure to publish papers. Whether there's anything actually meaningful in them or not is sort of, is sort of secondary. And again, this is their complaint. And then there's this question of like, okay, like, where are the results, right? Like, how do, how do we score?

• 51:33Marc Andreessen?

  This is like, if you, if you chart like the number of papers per year over the last 50 years, it's one of these lines that's like straight up to the right. Are the results up into the right? And there have been lots of studies over the years. Robert Gordon is an American economist, the famous, he wrote this big book about this that basically says that the, the actual amount of scientific progress coming out of that, if you try to measure that, is basically like flat and maybe down. And so it seems like there's some divergence that's, that's taking place there. There's a couple of ways to think about that. One is there's what's called the replication crisis. And this kicked off in, I think, 2005, when a Stanford professor named John Ioannidis wrote a now famous paper with the title, "Half of All Published Research Results Are Wrong," where he did a statistical analysis and basically, basically asserted that claim.

• 52:17Marc Andreessen?

  There have now been extensive replication studies in many fields. And it varies by field, but somewhere between like a third to, on, on the low end, like, you know, a quarter to a third, and on the high end, like up to two thirds or three quarters of all published research doesn't replicate. Uh, which is to say, if you run the same experiment again, you don't get, uh, you don't, you don't, you don't validate the results. And so there, there seems to be like an actual quality control issue, which we could talk about. Then there's the impact question, Ben, that you brought up, which is, how often are these papers cited? And then you can do citation counts, and it turns out most, most papers are never cited. And then you can also do readership counts, like library lookups, journal lookups. And it turns out that like, it's like, I don't know, half the papers are never even read. And then you've got this additional problem, and this is where things get controversial.

• 53:00Marc Andreessen?

  But look, you, you have, you have, you have a lot of published journal articles these days that are, for example, in this category, they call autoethnography, which is basically people talking about their own opinions on things and sort of observing themselves as like subjects. And this is a lot of the research that happens in the sort of humanities and liberal arts these days. And those papers, you could have an opinion of them, which is just like, wow, this just seems like naval, sort of naval, naval gazing, not that there's nothing really, just, it's like, I have an opinion, you have an opinion, let's, let's both write our opinions, right? And publish them and call them papers. But This also, the reason I bring this up is not just to pick on them, it also just turns out they have like, basically, they generally have zero future citations. And so, they're not cited by anybody else, they're not, they're not, there may be something brilliant in them, but they're not leading anything.

• 53:42Ben Horowitz?

  Right, right. They're adding to the knowledge of the world, right?

• 53:45Marc Andreessen?

  If, right, if they were being read and cited, that would be a good sign, but they're not, in a lot of cases, being read and cited. You and I both know people who have come out of the university system who would express this quite strongly, which is like, it does appear that there is some sort of crisis going on, which is, basically, there's something broken in the research engine, not in the process, but in the outcome. And, and in particular, the replication crisis at the heart of it, like, if the science doesn't replicate, it's not science, like, it's not real, like, something, you know, something else happened along the way, and then that opens the door to like, well, was this, you know, there, look, there have been cases of overt fraud, there have been, you know, criminal cases that have flowed from this, where it turned out that people were deliberately lying. In a lot of cases, it appears they're not lying, maybe they just like, don't realize that they're publishing fluke results.

• 54:27Marc Andreessen?

  Anyway, like, I'll just say this, there is a long, there's been a 20, coming up in 20 years now, of debate in the scientific community as to what's going on here. And so, yeah, let's pause on this topic, because it's so central to the mission of the modern university.

• 54:41Ben Horowitz?

  On the negative side, the other problem is that government funding turns out to be highly corrupting, because what happens is, the way the funding works is, there's a panel of government bureaucrats that takes proposals for research and then approves them. And like, as venture capitalists, that's not going to lead to anything good, because they're basically only funding ideas that they understand, which are very, very incremental, shallow, uninteresting things to research, as opposed to real breakthroughs. And I'm, I know this very well, because I'm on the board of PISI, which is Sean Parker's Cancer Institute, and we've adopted the model of the Howard Hughes Medical Institute, which

• 55:25Ben Horowitz?

  also funds research, and we pick researchers. So, you know, it's like picking an entrepreneur, pick the smartest researcher, and let them do their, and fund them to do their work, as opposed to, because science is not... I'm gonna do this and I do this. It's I'm gonna go explore this problem and I may discover something. And that's how everything's been discovered. You never kind of do what you set out to do. And so the whole government funding process is incredibly corrupting and bad and massive and drives so much of the research that's done in universities because it's a gigantic, it's like a gusher of cash. So it cannot be resisted, but it's it's set up in a very horrible way. So that's that's a problem.

• 56:07Ben Horowitz?

  I will say like we, I mean, we should state that we have funded many things that have emerged from universities, including we've funded a company doing CRISPR from the kind of inventor of CRISPR. We funded Databricks out of Berkeley, which was research done on computer science and scalable systems in their basis in their amp lab. We discovered funded any scale, which is out of the basis lab. We funded Martine out of the Stanford out of Nick McKeown's lab. And so like, obviously, our money is where our mouth is. And there's some very good things coming out of universities still, like really important breakthrough research technologies, things that save lives. So it's not a zero. I just want to like, make sure that we're clear on that.

• 56:52Ben Horowitz?

  I think that it's massively inefficient. A lot of the research is completely useless. A lot of the fields that are being researched are completely useless. But I do think on this one, there are so many genius scientists in universities that we we have to be kind of careful to, you know, you know, as a society, ship the money to funding the the people who really need the whose research we really need and away from this just wasteland of ridiculousness.

• 57:24Marc Andreessen?

  Good. Okay, let's put a tie that off for the moment. And then let's go to number four. So number four, policy think tank. So this is a very interesting thing that happened. This started about 100 years ago.

• 57:33Ben Horowitz?

  So Woodrow Wilson idea, right?

• 57:35Marc Andreessen?

  Yeah, it's a Wilson era thing. Almost 100, almost exactly 100 years ago is when this started. And in particular, there's there's a book called Public Opinion written by a guy named Walter Lippman that sort of defined this at the time, what I'm about to describe. And so it just introduced a topic by saying the following, which is today, it's just like totally normal to like, read in the newspaper that like, there's some social issue of poverty or something, something, health or something. Right? And then they will quote in the newspaper, experts in that field. And those experts by definition are.

• 58:05Marc Andreessen?

  Well, they're university professors, right? They're like, by default, those are always university professors. And, and so the professors are kind of the oracle of wisdom in that, in that, in that area. And then the, the media, so basically the media picks up the expertise from the expert professors out of the universities. And then the politicians basically receive that through the media. And then, and then, and then the media and then the politicians, basically that's the content for the proposals that the politicians take forward. Like, that's where the, that's where the proposals come from. And then when you're trying to pass the law, you're like, well, this is based on research. Like, this isn't just like my opinion. This is based on like research that took place in the whatever political such and such and such health policy department at Harvard or whatever it is, right? And so it's, it's, it's validated. Now, if you go back historically, like prior to about 1920, this was not how things worked.

• 58:50Marc Andreessen?

  Like in like 1850, if somebody's trying to pass a law or something, they're not quoting a professor, like if you quote a professor, it'd be like quoting a, like it would have been very incongruous, like kind of thing, just not something people would have done. It's crazy. Yeah, like random, yeah, some, like some random person, right? But basically, so what Walter Lippmann did in his book is he basically, the, the claim at the time basically was, and I think, look, I think this made some sense, at least at the time, was basically in the old world, like system, societies were simpler and everything was smaller, countries were smaller, pre, earlier, you didn't have modern technology. Governments were smaller, yeah. Governments were smaller and you didn't have all these systems. You didn't have like, you didn't have modern, you didn't have fully modern developed economies. You didn't have like healthcare systems, you didn't have educations, you didn't have all these systems that got built.

• 59:35Marc Andreessen?

  These systems kind of got built between like 1880 to 1920, in a lot of cases, you didn't have everything, mass media and mass manufacturing and all these big systems. And so basically what he, what he said was like, look, like the modern policy issues are, are now more complicated than normal people can understand. And so there's just no normal person, and particularly there's no normal voter in their day to day life who's going to be able to have like a coherent opinion on like healthcare policy. And so he's like, basically, we need essentially a priestly class of secular experts who actually have full-time skills, knowledge, bandwidth to be able to do all the work to understand these issues and then make the recommendations to the politicians. And then the politicians, basically their job is to sell that to the public. And he said, basically, that will be a superior method of governance than, than letting actually voters decide anything.

• 1:00:17Marc Andreessen?

  You could make a steel man argument to say that that worked really well at that time, because if you had like super smart people in the these various positions, then maybe it's better. Well, so there's an interesting question, right? There's a lot of dispute over even what happened in the 80s.

• 1:00:32Ben Horowitz?

  That idea was immediately followed by the Great Depression. I'll just point out.

• 1:00:36Marc Andreessen?

  The Great Depression, exactly. World War II, right? So, yeah, exactly. Right? And so there's like a historical debate about whether that worked then. But then there's a pressing debate as to whether that's working today. And I would just say that like, there's just a very obvious kind of flaw in that logic today, which is it's it's an empirical observation that the faculty at American universities is now radically polarized on in one political direction, radically. And we could also post a graph on this, maybe, which is the numbers are like really radical. There's there's fields in which it's like 30 to one liberals to conservatives, or 50 to one, or 100 to one, right? And so basically, it's just got empirically in the data, the idea of having conservative faculty to these places is basically is basically no longer, no longer the case. They can't get hired, they can't get promoted, they can't get tenure. And so increasingly, the

• 1:01:21Marc Andreessen?

  policy recommendations coming out of the policy think tank components, these universities are very sharply partisan and extreme. And, and look, if you're on that side, you're obviously in favor of that. But it's just, it's hard to believe that that that therefore the universities will continue to be accepted by the political process writ large as the as the advisors in the way that they have in the past.

• 1:01:41Ben Horowitz?

  Yeah, no, and I, and also, well, this kind of brings up like, interestingly, I hate to get into today's politics, but the Roland Fryer case, right, where here we have probably one of the most important issues of, you know, our generation, which is this whole question of police brutality, and how does race play into that and so forth. And literally, one professor in the country did definitive research, and not just a professor, but, you know, I think one that most people in the field require regard as a true genius of the of the field. And I've had an exceptionally hard worker who ran a great lab and all that kind of thing.

• 1:02:22Marc Andreessen?

  And, and also happened to be black.

• 1:02:25Ben Horowitz?

  And, and was black, so kind of credible on, on that front. And he, he, he came to some very interesting definitive conclusions, or like conclusions that that I think were important because.

• 1:02:41Ben Horowitz?

  You know, they got to like, what is the root cause? Right? Like, what is the root cause of the problem? And he got basically steamrolled by the politics at Harvard. And, and, and, and by the way, then what happened subsequently is his recommendation or his kind of ideas were not taken by society. What was taken were people who were kind of, who did far worse or no research. And, but were experts. And kind of the result was the defund the police movement and the subsequent like radical increase in murders of black people over the last two years, which is probably the, the greatest domestic tragedy that we've had. And, and that's what the system put out.

• 1:03:26Ben Horowitz?

  So I think to your point, the truth can't come out. Or like, the truth is somewhat illegal in the current university policy system, depending on what it is. And not, not all truths are legal, but some truths are way illegal. And the consequences are dire. And like, it's something that I, is, is very personal to me. But I think this, this just happens to be one of the more visible kind of times the system failed. But I'm quite sure it fails in, in, in other cases that are just as important.

• 1:03:57Marc Andreessen?

  Yeah. And I'll talk about this at the end, but if you look at the, if you look at trust ratings, trust, Gallup does trust survey of, of American voting population view of universities. And the, the numbers are, I'll talk about this, yeah, the numbers are in collapse. But in particular, the numbers are in collapse among people on the right. And yeah, if you're like on the left, you're like, okay, that's fine. It doesn't matter. But, but it turns out people on the right also vote. They're also a big part of the tax base. And if the system loses credibility among half the population, half the voter base, it's hard to see how there will be continued political support for the level of funding that, that currently exists.

• 1:04:30Ben Horowitz?

  Yeah, yeah, yeah, no, I think. Yep. So definitely a big problem, but I would just say again, like, there's obviously great research going on in universities and so, which is a huge asset to the country and ought to inform, the great research ought to inform policy. And so we do have to be careful with the baby in the bathwater on this one because there's not really another set of, or there's not another set of institutions that does this kind of work.

• 1:05:02Marc Andreessen?

  So then I'm going to bundle the next two together. So moral instruction, and then I'm just going to go straight to social reformer. So I'd say moral instruction is, like I said, there's this historical role that a lot of universities, a lot of American universities started actually as religious kind of moral institutions. They're not formally religious institutions today, but they maintain sort of a moral instruction role. And then there, what I call the social reformer, and social reformer is sort of the implementation of the moral instruction. So they take a step back past simply having an opinion about the order of society. They're actually taking actions to try to change the ordering of society. And in particular, this, of course, the hot topic here is DEI. And of course, DEI is a very hot political topic right now for two reasons. One is the massive controversy over the Supreme Court case on admissions and the

• 1:05:43Marc Andreessen?

  use of diversity or adversity kind of scores, the DEI programs generally, legal challenges on those. And there's going to be more cases like that coming up. And then the other is this current kind of crisis, obviously, about kind of the more recent events. But I am going to, Ben knows far more about this stuff than I do. So Ben, why don't we, yeah, let's talk about what you think is most important here.

• 1:06:00Ben Horowitz?

  Well, so just kind of starting with morality. One thing about humans is morality is complicated, very complicated, and it's complicated at different scales of society it changes and these kinds of things. And so I think Lindy's strong moral values are actually like fairly important, which is why the Bible gets a lot of criticism, like these days mainly for things that...

• 1:06:28Ben Horowitz?

  They said in those days, particularly about like various topics that we've changed our minds on since. But like in totality for something that's that old and it's the same for the Quran. Like it did get a lot right and that stood the test of thousands of years. And so now we're kind of inventing morality as we go. And I would just say what happens when it becomes a moral issue is you can't debate it. Right. Like this was a problem with the Bible too, right? Like you can't debate what's in the Bible. It's what God said, like, what are you talking about? Like, shut the F up. And I think that these new moral issues are also hard to debate for many reasons. And on DEI, let me just kind of talk through where that gets problematic.

• 1:07:12Ben Horowitz?

  So it's very hard for people to question any of the DEI orthodoxy. Because you get not of being an apostate or blasphemous, but of being racist or sexist. And that's probably in modern society, I'd say worse than being an apostate or blasphemous. And so people don't really think about how the systems around that work. And just to give you an example, so you kind of have to think about DEI. Like if you're an employer and you're trying to hire the best, most talented workforce possible.

• 1:07:52Ben Horowitz?

  What are your assumptions about your DEI program that you go into with? And this is something is that's I've studied extremely hard in my life, in my career. And what we implemented at the firm, nothing on this kind of thing is anywhere near perfect. But look, we're the most like fact, most diverse venture capital firm in the world. Like, and we know this from Maxine Waters, who requested all the diversity numbers. And you basically played that back to us. And we're a large scale, 550 people. So it's diverse. We do not have a head of DEI and so forth. And it's because we start from a different assumption than these DI programs start from.

• 1:08:36Ben Horowitz?

  And ironically, the assumption that we start from is the non-racist, non-sexist assumption, which is, we believe the talent is out there. And if you believe the talent is, there is talent in the world that is in kind of different categories, then the approach you take to the system is basically threefold. One is, you have to have the right criteria for the various jobs, which means that not, we're not, I think Kara Swisher had this thing, the meatocracy. Well, like you and I don't hire ourselves for every job because, one, like, we're not that great at networking. And like, we have a firm that, like, its whole business is networking, and we hire

• 1:09:21Ben Horowitz?

  people for that. And that's a very different criteria than like, something that we would just like replicate ourselves on. Secondly, from a recruiting standpoint, you need to go far and wide and find the best talent. Like, if you look in the exact same place, if you hire everybody, you're going to get the same kind of people. So you have to kind of expand the scope of like, where are you going to go find the talent? And then the third thing that you have to do is you have to create a work environment where, and this is where the universities go horribly wrong. That's great for people to work who are from different backgrounds. Like, that's kind of how you would design the system. And that's sort of how we've designed our system.

• 1:10:03Ben Horowitz?

  And when we think about the diversity in Andreessen Horowitz, we never think of it in terms of, oh, this person is as good as the white man who would do the job, right? We think of, there's no white man that could do that job, like, that could have built a cultural leadership fund. Like, that's not even possible. And so that's, it's a very different lens. But it starts from a belief that talent that I need is out there and in like, different populations. If you, on the other hand, took the assumption that the talent is not there, you'd do exactly what the universities do. And I know this from their, the way they hire their faculty is, what would you do? You'd make race and gender explicit criteria.

• 1:10:47Ben Horowitz?

  So two things that objectively have nothing to do with the actual job that you're hiring for, but are substitutes for the fact that you don't believe the talent is there. And that's what they do. And then, and then what is the side effect of that? And the side effect of that, and this is what's happened in all the universities, is if I am the, whatever diverse candidate I am, the woman professor, the black professor, Hispanic professor, as soon as I get there, everybody knows what our process was, what our hiring criteria was, and I'm a second-class citizen. And that's the worst fucking shit. And so then, the retention is bad. And like, I saw this at Columbia, like, the retention is terrible for all your diverse hires.

• 1:11:30Ben Horowitz?

  It's way worse than your retention for your regular hires. And then, how do you fix that? More racism. So then, you go, well, like, we need to make it, we need to start not bringing in anybody who's not of this criteria, and that kind of thing. And then, you're, you're just in this weird degenerate state based on a morality that you weren't allowed to discuss. And so, because, like, luckily, because I run the firm, I discuss it with you, we can get around that, and we can do things. But, like, they're all starting from, like, a racist sexist set of assumptions that, like, the only way to bring in diverse people is to make race and gender a criteria, which,

• 1:12:14Ben Horowitz?

  by the way, isn't true. And it's objectively not true, because, like, I mean, we're 550 people, more than half are women. You and I are the founders. We're like, white men. Jewish does not count as not white. But, like, we just had the right criteria. We were very, very careful in our criteria for the job. We had many things in the criteria that we don't have. We have a whole process for generating criteria that basically aims to make sure that we can find the best talent wherever it is. And then, we go get that talent, and then, because everybody in the firm is hired in any given position on the exact same criteria, we have no retention problems among, like, any of our kind of various people we have here.

• 1:12:59Ben Horowitz?

  And, like, we're just all A16 zers. We're not, like, the, we don't have ERG groups who don't need any of that. Like, that's not a thing. And so, and a long, long way of saying...

• 1:13:11Ben Horowitz?

  If you can't discuss it, you can't design the right program. And that this is the whole problem with morality, right? Like if morality becomes religion, you just have to have faith in the doctrine. But this doctrine was invented by like a bunch of people who just made the shit up like two weeks ago, not people from 2,000 years ago who have stood the test of time. Right. And like that, that whole doctrine in the Bible lasted many years before they ever read it down. And so it had kind of, they only wrote down what they could remember that worked. And so like, that's why it works and like, we don't have that process now. And it's a huge, I think it's a huge problem. And, and I think that has to do with like every moral position in the university, which is,

• 1:13:56Ben Horowitz?

  and, and it becomes very quickly indefensible, which is what's happening right now.

• 1:14:00Marc Andreessen?

  Yeah. So as, as everybody knows, so this is now a hot, the, the, the sort of set of trends that you're discussing have been building, growing for a long time. Like some of these programs were created as far back as the 1960s and they've been kind of escalating and evolving over the course of even, even longer than actually you and I have been alive in some cases. And then the last 10 years, they intensified tremendously. And then in just in the last like three months, all of a sudden there's this kind of moment where at least some people are kind of throwing up a flag and saying, okay, it's time to like rethink this. Yeah. What's your, do you, especially based on your experience, kind of being inside the tent at one of these places in the past, like what, do you have like a prognosis of the next couple of years of like, you know, lip service and then more of the same? Or like, is this the opportunity for rethinking?

• 1:14:42Ben Horowitz?

  So to rethink it requires real leadership, even in our firm, like it's important. Like I always keep explaining it because it's so important and it's so different. And, and look, we own the firm, like nobody can fire me, nobody can fire you. It's much harder, you come in as a. President of a university, first of all, you can get a vote of no confidence from the faculty. You can get fired by the trustees. So there's a lot of ways you can lose your job. They're very fucking prestigious cushy jobs. Nobody wants to lose them. And so the level of leadership and risk that you'd have to take to overturn essentially

• 1:15:25Ben Horowitz?

  the current university religion, I think, is pretty risky. And like, and people have seen people like Larry Summers famously got fired from Harvard for questioning the religion. In like, not even questioning the religion, right? He just made a statement that said, "Well, like, if you look at the data, this is what it says." So that could be a possible explanation. I think it was something along those lines. But he got fired. And so I think it's pretty hard to change unless public sentiment really, really swings on it. I don't know. Like, I think it'd be very hard for Columbia to change on that front. It's

• 1:16:04Ben Horowitz?

  a great university, but I, like, when I was there, I brought it up. I was like, "Look, can we start with..." Like, I remember the conversation at the Board of Trustees. I was like, "Can we start with the fact that we have a bad attrition problem among our black faculty that we hire? Like, don't we think that's a problem? Like, before we figure out how to recruit the next one? Should this be a good place to work for the fucking last one? Like, why don't we start there? And how do we get to that?" And it was, they shut me down, like, and I shouldn't say they, it's 24 people and so forth, but the leadership was like, "Shut the fuck up." Like, "You're going, you're so far outside the religion

• 1:16:48Ben Horowitz?

  that, like, we can't even hear a word you're saying." And that was one of my kind of points of high frustration there. But like, it's really hard. It's a big system, and everybody believes one thing. And it's been drilled into them. And there's a lot of literature on it and there's, and so forth. It's hard to be a systems thinker if you haven't designed large systems, if you haven't run large systems, and you haven't dealt with the consequences of them being wrong. And I think that that's one of my biggest lessons in life, is that if you're not a practitioner in that, and not just designing and running a system, but dealing with the consequence of it then.

• 1:17:29Ben Horowitz?

  You're never going to face that fucking reality.

• 1:17:31Marc Andreessen?

  Yeah, yeah, that makes sense. And then there's going to be just one final note would be this is let me look Harvard Harvard ruled. Harvard ruled against the use of racing admissions, but they did open the door to the use of so-called adversity. So the diversity programs are in some cases illegal now. The adversity programs are being created to replace them.

• 1:17:48Ben Horowitz?

  Yes, the the admission thing is a whole right another world than the kind of hiring one. And one that I have to say I'm not as familiar with, but other than reading the Supreme Court court cases and so forth. Because the trustees weren't really involved in admissions. So I would just say university admissions are pretty weird.

• 1:18:11Ben Horowitz?

  You know, from my reading in it like that's one of the things I mean, the other one that's really interesting is, which I think is misconstrued or misunderstood is this legacy thing. Because people think, well, if you're a legacy, you get it. It's not being a legacy. It's being a giant donor. And you're really a giant donor if you're those tend to be legacies. But that's really what it is. They kind of obfuscate it. Then the universities do this by calling it like, oh, we have this many legacy. They're not legacies. They're like people who gave them 10 million. And that's, I think that's the price $10 million to get your kid into Harvard. Or maybe it's 20 million now it's inflation.

• 1:18:52Ben Horowitz?

  And it's a pretty big percentage of the students because it's not that big a class, right? A thousand students and who are your giant donors? All of 100% of the giant donors get their kids in. And so that's a real knock on the meritocracy itself. And then if you then add in the adversity program and so forth, like eventually the people who objectively would qualify in.

• 1:19:22Ben Horowitz?

  There's not many. There's slots for them and everything else is like some kind of like weird thing. And that back to your original point or the original discussion is like, well, what does that do to the credential? Like the the original Harvard students made a lot of money. And so you have this huge donor base. But then does that corrupt the ability for the next set to make money by destroying the credential?

• 1:19:46Marc Andreessen?

  Yeah. Yeah. And then, by the way, are you selling a bill? Are you effectively? Have you ended up as a position where you're selling a bill of goods to the new students, promising them that they're going to be valued that way? And then it turns out employers are going to figure this out or figuring out in real time, right? And then

• 1:19:59Ben Horowitz?

  And you already have that problem in many schools, right? Where the degree is not worth the money. We have a student loan crisis and all this thing. And then you're going to really exacerbate it.

• 1:20:09Marc Andreessen?

  Okay, good. I'm going to skip. I was trying to pick up the pace here a little bit to close it out. I'm going to skip immigration agency because we talked about that. Sports league, let's spend a moment on that because that's a there was a sports has become such an integral part of how a lot of these places operate and part of the financial structure. And then I'm not a sports guy, but I've been following there's sort of it seems to be recurring. I don't know. I'd say both tension and scandals around compensation for student athletes and in the recruiting process.

• 1:20:33Ben Horowitz?

  Yeah, well, it's changed too recently. So like historically, so it started out very innocently. Your university, you have sports athletics, I think, is a kind of great part of the well rounded education. It's kind of goes back traditionally all the way to the Greeks, I imagine. And and then it's a great experience to play college. Everybody. And it's amazing. Like if you look at the donors, by the way, this is another thing I know from being a trustee. A crazy percentage of the donors are people who played college athletics at the school. So it's like really the people who have the most school spirit are the athletes by far, like not even close.

• 1:21:14Ben Horowitz?

  And so it's like a really kind of important component of the university historically. But what happened is professional sports then emerged kind of after college sports. And then college sports became feeders to the professional sports. And then college sports basically became professional sports themselves. So college football television ratings are much higher than NBA ratings for any given game. So it's that big. And then the coaches, right? It's not like, and they call it amateur athletics, whatever. But the coaches, like Jim Harbaugh, who just won the whatever national, he makes like $10 million a year. So like, that's not a university salary.

• 1:21:59Ben Horowitz?

  That's like a professional football salary. That's as much as any professional coach makes. So then the athletes get paid nothing. Okay, but they're students, right? Well, they're not students because to play at Michigan or Alabama or any of these schools, practice is 40 hours a week. So when the hell are you studying? That's a great question. And you're practicing games and travel and the whole thing. And so you've got this, obviously you're running out of the back door. And out of the backyard, you've got a professional, like a major professional sports league, where you're using essentially slave labor. Like you're giving them free tuition, some of them.

• 1:22:44Ben Horowitz?

  But like, and they're taking great like health risk and so forth. So like that, that just became a whole issue. And then in California, they, so a couple of things happened. They kind of made legal, I think first in California and now nationally, this name and likeness thing. So it used to be the colleges won't let you sell. Your name and likeness, like they could sell it, they could sell your, you can sell your jersey. And so that changed. So some of the very, very top guys, the most famous college athletes, which is a tiny handful of the whole population, make a lot of money now, or like, like real money, like good compensation. And then in college football, they have this thing called the portal, which you can sign

• 1:23:27Ben Horowitz?

  up for and you could just transfer schools, like trade yourself to another team. Like whenever you want, or once a year, whatever. And so it's fully professional sports. Like there's no hiding it. You've got some guys getting paid, you've got transfer portal and so forth, but not everybody gets paid. A lot of them don't get paid. And it seems really unfair, right? Like there are labor laws in the United States of America. And then there's also, you ought to be able to bid for salaries on athletes because anything else is pretty un-American, right? Like you can't restrict somebody from getting a job. It's clearly a job. It's not an education. And there's little schools. I mean, Columbia football is not like that. It's, it's more like high school football.

• 1:24:09Ben Horowitz?

  But, you know, for sure, University of Michigan, Alabama, Georgia, like these are professional programs. And so what do you do about that? Do you actually share the money with the student athletes who are your employees? Or do you continue to run this, essentially a scam and have them play great injury risk, put in a huge amount of time, make you a ton of money and keep going? So it's a, it's certainly coming to a head now.

• 1:24:37Marc Andreessen?

  And it's fair to say that the revenue from these programs is substantial as a percentage of the operating budget?

• 1:24:42Ben Horowitz?

  Oh, yeah, yeah, yeah. Like, like it pays, football, football, basically, I think the economics of football pays for every other sport and Mensa.

• 1:24:50Marc Andreessen?

  Yeah.

• 1:24:51Ben Horowitz?

  The big schools, so.

• 1:24:52Marc Andreessen?

  And so if, if like, for example, if, if, not that this would happen per se, but just to illustrate it, if a law were passed that universities didn't have sports programs anymore, they would lose some significant percentage of their budget?

• 1:25:04Ben Horowitz?

  Yeah, yeah, yeah, yeah. Particularly at the big schools and alumni donations. Like, so a big part of alumni donations is for sports, as you know. Your father-in-law was a huge booster supporter of Stanford and the sports programs there, right? Like, and sports, he's very attached to it. And by the way, really great example, he was a great college athlete at Stanford. Stanford gave him that scholarship. He always felt tremendous loyalty to the school. There's very people who aren't athletes that feel that loyalty. So it's a tricky problem because it's not just the economics from the football revenue. It's the economics from the donations that the football generates,

• 1:25:47Ben Horowitz?

  both from alumni who want that program to be good because they went there and they played for that team.

• 1:25:55Marc Andreessen?

  I'm going to skip the, just a couple more left, I'm going to skip the hedge fund. Spend a moment on adult daycare. So I just highlight a couple of things on the adult daycare theme. So just, maybe everybody knows this, but I just, from where I grew up, it's just kind of very clear. There's two very different younger adult experiences for people in the US. There's the go to college and be in a college campus environment between the ages of like 18 to 22, or even 18 to 24, and kind of be in this kind of not quite adult. It's like a supervised environment. There's a lot of things taken care of for you. So there's, there's the sort of, it's not the real world. And then there's just this totally different experience that people in middle, lower middle class or lower class have, that they just don't do that. And so you're 18 and you get a job and like you get an apartment and like you're in like real life. And so there's this big discrepancy.

• 1:26:40Marc Andreessen?

  And of course, the lucky kids are the fortunate ones are the ones who are going through the college part. They just have a completely different and I would tell you much more pleasurable experience for the course of that than just going to work, right? In part because of the jobs that you get, like if it goes because of the credential, if you don't go to college, the job isn't even as good. And so you have to start working sooner and the job isn't as good, right?

• 1:26:57Ben Horowitz?

  Yeah, you're doing something hard.

• 1:26:59Marc Andreessen?

  Yeah, you're out in the heat. It's like, you know, it's real, your real life. And then like a lot of people have observed, and we hear this, you mentioned, we hear this from employers, but like a lot of people have observed that like there is something happening. There's an entitlement indulgence culture that has gotten very intense that a lot of people are experiencing from graduates. And that's probably been the case for a long time. And we're probably, you and I are probably examples of it at one point in our lives. But like, it seems like it's gotten much worse in the last decade. Jonathan Haidt has written about this at length. He's a professor, I think, at NYU, studies this issue. And he's a psychologist. And he, the way he describes it is, he says, basically, the way that these environments are run now, he refers to it as reverse CBT, which is sort of reverse cognitive behavioral therapy. And so what he says, I'll spend a moment on that. So what he says is cognitive,

• 1:27:44Marc Andreessen?

  so cognitive behavioral therapy, CBT, is the one form of therapy that clinically replicates. So it's the one form of therapy that will reliably make people feel like basically function better psychologically. And it basically, it's essentially applied stoicism. It's basically taking responsibility for your own life. And so it's basically getting you out of the mindset of blaming other people for your problems, and more into the mindset of taking charge of your own life and figuring out how to process through your issues and focus on outcomes. And so he says, the culture at universities now, in a lot of cases, for especially for undergrads, is what he calls reverse CBT, which is teaching you that basically you're a victim, and you're oppressed. And if anything bad happens to you, it's because it's somebody else's fault, right? It's systemic oppression, right? Or it's bias, it's this or that, or it's you're in the wrong group. Microaggression.

• 1:28:28Marc Andreessen?

  Microaggressions, or whatever. It's this entire cluster of basically things that have people basically convinced that they basically don't have control, right? That basically life is out of their control. And then he points to this like rapid escalation in reported rates of like reported mental illness and reported basically like need for therapy, mental illness, mental health services. And so he basically says something is going very wrong. And then you also have these recurring scandals happening on campus with what you might call the do it yourself on campus justice system, right? Which is, if you don't go to college, and you're 19, and you get accused of sexual assault, like you're dealing with the police. If you're 19 on campus, and you get accused of sexual assault, you're dealing with basically campus HR.

• 1:29:08Ben Horowitz?

  Yeah, yeah, and the university is actually required to adjudicate rape.

• 1:29:13Marc Andreessen?

  Yes, correct. So, yeah, so basically Title IX, Department of Education requires universities to adjudicate rape cases on campus and other, other forms of, of potential alleged offenses like that. But no university has its own court system.

• 1:29:25Ben Horowitz?

  Yeah, we like fucking try and make it up as we go. Yeah, it's, it's, it's not good.

• 1:29:30Marc Andreessen?

  So there's, there's no, there's no, there's not even a formal, so therefore there's no guaranteed due process, there's no objective standard of evidence, there's no lawyers, there's no defense, you don't have a, you don't have a right to an attorney. And so there, there have been a kind of recurring scandals in, in lots of different directions on this. And so, so there's this hot house kind of psychological legal HR environment that's been created that, again, just according to objective metrics of things like reports of, of mental distress, seems like it's going very badly sideways. Yes, let me, let me pause there and see what you think.

• 1:29:59Ben Horowitz?

  I definitely agree with that. I mean, I think that, and look, the other thing that

• 1:30:04Ben Horowitz?

  you have to throw in there is like, you've got students, no parents, and a lot of alcohol and drugs in college. I mean, and so that, look, I mean, we know from the work environment, like that the, if you want sexual harassment, like serve a lot of alcohol at company events, right? Like, that's the way you get it. And so it's that you just, you, you create an environment with like drinking and drugs, where you actually do have, like, no matter how, whatever good the kids are, you just end up with incidents. And then those incidents are adjudicated in some kind of weird kangaroo court. And then, and all that implies, and

• 1:30:47Ben Horowitz?

  then the savvy students can obviously manipulate that system if they wanted to. And, and, and, and, so, yeah, like, that, that part, although, again, like, it's really tricky because this is, in any, I think, college, it's a tiny, like, percentage of the population that gets involved in that. But...

• 1:31:12Ben Horowitz?

  Everybody knows about it, so it has an effect.

• 1:31:17Marc Andreessen?

  Yeah, well, again, just a reason, remember, you know, it just goes back to the again, once again, it goes back to the credentialing, right, which is just like, what are you getting? What kind of person, what kind of human being are you getting on the other side of this? Who's been through a system that sort of culprits a set of values that result in very high levels of emotional distress, like, what does that mean for employment, workplace culture, you know, what like, are employers going to have to like, screen more aggressively for behavioral characteristics if more and more of the of the graduating students have like, experienced very high levels of emotional distress, kind of going through this process?

• 1:31:46Ben Horowitz?

  Yeah, I have heard about that more recently in hiring college grads. I have to say that the college graduates we've hired at the firm, I haven't seen that at all. I mean, like, they're like, the young people we have, I think, like, wow, I'd never get a job here. These, these kids are so good. So in terms of direct experience, I don't see it yet, but I'm sure it's out there. Or it seems like it's likely.

• 1:32:11Marc Andreessen?

  Yeah. Okay. And then I'm gonna skip dating site, which is one of my favorite topics, but we will tackle that at another time. And we go to the final one, which is lobbying a firm. So let me, let me outline a bunch of thoughts here, and then, and then Ben will get your take. So, so most importantly, like, look, everything we've described, the entire bundle runs on taxpayer money. So, and basically, there's, there's, and there's multiple streams of taxpayer money, but there's four big ones that I always focus on. So one is federal student loan funding, which is now in the trillions of dollars of subsidies for federal student loans. So in other words, like, students would not be able to afford anywhere near the level of attendance rates that they have without, without that program, which is hugely expensive to the taxpayer, and which now has direct bailouts attached. And so that's a very expensive taxpayer program. Federal research funding, which is very large, and by the way, very significantly, federal research funding isn't just funding for research.

• 1:32:56Marc Andreessen?

  The administration takes a rake of, at these institutions of, of the research funding that's actually quite large. And so the, they, they get a big, a big percentage of it. And so that goes to pay for a lot of, a lot of administrative expenses and administrator salaries. And then there are two key tax exemptions. There's a tax exemption at the operating level, which is, these are, these institutions are nonprofits. And then there's a tax exemption at the endowment level, where, which is their, their endowment compound on a, on a tax-free basis, like a foundation. And then there's a really critical kind of detail to kind of who gets access to all this, like which institutions get access to all this federal support and all this money. And that's the technical term is accreditation. These are the institutions that have access to everything I just described are all accredited institutions. If you dig

• 1:33:40Marc Andreessen?

  into the detail of that, there's a very interesting little quirk to it, which is these are institutions accredited by the Department of Education, but the Department of Education, Federal Department of Education, does not itself do the accreditation. What it does is it outsources the accreditation to associations, the third-party associations that do the accreditation. And those third-party associations are made up of, and you will never guess, universities, right? And so just as an example, just to pick an example, Harvard, I looked it up last night, Harvard is accredited by something called the New England Commission on Higher Education. That commission is a nonprofit, which is composed of 200 colleges and universities such as Harvard. And so that

• 1:34:18Ben Horowitz?

  Makes it kind of hard to start a new accredited university.

• 1:34:22Marc Andreessen?

  Correct. This is, this is sort of, Unumus is a venture capitalist. That's exactly right. Like, could you start a new university and get accredited today? And the answer is almost certainly no.

• 1:34:31Ben Horowitz?

  I would get no federal funding.

• 1:34:33Marc Andreessen?

  And it would be non-economically viable, right? And so, and then of course, in economic theory, you have a term for this, which is cartel. And so there's an education cartel, you know, in much the same way that there's like an oil cartel or whatever. So like, that, that, that, that, that's the setup. The fiscal situation at these places is actually quite interesting. So we talked already, student, the cost, student costs, tuition and everything else increase much faster than inflation. But these are nonprofits. And so they're not trying to drop money to the bottom line. So instead of what they do is they also inflate their operating costs to go right along with the student costs. And so what they're doing basically is they're, they're, because they're able to escalate tuition rates so dramatically, they can escalate the entire cost base at the equivalent rate.

• 1:35:12Ben Horowitz?

  And they're able to, I think it's important to note, they're able to escalate tuition rates so fast because I believe it's in the Obama administration, the federal government basically said that the government would lend anybody the money to go to college who needed it. So basically, so it's unlimited. The universities just basically raise tuition because you have to go to college. Like it's in the, or it got into the ethos of the culture that you can't get a good job without going to college. So everybody has to go to college. Everybody can afford college because we'll lend you the money. And so therefore we can charge whatever we want.

• 1:35:51Marc Andreessen?

  Yeah. It's a, you have an infinite federal, you have a multiple trillions of dollars, infinite federal backstop for, for the, for the, for the student, for the student side of it. Including now with the, with the bailouts. And so you basically just like, you get to write, you get to write these checks to yourself from the taxpayers.

• 1:36:05Ben Horowitz?

  Only accredited universities.

• 1:36:08Marc Andreessen?

  For accredited universities, for the, for the universities that are accredited themselves. And then what happens is a lot, if you talk to anybody involved in these places, what you find is that a lot of the expense escalation is not, where the expense escalation is not going is towards taking on more students. Right? Or for that matter, taking on more research. Where it's going is to take on more administrators. And so the sort of administrative component of these places, the, the, the sort of bureaucratic structure, like that's where the cost inflation is like really kind of going wild. There are multiple large institutions too, that have been identified in public, Stanford and Yale, that now have more administrative staff than they have students. Right? And so, and so, and the joke, the joke at those places is like, we could literally replace, we could literally have a personal concierge for every student.

• 1:36:51Marc Andreessen?

  And so you're talking tens of thousands of, of administrators. And again, the administrators are raking funding from every other part of the complex, everything from sports to research to tuition, to everything else. And so, so anyway, but the, the point is like, the, the, the, the operating cost is, is escalating. These places are not running on high margins. They're actually spending the money that's coming in.

• 1:37:08Ben Horowitz?

  Yeah.

• 1:37:09Marc Andreessen?

  And then the endowments, the endowments are big, but they're not that big relative to the expense base. Right?

• 1:37:14Ben Horowitz?

  And there's normally like 10 big endowments in the country, right?

• 1:37:17Marc Andreessen?

  And there's only ten big endowments. And then there's one other trick. There's one other twist, which is a lot of the assets of university endowment are restricted.

• 1:37:25Ben Horowitz?

  Yeah, they're earmarked. Exactly right.

• 1:37:26Marc Andreessen?

  They're earmarked by the donors for specific programs.

• 1:37:29Ben Horowitz?

  Yep.

• 1:37:30Marc Andreessen?

  And so they're not, it's not, the endowment is not a giant pot of money that the administrator can do whatever he wants with. Most of that money is actually off limits. If you talk to people who run these places, they will, I'm not saying anything I don't think that they would agree with, like, these places are actually quite, they're not levered in terms of debt, but they're levered in terms of a very high dependency on, on, on the entire structure that they have in place right now. And if there is ever a crack in, and the number of students, if there's a crack in access to federal loan funding, if there's a crack in research funding, if there's a crack in sports funding, if there's a crack in the tax structure, like, these places are not as fiscally stable as they seem from the outside. And, and, and they seem, quite frankly, just from the outside, they seem unable to constrain any of this. They just, they seem like they're on a one-way treadmill

• 1:38:13Marc Andreessen?

  on, on everything that we're describing. And then now on top of that, at least some institutions, you have these donor strikes, right? And so you have this kind of open question as to whether the, the donor flows are going to happen. And then let me add, add one more thing, which is where I start to get worried for my friends who run these places. So Gallup does this. They do these, they do these surveys every year on trust in institutions among the American voting public. In 2015, 57% of American voters had a positive view of American universities. 57%. In 2023, that's 36%.

• 1:38:42Ben Horowitz?

  Well, statistically significant drop.

• 1:38:46Marc Andreessen?

  Yes. So that is a, that is a, yes, for the math majors in the audience, that is a 21% drop in eight years. And so if you're running a business, like, you're, at that point, you're like, you're freaking out, right? Like, you're, you're tearing your hair out and ending up with a haircut, Ben and I have, because like, you, that's just like, oh, my God, what's happened? I'll just give you a couple other data points on that. There are, there are, you can see and find this on the Gallup website. There are drops in every subgroup. So there's no subgroup that has a higher view of, of universities. Every, everyone is, is a drop. And then among people with no college degree, it's a 25-point drop. And of course, if you're running a college, you're not used to thinking about people with no college degree because they're not your constituent. But the problem is they are voters

• 1:39:28Marc Andreessen?

  and they are taxpayers and they are a large percentage of the population and you do need their, you do need their support in order to keep the sort of funding aspect of this, of this rolling. And so, and then there's this question of like, okay, 57 to 36%, 21 point drop in eight years. Is that anomalous or is that going to continue? And like, you could hypothesize that that was a one-off, but you could also say, wow, like-

• 1:39:49Ben Horowitz?

  And that's before the current media blitz on-

• 1:39:53Marc Andreessen?

  Oh, this is all pre, yeah, this is all pre-October, October 7th. This is all pre the recent stuff, yes.

• 1:39:58Ben Horowitz?

  The congressional hearing.

• 1:40:00Marc Andreessen?

  So if you pull today, yeah, if you pull today, it'd be hard to imagine the numbers are higher. It'd be easy to imagine that they're lower. But let's even say, so what's the baseline? Is the baseline a 3% drop per, if you just go in the last eight years, eight years, 21%, it's like a whatever, two, two to three, two, two, two and a half, two and three quarters, something percent drop per year. And so if you project that forward in the next decade, you could lose another 25 points. So that 36, that 36 could drop to 11. By the way, 11, 11 is like where Congress is, right? Like, right? And so like, there are institutions in the US that have like 11, 10, 9, 8%-

• 1:40:35Ben Horowitz?

  People don't pay for them or like don't pay for them directly.

• 1:40:38Marc Andreessen?

  Congress has a huge advantage. They get to set their own laws. The rest, the rest of us are subject to that. And so I think there's a really fundamental, I think if I were a leader of one of these organizations or on the board or just as a public spirited citizen as I am, like, and I want these institutions to succeed, I think there's a really fundamental, critical thing that you have to look for, you have to look out in the next five to 10 years and say, okay, what, if these current trends continue and if popular support drops from 36% to 30 to 20 to 10%, which is a real possibility, like, is there therefore the political will in the country and support to maintain the current structure and in particular, the current funding structure? And I think you need to close your eyes and imagine that you lose the operating tax break, you lose

• 1:41:19Marc Andreessen?

  the endowment tax break, you lose the, potentially the research funding, you lose the, the student loan. Like, all of these things could come to political head, I think essentially at any moment with, with the pressures that are in place right now. And basically like-

• 1:41:31Ben Horowitz?

  A candidate could win based on a promise to defund the university if you're not careful, right?

• 1:41:38Marc Andreessen?

  Yeah, exactly. And of course, again, we've tried to not talk that much about partisan politics on this, on this, on this, in this, in this thing. But to the extent that these places have become very partisan political actors themselves, they're, they're having an, maybe their supporters feel better about them, but they're having alienating effect on a large part of the, of the voter base and a large part of the political structure of the country. So I think there's a, I think there's an existential question. And it's not, look, it's not that these places don't have lots of levers that they can pull and lots of things that they can rejigger. But to your point, like, kind of, what's the level of, what's the level of sort of predictive power and then sort of leadership willpower that you need to get in front of problems like this? And I think that's a very open question right now.

• 1:42:15Ben Horowitz?

  Yeah, yeah. No, it's scary. I mean, you have to, like, I would just go back to the, like, gigantic amount of goodness that's in the universities and all these problems could, could certainly undermine that in a kind of fundamental existential way. If, if this, if these trends go unchecked, very, very bad things could happen. So, which gets into, okay, what do you do?

• 1:42:40Marc Andreessen?

  Yeah. So we're pushing, we're coming up in two hours. And so I think we should probably not have the long form, what do you do, conversation this time. I would just volunteer, add whatever you like, but I would volunteer two things, which is, one is, well, there are actually three questions, which is, one is the reform question, which is like, okay, what if you were, if you were, if you were still on the Board of Columbia, what would you be trying to do? And like, what's the reform opportunity? And look, which of these problems do you actually want to tackle? And whatever, so forth, all the, all the interesting questions that flow from that. Second question should be, would be like, look, like, in, should, should there be more universities? Like, one of the issues is just like, there just aren't, as you said, there just aren't enough slots. Maybe part of the answer is create new institutions. And maybe you figure out a way to get them accredited and so forth, but, or figure out another funding model. Or maybe they happen in other countries or whatever. So could you start new competitive institutions that

• 1:43:24Marc Andreessen?

  maybe are able to solve some of these problems? If it's too hard to, to reform the current ones. And then the third, and this is probably, we should set up another session on this. But, you know, then there's also like the, is there a potential, is there a basic potential for entrepreneurial opportunity here that would basically be a side effect of unbundling? And so, for example, could you take the credentialing component of it and have a business or entity of some kind that just did that? Could you take the educational course thing, break that out separately? Could you take the research part, break that out separately? The policy part, right? The immigration part, the sports part, the social aspect of it? And then there are, by the way, there are founders and startups in, in, in a bunch of these sectors.

• 1:44:02Ben Horowitz?

  We, we funded overtime, which is doing that in the sports area.

• 1:44:06Marc Andreessen?

  Yeah, exactly. And so like, does it make sense to think about either startup, more startup companies in these sort of unbundled categories? And by the way, maybe it's not all for-profit companies. Maybe also, we just need like literally more nonprofits. Maybe you need actually sort of independent entities. Maybe hypothetically, there should be more independent research institutes or independent science institutes. You mentioned HHMI, like maybe funding should go to, maybe, maybe there's a different way to do research funding. There should be a much bigger philanthropic component to research funding in place of the government's role. And there are people, Patrick Collison has a big, and his wife have a big new biotech research institute at Stanford along those lines, or associated with Stanford, but a separate thing that they're funding. And so there's, there's these very kind of interesting questions along the way. So anyway, for the entrepreneurs, the audience, as you're

• 1:44:48Marc Andreessen?

  listening to this, is just think, okay, think about each of these sort of functional components of the modern university. Like historically, when there's sort of this sort of systemic situation going on, there's often entrepreneurial opportunities to kind of split off aspects of it and break them out into, into separate categories.

• 1:45:04Ben Horowitz?

  Yep. I think those are all good. I mean, just kind of going back to your question for me, which is, okay, if I was a trustee still at Columbia, what would I advise them to do? And I think that like, I kind of think that a huge, or a very large part of the problem is the number of constituencies that a university has. So you have, as we kind of alluded to, you've got the student, you've got the parent, you've got the donor, you've got the, you have the trustees, you've got the sports fans, you've got the faculty, and you're kind of trying to optimize this very elaborate bundle for all those constituents.

• 1:45:42Ben Horowitz?

  And I think that that is, that's got to be focused. And I think the way out is to focus on the student, because the student is the thing that, if you, basically the way I would look at it, if it, if it was my business, and a university is different than a business, but it's got a lot of the same characteristics. I think if you lose the student, you're done. That's the end of the whole thing. Like, it doesn't matter what the faculty think, it doesn't matter what the alumni think, it doesn't matter what the donors think, it doesn't matter what anybody thinks, if you're not attracting and developing the brightest minds in the world. Like, if that's no longer happening, then that's it. Like, game over. And so...

• 1:46:28Ben Horowitz?

  My view would be, I would try to refocus the whole university on the value proposition to the student and then the kind of student that we produce. Like, how do we attract the best, give them a value proposition, so when they come out, they make an outstanding living, easily pay back their student loan, and everybody wants to hire them, and like, let's go back to that. And I think if you had that as the focus, then a lot of the problems would solve themselves. Now, very difficult to do, because the university is a hierarchy, and it's not a hierarchy.

• 1:47:08Ben Horowitz?

  It's kind of like, there's an administration, there's faculty, faculty have tenure. When you have tenure, you're very hard to remove, and there's just a huge constituents of administrators and politics, and everybody is hired. Like, there is, nobody owns, there's no owner, there's no founder. Like, these things were founded a long time ago, there's no founder left, there's nobody who can just exert their moral authority to get that done. So, I think that, it is a hard problem, but it is solved because the assets are so strong. I mean, they've got the gorgeous campuses, the amazing faculty, the incredible reputations,

• 1:47:48Ben Horowitz?

  global reputations, so there's a lot to work with, but these are real problems.

• 1:47:54Marc Andreessen?

  I think that's a good point to end on.

• 1:47:56Ben Horowitz?

  All right, great. Well, thank you, I hope you enjoyed it, and then we'll be back to talk about how to solve it.

• 1:48:01Marc Andreessen?

  Sounds good, thanks, everybody.