The DotCom Boom And Bust with guests Marc Andreessen and Tim Draper

The Boost VC Podcast

The media is filled with experts comparing today’s market with the dot-com crash of 2000. But few, if any, of these experts actually lived and worked through the dot-com boom and bust.

Marc Andreessen is Founder and General Partner at Andreessen Horowitz, and Tim Draper is Founder and Managing Director at Draper VC. And both Marc and Tim were either running or investing in tech startups at the time.

So, what was it like to experience the dot-com crash? What did Marc and Tim learn that might give us clarity around how to navigate an uncertain economic future?

On this episode of Boost VC, Marc and Tim join us to explore the likelihood that we’re headed into a recession and explain what they’re encouraging founders to do right now.

Marc and Tim discuss the mistakes they made in the early 2000s and describe why a downturn can be good for the best companies.

Listen in for insight on retaining employees in a remote or hybrid setting and get Marc and Tim’s advice on contingency planning to survive an economic crisis—without losing your business.

Topics Covered

Where Marc and Tim go for their media

• Timeless source of info = books prior to 1960
• Direct conversations with founders
• Science fiction to predict future

What Marc was doing in the early 2000s

• Launch Netscape in 1999 at high point in market
• Lifting weights to burn off stress

What Tim was doing in the early 2000s

• Just raised $1.4B to bring VC to world
• Hosted party ‘2001 Cyberspace Odyssey’

What it takes to be a successful entrepreneur

• Smart, open to new ideas and determined
• Social skills to build team, raise money, etc.
• Disagreeable (think against the grain)

The likelihood that we’re headed into a recession

• Good people laid off start own businesses
• Economy too complex to predict future

What a16z is encouraging founders to do right now

• Think in terms of scenarios and contingencies
• Consider specific circumstances of your company
• Cut deep enough that only do layoffs once

Tim's experience as an investor in the dot-com crash

• Reactive approach, scrambled to raise money
• Lost 4 businesses with $100M in revenues

The difference between the dot-com crash and 2008

• 2000 was equity-driven, credit crisis in 2008
• Tech companies don’t run on debt

What Marc did right and wrong in the dot-com crash

• Underestimated how bad things could get
• IPO saved company from bankruptcy

Why a downturn can be good for the best companies

• Eliminates competition
• Easier to recruit, gain market share

How to retain employees in a hybrid/remote setting

• Create intense social bonding experiences
• Management training, employee development

How tech innovation is flowing out of the Bay Area

• COVID as catalyst, other cities rise in importance
• Texas and Florida are attracting entrepreneurs

How governments are in competition for entrepreneurs

• Regulations push businesses out
• US can remain #1 if allow startups to innovate

Marc and Tim’s greatest qualities + accomplishments

• Tim fearless in engaging with boldest ideas
• Marc transformed the VC business

Connect with Marc

Andreessen Horowitz https://a16z.com/

Andreessen Horowitz on Twitter https://twitter.com/a16z

Marc on Twitter https://twitter.com/pmarca

Connect with Tim

Draper Associates https://www.draper.vc/

Tim on Twitter https://twitter.com/TimDraper

Draper University https://www.draperuniversity.com/

Meet the Drapers https://www.meetthedrapers.com/

Resources

Tom Swift Books https://tomswift.net

The Hard Thing About Hard Things by Ben Horowitz https://www.amazon.com/Hard-Thing-About-Things-Building/dp/0062273205

My Years with General Motors by Alfred Sloan https://www.amazon.com/Years-General-Motors-Alfred-Sloan/dp/0385042353

The a16z Podcast https://future.com/a16z-podcast/

Sarbanes-Oxley Act of 2002 https://www.law.cornell.edu/wex/sarbanes-oxley_act

Draper Innovation Index https://index.draperhero.org/

Connect with Boost VC

Boost VC Website https://www.boost.vc/

Boost VC on Facebook https://www.facebook.com/boostvc/

Boost VC on Twitter https://twitter.com/BoostVC

Boost VC on Instagram https://www.instagram.com/boost_vc/