Investing in the Weird Stuff with Andreessen Horowitz's Chris Dixon

Transcript

so Chris Dixon our next guest from andrion Horwitz invests like only exclusively in weird things so this is going to be a really fun conversation please welcome him to the stage along with Ryan Lawler our [Applause] moderator weird all right yeah it's all the weird stuff so uh so being the guy at andri and Horowitz who gets to invest in the weird s... Read More

Summary

In this video, Chris Dixon, a venture capitalist at Andreessen Horowitz, discusses the importance of investing in "weird" and innovative technologies. He explains that identifying interesting trends and finding passionate individuals starting companies around those trends is key to successful investment. Dixon also emphasizes the significance of following what hobbyists and developers are excited about, as they are often the ones who create the future. He discusses how his firm chooses companies to invest in and the challenges of investing in nascent markets. Additionally, he shares his thoughts on categories he hasn't invested in, such as Internet of Things and AI, and highlights the potential of companies in New York City to become multi-billion dollar entities. Finally, Dixon expresses his belief that the current technological landscape is not in a bubble.

Questions & Answers

Q: What makes Chris Dixon uniquely qualified to invest in "weird" technologies?

Chris Dixon explains that his background as an entrepreneur and angel investor provides him with the experience and knowledge to identify interesting trends and great people to invest in.

Q: What is the common thread between investments like Bitcoin, VR, drones, and Soylent?

Dixon believes that the common thread between these investments is the excitement and interest of hobbyists and developers. He explains that their excitement often indicates where the future is headed and that these are the people who create the future.

Q: How does Dixon identify interesting trends?

Dixon looks at academia and what the smartest hackers are excited about on the weekends. He believes that universities and hackers are thinking about the next big things that will happen in the next ten years, as opposed to institutions and companies that think on a shorter-term basis.

Q: How does Dixon pick companies within these nascent markets?

Dixon explains that when investing in known trends, venture capitalists are taking a risk on which company will succeed. With futuristic investments, there is a two-stage bet: first, betting on the trend happening, and second, betting on a particular company. The evaluation of people plays a crucial role in making these investment decisions.

Q: How does Dixon choose one company to invest in within a specific trend like Bitcoin?

Dixon highlights that venture capital firms typically do not invest in competing companies. However, within a particular trend like Bitcoin, they may invest in the infrastructure layer (e.g., Coinbase) and applications built on top of it. They consider factors like potential competition and evaluate companies individually.

Q: What are some categories that Dixon hasn't invested in or has decided to pass on?

Dixon mentions two categories: Internet of Things and AI. He explains that while there are good companies in these categories, there may be challenges such as incumbents like Apple and Google entering the space or the complexity of coordinating the various components in these fields.

Q: How does Dixon view the potential of companies in New York City?

Dixon believes that there will be ten billion-dollar-plus companies in New York City within the next two to three years. He cites companies like Etsy, Shutterstock, BuzzFeed, and Stack Exchange as examples. He also mentions the benefit of having a significant technical presence and startup experience in the city.

Q: Is Silicon Valley in a bubble?

Dixon answers with a definitive "no." He explains that while there may be certain areas of overvaluation, overall, there is still tremendous potential for growth and innovation in the technology industry.

Takeaways

Chris Dixon believes that investing in "weird" and innovative technologies requires identifying interesting trends and finding passionate individuals. Following what hobbyists and developers are excited about is crucial in predicting future trends. Venture capitalists evaluate companies based on people and make bets on both the trend and the specific company. Dixon mentions that he hasn't invested in categories like Internet of Things and AI but sees great potential in companies in New York City to become multi-billion dollar entities. Lastly, he asserts that the technology industry is not currently in a bubble.