A discussion between two heavyweights like Marc Andreessen and Clayton Christensen is bound to be interesting, especially when they discuss how their own ‘industries’ (Education and Venture Capital) are themselves being disrupted. Andreessen makes the observation that in the VC world, the return over the last 15 years has been nearly zero. The problem, in his analysis, is that there are not enough really good, big opportunities (not enough Unicorns) to invest in so the $6 trillion (yes trillion) invested in bonds that are now returning a negative yield has no place else to go, yet investors keep searching for something. As a consequence, you have a lot of money (a fraction of the $6T) being invested ‘unwisely’ (to use a polite term).
Christensen poses the interesting hypothesis that the reason that there are not more Unicorns is that startups, and their VC backers, have fallen into following a ‘formula’ of what a good company looks and behaves like. Potentially disruptive companies that do not follow this formula don’t get funded. A situation that will inevitably lead to disruption.
The article contains a lot of other good insights and quotable lines, Worth a quick read..