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    Shannon Henry's The Download – Live
    Discussion With Netscape Co-Founder Marc Andreessen

    Thursday, September 16, 1999 at 1 p.m.

      Shannon Henry
    Shannon Henry (TWP)
    Welcome to The Download – Live. I'm your host, Shannon Henry. My guest today will be Marc Andreessen, co-founder of Netscape and former chief technology officer of America Online.

    Andreessen was only 22 when he co-founded Netscape Communications Corp. in 1994. It went on to become one of the most innovative Internet companies that Silicon Valley has produced. AOL acquired it in March for $10 billion and depicted Andreessen's move to the Dulles-based company as a sign of technology leadership and a smooth melding of the two firms.

    Marc Andreessen
    Marc Andreessen (AP)
    He bought a house in McLean and commuted between Virginia and Silicon Valley. The Washington-area technology community embraced him as a new local star.

    Now he says he'll never work another full-time job again, focusing instead on nurturing start-up companies.

    Andreessen will be online at 1 p.m. Thursday to talk about Netscape, AOL, the Web and start-up companies.

    Transcript Follows

    Shannon Henry: Welcome to our discussion with Marc Andreessen. We're thrilled to have him here today. Send your questions now!

    Shannon Henry: Hi Marc! Let's start off by putting to rest all the rumors about why you resigned as chief technology officer of AOL last week. Why did you? And what will you concentrate on now?

    Marc Andreessen: Rumors? We don't need no steenking rumors! I've taken on a new role at AOL (part-time Strategic Advisor) in order to spend more time on startups, both on my own behalf and on AOL's behalf. There are lots of ways that AOL can benefit from all the startups that are happening in Northern Virginia, Silicon Valley, and elsewhere, and I'll be focusing a lot on helping that happen.

    Washington, DC: Hi Mark - Ben from DC, asking, in your opinion, which presidential campaign is making the best use of the Internet, and what you think the impact of the Internet on politics will be?

    Marc Andreessen: Hi all -- I think many of the campaigns are taking the Internet seriously this time around, which is great to see, including the Gore, Forbes, and Bush campaigns. It's kind of fun to see all of Bush's donors up. I read that someone took the PDF files that are on the web site and put them in an Excel spreadsheet so you can do all kinds of interesting analyses :-).

    Dublin/Ireland: I am an AOL shareholder, looks like the street is wary about AOL or is it the Internet. How do you see AOL developments-growth over the next 5 years.

    Marc Andreessen: I think the stock market very accurately values all companies over the long term -- in the short term, in a fast-moving environment like this, I think it's natural that there will be lots of volatility. I think AOL is going to do fantastically well over the next 5 years, AOL is really tapped into the mainstream of the consumer market unlike anyone else and is very good at pursuing that and building a great business on that. Which is good for all of us because it will help the Internet be available to everyone on the planet, ultimately, which in my mind is a great goal.

    Gig Harbor, WA: Our company,, isn't exactly a startup -we've been around 10 years-, but we are seeking capital for the first time to grow to meet a huge demand. Is there a place in the venture capital world for companies like us?

    Marc Andreessen: Absolutely... more small and growing companies are getting funded every day, it's really a period of venture investing unlike anything we've ever seen. Angels or private individuals often fund companies when they are very small or very new, professional venture capitalists fund a smaller set of companies that they think will grow very fast. If you are looking for capital I'd suggest looking at for one (a web site that links growing companies with angel investors) and also Capital Investors, a local Northern Virginia angel group that I'm a member of, for another.

    London, United Kingdom: Do you believe that online businesses are serious competitors to traditional brick and mortar retailing-banking organizations?

    Marc Andreessen: I think so -- I think we're already seeing that in how AOL was able to compete effectively with companies like AT&T, Amazon with Barnes & Noble and Borders, and with Toys R Us. It's still the very early days of ecommerce and traditional companies have a lot of opportunities, but the Internet is a major discontinuity (what Andy Grove calls a "Strategic Inflection Point") for almost any business, and there are lots and lots of businesses out there that have simply not come to grips with that yet and are essentially waiting to be cannibalized by their online competitors.

    Shannon Henry: Since you spend a lot of time in many of the tech centers -the Valley, Washington, Boston, etc., can you tell us a little bit about how they're different?

    Marc Andreessen: Silicon Valley is still unique in the sheer concentration of venture capitalists, entrepreneurs, programmers, marketers, lawyers, investment bankers, etc. all geared towards high tech, however it is a very congested and expensive area and it's getting harder to do new companies there. Northern Virginia is I think the #2 market, growing very fast, with many advantages (great concentration of talent, growing and very smart venture capital base, etc.) and will close the gap with Silicon Valley over the next 5 years considerably. Seattle is probably #3, with lots of smart people and Microsoft money :-). Boston, Raleigh-Durham, Austin, Colorado, and other locations are also doing very well. The upshot is that it is very feasible to do a startup in any of these locations, and lots of others.

    Washington, DC: Mark,
    For those of us who have new hi-tech, internet related businesses that we want to fund, how do we get in touch with you to pitch our idea and get your feedback?


    Marc Andreessen: I would suggest calling the Capitol Investors group, which is run by a gentleman named Jeff Tonkel, of which I am a member. That is a good way to get the attention of not only me but also about 20-25 of Northern Virginia's smartest high-tech execs and entrepreneurs. His email address is

    Washington, DC: Marc,

    It's been several months since AOL acquired Netscape. I haven't heard that much recently about Netscape's e-commerce line of software products -e.g., BuyerXpert, SellerXpert-. What is the direction for these products?

    Marc Andreessen: I love that question because I love those products :-). All of Netscape's ecommerce software products are now part of the Netscape/Sun alliance under the "iPlanet" brand and are being sold and supported by both Netscape and Sun sales and service people. They are doing better than ever, Sun has proven to be a great partner in this space. There are new product announcements out of the alliance virtually every month, stay tuned for more yet to come...

    Leesburg, Virginia: I just finished reading Jim Clark's book on the making of Netscape. He seems to give you very little credit, other than bringing the gang from Illinois with you. Do you think this perception is correct, and if yes, does it bother you.

    Marc Andreessen: :-) I disagree, I thought the book was a fine retelling of the Netscape story and I think Jim is one of the most amazing geniuses who has ever started a business -- he's the only person in history to have created three billion-dollar companies from a standing start, which is simply an amazing feat and which is not a coincidence, it's because he's a genius.

    Somewhere, USA: Marc, My parents use COMPUSERVE and we use AOL. Is there any future plan to incorporate the COMPUSERVE folks into the mainstream AOL family so that they can enjoy the benefits of things like AOL Instant Messenger?

    Marc Andreessen: Try Compuserve 2000, I think you'll find it's a big step in the direction you are talking about.

    Springfield VA: If you have Billions.

    Why continue to work?

    Marc Andreessen: I don't have billions :-), and I love what I do... what can I say?

    Vienna, VA: What do you feel is the preferred method for getting a startup going: bootstrapping? VC-funding? others?

    Marc Andreessen: I believe very strongly that any method can work. Many great companies have been built by boostrapping (including Microstrategy in Northern Virginia, and EDS back in the 60's, which is an amazing high-tech startup story if you haven't read about it -- read either of the two Perot biographies and ignore the parts about politics :-). The VCs have company building down to as much of a science as it's ever likely to be. Angels can also be very effective. The most important thing is to get started and do something useful and interesting, and get great people working on it... these days the #1 reason companies don't get funded is simply because what they're doing is not unique or interesting enough, the #2 reason is probably because there isn't enough of a team working on it. The funding is out there.

    College Park, MD: These days people are always talking about that next killer app for the Internet. In recent years though it hasn't really been the traditional applications that runs on computers -ie. Netscape, Pointcast, ICQ- that have caught fire, but content-filled websites -eBay, Yahoo!, even AOL sites-. Do you consider these some of the next killer apps, content-rich websites and where do you see the website going?

    - Vikram Pant, Univ of MD - College Park -BTW - AOL Summer '99 Intern-

    Marc Andreessen: The traditional concept of "killer app" was a software product that lots of people have to have -- clearly Netscape and ICQ are killer apps. These days I think you are right, often that is a web site instead... kind of a "killer site" or a "killer business". I tend to look for sites that benefit from a phenomenon called "increasing returns" -- which are driven to get bigger simply because they are getting bigger, sort of like a self-fulfilling prophecy -- like Ebay, where the more buyers there are, the more sellers sign on, and the more sellers, the more buyers, and so on and so on. I think there will be some new killer sites in interesting categories like barter and also aggregated buying. I'm an investor in a site called that lets groups of people come together ad hoc over the net to buy in volume, it is a great example of increasing returns -- everyone will want to be part of the biggest buying group, because that's where the lowest price is; the lower the price, the more people who will join; and so on.

    Alexandria, VA: I was wondering how long you spent creating mosaic and what gave you the idea of -or the vision of- a web browser in the first place. Was it just something you were tinkering around with?

    Also, is it true the University of Illinois tried to shut down Netscape and profit themselves from your invention?

    Marc Andreessen: We basically just thought that it didn't make sense that the Internet should be hard to use and require a degree in computer science... that it should be as easy to use as a Mac, for example. That was a radical idea back in 1993, when virtually everyone on the net was a highly trained computer scientist or researcher. We were also inspired by a lot of the work that had gone into the Internet up until then, including the creation of the web and also ideas going back to the 1960's from Doug Engelbart and Ted Nelson. It took about 3 months to do the first version of Mosaic, and we worked on it for a total of about a year before we left and founded Netscape.

    The University of Illinois did try to kill Netscape in its early days, one of the all time big mistakes by any university, for many reasons. I don't think they would try to do that today, in general universities benefit a lot from successful startups that spin out of them, such as Stanford, which has benefitted enormously from Hewlett-Packard and other spinoffs over the last 50 years, also MIT and spinoffs like DEC and others.

    Washington, DC: “How many customers does a company need to make a profit?” Sound familiar? Care to respond for those who don't remember your comment about AOL?

    Marc Andreessen: The answer turned out to be 8 million :-).

    McLean, Virginia: Is Microsoft going to crush AOL with free net access, as well as Sun-Netscape alliance?

    Marc Andreessen: No.


    Glen Burnie, MD: Marc: Sounds like you're becoming a free agent. Do you think that's how all of us are going to work now that the Net has gone mainstream?

    Marc Andreessen: I think it is getting easier and easier to work as a free agent... the net makes it possible for smart people to work from anywhere in the world, in theory. More and more I think lots of people are deciding to be free agents and work on specific projects that interest them, for either one company or lots of companies. Also like a lot of people I have become almost completely portable -- my notebook PC, my cell phone, my 2-way email pager, and my briefcase and I can work from anywhere :-).

    San Francisco, CA: Hi Mark,

    I saw you at the UCON in San Fran a few months ago. I really enjoyed what you said Jim Barksdale said about Edison inventing the lightbulb.

    On that theme, we still are often using the old model and applying it to the internet -ie- catalog shopping, newspaper delivery, radio call-in shows, etc.-

    Where is the future here? What's the paradigm shift that will happen?

    In the early days of movies, they filmed things you would see in the theatre -ballets, plays- until people figured out they could tell their own stories.

    What do you see that future where we are making new models and getting rid of the old ones?

    And, how do you feel about Mozilla?

    Marc Andreessen: I agree with you... Marshall McLuhan once said that the content for every new medium is the previous medium -- we see that today where everyone tries to take models from TV, radio, newspapers, magazines, etc. and wedge them into the net, just like TV and movies were basically just a stationary camera pointed at a theater play. I think it's going to take quite a while, perhaps 10 or 20 years, before we really see how the net is going to be used as a medium unto itself. Also we should not underestimate the net's continued ability to change -- TV and radio were hardware-based media, once you set the standards they didn't change (color TV has been exactly the same for almost 50 years); the Internet is software-based and so it keeps mutating and you can continually do new and different things on it. So it may never stabilize, it may always just be chaotic and in flux.

    Herndon, VA: Does AOL have a broadband -xDSL, Cable Modem, etc.- strategy, that is, alternatives to the conventional 56Kbps dialup consumer access to the Internet?


    Marc Andreessen: Yup, AOL will be rolling out DSL in conjunction with many of the local phone companies, has a deal with Hughes/DirecTV for high-speed Internet access over satellite, and so on. There will be lots more deals in general throughout the industry over the next few years.

    Tysons, VA:

    Do you see limited bandwidth as the biggest constraint to faster growth of the Internet, or is it the "digital divide" which prevents lower income households from getting online?

    Marc Andreessen: I think the Internet is clearly very useful and beneficial to people even at current bandwidths (e.g. 28.8 or 56 kilobits), so the biggest constraint to growth is the digital divide, in particular the ability for people to afford the equipment and services needed to get on the net. Clearly the situation is improving with the declining cost of a PC, etc. but we have a lot further to go.

    Washington, DC: How much does AOL spend on postage each year? It seems kind of odd that such a hi-tech, forward thinking company relies so heavily on "snail mail".

    Marc Andreessen: It works :-). It's hard to reach people who are not yet online by doing just online advertising :-).

    Fairfax, Va: I am a big fan of Sun Microsystems. They seem to have their share of geniuses, such as Bill Joy, James Gosling, and Scott McNealy. What do you think of the company, and what do you think the future of the Sun-AOL alliance will bring?

    Marc Andreessen: Sun is a fantastic company -- very visionary, like when they had an Internet strategy back in the mid-80's when most other companies had never even heard of the Internet. Also extremely successful as a business. Scott, Bill, James, etc. are clearly all geniuses... also Bill Raduchel, who just joined AOL, and Eric Schmidt, who left Sun to run Novell, and lots of others. Pound for pound it's one of the smartest companies out there.

    Dulles, VA: Marc...

    Inquiring minds want to know... what's the deal with the Miller Lite commercial? ;--

    Marc Andreessen: I couldn't turn down an opportunity to work with Norm MacDonald, who I think is very funny, and pick up the $25,000 fee which I immediately donated to charity :-).

    BP from Fairfax, VA: Hi Marc -
    Are you still single -- and if so, how would you like me to set you up on a date with my sister? -she likes bulldogs!-

    Marc Andreessen: Maybe we should just shortcut and set her up with my bulldogs :-).

    Bethesda, MD: Do you get the AOL disks in the mail like the rest of us? What do you do with them?

    Marc Andreessen: Yup, and I use them as frisbees with my bulldogs -- they love to chase them across the yard and then try to eat them... crunch crunch :-)

    San Francisco, CA: Marc:

    What do you think of the work TechNet is doing to bring politics and technology leaders together. It seems that Roberta Katz -new TechNet President and CEO and former Netscape General Counsel- has done a wonderful job so far.

    Marc Andreessen: I think Technet is doing very important work -- I just had lunch with Roberta and she has all kinds of projects underway for expanding Technet into many more high-tech startup areas, for further educating policymakers and politicians, and for getting more high-tech people involved. It's very important work because the government is going to have a major influence on all of these changes in our society and we need to make sure we engage with them and work with them.

    Washington DC: I am interesting information on the process of "starting" up starts. I am technically proficient, understand the concept of design, and have an entrepreneurial spirit, however I lack perspective on where to focus my attention for ideas-concepts of innovation or design. Also, are there any -in DC- interest groups-clubs that are devoted to the concept of nurturing up starts or developing individuals that possess the desire to get involved in this movement?

    Marc Andreessen: My suggestion for what to focus on is just one good, simple idea that no one else seems to be doing -- all the best startups in retrospect had an "of course" quality about them once they got successful -- they did something that lots of people could have done, in theory, and should have done, but only they did, because other people just missed it or thought about it wrong. Apple, Sun, Oracle, Microsoft, Netscape, Yahoo, Ebay, AOL, and many others are examples of this. Remember that they all started out very small and generally undercapitalized -- e.g. Yahoo was two college kids in a trailer at Stanford for almost two years before they got venture funding. In DC check out the Morino Institute, they have a tremendous number of programs for helping nurture high-tech startups. Also check out

    Mclean, VA:
    Hi Marc-- very excited to see you online--- My question is as follows:

    What do you think the most common way to access the Internet in the future will be: through fat clients -stand alone applications- or through the standard browsers?


    Marc Andreessen: Both, actually -- the problem with just a web site is that there are lots and lots of web sites out there now, getting someone to come to the next new one is getting really hard -- a fat client on the desktop can serve as a great "anchor" and keep bringing people back. But it has to be very carefully designed and built, since not many fat clients can be successful, since people will not download too many pieces of software. So I think it's a combination.

    Shannon Henry: Everyone I've interviewed about you says you're a voracious reader. What books are you reading now and what magazines/newspapers/web sites do you regularly read?

    Marc Andreessen: I read huge piles of stuff... I start to get nervous and fidgety if I don't have something to read at all times... I sometimes think my house is going to burst at the seams from all the paper and magazines and newspapers I have piled up... recently I've really enjoyed Cryptonomicon by Neal Stephenson, I've also been rereading Applied Cryptography by Bruce Schneier, also both biographies of Ross Perot (the EDS story), etc.

    Shannon Henry: Is it true that you and your bulldogs didn't much like the Washington weather? Does your new role mean you'll still be spending time in the area?

    Marc Andreessen: We all love the Virginia countryside and parks, bulldogs are unfortunately very heat sensitive and so for a while there they couldn't go outside except at 3AM :-(, but I'm sure they'd like the weather there now :-).

    Bethesda, MD: What do you think is the smartest decision you ever made?

    Marc Andreessen: Agreeing to do this web chat :-).

    Washington, DC: Is there a version of AOL that I can load on my PC running Linux?

    Marc Andreessen: No, but you can run Netscape :-).

    Bowie, MD: What do you suggest for a group of recent college grads -with full-time jobs- who want to form a technology start-up? Is it possible to do so while working and with a very small amount of money available?

    Marc Andreessen: Depends how hard you want to work... seriously... it's hard to do it and have a full-time job at the same time, but Ross Perot did it, Paul Allen had a job when he and Bill Gates started Microsoft, etc. At some point though an entrepreneur has to really commit and go full time after the new opportunity, especially these days since the market is so competitive and there are so many startups. It's often a very big leap. I often think these days that the risks and uncertainties (and often terrors) of doing a startup are getting glossed over, it can be a very scary thing, and very risky. Money is not really the issue so much as whether the people involved can get by on the money they have long enough to get traction on the new idea.

    Kansas City, MO: Marc,

    Many of us are seeking Internet careers-- but have time constraints that preclude working typical startup hours. -e.g., I'm a mother of with two children and a third hopefully arriving this afternoon-. What suggestions might you have for folks trying to pick strategic Internet projects and developing an intelligent Internet focus given other lifestyle demands?


    Marc Andreessen: I think a lot of the larger Internet companies are getting much better at hiring really good people who do not want to work insane startup hours... I personally that it is unreasonable to expect everyone in even a small company to work 80+ hours/week, I think many people are most productive at a reasonable number of hours of work per week, although there is certainly lots of pressure in many startup environments to work lots of hours. So I'd look at the bigger Internet companies where there are lots of opportunities and where they're still doing many interesting things.

    Congratulations on your new arrival!

    Arlington,VA: Do you think you'll be putting your new house in Mclean up for sale any time soon as a result of your new role at AOL?

    Marc Andreessen: Want to buy it? :-)

    Just kidding...

    Alexandria, VA: How do you react when people discussing about the Netscape history say: he's the guy that was working on campus for $6.95....

    Marc Andreessen: It's true... of course $6.95/hour in Champaign Illinois is equivalent to about $50/hour in Silicon Valley :-).

    Great Falls, VA: Your story about making the internet as easy to use as a Mac begs another question. What do you think about Apple's latest products, particularly the G4, airport, and iBook, and what do you see happening in the future for Apple?

    Marc Andreessen: Apple's new products are simply amazing -- just last night I was excitedly showing someone the foldout ad for the G4 Macs in this week's Newsweek -- they are amazing machines, with great design and great marketing behind them. It's been really great to see, it makes you wonder what could have been had Steve Jobs never been kicked out of Apple in 1985. Apple looks like they have a great future in front of them now. All I know is that I want a G4 and one of those huge new 22-inch Apple LCD displays :-).

    Gotta run... thanks for all the great questions!

    Shannon Henry: Thanks for the insightful answers Marc. And thanks to all of you around the world for your great questions. In two weeks we're scheduled to have Mario Morino as our guest, so come back then. Bye!

    © Copyright 1999 The Washington Post Company

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