Andreessen Horowitz’s (a16z) shift from being close to the media to choosing to speak out is just a microcosm of the deteriorating relationship between the tech industry and the media industry. This article tells many stories that a16z has not publicly disclosed, and discusses the relationship between VC, media and the technology industry. The author is Eric Newcomer, a former Bloomberg reporter.
Benedict Evans, who was an in-house analyst at a16z, has been thinking for years that ” a16z is a VC-money media company “.
This perception is becoming more and more true.
While there has been a lot of informal talk on Twitter about ditching the media and opting to “publish directly,” a16z has really taken it consciously and step-by-step, and the company’s strategy has huge implications for the future of media and the venture capital industry. .
Here’s a story about how a16z disrupted the VC world by courting the media and then deliberately abandoning its good relationship with the media.
Let’s start from the beginning now.
About a decade ago, Margit Wennmachers sent an email to reporter Kara Swisher.
Kara Swisher wrote a story during a break from horseback riding, mentioning that Margit Wennmachers will be leaving Outcast, the communications agency she co-founded with Caryn Marooney, to join one-year-old venture capital firm a16z as a full partner – Silicon Valley Few women hold the title of full partner, especially in 2010.
In an interview with a16z’s internal podcast, Wennmachers explained her early company positioning strategy. She recalled: “ I wanted to try to be on a cover story because — now it sounds clichéd, everybody reads the news on Twitter, they read stuff online — but the cover story still has a statement. It’s the sort of promotional material print you see in an airport. ”
Leveraging Wennmachers’ media expertise, Marc Andreessen’s “One Second Thought” model, and Ben Horowitz’s prestige, the trio took Silicon Valley by storm. The company makes bids for sought-after companies, offers founders a range of services, and goes to great lengths to tell its story to the media.
Encouraged by Wennmachers, Andreessen wrote a historic op-ed in the Wall Street Journal in 2011 titled “Why Software is Eating the World.” This sentence is now known to everyone, so that all kinds of propaganda will shout “xxx eats the world”.
” Margit Wennmachers is indeed the hidden founder of this company, and Marc, Ben, and Margit control the power mechanism of the company, ” a startup founder who had raised funds from the company told reporters.
Communications executives and journalists alike were in awe of Wennmachers’ influence over the media. One public relations person said: “The inside story in Silicon Valley is: She’s the best person, she’s very good. I would never want to have a bad relationship with her .”
While Wennmachers’ early-stage strategy was familiar to many in Hollywood and Washington, she was less common in the club-like, high-flying Silicon Valley of the time. “She would say her job is to curate information so that it can shape the narrative,” said a person familiar with Wennmachers.
Wennmachers uses industry gossip and her contacts with the firm’s partners to maintain her good image with many journalists .
A communications executive at an a16z-invested company recalled that Wennmachers had scouted for a reporter about an upcoming news release, and the executive said Wennmachers personally passed the scouting information to the reporter.
A PR executive (from a powerful company in competition) described Wennmachers as a strong man. “You can’t get past us (posting a message), and if you get past us, we’ll cut off the flow of information.”
A news source recalled that Wennmachers had tracked down a potential story. When she called back to pour cold water on the story, the reporter took it in stride. Wennmachers told reporters that they were now “good friends,” a statement that struck reporters as odd. They just want to get the facts right. But Wennmachers’ attitude seemed to reflect the comfort she expects from journalists who dutifully cover Silicon Valley.
Wennmachers regularly hosts salon-style dinners at her home in San Francisco’s Presidio neighborhood, inviting journalists, portfolio companies, and corporate partners to attend.
While it’s not uncommon for venture capital firms to entertain journalists, Wennmachers did a better job than others. When I was invited to one of her dinners in 2014, I felt like I was finally being invited into Silicon Valley’s inner circle.
“ I was invited to dinner at her house with members of the media. It was incredible ,” recalls one founder. “It was like a cool invitation. If you’re in the media, it’s really cool to have dinner at Wennmachers’ house. It’s an exciting thing, and it’s a little heartwarming to think about.”
Wennmachers can put on a friendly face, but after spending time with her you realize she’s a deeply serious person. She won’t win over reporters because she’s funny, but because she doesn’t tell that crap. She can fundamentally understand what makes a good report, and she understands a reporter’s motives better than many reporters. That’s partly why a16z has since turned against the media.
In the early media heyday, Wennmachers would assign firm partners to media companies. These media companies are eager for their partners to speak at lucrative conferences, and the firm’s partners fill reporters’ columns with their own rhetoric predicting what the future will look like.
The two women, Swisher and Wennmachers, have climbed the ladder in a male-dominated industry and remain friendly to this day. Many Silicon Valley insiders strongly suspect that one source of Swisher’s daily Silicon Valley news is Wennmachers, but Swisher claims that Wennmachers is very loyal to her own company, even though Wennmachers “doesn’t pretend when I might be calling to ask a question. I don’t know.”
Marc Andreessen himself maintains a close relationship with journalists like Swisher. “Marc handled all the communication on his own and over time he stopped wanting to deal with the media. There were many reasons for that, including some of the mistakes he made.”
Between 2009 and 2015, a16z won a string of truly amazing news stories, propelling itself to the top of the VC firm — at least in terms of reputation. The media loves the bald internet geek (referring to Marc Andreessen) and his big-eyed-looking master business assistant. Reporters would snoop on Wennmachers at cocktail parties or lunches at the Bartley Hotel, even though she was rarely mentioned in the coverage.
Then magazine writer Tad Friend recommended a profile on Marc Andreessen for The New Yorker. Wennmachers found that the company’s place in the public consciousness had begun to shift, and it was no longer an exciting rookie .
“At that point, I was at a stage where it was like saying ‘enough,’ we’ve talked enough about ourselves,” Wennmachers said in a podcast interview.
On the other hand, she thinks “The New Yorker is The New Yorker, so how often does the New Yorker write a definitive article on venture capital? Once a decade? Maybe? Well, I should hope that Is the article about someone else, or about us? Do I want a place in the story?”
She decided to finish the story, and although she certainly won’t have a place, she’s only worthy of being mentioned in passing. Marc Andreessen’s shiny head became the focus instead.
Published in May 2015 as “Tomorrow’s Advance Man,” the gleaming portrait in the report immediately became a seminal report on the venture capital industry.
Although the article is more than 10,000 words long, it only mentions Zenefits in passing. Zenefits is one of a16z’s most significant investments, having invested heavily in Parker Conrad’s HR software company and hyped it up in the media. However, cracks have begun to appear.
In late 2015, Buzzfeed reporter Will Alden questioned whether the company’s health insurance brokers were properly licensed, a move that sowed the seeds for the breakup of Zenefits.
That same year, John Carreyrou revealed that Theranos had “difficulty with blood testing technology”. Theranos mainly raises money outside of Silicon Valley, but some venture capitalists still tie their reputation to maintaining the company. Marc Andreessen seemed to have developed an affinity among those who had been tweeting a lot at the time, when someone chose to block people who were negative about Theranos on Twitter.
For journalists, especially their editors, Theranos story shows that tech journalists need to take a more critical eye on the startups they cover. Carreyrou is an investigative journalist who doesn’t work in Silicon Valley at all, and tech journalists shouldn’t ignore Theranos’ shortcomings. Because of this, they went the extra mile.
Later, a16z did find problems with its own portfolio companies as well. In May 2016, I covered Zenefits’ “self-destruction” in BusinessWeek, while numerous tech journalists dug into the company’s failure.
And behind the scenes at the time, Wennmachers’ top lieutenant Kim Milosevich blamed much of the company’s “self-destruction” on its co-founder Parker Conrad – who of course should bear a large part of the company’s problems.
But Lars Dalgaard, a partner at a16z, cheered Conrad on, reassuring that Conrad had doubled the company’s revenue growth target, which I reported at the time. Zenefits is the company a16z wants to grow, grow, grow again .
A few years ago, Ben Horowitz himself wrote an article in defense of “fat startups”—those that spend aggressively to thwart their competitors—and Zenefits appears to be running the rules of the game.
But as the company’s business began to falter and regulatory risks mounted, Horowitz stepped in and pushed Conrad to step aside. The company blamed Conrad, and David Sacks, who had been the company’s chief operating officer, was pitched to the world as a turnaround CEO.
That same year, the media began to turn their attention to the a16z itself, wondering if it really lived up to the hype it had built over the years.
WSJ reporter Rolfe Winkler (with whom I occasionally play bridge) wrote in a September 2016 report that a16z’s returns trailed the likes of Benchmark and Sequoia.
As an early indication of how things might change, a16z issued a chatty public response.
It’s a rebuttal that journalists are all too familiar with. In public, the parties shouted that the report was all wrong, and after the report was broadcast, a blog post with no specific contradictory details was published. Internally, the PR team has no objection to anything credible in the fact-check, nor does it ask for post-mortem corrections .
a16z wants people to think it does a good job, not a bad one. Of course, the blog post drew a rabid loyalist on Twitter who lashed out at the press.
Scott Kupor, a partner at a16z, posted a philosophically titled post titled “When does “Mark” count as Mark? When it’s a Venture Capital Mark”” (Original: When is a “Mark” Not a Mark? When it’s a Venture Capital Mark. Mark means “mark, mark” and is also the name of Mark in the company, the title pun intended ). To this day, the company disputes the report’s conflation of “Mark” with “Return,” the Wall Street Journal term.
I asked Kupor to speak for another report and he declined. “Right now, we’re going to stick to our Twitter wars (smiley).”
I replied, “go direct.” Then he sent me another smiley face.
A few weeks after the Winkler report, Marc Andreessen deleted his old tweets and essentially disappeared from the social network. (I doubt that Winkler’s reporting was tenable in hindsight, but someone would need to reveal their return to me).
By 2017, the election of Donald Trump as president (in my opinion) had cemented journalists’ intent to spot unscrupulous founders.
Journalists and their coastal readers can’t remove the strongman from the White House, but they can at least hold Silicon Valley’s leaders to a higher moral standard. Combine that with journalists’ efforts to replicate Harvey Weinstein’s reporting on #MeToo, and they’re on a much-needed path to radical accountability.
In 2018, Facebook’s swift release of information about Cambridge Analytica (which included Wennmacher’s Outcast-era co-founder Marooney among key communications executives at the time) just before The New York Times was about to report was a negative. An important example of getting ahead of the news before it was reported. Facebook’s disdain for The New York Times seems to have only cemented the media’s perception that there is a real scandal there, and it’s another sign of souring relations between tech communications executives and journalists covering the tech industry.
As the relationship between Silicon Valley and the media began to break down, a16z adopted another marketing strategy . The company has been building its own media business, hiring Sonal Chokshi, a former opinion editor at Wired magazine, in 2014. Chokshi serves as the company’s editor-in-chief, managing an ever-expanding “fleet” of popular podcasts.
Today, about 10 percent of a16z’s 200 members work on its marketing team, and the company is expanding its editorial operations.
Those around the company know that Chokshi’s internal media strategy is the future of the company. ” They’ve basically become a media company ,” a correspondent told reporters .
A number of companies and VCs have been experimenting with content marketing for a long time — and those posts on Medium do just that . What’s unique about Wennmachers’ and Chokshi’s operations is that they do it well and on a larger scale. Their podcasts are actually quite entertaining. With the media taking an extremely negative stance towards the tech industry, there will be a greater demand for more optimistic coverage, and the a16z can fill that market demand.
Meanwhile, the company has largely stopped working with the media. I’ve spoken to reporters from some of the top media outlets, and that’s the consensus. The company has been quiet for the past few years, or even disappeared. a16z doesn’t participate in media coverage most of the time, only writing a story for Forbes’ “Midas List” — one of the most shameless positive media sources in the tech industry today .
Andreessen has started chiming in on the chat at Clubhouse, the firm’s portfolio company. His comments drew attention. How much of the company’s silence was tactical? How much of the silence simply reflects the anti-media spirit that has permeated the company’s leaders?
It’s not unreasonable for me to post this story on a “direct-to-publish” platform like Substack, which belongs to a16z portfolio companies.
During the most recent Thanksgiving, cryptocurrency company Coinbase published a blog post that warned of a major news story to come. Coinbase is essentially a satellite spinning around venture capital firm a16z, whose vice president of communications is Milosevich, Andreessen’s longtime PR handler who handled reports of Conrad’s ouster.
“The New York Times is planning to publish negative coverage of Coinbase,” the announcement reads. Coinbase published the blog post ahead of the news, amid a subtle duet between the tech media and the companies they cover. Undoubtedly a bold and deliberate move. The move was facilitated by communications experts behind the scenes. The Coinbase post added: ” We don’t care what the New York Times thinks .”
That’s a jaw-dropping remark, and Milosevich has been helping a16z court the press for years and has profiled Coinbase board member Marc Andreessen in multiple magazines.
The staunch supporters chose their positions before the newspapers published their investigative reports. New York Times reporter Mike Isaac (Charmin bear on Twitter) tweeted: “This preemptive attempt is horrifying. It anchors the readership of an upcoming story and destroys them.” All trust, connections to) the media.”
Balaji Srinivasan, chief apostle of “the church of going direct” (a joke here) retweeted his tweet and replied: ” Who would trust the New York Times? “
On Friday of that week, The New York Times ran the headline “Tokenized’: Inside Black Workers’ Struggles at the King of Crypto Start- Ups), which mentioned that “remarks by 23 current and former Coinbase employees (five of whom spoke in real names), as well as internal documents and recorded conversations, suggest that the startup has long struggled with managing black employees. ”
But after the report was published, a16z acted as if nothing had happened, and in December published an elaborately illustrated series titled “Social Strikes Back.” It looks like an article you’d find in Fortune or Wired, but of course there’s no dedicated space devoted to the company’s culpability of Coinbase’s corporate culture.
Adam Mendelsohn, who oversees communications for TPG and longtime media advisor to LeBron James, said: “Tech companies have to ask themselves if they can commit to the role of media in an informed society. It’s not hard to self-publish, but self-publish And it must make the information you publish correct.”
Few people know the media as well as Wennmachers, but she also sees the dark side of it.
At a time when the tech media wants to create utopian myths, Wennmachers has seen how eager they are to get her call. Now that the media’s attitude toward tech companies has shifted, she’s less powerful in shaping the media’s brand. Now that reporters are trapped in narratives she doesn’t like, she naturally comes to the conclusion that she doesn’t need reporters anyway.
There’s a good chance she’s right, and not working with the media is a good strategy for a16z. The company has the tools to speak directly to its audience. But is her strategy good for the world? Is there any value in engaging with independent media?
To write this story, I spoke with Wennmachers herself for over an hour on condition that she not be quoted. Wennmachers made it clear that she strongly disagrees with many of the features and facts in this report.
Unfortunately, I cannot reveal the rest of her remarks in the conversation.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/why-did-a16z-choose-to-make-itself-media/
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