Excellent interview with Marc Andreessen (Founder: Netscape, Loudcloud, Ning, Investor: Plazes, Netvibes, Twitter, Board: Facebook, eBay) being interviewed on Charlie Rose.
I love what he has to say about the lowering of production and infrastructure costs for web applications bringing a new wave of innovation. With colaab we’ve seen this first-hand. The tools available have enabled us to build an advanced RIA for collaboration, with a small passionate team. We’re running on Amazon Web Services which means that we only pay for usage and we can scale our infrastructure up and down dependant on demand.
storm ideas was founded specifically to take advantage of this shift, but always nice to have your strategy validated by one of the Internet’s luminaries.
He’s also got some advice for the print industry:
CR: So to play offense for a newspaper for you means what?
MA: Oh, you got to kill the print edition.
CR: You would stop the presses tomorrow?
MA: You have to kill it.
CR: Stop the presses tomorrow.
MA: You have to kill it.
CR: Stop the presses tomorrow.
MA: Stop the presses tomorrow. I’ll tell you what. The stocks would go up. Look at what’s happened to the stocks. This investors are through this. The investors are through the transition. You talk to any smart investor who controls any amount of money, he will tell you that the game is up. Like it’s completely over. And so the investors have completely written off the print operations. There is no value in these stock prices attributable to print anymore at all. It’s gone.
CR: So you would recommend to the owners of the New York Times, stop printing papers.
MA: Yeah, absolutely. You have to. You have to.
CR: And take your losses?
MA: Yeah. You have to.
CR: Like a courageous person.
MA: Chronic pain? Acute pain. How many years — music industry, same thing. How many years of chronic pain do you want to take to avoid taking a year of acute pain?
He goes on to describe how if you have 90% of your revenues from one area and 10% from another (as you can imagine might currently be the case at a newspaper between print and web) then your efforts will be distributed across those areas accordingly. If the area you receive 90% from now is in terminal decline then he suggests that it’s a better strategy to get out from under that, take the hit now, and focus on the 10% that has long term potential. He backs this up with an interesting story of the early days at Intel where over 50% of their revenue came from selling memory but they were being undercut by manufacturers from Japan – they chose to refocus on the microprocessor, and we all know what happened next.