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90% of everything is. . . Guess

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Previously, 90% of the time, you only accessed things on your computer’s local network. Then in 1993, at the University of Illinois, Marc Andreessen developed Mosaic, the first Internet browser, which allowed users to browse the World Wide Web 90% of the time. He moved to Silicon Valley and founded Netscape. Mr. Andreessen is now a general partner of a first-decile venture capital firm, better than 90% of his peers. Andreessen Horowitz recently raised $9 billion in new funding.

Last week, I spent some time sitting on Mr. Andreessen’s back porch thinking about the magic of 90% and how it created Silicon Valley and continues to rule it. “In venture capital, you think a lot about what’s called adverse selection,” says Andreessen. “’Why am I lucky enough to be the person you are trying to raise funds from?’ You want to achieve a positive selection, the best people come to you.

But how? Mr. Andreessen begins with the replication crisis in scientific studies, particularly in psychology – more than half of studies cannot be replicated. I suggest that “studies show” are the two most dangerous words in the English language. Mr. Andreessen quickly adds: “The corollary is ‘the experts say’. ”

Mr. Andreessen’s friend in the world of scientific research told him about a landmark study of heart and lung drugs that were approved but weren’t effective. Mr. Andreessen learned that “one of the things you do to counter a replication crisis is ‘hypothesis pre-registration’ – instead of pretending afterwards that you have a hypothesis, that you select data to to prove.” The result of this pre-registration? There were fewer new drugs approved because researchers could no longer tamper with the data. “Of course, that implies that most of the drugs that are already on the market today probably don’t work.” His friend agreed and said forget 50%, it’s 90% of the research that’s bad to begin with.

Then Mr. Andreessen said, “I had heard of that, aha, Sturgeon’s Law!” Theodore Sturgeon (1918-85) was a science fiction writer bored that people say all science fiction was bad and wanted to defend the 10% that was good, saying “90% of everything is crap” . Mr. Andreessen says that “90% of music is crap”. The same goes for “paintings, writing, TV shows and movies”. I would add ideas, actions, opinions, politicians – the list goes on.

This is “the nature of creative work. There are only a few people in each area who know what to do,” says Andreessen. “The reason I’m so fascinated by this is that the ethic of our time is egalitarianism. Everyone is the same, everyone is equal. The vanity of the day, the philosophy that if only you put in the time, you’ll get great results. “It’s not just about effort. It’s not just accidental. Something else is happening. In these areas we have a very small number of people who know what to do. And we have a much larger number of people who generally work under a number of delusions, generating shit. It’s like that. I wish there were more quality painters. . . or contractors.

How does this explain Silicon Valley? After Franklin D. Roosevelt’s science adviser, Vannevar Bush, conceptualized modern university science — “scale science” — metrics were put in place: number of papers, grants, number of students per teacher, quotes. Universities have created an easy-to-play implicit grading system. University research is a “self-accrediting cartel without market pressure,” Andreessen notes. Hence the replication crisis.

“Super talented” people, according to Mr. Andreessen, leave academia or big business because they realize they are “swimming in an ocean of mediocrity”. Hence the positive selection of venture capitalists. “Doesn’t it take a bold person to take the leap?” I ask. “Yes, aggressiveness and intolerance. Or aggressive intolerance! said Mr. Andreessen. “But it’s not the people’s fault, it’s the systems fault.” University research and big companies like IBM “keep running the same scripts.” They need a new model. Attention Apple,

Amazon,

Facebook and Google.

Silicon Valley has therefore become a positive talent attractor. “Venture capital needs to meet the best, those in the top 10%,” says Andreessen. Thanks Sturgeon. And far from the East Coast, it was “the vanguard of the frontier”.

But doesn’t Sturgeon’s Law also apply to investing in startups? A typical venture capital fund has a home run, a few companies with poor returns, and many steaming holes in the ground. “We have a sponsor who has complete data,” says Andreessen. “For high-end venture capital funds, the good news is that it’s not a 90% failure rate, but a 50% failure rate. This is for companies in the first decile. So maybe Sturgeon’s Law doesn’t apply. But wait. The 90% of bottoms below the top decline do worse. The law of the sturgeon reigns. Mr. Andreessen pauses, raises an eyebrow and nods in agreement.

Does this law apply everywhere? Or maybe 90% of all laws, including Sturgeon’s Law, are crap.

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