Tesla has often been compared to Apple for its disruptive nature, but Marc Andreessen, a billionaire venture capitalist and co-founder of Netscape, is taking the comparison a step further.
Andreessen believes that Tesla could have a similar impact on the auto industry as Apple had on the mobile market in the late 2000s.
The investor was on Bloomberg View columnist Barry Ritholtz’s podcast this week and described the link between 2007 Apple and 2017 Tesla (via CNBC):
“If you squint at Tesla one way, it looks like Apple circa 2007, 2008 — where they’ve released the iPhone, they just haven’t sold many yet. But they’re going to sell a ton. Another way of looking at Tesla is they’re Apple in 1992 with the MacIntosh. Yes, their integrated hardware-software is good, but other people are going to come up with software as well. … And I think that’s the big question on Tesla — which way does it tip?”
He sees the increasing importance of software in the auto industry has an opportunity for disruption.
“Obviously there’s a lot more software in cars than there was 10 or 20 years ago. Everybody knows that. It’s a step further to say that in 10 years, the winning car company will be the car company that makes the best software.”
It plays right into Andreessen’s famous thesis that “software is eating the world” and he is putting his money where his mouth is since he invested in Comma.ai, George Hotz’s self-driving software startup.
The billionaire VC thinks that startups have a better chance of taking advantage of the shift than legacy automakers:
“There’s no existing legacy car company in the world today that would say that’s the case. They would all say that they are best at making cars, and that the software is a component that goes in the cars. Our thesis is, no, what’s actually going to happen is the value will flow to the software layer. The entire experience of being in the car will be defined by software.”
It wouldn’t be fair to say that automakers have been completely oblivious to this shift. They have almost opened offices in Silicon Valley to tap into the local software talent.
Andreessen sees an opportunity for automakers to partner with his startups:
“As you know, in phones you used to have these companies like Nokia, Rim and others that made phones and used software as just this sort of add-on to the hardware. Car CEOs, the new generation, they’re all working on this. They’re spending a lot of time out here [in Silicon Valley], and they’re spending a lot of time with us. But literally, the way they frame that question is, ‘We, existing car company, do not want to be the Nokia of cars.'”
Automakers’ interest in Silicon Valley startups has been clear over the past year, especially when it comes to self-driving startups. GM bought Cruise Automation for close to $1 billion and invested $500 million in Lyft.
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