Marc Andreessen's New Gamble

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Once Gina convinced Andreessen that the consumer Internet was still alive, they came up with the idea behind Ning. Gina had been obsessed with online social behavior, and the technologist in Andreessen wanted a company that would be an open platform, giving people total creativity to make it whatever they wanted.

In essence, Ning allows people to create their own mini-MySpaces. Say you want to stay connected to people with whom you attended high school. It lets you create your own social-networking site just for that purpose. Like Facebook or MySpace, Ning has profile pages, photos, videos, and messaging. Name it whatever you like, pick the layout, and voilà—you have your own social network.

Everything about Ning is customizable. All the underlying code allows tinkering. So if you know Web languages such as HTML, you can completely reconstruct the look and feel of the site. If you're less tech savvy, you can just follow easy-to-use templates: Put this column here, ask people these questions when they fill out a profile. The site is free if you allow ads on your social network. If you don't allow ads, you can pay a monthly fee to Ning. Want to sell your own ads? That's cool, too. All this means Ning is the exact opposite of MySpace, which has a one-size-fits-all approach that may appeal to millions but also turns off others.

Andreessen and Gina were quietly building Ning for about two years, at one point operating under the code name "24 Hour Laundry." In February, 2007, they felt it was finally ready for prime time. They approached BusinessWeek, Newsweek, The New York Times, and of course all the bloggers. "The smarter members of the media were off-the-charts positive," according to Andreessen.

Before Ning's February, 2007, launch, 30,000 mini social-networking sites had been created. The week after, 13,000 more were added—a big jump, thanks largely to Ning. Recently, Ning has been valuated at $500 million and growing in popularity, with page views rising 10% each week. But not everyone is a believer in Ning. Plenty of critics say people don't want to build their own social networks. Moreover, the critics claim it's too hard to fight the early lead and fast growth of MySpace and Facebook.

To Andreessen, this is reminiscent of the early Netscape days, when naysayers told him all the users were already on CompuServe, AOL, or Prodigy, and he couldn't fight that momentum with a browser even if it could give you unfettered access to the entire Web. As with Netscape, he believes Ning will be huge, provided the execution is right. What's more, Andreessen believes this fervently enough to invest $9 million of his own money in the company and to enlist a host of friends into making small investments, capped by Andreessen at a few thousand dollars apiece. As in the case of Ning's early 2007 launch, no venture capital was involved. If Andreessen can't have control as the CEO, he intends to keep control as the only investor of any size. The approach has allowed Andreessen and Gina to move just as fast or as slow as they want without any outside pressure.

Personally, 36-year-old Andreessen feels he no longer has to prove anything to anyone. While people have been calling him a has-been, his net worth has grown nearly fivefold and is now well north of $600 million. But he is disturbed by one fact: Most of the fundamental breakthroughs in science, math, culture, music, or business, he says, came from people in their early twenties. "As far as I can tell, it's not because those people are particularly brilliant or unusual, it's because you know enough to be able to actually produce something…. You have enough of an education and training," he says. "But you're so young, you know little about what's been done before. You've not bought into the assumptions that exist in any field. By the time you're 35, you start to have a really good understanding of the things that are possible to do and not possible to do." So while he's happy he has gained the experience to know that good times always come back in Silicon Valley, the confidence to tell doubters they're flat wrong, and the money to do whatever he wants, Andreessen knows his experience may be a hindrance if he wants to truly change the world again.

From Once Your Lucky, Twice You're Good: The Rebirth of Silicon Valley and the Rise of Web 2.0, by Sarah Lacy. Reprinted by arrangement with Gotham Books, a member of Penguin Group (USA). © Sarah Lacy, 2008.