How Is Venture Capital Changing as Companies Get Easier to Build?

Ben Horowitz says the venture industry was basically the same from 1970 to 2008 and 2009, because firms were built not to change. a16z started in 2009. The internet was the first big break: companies got easier to build. A computer company used to need manufacturing, professional services, and a direct sales force before the first product sold. Twitter was five people with laptops and AWS. AI is the next step, so the venture landscape is almost certainly going to change again.

Older bets were expensive and very likely to fail. The hit rate for promising companies went up. What stays is momentum. Two companies can have the same idea and two strong teams, and the one that gets more momentum wins, because the path depends on what happens along the way. Raising from a strong firm can bring engineers, which brings a better product, more customers, and a faster next round. If there are dramatically more companies, or they need less money, the work under that changes. Helping a company get momentum, and become more attractive to customers, employees, and later investors, is the part he expects to remain.