Andreessen Horowitz Part II

**Ben Gilbert** (0:00)
I need an M1 so that we can not have this very quiet little background noise that hums, that we have to remove in our audio, that annoys me to the nth degree. There's a million reasons I need an M1 Mac, but this one is clear and present. I can't wait, September.

**David Rosenthal** (0:18)
Is it you, is it you, is it you?

**Ben Gilbert** (0:32)
Welcome to season nine, episode two of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert and I am the co-founder and managing director of Seattle based Pioneer Square Labs and our venture fund PSL Ventures.

**David Rosenthal** (0:47)
And I'm David Rosenthal and I am an angel investor based in San Francisco.

**Ben Gilbert** (0:54)
And we are your hosts. Well, listeners, welcome to Andreessen Horowitz, part two. We last left Mark and Ben in their instant messenger conversation in 2009 with the famous first words, we ought to start a venture capital firm. And I was thinking the same thing.

**David Rosenthal** (1:12)
Yeah, I think that conversation was actually, it was actually 2008

**Ben Gilbert** (1:16)
2008 That makes more sense. Launched in 9

**David Rosenthal** (1:19)
Takes a little while. We'll get into it. It takes a little while to set up a venture firm, raise the money.

**Ben Gilbert** (1:24)
Why, you don't just like snap your fingers and have $300 million?
Well, today, listeners, we will cover the next 11 years from the firm's founding to today. This is the story of the VC firm that basically changed everything in the whole landscape. Super high valuations, massive fund sizes, criticism for both of those things, becoming an investment firm and a media company, popularizing the message that former operators make better VCs than career investors do. I mean, David, reflecting back, it's pretty crazy that A16Z is only 11, 12 years old.

**David Rosenthal** (1:58)
Wow.

**Ben Gilbert** (1:58)
Yeah, they became a big dominant force so quickly. To put it in perspective, they were founded two years after the iPhone came out.

**David Rosenthal** (2:07)
That's right. Pretty good time to start a venture capital firm.

**Ben Gilbert** (2:12)
Perfect timing. Well, listeners, two things to highlight if you like the show. One is our Slack, and when I say Slack, I do indeed mean the company that A16Z made three-ish billion dollars investing in.

**David Rosenthal** (2:24)
Do you mean TinySpec?

**Ben Gilbert** (2:26)
Oh, sorry. I do mean TinySpec. You're right. We've got a great discussion of these episodes, crypto, investment ideas, all good stuff with a community of 8,000 super smart people like yourself. Join at acquired.fm slash Slack. And the Limited Partner Program. This is our members-only community where we drop special for subscribers content. The most recent one was with Kyle Samani, who is the co-founder and managing director of MultiCoin Capital. We talked with him about how to manage a crypto fund, how it's different than managing a normal fund, which we'll talk about on this show. Very different, it turns out.

**David Rosenthal** (3:05)
What was his line? He was like, because they have a hedge fund and a venture fund all doing crypto. And he was like, well, the demarcation is, you know, if time to liquidity is more than like six, nine months or so, we put that in the venture fund. Oh, wow.

**Ben Gilbert** (3:17)
Yeah, a whole completely different universe. If you want to listen to that or any of the other LP show episodes or join us on our next upcoming Zoom call with LPs, you can click the link in the show notes or go to acquired.fm slash LP. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (3:37)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose-built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (4:02)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (4:08)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (4:27)
Obviously, it's a huge benefit for the environment and for customers on costs since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.