What better way to kick off TechCrunch Disrupt SF 2012, than to bring together Silicon Valley legend “Coach” Bill Campbell, Chairman of Intuit and Apple board member, with Andreessen Horowitz co-founder Ben Horowitz? One of the first questions Campbell brought up was this idea of “software eating the world.” What that means, said Horowitz, is that there’s increasing value as the tech industry is moving from hardware to software. We’re already seeing this in cloud computing, and notably in consumer electronics where for years, companies based in Japan and Korea led the way. Now, as the value is moving to software, companies with access to content, software and hardware – like Apple and Amazon, for example – are taking over.
Technology, and specifically software, is now in a position to “eat every industry systematically,” said Horowitz, leading him to quip (stealing a line from Marc) “dinosaurs were not in favor of being replaced by birds,” as to how the older competitors see this transition.
Speaking of Amazon’s latest announcement, Horowitz remarked that “it’s hardware, software and content – and increasingly, to play in that field, if you don’t have great access, great pricing and great availability of content, you probably can’t compete in the computer business,” he said, “which is really a new thing.”
Horowitz said that traditionally, the total return on VC investment over the years remained consistent because there’s only some much that the industry could absorb. Now software is “eating” other industries from animation (like Disney’s Pixar) to even agriculture and education. As this transition occurs, Andreessen Horowitz is open to investing in entrepreneurs who are innovating in new market segments – even if they had never before considered that segment. We’re looking for breakthrough ideas, he said, things that had never been thought of before. What’s more important to the firm is that the entrepreneur has the courage to build a company around their idea.