Snapshot · The a16z Show
Superficial adoption of electricity gave factories only 6% efficiency gains; fully redesigning factories around it delivered a 3x productivity improvement that powered 20th-century US growth.
Where this was said
At 33:28 · chapter starts 32:45
Gabriel surfaces a claim Alejandro made earlier: the biggest AI opportunity may lie with entirely new companies, not incumbents. Alejandro grounds this in Schumpeter's theory of creative destruction — innovation historically destroys old companies through new entrants rather than incumbent adaptation. The reason is structural: a CEO of a large public company faces enormous friction in betting the organization on a complete rebuild. New founders face no such constraint. To make the argument visceral, Alejandro tells a story his team has heard many times: Edison commercialized electricity in the 1880s, meaning Ford's production line could have been built 40 years earlier. Factories that simply replaced coal engines with electric ones captured only 6% of the available efficiency. Those that tore down their multi-story, shaft-and-belt factories and rebuilt flat, distributed facilities around small dynamos captured a 3x improvement in productivity that fueled 20th-century American growth [1] — Alejandro Maza Ayala "Factories that replaced coal engines with electric ones in the early 1900s got only 6% efficiency gains. Those that redesigned their entire…" 32:40 . The same pattern played out with the computer, and it is playing out again now. Alejandro's closing advice to founders is simple and urgent: build deep, build for the future capability curve, and recognize that for the first time in history, the most powerful tools in the world are available to anyone for $20 a month.
The right way to build now is to project a linear trend for AI improvement and design your company for that future state — then build backwards. This is the first time in history that the most powerful tools available are accessible to any founder for $20 a month.
Joel de la Garza noted that the CISO role is a relatively recent invention, with Steve Katz widely credited as the first-ever CISO.
Harold Ramis recounted that during Caddyshack filming, storms kept the cast cooped up in a Florida hotel for days, during which they partied and did drugs all day and night.
In the 1820s, China accounted for 25% of global economic output, making it the world's largest economic machine — a historical precedent for its current AI superpower ambitions.
66 Americans held hostage at the US Embassy in Iran were released after 444 days, within hours of Reagan's inauguration.
In the first round of the secret arms deal, 508 TOW missiles were transferred from Israel to Iran in exchange for hostage releases.
America secretly transferred 2,000 missiles and missile parts to Iran across 8 separate shipments over just over a year.
Despite all the missile sales, only 3 of the 7 American hostages held by Lebanese terrorists were ultimately released.
The CIA supply plane that blew open the scandal was flying at only 2,500 feet in broad daylight when it was shot down on October 5, 1986.
In his 1990 deposition about Iran-Contra, Ronald Reagan said 'I don't remember' or 'I don't recall' 88 times.
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