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Marc Andreessen: Tech is recovering from a depression

By
JP Mangalindan
JP Mangalindan
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By
JP Mangalindan
JP Mangalindan
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February 13, 2014, 12:00 AM ET

FORTUNE — Contrary to arguments that Silicon Valley is repeating the same process that led to the dotcom bust in the early 2000s, Marc Andreessen argues tech is doing something entirely different: emerging from an industrywide depression.

“I think we’re recovering from a depression, and I think we felt the depression very acutely in the Valley,” said Andreessen, co-founder of the venture capital firm Andreessen Horowitz, during a panel at Goldman Sachs’ Technology and Internet conference in San Francisco this week. By “depression,” he refers to the years following 2001 when many Internet startups crashed and burned. “It was a very miserable time: A lot of the rest of the world moved on into real estate and all these other exciting things.”

Instead, Andreessen explains that the Internet is following the same trajectory that older technologies like cars, railroads, and steam engines followed — a path illustrated in Carlota Perez’s 2003 book, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages. Explained Andreessen: “First the new technology is not taken seriously at all. Then it’s taken way too seriously way too quickly. Everybody gets too excited. Then there’s a gigantic catastrophe, and then stuff actually starts happening.”

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During the panel, Andreessen also weighed in on Bitcoin, the controversial digital currency that allows anonymous, instant payment exchanges anywhere in the world. Despite how it’s currently perceived — that it’s primarily the stuff of “nerd fantasy” for “hackers, criminals, and Silicon Valley guys” — Andreessen views it as a fundamental technological breakthrough that addresses the problem of what he calls, “distributed trust.” “Bitcoin is the first Internet class, Internet scale, Internet-made approach to dealing with money and transactions,” he argued. “We think the technology leads itself to many other kinds of transactions, many other forms of things you can trust: digital stocks, digital bonds, digital keys, digital contracts, digital signatures, digital voting.”

Bitcoin’s unprecedented versatility will likely lead to a regulatory agency “food fight” for instance, as parties attempt to legitimize it, but Andreessen argues Bitcoin is already helping re-imagine how the financial systems works and that it’s potentially a good thing in particular for countries outside the developing world. As he reminded, some countries remain saddled with poor central banking systems, bad currencies, and theft and embezzlement on giant scales. Summed up Andreessen: “So the prospect of a new technology that literally runs entirely in software completely independent of any national policy, lets money travel freely across borders is actually a pretty big deal once you get out of the West. “

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By JP Mangalindan
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