Andreessen Horowitz partner John O’Farrell tells John Kennedy about finding the right environment for start-ups and the eternal hunt for great companies to invest in.
John O’Farrell is an Irishman who happens to be a partner at one of the most powerful venture capital firms in Silicon Valley.
Andreessen Horowitz, founded by Netscape founder Marc Andreessen and Opsware founder Ben Horowitz, holds stock in some of the highest-valued, privately held social media companies, including Facebook, Groupon, Twitter, Foursquare and Zynga.
An engineer by training, O’Farrell worked with Siemens in Germany. He came to the US in the early 1980s to earn an MBA at Stanford. His career brought him to working with companies like Booz Allen Hamilton, US West and @Home Network.
His involvement with Andreessen and Horowitz began when he went to work at Loudcloud, one of the first cloud computing, software-as-a-service (SaaS) companies.
The company was transformed into Opsware and Hewlett-Packard bought it in 2007 for US$1.6bn in cash. Following this experience, O’Farrell went to work with Silver Spring, a smart-grid company.
In 2010, he became a venture capitalist when he joined Andreessen Horowitz and has built up a strong following as a prolific blogger, offering inspirational and encouraging advice to entrepreneurs.
I bumped into O’Farrell as he emerged from a panel discussion on venture capital at the recent Dublin Web Summit in Dublin, Ireland. With his characteristic politeness, O’Farrell hadn’t expected to be interviewed on the spot but answered my questions in a way that was helpful and insightful.
“I have met some interesting companies,” O’Farrell says. “I would say Ireland has potential. It is really important, particularly for a small market like Ireland, to focus on gigantic markets up front and that usually means the US.”
“Having a Silicon Valley and Irish presence is better than being pure Ireland-based, so maybe put your management team or some of them out in the Valley where they can tap into that ecosystem and put their development back here – that would be a model that can work and become very big.”
I ask O’Farrell is the ‘next big thing’ technology just around the corner or is everyone too focused on social? “It is, but the big question is, what is it? Rather than being focused on mobile or social or local, we are much more focused on finding great companies.”
I then ask him if he thinks social has a sell-by date and if the bubble is likely to burst. “It really depends on the company. For truly great companies, the market is so much bigger than it ever was before – 13 years ago, when Netscape was sold to AOL, there were maybe 50m people on the internet, now there are 2bn.
“As a result, companies need a lot more capital and tend to stay private longer than they used to and that translates into high valuations for them. I personally don’t think it’s a bubble,” O’Farrell says.
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