20VC: a16z Partner Frank Chen on The Future of Car Ownership, Whether The High Employee Attrition Rate in The Valley Is A Feature or A Bug & His Biggest Lessons From Netscape, Loudcloud & Opsware

Frank Chen is a Partner @ Andreessen Horowitz, one of the world's most prestigious venture firms with a portfolio including the likes of Airbnb, Coinbase, Github, Lyft, Slack and many more incredible companies. As for Frank, prior to joining the world of venture, he was a VP of Products & UI Design at HP Software and before that held the same title at Opsware. Before that, even cooler, Frank was Director of Product Management @ Netscape where he led a cross-functional team that defined, shipped, and marketed Netscape's award-winning LDAP directory and security products. In Today’s Episode You Will Learn: 1.) How Frank made the move from the world of operations with Opsware and HP to being a Partner at Andreessen Horowitz? 2.) How does Frank view the current state of play for AI and machine learning? How does the rise of automation shift the economy as we know it? What does it do to class distinctions? How does Frank view it's impact on the labour market? How does Frank think about the value of truly large datasets? Where is the asymptotic moment where the utility value of data is realised? 3.) With the rise of self-driving, how does Frank perceive the future of car ownership? Who will fundamentally own and operate the vehicles? Will it be a horizontal play or a vertical play? In terms of adoption, why is Frank negative towards a driver assisted transition phase and believe in a more binary transition? 4.) How does Frank perceive the rise of automation and self-driving cars impacting public infrastructure? How will the layout of our cities change over time? How does Frank believe urban real estate could be optimised in a more efficient manner? Which nations does Frank believe will be the first to innovate here? 5.) What is the most challenging element of Frank's position as Partner @ a16z? How does Frank think about the right way to say not to an entrepreneur? How does Frank look to scale the learning curve rapidly when investigating new industries? What are the challenges here? What advice would Frank give to someone looking to scale learning curves? Items Mentioned In Today’s Show: Frank’s Fave Book: The Chronicles of Narnia, The Lord of The Rings Frank’s Most Recent Investment: Branch As always you can follow Harry, The Twenty Minute VC and Frank on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.

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

• 0:00Harry Stebbings?

  The 20 Minute VC is back for another week with me, Harry Stebbings, at H Stebbings1996 with two Bs on Instagram. I would love to see you there where you see all things behind the scenes. But for the episode today, we constantly discuss everything investing, but we don't often dive deep on the future of innovation, entrepreneurship and society. Really what we're fundamentally investing in. And so I could not have a better person with me today to discuss just that. So joining me in the hot seat, I'm so excited to welcome Frank Chen. Frank is a partner at Andreessen Horace, one of the world's most prestigious venture firms, with a portfolio including the likes of, check this out, Airbnb, Coinbase, GitHub, Lyft, Slack, and many more incredible companies. As for Frank, prior to joining the world of venture, he was a VP of Products and UI Design at HP Software, and before that held the same title at Opsware.

• 0:45Harry Stebbings?

  Before that, even cooler, Frank was Director of Product Management at Netscape, where he led a cross-functional team that defined, shipped and marketed Netscape's award-winning LDAP Directory and security products. And I want to say a huge thank you both to Margit and Meyer at Andreessen Horace for all they've done to make this happen. I really do so appreciate that. And we mentioned some incredible companies in the intro there, and I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Henrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required, and limits 10 to 20 times higher than standard cards. Yes, pretty incredible, I know.

• 1:26Harry Stebbings?

  And you can sign up for Brex today and get card fees waived by entering the code HARRY during signup. Honestly, it really is such a special service. And speaking of special, did you know that there are five job openings for every one developer in the US? No wonder hiring great engineers is impossible, and that's where my friends at Terminal come in. Terminal is your dedicated partner in quickly building skilled remote engineering teams. How do they deliver both speed and quality? Well, Terminal does this by focusing on everything necessary to successfully source, set up and support these teams. From little things like managing office logistics to big things like benefits, legal and community. And they've developed this proprietary and comprehensive remote team solution based on decades of experience building remote teams across multiple continents. So they really know what works, but don't take my

• 2:10Harry Stebbings?

  Take the words of Eventbrite, former 20 VC guest Hymns, DialPad and more, all customers and lovers of Terminal. And you can find out more today at Terminal.io. And finally, I've always been a big history man, and so I want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world. With more than 50 years working with VCs, they help VCs form and manage funds, make investments, and handle the myriad of issues that can arise throughout a fund's life cycle. So to learn more about the number one most active law firm representing VC-backed companies going public, head over to Cooley.com and also go to CooleyGo.com. But you've heard quite enough of me drawing on,

• 2:52Harry Stebbings?

  and so now I'm very, very excited to hand over to Frank Chen, partner at Andreessen Horowitz.

• 3:02Speaker 01

  You have now arrived at your destination.

• 3:05Harry Stebbings?

  Frank, it is such a pleasure to have you on the show today. As I was just saying to you beforehand, I've been such a fan of your content for such a long time. So thank you so much for joining me today.

• 3:14Speaker 02

  Oh, thank you for having me, and that's very kind of you to note on the content. I have a ton of fun putting together the presentations.

• 3:21Harry Stebbings?

  I'm sure you do, but I would love to get the ball rolling today, Frank, by discussing a little bit about you. So tell me, how did you make your way into the world of startups and venture and come to be a partner today at Andreessen?

• 3:31Speaker 02

  Well, I kind of did it by accident, which is unlike many of my peers, I had not plotted a lifelong path to get to venture. I kind of fell into it backwards because Mark and Ben, or the Andreessen and the Horowitz of Andreessen Horowitz, were doing it. And I have been working with these guys now for 25 odd years, and they're always doing interesting things. And I'm like, okay, if they're going to start a venture firm, maybe I'll go see what that's like. And the thing that has been awesome for me is I have a super curious personality. I'm always like the four-year-old asking, why? Why is that? Why is the sky blue? Why does gravity pull us down? Somebody with that kind of innate curiosity, this is the best job ever, right? Because you're going to learn something new every hour if you do your job right.

• 4:15Speaker 02

  And that's exactly the situation I'm in.

• 4:17Harry Stebbings?

  It is a very unique position and absolutely on the learning front. I do have to ask you, you mentioned the element of working with both Mark and Ben for a considerable time. And obviously, The Hard Thing About Hard Things is such a hailed book in our industry with the lessons from Ben from Opsware. You also experienced that journey firsthand. So I have to ask you, Frank, and super interested by your perspective, what were some of the core takeaways for you?

• 4:38Speaker 02

  Yeah, so two big things from my experience, and this is sort of Netscape and Cloud, Cloud and Opsware, which is, one, it is a lot harder to build a business than it looks from the outside. And when you read The Hard Thing About Hard Things, you sort of realize, yeah, boy, that thing, we nearly died 100 times. And then we had lunch every day, you know? So it is a lot harder to build a big durable business than it looks from the outside. And then two, the thing that I really learned was the value of loyalty. Because when the company is not doing well, what happens as a manager and a leader in the company is you spend all of your time basically talking people from leaving the company.

• 5:17Speaker 02

  And if you think about the ecosystem that you're in, there's always a shinier new thing in Silicon Valley. There's always a Google or a Facebook or some other cool place to go. And there's a natural flow of talent. You know, some would argue, look, this is one of the things that keeps the Valley what it is, which is there's a free flow of people and information and ideas. But if you think about it from the flip side, which is from the point of view of the company or a manager, like having people leave every 18 months, that's not good for your company. And so I learned a lot about how to inspire loyalty and certainly taught me a lot about staying in place when things didn't look like they were going well. Because it's hard enough building a company if you have attrition of your key talent continuously, it's even harder.

• 6:01Speaker 02

  So loyalty is sort of, I think, an underappreciated value here in the Valley.

• 6:05Harry Stebbings?

  I couldn't agree with you more. And I do have to ask, I studied attrition rates before across the world. And in the Valley, it's apparently 1.4 years average duration at a company today. Do you think that's a foundational problem that maybe the Valley lacks? Maybe a more foundational loyalty towards the mission and the relationships that you have with the likes of Ben and Mark?

• 6:23Speaker 02

  You know, it is both a feature and a bug, as I pointed out. If you're looking at it as a feature, you think, look, we have a free flowing set of ideas and people moving between companies. And actually, academia who have studied why Silicon Valley beat Route 128 in Boston. They will point to this as a feature, which is in Boston, you basically settled in a deck or Lotus. And you basically spent your entire career there. You might think of different ecosystems where sort of Japan and Korea where this is still prized. Like my parents grew up in a generation where lifetime employment at the same company was the ideal. And anything else that sort of fell short of that was considered suspicious. And so that's sort of the feature point of view.

• 7:03Speaker 02

  The bug point of view on it is as a manager and as an entrepreneur, trying to build a durable company that can weather the many, many storms you're going to go through as a startup. And so if you've got people leaving every 1.4 years, it's hard to keep people in those seats. It's hard to achieve the continuity. It's hard to keep the tribal knowledge in the system. And so that's sort of the bug point of view. And I think we need to strike the right balance in building great companies. You're not going to hang on to everybody, but it would be good to be skilled enough and persuasive enough and had high enough EQ to convince the people that you need to convince to stay with you for years and years rather than 1.4 years.

• 7:41Harry Stebbings?

  Absolutely. And as I said before the show, massive, massive fan of the content. And when I was putting together the schedule, I have to say I felt rather sorry for you because I wanted to cover three of the largest topics of our time, really, all in 20 minutes. Starting on automation and the future of work, then moving to self-driving cars, and then finishing on the cities that those cars drive in and how they maybe need to be reinvented. Does that sound good?

• 8:02Speaker 02

  Oh, I'm ready to roll. Let's go.

• 8:04Harry Stebbings?

  Okay, so let's dive into automation and the future of work. If we start with perhaps the most meaty element, I speak to many different experts on the topic. And some suggest AI's ability for human augmentation, the benefits. And others suggest we've never seen the rate of adoption like before, including horse and carts. And so we're in a little bit of a sticky situation. Where do you sit on the pendulum, so to speak, and what's that current state of play?

• 8:27Speaker 02

  Yeah, well, let me share a couple of factoids first that sort of ground what's happening in this ecosystem. And they're fun. So first is the biggest AI conference for researchers is called the Neuroinformation Processing Symposium. This year it's sold out in a little over 11 minutes. It's like a Beyonce concert. So that's research. The second is If you talk to Paul Doherty, who is the CTO of Accenture, and he's been at Accenture for three decades. He says he's never seen anything grow this fast inside big businesses, right? So if you think about headcount, think about budget, like any metric you can think of, it's faster than the rise of client server computing. It's faster than the move to internet computing. It's faster than shifting to mobile. This is the big one so far as he's seen in thirty years at Accenture. So that's pretty impressive.

• 9:12Speaker 02

  And then you know it's big in tech when all the politicians are waving their flags and saying, hey, look, come to my country and in my country you will be rewarded. There'll be tax breaks, there'll be regions, there'll be collaborations with universities, and I will be the best country or region on the planet to bring your AI researcher to build an AI-powered startup. And so, look, you have researchers, you have the business community, you have politicians waving the flag. So that just gives you a sense of the tremendous excitement that's happening. And so I think it's up to us now to be responsible in the design of these AI systems. And if we're responsible and we're thoughtful and we bring empathy to the design of our systems, we are going to be the best humans we have ever been, period.

• 9:56Harry Stebbings?

  No, I love that kind of the best that we've ever been. I do have to ask it, maybe from a more financially macro perspective, if we think about the best humans in the society that we inhabit, how does that maybe shift the economy? I'm always really intrigued by kind of automation's role on class distinction. Does it maybe change class distinctions?

• 10:14Speaker 02

  I'm not sure it changes class distinctions, but the way I think about it is that there's a set of things that machines are fantastic at. And so think about sort of the spreadsheet era or the database era. It was just true that spreadsheets and databases remembered more, could do math faster, could do more math more accurately, and it turbocharged humans. And where we were actually afraid when the spreadsheet came out that, oh, my God, well, there go all the white collar jobs. We've actually created more white collar jobs post the spreadsheet than we have in the decades before the spreadsheet. And so it didn't turn out to wipe out all the jobs. It turbocharged us and it created new jobs. So AI, I think, is going to be like that, which is there's a bunch of things that AIs can now do that spreadsheets and databases could never do. It will turbocharge our capabilities, it will do some.

• 11:00Speaker 02

  Some of the most dangerous and dirty jobs. So think about power plant inspections. Think about cell tower inspections. Think about improving mine safety. One of the very little known facts is that one of the most dangerous jobs on the planet is long haul trucking, which is in the United States, this causes the most fatalities being a long haul trucker. So look, we've got to get the truckers out of the cabs as soon as we can. If we can invent a technology that can drive long haul trucks safely. And there are many startups working on that and I couldn't be more excited. So I think there's a bunch of jobs we don't want to do because they're dangerous. There's a bunch of tasks we shouldn't be doing because computers are just better at them than us. And then what's left for us, I think, is sort of the most creative and awesome parts of being human,

• 11:44Speaker 02

  which is it's the non repetitive task. It's thinking outside of the box. It's connecting dots that didn't seem like they were possibly going to be connected. It's being truly creative, like figuring out the double helix structure of DNA, right? All of those things that created the unanticipated are not soon to be automated. We have no idea how to do that. And so we can lean in on the most awesome parts of being human. And then hopefully we get some help on the routine and the boring and the frankly dangerous.

• 12:12Harry Stebbings?

  I do have to ask, and speaking on kind of the enabling technology behind what will allow us to be the best ourselves that we can be. Obviously, a large amount of AI is driven by large data sets. But I had a guest on the show the other day that went counter to this. And he said, the value of massive data sets is largely overplayed. Frank, tell me, is that a fair assessment? And how do you think about the importance of massive data sets at scale in the effectiveness of AI implementation?

• 12:36Speaker 02

  Well, if you think about one of the most popular machine learning techniques today, it's called deep learning. And it absolutely depends on large data sets. So if you think about deep learning in the context of self driving cars, they're using deep learning to figure out, is that a stop sign? Is that a pedestrian? Is that a biker? And that absolutely depends on large data sets where you're taking the video and other feeds from these cars and you're giving them to human labelers and asking them to identify what is actually in this frame of video. So there are certain tasks for which large data sets matter a lot. Now, some interesting approaches to achieving very good AI without large data sets. So approach one, let's have the machine generate the data sets themselves.

• 13:17Speaker 02

  And so if you look at AlphaGo, which is a system that learned to beat world champions at Go, they basically generated their own data sets by playing each other. So no human games involved. So that's one way to get around this big data set problem. Another is to use a set of techniques that does not depend on big data sets. And so reinforcement learning is an example of a type of machine learning that doesn't require a massive data set. It's sort of, you let the system play in a simulated environment and it sort of figures out what to do. So programming robots to put stuff in the boxes that Amazon is sending you sort of pick and patch, those types of things are now using these techniques like reinforcement learning where you don't need massive data sets.

• 13:56Harry Stebbings?

  Absolutely. I do have to ask before we move on to autonomous cars, another small topic to touch on. But obviously discussing AI, I had Aaron van der Vender from Founders Fund on the show recently, actually, and he stated the majority of AI is a scam and it's largely a case of rebranding in most circumstances, be it from statistics to big data to every other nomenclature that we've gone through over the years. Is that fair from your perspective? And how would you respond to that kind of merely a change of nomenclature?

• 14:23Speaker 02

  I'm not sure I would say all AI is a scam. I will say, I think I understand the impulse behind that statement, which is about three years ago, as we looked at startups, everybody became an AI startup. They got the dot AI domain name. It was the second phrase in their pitch decks, which is, I mean, AI powered such and such. And look, some of those were real applications of AI. Some of them was sort of marketing veneer over things that they'd always been doing, like, you know, data analysis. On the balance, though, I think there are genuinely new techniques that big companies and small companies are putting into their software that make them better and more useful. The types of predictions we can make, like, do you have cancer or not? The types of things that we can do, like, is your grandmother in this picture? The types of questions that we can answer, like, where should the soccer players be on the soccer field?

• 15:08Speaker 02

  Those were things that we could never do with the previous generation of technologies. No matter how hard you asked an Oracle database, where should the soccer players be? You were never going to get a good answer. And so there are really new questions that we can ask and answer of our software that we've never been able to do before. My partner Benedict Evans uses a great analogy of imagine that you had a million interns and the million interns could look at all of the pictures on Instagram and they could identify fashion trends. Well, now we don't need a million interns, we just need a set of machine learning algorithms and we can identify fashion trends. That's awesome and that's new and I think companies are racing to take advantage of all of these new things that we can do with our software.

• 15:50Harry Stebbings?

  Absolutely, and always a great analogy from Ben, but I do want to dive into one of the dominant themes of kind of vertical AI being applied today and we touched on it earlier with autonomous trucking and it's kind of the autonomous car industry. I want to start on ownership and the foundation, so to speak. So how do you foresee the ownership structure and usage model playing out for the self-driving car industry over the coming years?

• 16:11Speaker 02

  Yeah, I think that in most urban and most suburban settings, people will stop owning their cars. So we've already seen the massive growth of companies like Lyft and Uber and I think the natural extension of that is why should I own a car at all? If you think about the biggest part of the cost structure of delivering rides as a service today, it is the driver. And so, once we get the driver out of the equation, then it will be cheaper for you and I to be chauffeured everywhere than it will be to own and operate our own car. So to put that in dollar terms, most analysts would say it costs about a buck or a buck fifty a mile for you to own and operate your own car. So that's depreciation and insurance and fuel and maintenance and so on and so forth.

• 16:53Speaker 02

  Most of the self-driving estimates put the car, the cost of operating a profitable self-driving service at around fifty cents. So literally sort of half or a third of the price. I think even when we get to price parity, there's going to be a lot of people switching. When we get to it's cheaper to be chauffeured everywhere, then I think we just stop owning cars.

• 17:13Harry Stebbings?

  I couldn't agree with you more in terms of the car ownership element there. In terms of the ultimate owner, I'm too intrigued not to ask, it's like, you know, I'm always perplexed by kind of Tesla moving down the stack into having an Uber-style service and then Uber moving up the stack into having a Tesla-style car. Creation process. How do you think about the ultimate owner of those cars in this kind of service model?

• 17:33Speaker 02

  Yeah, it's a little unclear how it will play out. It's certainly possible that the owners are the manufacturers, right? You mentioned Tesla, BMW just offered, started a ride hailing service in China. And so if you think about BMW, they're going to make the transition possibly from making the ultimate driving machine to operating the ultimate B-driven service. That is a massive transition. I actually expect most of the manufacturers to not be able to make that transaction. Because if you think about every bonus that has ever been paid out at a car manufacturer, it's because you designed a car that people really wanted, the three series. Or you worked with an agency to come up with the tagline ultimate driving machine. Or you've created the leasing model that drove your market share up five points, right?

• 18:17Speaker 02

  Like, all of those things were aimed for getting a consumer to buy or lease your car. To design a whole new set of incentives for your people to say, look, I want you to Liza or I want you to be Uber or all of those things is going to be monumentally difficult for companies that have been doing it very, very well and very, very profitably for, in some cases, a hundred years. So I think the manufacturers are going to have a hard time making the transition. It's the ultimate innovator's dilemma. So if you think maybe the OEMs, the car manufacturers, aren't going to do it, it's possible that the ride-sharing companies Lyft and Uber get there. It's possible that their ultimate ownership is by leasing companies. That's how airlines work. So you have GE Leasing that basically buys the airplanes from Boeing.

• 19:02Speaker 02

  And Airbus and then they lease them to the carriers. So it's possible that they do that. It's possible that there will be private equity ownership. So let's say you were a private equity fund operator and you wanted the reliable lease payments that come out of Lyft and Uber and services like that. So you buy the cars and then you lease them and then you get a pretty predictable rate of return because Lyft and Uber are very good at predicting how many roads they need in what cities. And you just wanted that income stream. So I think that's also a possibility. But I think it's a little too early to say exactly who will own the cars. I will say, just to reiterate, I think it's not going to be us, at least in cities and. densely populated suburbs.

• 19:40Harry Stebbings?

  No, I couldn't agree more there. And I hadn't actually thought about the P E entrance. So that's a super interesting method of thinking. I am really interested because you mentioned Ben, your partner earlier. And he said about when we look at the kind of current landscape of levels of self-driving today, that we're currently in this kind of evolutionary phase, so to speak, being human input still being required, but you know, automation still being possible. I'm intrigued, how do you think about this kind of phase-driven deployment process with self-driving? Do you think that's what we'll see? Or will it be maybe more of a binary shift?

• 20:08Speaker 02

  So I'm thinking it's going to be more of a binary shift because the cars where you need human input. So you think of Tesla Autopilot or you think of Nissan's Pro Pilot, right? These are products that are driver assist features. They put the driver in a very tough situation, which is you can sort of pay attention. And when you really need to pay attention, I'm going to sound a chime or something. I think that kind of half paying attention is very, very dangerous for humans. Right? So we already see this with planes. When autopilots are routinely engaged, pilot skills atrophy, right? And so there's a well documented history of plane accidents that are caused by pilots just forgetting how to fly the plane because they don't really need to most of the time.

• 20:51Speaker 02

  So I think from a skill atrophy point of view and from an attention point of view, we're in this transition phase where all this driver assist is going to get phased out in favor of complete driving. Now, on complete driving, I think it's going to unfold not we wake up one day in a city and all the cars drive themselves. So first, we're going to do things like long haul trucking, where there's a fixed route and we can map all the routes in advance and it's mostly freeway driving. And then it will be in geo-fenced areas. So think retirement communities, universities, military bases, where in general, we're traveling pretty slowly and we can also pre-map the entire area. So I think in those areas, they'll go self-driving. And then we'll sort of start to see tendrils creep out from the geo-fenced areas. Like, okay, let's say you live in a retirement community,

• 21:35Speaker 02

  but you need to get to the nearby train station and that's on public roads. And so you'll start seeing the cars get to the train stations or the mass transit stops. And I think in terms of full city deployments, you know, there's sort of two races. Race one is you're going to count on somebody like Waymo doing outstanding technology development and launching in the city of Phoenix. So that's sort of one strand. And on the other strand, I think what you're going to see is you're going to see an ambitious mayor wake up in China and just say, in my city, I'm going to be the first and I'm going to get promoted or my political career will flourish. By me banning human drivers. So I think that's sort of the other strand of how we see it go mainstream in cities, which is somebody will just wake up in China and say, next week

• 22:16Speaker 02

  it's illegal for human drivers to drive, once we have enough critical mass of cars that can drive.

• 22:21Harry Stebbings?

  I mean, what a day that would be and what a bold person that would be. But the final element that I do want to touch on with regards to the kind of autonomous car space itself is really more the parts themselves, integrating software into the equation. Today, the US spends a trillion dollars per year on car parts and servicing. Gus, how does this change with the rise of self-driving and how do we think about that kind of fundamental supply chain shift?

• 22:44Speaker 02

  Yeah, so the biggest shift that will happen in the supply chain is think of the percentage of the total cost of the car that goes to hardware and software, so electronics and software. So today, that's anywhere between, you know, sort of 10 and 20, 30%, depending on the on the car you drive and how many fancy features it has, like, you know, can it park itself? Does it have a lot of these so-called ADAS features that can drive on the freeway? So, you know, the more sophisticated the car, the more electronics and software. I think you're going to see, you know, half the price of a car go to hardware and software. So that's a boon, obviously, for people who are making those components. And it comes at the expense of people who are making older style components. So beginning with the internal combustion engine, think about your steering wheel, think about the exhaust pipe, think

• 23:29Speaker 02

  about your rearview mirrors, right? All of those will go away because the self-driving cars don't need rearview mirrors. They don't need steering wheels and brake pedals. They'll be doing all of that through software.

• 23:40Harry Stebbings?

  I do want to finish, and before we move into the quickfire, on the cities that these cars really drive in. Starting on again, the foundations being kind of the public infrastructure layer. How will both the rise of automation and autonomous cars change? Maybe how we approach building and use public infrastructure in the future?

• 23:56Speaker 02

  Well, the super exciting thing is we've really only had three chapters of city design in the history of cities. So chapter one was we walked around in our cities. And then chapter two was the horses came. And then chapter three was, okay, the internal combustion engine powered cars are here. And then you could argue there was sort of a chapter 3B, which is the freeways came through the cities. So depending on How you count them three or four chapters. When we have self-driving cars, we'll get to design the next chapter. And if we think about designing the next chapter, we can completely rethink how we use the space in our cities. So first, all the parking lots can go away because the cars will constantly be in motion. The fleet operators will need that to drive the efficiency and utilization out of their cars.

• 24:40Speaker 02

  And so if the car is not carrying you, it's carrying goods. And if it's not carrying a good, then it's on its way to being cleaned or serviced or charged. Right? So there will be no need for parking lots. And if we do need parking lots because we do need to plan for peak utilization in a city, we're not going to put them in a city. Like if you were the Sin City Designer of City, you'd put that in a suburb somewhere where the cars can go and rest overnight. Like imagine that you could walk into the City Planning Office of Los Angeles and say, hello, today 14% of all land in Los Angeles is parking lots. And I've waved the magic wand and you can have all of that land back to put to a higher and better use. Like how excited would you be? Like it was just such a transformation to the way that we can think about our cities.

• 25:22Harry Stebbings?

  I'm just really intrigued when you think about kind of fundamentally reshaping our existing cities. How do we think about that when they are so established and so concrete in their structure? How do we think about the ease of transitioning towards an autonomous kind of structured city itself? Much easier if it was a new city from afresh?

• 25:40Speaker 02

  Yeah, there's an awful lot of hardware, right? Concrete, asphalt, bridges and so on. And then there is also a decidedly non-software governance process, right? Which is civil planning mediated by governments, right? So this is not going to happen fast, the redesign of our cities. So it's going to happen one parking lot at a time, one auto repair shop at a time, one car dealership at a time. And we're going to make these local decisions like, gee, if we don't own cars, then we don't need to sell them. Therefore, car dealerships are going to start vanishing from inner cities. What do we do with that space? What do we do with the DMVs? I think the UK calls them DBLAs, right? So these places where we go and get our licenses, well, what do we do with that space? Because we don't need licenses anymore, we're being chauffeured.

• 26:25Speaker 02

  And so as these buildings disappear. From the infrastructure, we get to think about how do we recycle and reuse for a better and higher purpose in each city? And of course, each city will have a different answer to that question depending on what their economy and what their social goals are for the city.

• 26:43Harry Stebbings?

  I mean, it's just phenomenally exciting to see the surplus space that we'll see over the coming years. But I do in fact want to move into my favorite element of any interview being the quickfire round. So I say a short statement and you give me your immediate thoughts in about sixty seconds per one. Are you ready?

• 26:57Speaker 02

  I am ready.

• 26:58Harry Stebbings?

  So Frank, I'm sure you've read libraries and libraries of books, but what's the favorite book for you and why?

• 27:04Speaker 02

  Okay, I have a cheat. There are two series of books that are my favorites, The Chronicles of Narnia and The Lord of the Rings. And they were written by friends, C.S. Lewis and D.A.R.R. Tolkien, who used to gather at this pub at Oxford called The Eagleman Child. I've actually taken my kids there and it was a pilgrimage for me. And I love these books because they are what the authors would call sort of true myth. Like the fiction that they created, the detail around the worlds sort of taught you something about the world in a way that even the real world can't teach you. So love those books.

• 27:36Harry Stebbings?

  What's the most challenging element of your role with Andreessen today?

• 27:39Speaker 02

  Well, the hardest thing for me still, and I've been doing it now almost ten years, is saying no to an entrepreneur. Because every entrepreneur I meet is convinced that they're going to change the world and a lot of them are right. But we can't say yes to all of them by giving them money. We have to be measured in sort of who we give money to or who we invest in. And so saying no breaks my heart every time.

• 28:01Harry Stebbings?

  How do you scale the learning curve on new verticals so fast? What's that process for you?

• 28:06Speaker 02

  So this probably won't surprise you, but Google it enough so you can have smart conversations with people who really understand the space. So you've got to do step one, which is you've got to read and study yourself so that you get to the point where you can ask smart questions. You know, we'll do twenty percent of the learning on Google and eighty percent of the learning with people that we can ask smart questions of.

• 28:27Harry Stebbings?

  What would you most like to change about the world of technology and venture itself?

• 28:32Speaker 02

  The thing I'd like to most change is to bring a lot more transparency, especially to the interaction between investors and entrepreneurs. I feel like we've gone into a phase where we need, the ecosystem encourages hiding stuff from each other. And so the metrics in the pitch decks are hiding key facts. And I think Look, we're in this journey together. We want to help you create a successful business. And so beginning in that conversation by hiding key facts about your business is not helpful. And then on our side as investors, I think we can be a lot more transparent. We're certainly trying at a 16Z in how we make decisions and what we're looking for in companies. Let's not hide things from each other. Let's get started on transparency and mutual trust.

• 29:12Harry Stebbings?

  What advice do you often hear given that maybe you most disagree with?

• 29:16Speaker 02

  Yeah, I think Silicon Valley has this great bias that if you build a great product, then they will come. And so all you have to do as an entrepreneur is to build a great product. And what that leaves on the table is you have to think about how do I get my product to market? How do I get distribution? The advice that I would love to give people is building a great product is hard. I'm not taking any away from that. Building a great distribution channel is equally hard. And we need to take that just as seriously, if not more seriously.

• 29:43Harry Stebbings?

  I couldn't agree more on the emphasis on kind of distribution channel there. But I do want to finish, Frank. On which company have you spent the most time with recently? Where my you're most excited about the coming years and the opportunity ahead?

• 29:54Speaker 02

  Yeah, Harry, you're killing me. All my children are special and brilliant.

• 29:59Harry Stebbings?

  I would say you can always choose your favorite child.

• 30:01Speaker 02

  Yeah, exactly. I love what Branch is doing. Branch is making loans to people who have never gotten loans before in countries like Kenya and Tanzania, Nigeria and Mexico. And so serving the unbanked, I think, is a great social good. And they're doing it on the back of machine learning, which is deciding which people to give loans to. When there are no credit bureaus, comes down to behavioral analysis. And so do you have gambling applications on your phone? It turns out if you have gambling applications, you're a better credit risk. And I think if you had asked a million loan officers if they would have predicted that, they would have, million out of million times, said, no, of course, that makes you a worse credit risk. But when we ask machine learning algorithms to do that, they actually figure out that you're a better credit risk if you have gambling apps on your phone. And there's, you know, millions of other factors like that.

• 30:46Speaker 02

  So I love the sort of triumph of algorithms over judgment.

• 30:49Harry Stebbings?

  Really loves that example there, Frank. But as I said, listen, I've been such a fan of your content for so long. So thank you so much for joining me today, and it really has been such a pleasure.

• 30:57Speaker 02

  So thanks for having me, Harry. It was a great delight and thanks for having me on the show.

• 31:02Harry Stebbings?

  I mean, what an incredible guest Frank was to have on there. And I do want to applaud him for taking on probably some of the biggest challenges and questions we have of our time in just 25 minutes. I so appreciate that Frank, and it was great to have you on. If you'd like to see more from us behind the scenes, you can on Instagram @HStubbings1996 with two Bs. It certainly would be great to see you there. But before we leave you today, and we mentioned some incredible companies in the intro there, and I want to spend a minute to talk about Brex, the first corporate card for startups. Brex founders Henrique and Pedro built a payments business in Brazil, but found themselves rejected for a corporate card when they were in Y Combinator. They decided to build Brex with instant online signup, no founder liability required, and limits 10 to 20 times higher than standard cards. Yes, pretty incredible, I know.

• 31:46Harry Stebbings?

  And you can sign up for Brex today and get card fees waived by entering the code HARRY during signup. Honestly, it really is such a special service. And speaking of special, did you know that there are five job openings for every one developer in the US? No wonder hiring great engineers is impossible, and that's where my friends at Terminal come in. Terminal is your dedicated partner in quickly building skilled remote engineering teams. How do they deliver both speed and quality? Well, Terminal does this by focusing on everything necessary to successfully source, set up, and support these teams. From little things like managing office logistics, to big things like benefits, legal, and community. And they've developed this proprietary and comprehensive remote team solution, based on decades of experience building remote teams across multiple continents, so they really know what works.

• 32:29Harry Stebbings?

  But don't take my word for it, take the words of Eventbrite, former 20 VC guest Hims, DialPad, and more, all customers and lovers of Terminal. And you can find out more today at Terminal.io. And finally, I've always been a big history man, and so I want to talk about Cooley, the global law firm built around startups and venture capital. Since forming the first venture fund in Silicon Valley, Cooley has formed more venture capital funds than any other law firm in the world. With more than 50 years working with VCs, they help VCs form and manage funds, make investments, and handle the myriad of issues that can arise throughout a fund's lifecycle. So to learn more about the number one most active law firm, representing VC-backed companies going public, head over to Cooley.com, and also go to CooleyGo.com. As always, I so appreciate all your support, and I can't wait to bring you a really special

• 33:13Harry Stebbings?

  Founder's Friday this coming Friday.