Best Clips of 2022

Host: We've had some incredible guests join us on the a16z podcast this year, ranging from moonshot entrepreneurs to top creators to some of the most forward-thinking technologists, all of which are busy shaping the future right before our eyes. And we have so much in store for 2023 and truly cannot wait for you to hear who we have on the roster. But before we turn the calendar and close out the year, we want to cover some of the most interesting, thought-provoking, and important segments from our 2022 roster.

Host: The content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any a16z fund. For more details, please see a16z.com slash disclosures.

Host: So in our first clip, we have none other than Marc Andreessen. Marc has the unique perspective of someone who's helped both build and invest in the future, but he's also spent a wealth of time studying history. So in this clip, Marc discusses the moral panic that's accompanied new technologies throughout history, and specifically, one of the most unique ways that society responded to one of those technologies: the automobile.

Host: Could you speak a little bit more to the red flag laws that were implemented when cars were coming to be?

Marc Andreessen: Yeah, so cars. This is another great one. So like cars, it's like, okay, we all live with cars. We all can't live without cars. Like, you know, there's still huge fights about how cars should be used in our society, but like there's cars everywhere. Like our society doesn't function without cars. We just kind of take them totally for granted. By the way, we take them so for granted that we just like repeatedly bail out the big car companies, right? Like at this point, like the taxpayers have kept them in business for a long time.

Marc Andreessen: And so, you know, the car, you're just like, okay, the car must have been this obvious thing. Like, of course you want the car. Who could have fought the car at least for any kind of valid reason? And so, again, to your point, like it turns out actually the cars were actually a profound threat to the sort of social order of that time, of that era. This is like going back 100, 120 years. And it was basically this exact same kind of process played out with the car.

Marc Andreessen: And so the thing you mentioned, basically, the thing that happened at the peak of kind of the anti-car hysteria at the time, the moral panic around cars was basically, it's basically what happened was cars were a threat to basically, they were the threat to like the ordering of like everything from how cities were laid out. They were going to upend, you know, the ability to have like modern transportation, modern shipping. They were going to upend everything from the world of local merchants. They were going to upend, you know, there was an entire industry of blacksmiths. You know, the horse was like central to a lot of economies. A lot of people made their living off of dealing with horses. There were people who were like trained carriage drivers who all of a sudden were out of jobs. And so there was this like, all of a sudden, this huge backlash.

Marc Andreessen: And so what happened was a bunch of sort of state municipal level areas, both in the U.S., like in and around Pennsylvania at the time, and then also in the U.K., implemented, their legislators implemented at the time what became known as the red flag laws. So the red flag law works as follows, which is, okay, Mr. Car Owner, you've got your fancy new car. Congratulations. You know, you're very proud of yourself. You're probably a pretty, you know, well-off person. In the community, people probably generally are probably jealous of you to start with. You've got this fancy new automobile. And by the way, in those days, like cars broke down all the time. And so when you would take your car out for a ride, you'd be driving the car. And you'd often, like, have to bring a mechanic with you, right? Basically fix the car when it broke. We were still getting everything to work. And so you and your mechanic or whatever, your family, you'd be out, you know, motoring along in your car and whatever dirt road. And the law was that you had to employ another guy to walk, you know, 50 feet in front of the car carrying big red flags, right?

Marc Andreessen: Okay, so picture this. You're driving along. You're out for a nice Sunday drive. You got your kids, whatever. You got your mechanic. You're going along. You know, cars in those days didn't go very fast, but they didn't go faster than you could walk. And so you're driving along at whatever, 10, 20 miles an hour. But according to the law, you have to have a guy in front of you on foot, like out in advance. And he's got these, like, big red flags. And you have to follow this guy because he has to stand in front of you. And so you can only motor along at whatever the three or four miles an hour, you know, that this guy can walk. And this guy's like waving the red flags. Why is this guy waving the red flags? To warn everybody that a car is coming, right? Why was the explanation that he needs to warn people that a car is coming? Well, because the car might scare the horses. So like, you know, if the car comes along, it's making noise, it scares the horses. You know, the horses that are most of us on the road at that time, they freak out or, you know, bystanders freak out. People get hurt. Like, this would be really bad.

Marc Andreessen: And so literally it's like, okay, that was how the car got rolled out. The most advanced form of this law that I've been able to find went a step further. It said, basically, if you're driving along and you actually see a horse coming at you, you see somebody on a horse coming at you in the direction, you have to pull over to the side of the road. You have to disassemble the car. You have to take it apart, right? You and your mechanic would take the car apart, and you have to hide the parts of the car so that the horse can't see them, right? Because the horse might get scared, right? Get scared by the appearance of the car. And then when the horse goes by, you can then reassemble your car, right? And go on.

Marc Andreessen: Right? And of course, you look back to me and you're just like, okay, this is like incredibly comical. Like, how could they ever do this? And then of course, you get exactly your point, like social networking, you think of exactly the technology. So then you're like, oh yeah, you know, they're putting in place laws that, you know, a hundred years from now, you know, the laws that are being put in place now on a lot of modern technology topics are going to look just as silly as the red flag laws. But since nobody ever learns anything, you know, history will repeat.

Host: Next, we have Balaji Srinivasan, one of the most prominent blue flame thinkers of our generation. And in this clip, Balaji discusses the topic of a cloud continent, how we're already living a large portion of our lives there, and what it might mean for someone to fully migrate to the internet frontier.

Balaji Srinivasan: You can think of the internet as basically like giving rise to a new continent. Okay, imagine an Atlantis that just arose out of the middle of the ocean. And people were just taking commuter flights there back and forth each day. Okay. So you'd spend eight hours in Atlantis and 16 hours at home. That's really what the internet is. You know how I can prove that? Well, we're in it right now.

Host: Well, right. Exactly.

Balaji Srinivasan: Like one way of thinking about it is ask themselves what percentage of their time they spend, their waking hours, they spend looking at a screen of some kind. Okay. Whether it's a laptop, mobile phone, tablet, you know, their smartwatch, something like that. Right. What percentage of that time? Is that for you, Steph?

Host: I unfortunately have to say it's probably like 14 hours a day, but I'm probably an outlier.

Balaji Srinivasan: I'd say probably the average person though, right? It's a third of their day, maybe eight hours.

Host: That's right.

Balaji Srinivasan: So what that means, and that's up from basically zero in 1991.

Host: Yes.

Balaji Srinivasan: Right. So, you know, this Atlantis, this cloud continent, right? So just to extend the metaphor, we're taking these commuter planes up to the cloud continent 14 hours a day. And coming back. And we're only spending two hours of our waking lives, in your case, on the land and 14 hours in the cloud, right? For other people, it might only be a few, like three or four hours, but like, that's amazing. Billions of people have migrated huge chunks of their lives to this cloud continent, okay? When I say billions, I mean like three something billion just on Facebook, right? And you add all the people with smartphones and so on. So let's say it's under three, four billion people in the world. Half the people of the earth are now spending half their lives in this cloud continent, half their waking hours, okay, up from nothing in 1990 something.

Balaji Srinivasan: When we think about that, that is actually a different way of visualizing the whole thing. And you realize the internet is actually on par with the discovery of the Americas for the Europeans, right? Yes, of course, there were people in the Americas before the Europeans got there. I talk about this in the book, actually, that if you go and look at the Bantu expansion or the Mongols sweeping across the world, there's essentially no ethnic group that has ever had some location since time immemorial. They just killed the previous folks and kind of took over their territory or whatever, right? So leaving that whole part of things aside, from the perspective of the Europeans, like, quote, the discovery of the new world was this, you know, a huge thing. You know, similarly, like the folks who went over the Bering Strait, their discovery of the Americas was this huge thing. It was this new frontier, right? Which is obviously thousands of years earlier.

Balaji Srinivasan: This internet frontier where we've migrated to will over time give rise to new countries just like the Americas did. The Americas, people came there and they didn't think of themselves as American or Brazilian or Mexican or Canadian or something like that. Nowadays, North and South America, they're all slotted into the same grid as the old world, right? But initially, they thought of themselves as English or French, or they were colonists, they were settlers, right? They didn't identify with the new land as primary and the old world as secondary, right? They didn't think of themselves as a Polish-American or English-American, right? They thought of themselves as just English. And that's similar to folks who spend all of this time in this cloud continent, but have not made the flip, right? You're spending the majority of your time in the cloud continent, but you're not thinking of yourself as a cloud person first yet. Yet is the key word.

Host: Our next clip is from one of the original pioneers of speculative fiction. No more so than his foreshadow novel of Snow Crash, a groundbreaking piece of literature that imagined the metaverse, avatars, and AI-powered assistants long before their existence. Not to mention his countless other books like Cryptonomicon, touching on digital currencies in this case, again, long before the masses. If you haven't already guessed, I'm talking Neal Stephenson. And in this clip, Neal discusses whether or not the metaverse, the term he coined 30 years ago, is reliant on AR or VR.

Host: It's really important that you're bringing up the engineering side of this because it's not just how we want these worlds to look, but also how they align with our engineering capabilities. And of course, one way that these games are advancing is through augmented and virtual reality, or at least some of them are venturing into these new worlds. I'd love to hear your take on the importance of that, whether these metaverses do need to be in quote-unquote 3D, or whether actually many of them can survive and continue to thrive in the two-dimensional world that many people are participating in, because that really is the world that many of us are used to, right? Staring at our phones, staring at screens, and many people, even though they're not truly immersed, right? They're not in the third dimension, they feel quite immersed still. They feel like they stopped playing their game after five hours and they feel like they've truly been in another world. So what are your thoughts on the level of immersion required for this quote metaverse?

Neal Stephenson: We absolutely do not need AR and VR in order to build the metaverse. And 30 years ago when I wrote the book, I had a different view of it. And so I assumed that it would be all about goggles. A lot has changed since then. We've all learned a lot. Doom came out the year after Snow Crash was published. And it was kind of almost hard to remember a time when there weren't games like Doom, meaning games where your screen is a flat window into a three-dimensional world. And so if you had described Doom to me, you know, in 1992, said, well, you're, okay, you're looking at a flat panel screen in front of you on a monitor, but you're seeing a 3D world through it, you're running around in that world. I'm not sure if I would have understood it or believed that that could ever really work very well.

Neal Stephenson: But now, you know, fast forward 30 years, the day-to-day world that we're living in is one in which billions of people routinely access three-dimensional spaces through rectangles on two-dimensional screens, be they, you know, the screen of a laptop or a phone that you're holding up in front of your face. And it works really well. And one of the really weird aspects of it is the primitive control scheme. So most people are using like the WASD keys on their keyboard plus a mouse in order to navigate these worlds. Keyboards are a Victorian technology. And yet the human brain is so adaptable that even as clumsy as that is and as antiquated as that is, WASD is a perfectly useful way of navigating around in 3D spaces.

Neal Stephenson: I'm going to talk about VR. AR is a whole different thing, but let me just talk about VR for a sec. You know, early VR, just because of the limitations on processing power and so on, had high latency and other kind of quality issues. And it was, I think, pretty widely believed, even as recently as maybe 10 years ago, that as latency got reduced, as the quality of the experience improved, that we'd see a decrease in the tendency of users to get motion sickness. And I think that there was a decrease, but it didn't go to zero. It went to maybe, the last I've heard is like maybe 5%, 10% state-of-the-art quality VR are going to experience some symptoms. And in fact, I was playing a 2D video game just the other day where my friends and I turned on a new feature and we all had to stop because we were getting motion sickness. So imagine if you were trying to popularize television in the 1950s and said, we've got these great programs, we've got I Love Lucy, we've got the Ed Sullivan Show, you know, entertainment for the whole family. Five to 10% of you are going to end up throwing up into a wastebasket, you know, after half an hour of watching this. Well, that's a really high bar to commercial acceptance of entertainment technology.

Neal Stephenson: For AR, it's just a different thing. I mean, by its nature, when you're in an AR experience, it is or it should be somehow tied to the environment you're sitting in. Because if it's not, it's just kind of bad VR. You know, one of the most fascinating things I ever did was trying to make content at Magic Leap where everything that we built had to be aware of, in some sense, what was in the physical environment and be reactive. It's an incredible thing to work on. But because of that, I think it's kind of different from what most people talk about when they talk about the metaverse.

Host: Speaking of the metaverse, next up is Karen Chang, a wildly popular content creator who is reshaping the creator landscape through her use and exploration of AI and augmented reality. You'll truly have to go to her accounts to see what I'm talking about. But in this segment, we asked Karen about the interplay between artists and these new tools, and whether in fact the artist is losing relevance in this equation. Karen, I think, makes the perfect analogy to Peter Pan, highlighting the democratizing force of these new technologies.

Host: The maybe more interesting question is how fungible was Karen in that process? And I don't want to... Yes, how replaceable am I? But if you gave Average Joe the same project and the same tool, do you think they would come up with anything comparable?

Karen Chang: I think a lot of people would have been able to make a really good Cosmo cover. The people who would have done it best are people who have a good artistic eye, have the kind of the patience and the motivation to keep going and keep refining on the prompt, and who can describe what they see in their head. And so a lot of these people are not necessarily traditional artists. I think a lot of people could have made a really, really good result.

Karen Chang: There's actually an example that I have that we can show on screen. I, a while ago, wanted to expand the girl with the pearl earring. So you may have seen one thing that you can do that was actually just announced is you can expand paintings in DALL-E. And so you can basically take a famous painting and then imagine it was all around it. So you can take the Mona Lisa and imagine where was she? You can take the girl with the pearl earring and imagine everything that was around her. And so I made a video a while back where I imagined her like in a library and she was holding a book. And I was like, I want her to be like an educated woman, you know. And so I made that.

Karen Chang: And then I actually am working with a project with OpenAI actually right now. It's one that they commissioned. It's not out yet, but it will probably be out by the time this podcast releases. So if you go on my Instagram on KarenX Chen, you'll be able to go and see this filter. We made this Instagram filter where we expanded these famous paintings. And you can actually go inside through them and see these famous paintings. And I looked at my girl, the pearl earring, and I was like, this can be done better. And so I hired August Camp, who is the person who taught me about this method. And she has spent way more time in DALL-E than I have. She's so artistic and talented. I hired her to do this pearl earring. And when she showed me hers, I was just like, moved to tears almost like jaw drawn. I was like, that is what you made. And so I felt like she was irreplaceable in this. I mean, I could have hired 10 different artists to do this pearl earring and gotten 10 very different results. And what I like about this example is that everyone is starting with the same source image. And so it almost establishes like a little bit of like a control for it. And so I think this is the perfect case study for like, hey, different humans get very different results with AI. Yeah, it's a tool, as you said.

Host: But the reason I asked if you were fungible is because I just I really wonder how this progresses in terms of we know it's going to be somewhat of a democratizing force because now a bunch of people who like couldn't paint or couldn't do Photoshop in certain ways can now do it and create all of this art or these outputs. But I do wonder, then, does that make a lot of people really successful or a lot of people really capable? Or does it still surface the very, very best to the top, right? Where there's a different filter, and now the filter is prompt engineering, versus painting or drawing or singing or whatever it might have been in the past. So do you think that's still the case where you're still going to see these like outliers who are just so much better than the rest? Or do you think it'll be more of a level playing field than what we were seeing before?

Karen Chang: Okay, so I think that what this is going to do, what AI art is going to do is it's going to significantly lower the barrier to entry to become an artist. To be an artist right now, you have to have a lot of time, a lot of training, sometimes the monetary financial need means to be able to do that, or the willingness to be like a starving artist to do it, or it's a hobby on the side. There's definitely a barrier to being an artist. And now it's like, everyone can do it. I almost liken these image synthesizers like DALL-E or Midjourney to like a Peter Pan. But instead of stealing from the rich and giving to the poor, it takes the artistic skill of artists. And it's like, gives it to everyone like, here you go. You know, and so I do think that a lot more people are going to be empowered to be artistic or to be artists because they didn't necessarily have the patience to go learn oil painting, but they actually do have the talent to be able to describe what's in their imagination and continue to refine until they get the result they want.

Host: In the next two clips, we talked to the team at Privateer, an ambitious company with a mission of improving the sustainability of space. And in the first clip, we talked to Steve Wozniak. You might recognize him as one of the co-founders of Apple and one of the most impactful engineers and inventors of our time. Here, Steve discusses the difference between the inventor, the engineer, and the visionary, and how he envisions them all contributing to our future.

Host: The ability for these technologies to be exponential, right? What we see today from Privateer might not be what it is in five years or 50 years. And I had the privilege of talking to Alex yesterday and he told me this story about you from the very, very early days where when you were younger, you basically told your dad, hey dad, I want to have a computer someday. And he said, because at this time, this is true, he said, you're crazy. Computers cost as much as a house. And you told him, well, dad, I'll live in an apartment. And you seem to really, really just want a computer at that time. To your point earlier, starting Apple was not about building one of the biggest businesses in the world. It was wanting a computer and wanting other people to have that. I'm curious just to know from a personal perspective, what did you see back then? Was it truly just like a personal need for this device? Or I want to, you know, dig into that early Woz brain and hear your perspective on what was going on in those early days.

Steve Wozniak: A lot of great things come personally. And I learned even, I taught middle school and elementary school for eight years straight full time, full time, like every hour of the day up to seven days a week, no press allowed. So it's not a big story. But I learned that it was less important that you're speaking facts and knowledge from your mouth. Knowledge was less important than the motivation of my students to learn. Had to find ways to make it fun, make it understandable, to make it, you know, like stories that tell what in their head. And that when I decided, you know what, wanting something that even more important.

Steve Wozniak: And I go back. I wanted a computer. It was in my heart. And I didn't know if I ever get it. I didn't know if designing computers would ever be a job for engineers because we were back in the analog days, you know, smart math stuff. And, but I kept it in me and eventually I found the path to do it. So I was building a computer for myself and turned out that the point in time, luck is sometimes there's a lot of luck in business success. And the point in time that I was going to build that computer, no matter what it was worth, turned out to be worth a ton.

Steve Wozniak: And, you know, and then a lot of times when people are successful in technology, I've seen them look off into space because we almost all come from science backgrounds. And even when we, when Apple went public around 1980, our president, Mike Scott, maybe 81 or two, started a little company with some people. I funded into that. He's a friend. And actually we did a launch of a rocket from out at sea from somewhere. So I don't know. There were a bunch of rocket engineers around saying it is possible to do with, let's say, money. Now, governments have all the resources, you know, but they're stale in their approaches because of it. Here's what we can do very successfully, very stably. We know we'll get there if we put enough money in and test enough. And private industry works so differently.

Steve Wozniak: I've only been in private and I just love having ideas and thinking about them and, you know, thinking different and the creativity that comes about when you think, my gosh, I could do something that they haven't done before. Or maybe the resources are cheaper. The sorts of huge computing devices are cheaper to make and maybe certain types of motors. And I can do something that hasn't been done before, sensors that didn't exist before. And you got to always shoot for the top being one of the leaders in the world. And that's just how we think.

Steve Wozniak: So a lot of times when I think of government versus private, I also come down to types of people, which is very important. And you have an inventor who could be given a job and they've gone through all the right, they have the right skill sets and they've gone through the right university, you know, majors and PhDs. And they're an engineer and they can design what you sign them. But then there's the inventor. The inventor goes along, thinks, oh my gosh, is there something I'm interested in that I could do? And would it work? And maybe it hasn't been done before. And can I make a difference in the world? And the inventor wants to run into a laboratory, hook up some demos real quick, try to get some sort of prototype to show that the idea is right. And that's the sort of person I am. It's in your personality. You don't change it. You don't just say, tomorrow, I'm going to be an inventor. Today, I'm an engineer. You're usually one or the other. So that's another advantage of Alex, you know, putting together Privateer. We're looking for the inventor types, you know.

Host: Yeah, definitely. I mean, another word sometimes people use for inventor is visionary. And I'm curious, in the early days when you were just out of passion creating these computers, could you see the path to today? Of course, you can't picture everything with so many advancements since those early days. But like, how far along were you actually envisioning? And I'm asking this partially because even if we apply this to space, a lot of the things that people talk about in the realm of space also sound kind of like science fiction, right? They probably won't be eventually. But I'm trying to understand also how far along you see or the extrapolation that maybe goes on in your brain when you're originally talking about, yes, a computer with 200 transistors and now we're talking billions and the applications that have kind of sprung from that.

Steve Wozniak: I myself, I was really a great engineer in a certain field and I was designing the hottest products in the world for Hewlett-Packard without even having a college degree yet. And then you have, you talk about visionary, vision, see in the future. That's different than invention though. Inventor really wants to actually go in and create something today that didn't exist and not have a vision that's 50 years out or 10 years out because that's science fiction a lot. And everybody can talk about it and say later on, see, I proposed it, but it wasn't really possible to do with money. And the engineer says, feet on the ground? What can I actually do and build and deliver to people?

Steve Wozniak: When we started Apple, you know, we had a great product. It was going to be all the revenues of Apple for the first 10 years. We had a great lead. We were comfortable. We could do what we wanted. But the amount of memory that would hold a song costs, you know, we were back in the days of tape. It costs about a million dollars, a good fraction of a million dollars. Do you think we saw today where you have a device in your hand with a thousand songs on it even?

Steve Wozniak: No. Steve Jobs is very instrumental in always taking us, do what we can do today. Try to do something a little more tomorrow, a little more. And you can have a lot of failures too if you'll have one great product bringing in the revenues. But the whole idea was we'll move towards the future and we'll be a part of it. And we'll be in with it. After all, you look back and it was kind of invisible, the steps we took, but they all led to today. And then there was some of that invention stuff we got to. Steve Jobs' Apple II was really the iPod music. Music. And that was the first time, oh my gosh, up till then our company valuation was the same as the old Apple II days. And then all of a sudden we sold it to everyone in the world and our sales doubled and our profits doubled and the board gave Steve Williams and stock options and jet airplanes. That was the turning point. And then the iPhone was even better and it was based on the iPod, not the reverse. Not a phone that will include an iPod, more like it's an iPod, but you get a phone with it. And so it's hard to say that you really see the future more than a year ahead when you're working a year ahead on your projects. Whenever I tried to see the future a year ahead, I knew it one year ahead because I was working on it. If I looked two years ahead and made some guesses, oh my gosh, other aspects, other technologies and all came out from outer space and people's desire which way they wanted to go was different. It's very hard to predict even two years ahead successfully the way I work. Nowadays, we got huge, big companies. So it's kind of like, you know, anything they work on is going to be successful. It's not as much of a gamble, but real inventors like to gamble, like to prove the world that they can do more than you ever imagined.

Host: Our second clip for the Privateer team is with the other two co-founders, Chief Scientist Dr. Marva Jha and CEO Alex Fielding. Here, they talk about the problem of space pollution, but also the impact that space has here on Earth and the challenge of space governance, an issue that's becoming more and more important as lower Earth orbit becomes more crowded, but also more vital. We as humans have started to pollute air, land, ocean, and now it sounds like we're doing the same with space. But for some reason, it seems like most people know about the pollution in air, ocean, land. Why don't we know more about the pollution happening in space?

Marva Jha: Well, I think that most people, they just aren't aware of how many satellites we have launched. The fact that most of the stuff that we launched just doesn't come back where it takes a really, really long time to come back if it's in a sufficiently low Earth orbit. Also, people just haven't had a place to just go online and just kind of see the stuff. And now that we have Privateer rolled out Wayfinder, we're just like a click away from people seeing all these dots all around the Earth.

Host: I know you originally created something called Astrograph. And I heard you say on an interview that actually seeing the amount of stuff, some of it being valuable, some of it being junk, actually caused you to cry because it was so, I guess, devastating. Or maybe let's hear from your words. Why did that trigger that kind of emotion in seeing that?

Marva Jha: My career started at NASA Jet Propulsion Lab working on Mars missions. But when I moved to Mali in 2006, I started working with the Air Force Research Lab with the telescopes on top of Mount Paliagala. And all of a sudden at that time in 2006, there were only 1,200 working satellites and 26,000 pieces of garbage. And I'm like, what? Like, this doesn't make any sense. Holy cow. Like, this is ridiculous. How is it okay for like 96% of the stuff that we put in space to turn out to be garbage? Like, we don't see that in other domains. We don't have that as acceptable. Okay, we're going to put a bunch of stuff out here on the land, but 96% of the stuff we're going to put out is going to be trash. Like we don't do that.

Host: Alex, I want to hear from you. How much space debris are we talking? It sounds like it has increased with time, but I don't know if many people have a sense of the sheer magnitude of stuff up above us.

Alex Fielding: So we're talking about over a million pieces of debris that are smaller than a centimeter, but the only thing we can really see from ground-based radar is stuff that's bigger than the size of a softball. So when Marva says there's these 26,000 things, those are things the size of a softball doing roughly 18,000 miles an hour. And MV squared, still MV squared. So it's a real problem because the little pieces of debris, the things you can't see, can really hurt you in space. You wouldn't get on a passenger jet if you got told when you boarded the plane, there's a million little bullets flying around and this is going to make your life potentially very miserable. We just don't know. Hope you make it. That would be, but that's kind of what's going on with spaceflight. The first challenge is you have to be able to see everything so that we can put together a plan on how to solve for that. And AstroGraphs, Wayfinder, these are tools to help enlighten the world and kind of bring attention to the problem first so that we can all align on what the best solutions are for cleaning up space, which is kind of one side of Privateer's mission of making space safe and accessible for humankind.

Host: And I want to get to how we solve the problem, but I also want to speak a little bit to what is at stake here. So you're talking about thousands of things that we can monitor, but potentially millions that we aren't able to monitor. How often does this stuff actually collide? And then also, how often does that impact us on Earth, whether it be things actually coming down to Earth or impacting the satellites or infrastructure that we use on Earth up there in space?

Alex Fielding: I mean, there's a lot of collisions, right? And there are some that we actually can see and we can clearly identify that was caused by debris or even in the case of a satellite hitting an active satellite or vice versa, or two objects in near-earth space colliding. It happens a lot more than we would like to think. And there's also reasons why we don't talk about it as a community, why we don't just openly talk about our problems in the space community the way that we would in other academic communities or places where we're more data-driven. And some of that actually surrounds liability risk. As an example, many insurance policies in space on the riders exclude space debris from a covered loss. I'm not saying that people do it. I'm probably implying it. But if your insurance policy said we don't cover things hitting your car windshield that are rocks, then whatever cracked your car windshield is probably not a rock. So these are challenges we also working around which is the evolution of space policy and the Space Act and treaties evolving. These things were based in maritime law. And I guess that kind of made sense for the time because we needed a framework for how we interoperate in space. But that is actually creating the challenge because we don't have even the simplest notions of like right of way. You're in space. You're going to come very close to colliding with someone else's object, whether it's dead or alive. Who's got the right of way? Well, I mean, obviously, if it's dead, you better move. But if you're both active, who's got the right away? These are very simple constructs on the ground. You wouldn't get in your car and not know that. But in space, we're operating in the blind. We don't have these rules fully defined as a community. And yet we keep launching more and more things without solving those.

Host: Speaking of space, next up is Chris Power, founder and CEO of Hadrian, an advanced manufacturing company making precision components. Hadron is also building the next generation of factories to accelerate the pace of American manufacturing. And in this clip, Chris goes into why the American advanced manufacturing industry is so fragile and the repercussions that could occur if we don't start taking action to fix it. I've actually heard you use the term dangerous when you speak to the point that we're at in terms of this pipeline and this particular space of advanced manufacturing. And if someone's listening, they might be like, okay, a bunch of people are retiring. Some people are not very keen on the idea of us continuing to pursue space. But what would you say to the average person? Like, what's at stake here? What are we going to lose if these people retire and we don't have these things documented?

Chris Power: Unless we solve this problem, I think the country and our way of life is at substantial risk. The knowledge I give to people is if you're living in a small town or something like that, we've built up 200 layers of abstractions in society so that you can be an artist or you can be a painter or you can be in finance or in crypto or making video games or whatever happens to be. And the reality of the world is that 200 years ago, we were killing each other over food. And it's a miracle in the first place that we're here and that society is relatively stable and the roads get back. People forget because they grew up in America and it's so successful, but they don't have to worry about having a bulletproof car. Otherwise, if you have more than like $100,000 worth, someone in the game might try and steal your daughter, which for the rest of the world is like a reality, right? And because America is so isolated culturally, most Americans view of geopolitics is Russia bad. You don't learn those lessons. As a younger person, you don't realize that unless we keep the roads paved, this can all fall over very, very quickly. So if you run the scenario of saying, okay, right now, basically, we are successful because we are the world's police and whether we should play that role or not is obviously up to debate. But the reality is that we are fine culturally because everyone understands that if you mess with America, we will put a missile over your head and you're dead. Or if we go into a great power to the place, we have enough logistics and infrastructure to go and win that conflict or release. It's scary enough that that conflict never exists in the first place. And the analogy I like to tell people is, bar fights happen when both people mispredict their ability to win the fight. And bar fights don't happen for two reasons. One is there's two UFC fighters staring down each other and they both know the cost of the conflict. And the other person is scary so that fight never happens. Or there's a bunch of morons but there's a bouncer and he's big and scary enough so the conflict never happens in the first place. But that construct of the bar fight relies on impressions and social trade-offs that like, hey, enough people have seen their friend getting beaten up by a bouncer, so I'm probably not going to even test that assumption that this is a real thing. Now, the reality, of course, is that most police officers and most bouncers are probably incompetent, can probably get taken out by someone relatively competent as a civilian. But we have enough social construct around the concept that is a really dumb idea that no one wants to take the risk. And it's what I described in Defense Land is the lethality mirage. And a lethality mirage is basically everyone else's impression of you is that you are a 10 out of 10 lethal so they absolutely not going to talk with you. And then maybe you lose one small conflict and someone goes, well, hold on, like maybe these guys aren't so scary as we thought they were. And in reality, I think we're about a 3 out of 10. And the real danger comes when a great power competitor finds out before you find out that you're actually at 3%. So the problem with everyone thinking advanced manufacturing is in a really good place is that we don't go fix the problem. Because culturally, everyone thinks it's fine. The roads are getting paved, fighter jets get made. We go into a conflict, we're fine. In reality, we're probably so far away from doing that. But if we have one conflict with China where we expand most of our ballistics inventory, we might not be able to remake it for like five years and we're basically standing around with our hands tied behind our backs.

Host: And finally, we have Ryan Peterson, founder and co-CEO of Flexport, the full-service global logistics and freight forwarding platform worth $8 billion after its latest round of funding. Now, Ryan has a bird's-eye view of the global freight industry and understands the complexity of the supply chain better than almost anyone. So in our final clip, he breaks down the massive impact that e-commerce has had on the supply chain and the need for companies to adapt to customers' changing behavior. What have you seen as the impact, really, of e-commerce and the internet on the supply chain and on how it works?

Ryan Peterson: Yeah, well, I think you want to start with the customers, with all of us. And the internet has really put us, you and me and everybody else out there, in charge in a way that we've never seen before. In the era of mass media, companies only would run a television ad for whatever product they were selling. And then they would just kind of pump that down your throat and they only needed to have a limited number of SKUs, whatever was on television, basically. Customers didn't have a lot of choice. They could buy this, the Energizer or the Duracell and there were two choices for what battery and they happened to be in the stores. And so the brands were in control. Those who could afford mass media were in control. Now with the internet, there's just like a million choices. You have every kind of possible brand of battery that's out there. Battery is probably a weird case. But still, for every product category, there's a million choices. Everybody's unique. You can get the thing that matches your own personal taste. You're in charge as well in that they better have that product now. You're not willing to wait a week. Like in the Sears catalog era, you could order and you'd get it in three weeks. Well, you're going to go out of business if you can't deliver. It's becoming two-hour delivery, like if you can't deliver two hours. And so that is a very different supply chain. And what's happened is companies that haven't been able to run a supply chain that's that responsive, that can have a wider assortment of choices because we're all unique and we want our choices, and have it sort of edge cached, to use an internet analogy, like a CDN. You want to have these goods close to the customer so that it can get there really, really fast. In the old world, you could have one distribution center in the middle of the United States and distribute out to your store network from there. But it didn't have to be like super responsive to customer demand. Customer demand was pretty predictable, kind of always bought the same number of these batteries or whatever product. And it didn't have to be very agile. The modern world, all of a sudden, there's this proliferation of brands and it all has to be stored close to the edges. So brands need to have multiple fulfillment centers. You need about five fulfillment centers to get two-day delivery nationwide. And you need probably to do next day, it's more like 16 fulfillment centers and you want to do same day, well, you need one in almost every zip code, right? If you want to have two hour delivery. So that's a really, really different configuration of supply chain. And now you want to be able to get to that world where you're doing same day or next day delivery, you now need to load balance your inventory. Because if you put too much inventory out there and it doesn't sell, you're going to go bankrupt, right? You're sitting on all this working capital, as inventory that's not earning a return. Too little, and you lose the customer. And they'll never come back, right? They buy your competitor's brand. And so that's the fundamental problem. And these logistics teams don't even really, at the typical brand, don't even really know that that's the problem they're solving. They're just still used to a world where all they care about is the price of freight. And they want to buy the cheapest freight. And that's what they think their job is. When their job has become, how do I ensure a customer experience? How do I enable our sales and marketing to have the product in stock so that they can win those customers, help be a growth engine and a customer experience engine? And then how do they empower their CFO to not sit on too much inventory? And so it's a really different proposition. And frankly, most of the companies that we grew up with, these iconic brands have been going bankrupt left and right. If you Google retail apocalypse, just look like the number of companies that have failed, that are iconic brands that we grew up with, it's really sad, actually. And I don't think it has to be that way. So one of our, we kind of have dual purpose here. One is help the new age of brands rise up and not need to hire this big logistics supply chain team who just pushes paper and all they care about is the price of freight. But actually is empowered to solve these problems without hiring a big team because you don't need it anymore. You kind of outsource that to the cloud. And that's one aspect of what we do, help these small businesses grow really fast without the bureaucracy. The other is how do you help these enterprise brands, these famous companies, transform themselves for a world of e-commerce and not die? I think that both of these are really important missions for us.

Host: All right, that's it. That sums up our Best of 2022 episode. But remember, there's a lot more where those clips came from. So if a particular guest sparked your interest, go ahead and listen to their full episode. And if you are on YouTube, we've linked the full playlist in the show notes. And I just want to say a quick thank you for watching and listening as we revamp this podcast. And we truly are just getting started. So don't forget to tune in next year and leave your guest or topic suggestions in the comments below. We truly can't wait to continue tackling the most important questions within technology with you and the people on the front lines building it. We'll see you next year. Thanks for listening to the a16z podcast. If you like this episode, don't forget to subscribe, leave a review, or tell a friend. We also recently launched on YouTube at youtube.com slash a16z underscore video where you'll find exclusive video content. We'll see you next time.