Ben Horowitz: DFJ Entrepreneurial Thought Leaders SeriesBen Horowitz is the co-founder and general partner at Andreessen Horowitz, the author of the best selling The Hard Thing About Hard Things, and one of Silicon Valley's most respected and experienced entrepreneurs. Earlier today, he spoke at Stanford as part of the DFJ Entrepreneurial Thought Leaders Series. We've highlighted the key points below.
On people skills
- Having good people skills is very underestimated.
- Good people skills allow you to see things from other people’s perspective (extremely valuable).
- When CEOs make decisions, they have to consider how every single person in the company will perceive it and the decision should be made with that context in mind.
On working at big companies
- There is value in working at big companies when you're right out of college.
- You gain life experience and know more about the world.
- For good or bad, you’ve seen how a large company operates and how decisions get made.
- It is very difficult to start a company with no management skills or the network (this is where A16Z comes in).
The Hard Thing About Hard Things
- When Ben was CEO of LoudCloud/Opsware, he saw how hard it was to be CEO.
- Ben read a bunch of management books, and none of them helped.
- Management books teach you how not to screw up your company when things are going really well.
- How to lay off 80% of your workforce is not the kind of thing that gets talked about in management books (read Ben's book.).
- People give you obvious advice that you can’t really use like “hire A players” (ok, but how do you hire A players? When the A player wants to leave how do you get them to stay? When the A player wants a raise and you know they deserve it, do you give it to them? When other employees find out -- and they always do -- does that mean you give a raise to the next person that asks?).
Peacetime CEO/Wartime CEO (Ben’s blog post)
- Difference between peacetime/wartime CEO is the decision making process.
- Management literature is almost entirely made for peacetime CEOs (written by consultants who study successful companies in their time of peace).
- In peacetime, you can afford to do things outside of your core mission (Eric Schmidt was a peacetime CEO at Google, employees were required to take 20% flex time).
- In wartime, you can’t afford to do anything outside the core mission when you have three week’s worth of cash left, which means that wartime CEOs have to do more of the decision making themselves, make quick decisions, must get them right, etc.
- CEO is usually the one with the experience and authority to be decisive and make the hard decisions quickly.
- Ben came up with ‘A16Z’ (the number of letters between the A and the Z in Andreessen Horowitz).
- A16Z started 5 years ago with a $300 million fund (now managing $4.7 billion).
- The founder is essential to any long-lasting tech company, but the Silicon Valley way of doing things was replacing the founder with a "professional CEO." Why is that?
- So Marc and Ben decided to start A16Z, a VC firm that puts the founder first.
- It is easier to teach a technical founder management skills than teaching a professional CEO how to innovate.
- Two main advantages of having a professional CEO is having operating experience and a 'professional CEO network' (industry, recruiting, press, etc.).
- All eight A16Z partners have operating experience (“some experience required”).
- Over 100 people work at A16Z, most of them focused on helping portfolio companies, providing them with the professional CEO network.
Delegating as a CEO to your executives
- “The whole point of hiring an executive is to get leverage.”
- If you bring on an executive and things keep coming back to you within the role that you hired them for, the executive is not working out.
Audience question: what makes you so excited about Bitcoin and cryptocurrency in general?
- “Bitcoin is a legitimate computer science breakthrough.”
- The technology solves the double-spending problem that lets you transfer -- rather than copy -- a piece of digital asset across the web (see clip from the talk).
- The Blockchain is a digital ledger that nobody owns, which will be the driving factor for developers to built on top of it.
- An open platform that nobody owns and everybody can benefit from is key, and much like the internet, Bitcoin is doing that for finance/digital assets.
Audience question: if you were a student at Stanford today, what would you be working on?
“If I was at Stanford what I would be working on is Cryptocurrency or Biohacking — these are the two most exciting things.” says @bhorowitz
— Niv Dror (@Nivo0o0) November 20, 2014
Audience question: how important is it for you to be in Silicon Valley when building your company?
- Silicon Valley is the place to be if you want to build a really important technology company.
- The best engineers go to Silicon Valley (not that other startup ecosystems don’t have great engineers).
- There's nowhere else in the world with this kind of ecosystem awareness, depth of knowledge, mentorship, talent, availability of capital, etc.
- The people that have built the kind of company that you want to build are most likely in Silicon Valley, so there is a much stronger network effect and those people can help accelerate your company.