Ben Horowitz On What Makes a Great Founder

Introduction

Ben Horowitz: I think really good companies, the very, very, very best companies tend to have founders and CEOs who ask pretty aggressive questions—Zuckerberg, Larry Page, those guys who have kind of gotten all the way to the mountaintop, they’re pretty blunt. If you’re running away from the truth to preserve feelings, that’s a very dangerous thing in a tech company. And the kind of corollary to that is it’s really important that, like, bad news travels fast.

Brian Halligan: Yeah.

Ben Horowitz: If something’s wrong, that as CEO, you find out about it. And so you need that bluntness.

Brian Halligan: Hey, everybody. Today’s guest is Ben Horowitz of a16z fame. A few reasons I wanted to have him on. First, I wanted to get the behind-the-scenes look on why Andreessen passed on HubSpot back in the day, and there’s a funny story behind that. He’s seen so much. He’s backed some amazing CEOs and some CEOs that went down in dust. Like, what do they have in common? What are the great ones? What do they do? What are they like? What’s the patterns there? And the same with the ones who failed. I read his book, like, a hundred years ago when I was running HubSpot. I thought it was really good. I think he published it in 2014. I wanted the updated, you know, what’s changed since he wrote The Hard Thing About Hard Things back in the day. The convo, I think, is really good. One of the things I’ve always liked about Ben is he is completely unfiltered and gets after it. I think there’s a lot of nuggets in here. I’ll come back at the end and give you my summary.

Main conversation

Brian Halligan: You probably don’t remember when we first met. Can I …

Ben Horowitz: Yeah, remind me.

Brian Halligan: Can I tell you about it? It’s stuck in my mind. Kind of a long story. HubSpot pitched you on the Series D.

Ben Horowitz: Okay, I remember that. Yeah.

Brian Halligan: Three of us came in for the pitch. Our very newly hired COO, JD Sherman, myself, and my co-founder Dharmesh. And we walked in the room, we had a nice welcome, because there was a guy that worked for you that was your sales guy named Mark Cranney that was a former colleague of mine. And then we had just written a book called Inbound Marketing, and two of your marketers had the book. So we were like, this is a hometown—we got this.

Ben Horowitz: Yeah, yeah, yeah, yeah.

Brian Halligan: We sat down, and JD sat here and I sat here and Dharmesh sat here. I remember like it was yesterday. And we started with intros. JD barely got a sentence out of his mouth and you were like, “Wait, you’re the COO? Tell me about your background.” You spent, like, 15 minutes on JD. You spent, like, 15 minutes on JD, and then went to me. And then about 15 minutes on me like, “You’re such a knucklehead. Why’d you hire a COO?” And then Dharmesh. Anyway, you guys passed—as did everyone. Two weeks later, I read your book, and I saw in the book that you’re not a fan of the idea of hiring a COO. So I guess my question—and by the way, I think chips on the shoulder are really valuable. You put a chip, a ginormous chip on JD Sherman’s shoulder.

Ben Horowitz: Oh good!

Brian Halligan: [laughs] And it was incredibly beneficial.

Ben Horowitz: Yeah, yeah.

Brian Halligan: How do you feel about COOs these days? Same thing, or change your mind?

Ben Horowitz: Well, no. I mean, I think that generally when a company is small, flatter is better. In the early 2000s, it was a very popular construct, and it was kind of Mr. Outside, Mr. Inside, that kind of thing. You know, if you’re really scaling and you’re not kind of wrestling with product market fit, like, it can work for a time on a product cycle, but when you hit the end of the product cycle, it’s—you know, so much about a company, a tech company is kind of the communication architecture. And it just makes that worse generally. It’s a little like two people in charge. Not to say it can’t work. And, you know, it depends on the definition of COO. And if COO is really just a big title for the sales guy, like, that’s fine. You know, COO in the sense that I’m running the company and you’re like Mr. Thought Man outside, I think that’s not a great thing for a startup.

Brian Halligan: Yeah. You’ve invested in tons of CEOs at this point, coached tons. Like, what are you looking for? What’s like a major green flag, red flag? How’s it changed over time? Like, what’s your filter?

Ben Horowitz: On a CEO?

Brian Halligan: Founder, CEO. So you’re looking at the company and the market, but the person. Not the co-founder, the CEO.

Ben Horowitz: The thing about founder CEOs is that there’s definitely not what I would consider like a canonical one. So if you look at Mark Zuckerberg and Ali Ghodsi and Elon Musk, they’re all, like, extremely different types of people. So, you know, you try not to get into, like, anything about the look and feel or sound or, like, you know, are they very extroverted? Are they very introverted, or this kind of—none of that, I think, matters. There’s a few things in common. One is, you know, anybody great really thinks for themselves. So they don’t feel like they’re reading the room or influenced by what I’m going to say or anything like that.

Brian Halligan: And you could probably figure that out during the pitch, you think?

Ben Horowitz: Well, you can figure out if they’re not that during the pitch, for sure. And then, you know, do they have, like, truly original thinking on things? And then, you know, from a leadership standpoint, I really like the Colin Powell definition, which is, you know, leadership is the ability to get people to follow you if only out of curiosity. So I think well, would I want to work for this person? Like, how interesting are they? And if you don’t have that, you’re not going to bring in the super high-end talent, which is—you know, it’s kind of a momentum thing. If you can’t hire the very, very top talent, then you’re not—very unlikely to be a great company. It’s kind of, you know, how good is your talent density and all that kind of thing.

Brian Halligan: We just had our Sequoia offsite and I got into, not an argument, but a discussion with Shaun Maguire, one of our partners.

Ben Horowitz: Yeah, he’s very outspoken.

Brian Halligan: Very outspoken. And he got up and he said, “What we should be looking for are these founders that won the chess Olympiad or the math Olympiad in high school and surrounded by other of those folks.” And he was very articulate on it and made a good point. A lot of people shook their head and I thought about it and I was like, well, HubSpot’s no Tesla, but it did pretty well. And my co-founder and I, we’re Sloan people, you know?

Ben Horowitz: Yeah. Yeah, yeah.

Brian Halligan: And then we hired crap tons of people from Northeastern, and I was like, it worked out pretty well. And then I just think, like, early in the cycle, maybe you need those PhDs and those, you know, chess champions, math champions. But as it moves up the stack, Salesforce and ServiceNow, kind of look like us. Do you have a take on my disagreement with Shaun?

Ben Horowitz: Well, I think it depends a little on the era and the market. So if you look at HubSpot, like, it was a marketing sales idea as much as it was a technological idea. So you have to have great people on that side who tend not to be math Olympiads.

Brian Halligan: Yes.

Ben Horowitz: And so for that company, I don’t think that’s right. For other companies, that’s right. The other thing is, you know, math Olympiad is very specific. The very best companies are founded by exceptionally smart people. There’s no question about that. I agree with him on that angle of it. You know, like, how smart is Elon? Extremely fucking smart. Was he a math Olympiad? Probably not. Like, I don’t think so. But just, like, raw horsepower is pretty important. Like, Larry Page is probably, you know, one of the smartest people in the world. That ends up mattering if you’re gonna build something Google-sized. It’s very hard to imagine that without somebody like Larry Page who could even think of something that big.

Brian Halligan: Yeah. You’ve worked with a lot of CEOs. Who’s the best?

Ben Horowitz: Probably the best one that I personally work with right now is Ali Ghodsi at Databricks.

Brian Halligan: Yeah.

Ben Horowitz: You know, he’s a PhD in computer science. He’s extremely smart. So he kind of meets the Shaun Maguire test, but he’s an exceptionally good—you know, for an enterprise software CEO, he’s exceptionally good at go-to-market, able to compete with Snowflake, which is a very, very good go-to-market organization. And then he’s just absolutely paranoid. The only person I’ve ever known as paranoid as Ali—I mean, I guess Elon is this level of paranoid, but Andy Grove was this level of paranoid.

Brian Halligan: He wrote a book about it.

Ben Horowitz: Yeah, yeah. Exactly. You know, I think some of that comes from him being—and he’s a refugee. He grew up in Iran, and then when the Ayatollah Khomeini came in, he had to flee to Sweden. Hopefully that’s correcting now finally after all these years but, you know, having everything taken away from him really informed his psychology in a way that’s, I’d say, very beneficial for a founder.

Brian Halligan: Okay, I work with a lot of founders, their companies are growing fast. And I’m kind of new to this. What’s the pattern of mistakes these folks make on the way up? What are the common traps?

Ben Horowitz: So look, I think the universal one kind of starts with—it’s kind of confidence is a way kind of in a word, but it starts with the fact that nobody knows what they’re doing—as you probably have experienced yourself. You have an idea, you invent something, you don’t know how to run a company.

Brian Halligan: No idea.

Ben Horowitz: And so you start, you know, building the company, and you make a lot of mistakes. Those mistakes are extremely damaging. You feel terrible about it, because you hired all the people, you sold them on this great idea, then you make a mistake and everybody gets hurt. And if you’ve not kind of been in a position like that, which almost no founder has, it can be, like, highly psychologically challenging.

And you see people react to it in two very dangerous ways. One is they overly defer. So okay, I hired a lot of smart people. I’m gonna be very open to their input on all the decisions to the point where I’m not really making the decision myself, I’m kind of doing a poll. But nobody other than the CEO has the context to make that decision. Nobody kind of sees the whole picture. And so that can lead you into not only bad decisions, but a very dangerous political environment where people go, “Oh, there’s a vacuum here, I can step into it.”

And then the second thing that you see often is just hesitation. I don’t know what the right answer is. I have a suspicion, I’m, like, 52-48 on it, but I’m afraid to make a mistake, so I’m gonna not decide. And then the other kind of hesitation is, well, I’m gonna avoid it. Like, I see something bad. I really need to fire the head of sales. What is the press gonna say? What is my board gonna say? What is this gonna be? Da da da da. And you’re thinking about everything that you should not be thinking about, rather than can this person do the job? And those things are really what cause founders to fail at the CEO job, that lack of confidence, that hesitation. You know, when I talk to CEOs, I’m like, “Look, if you were, like, a linebacker in the NFL and you were really fast but you didn’t trust your eyes, you would get cut because you wouldn’t get to the—no matter how fast you are, you’re not gonna get to the ball carrier in time.” And if you don’t trust your eyes as CEO and go run at the problem and make the decision, you’re gonna fail. You’re gonna—like, that’s what’s gonna get you replaced.

Brian Halligan: It resonates with me. At HubSpot, we had all kinds of debt: culture debt, product debt. We had decision debt at times, I would call it.

Ben Horowitz: Yeah, yeah.

Brian Halligan: And when the company was …

Ben Horowitz: Decision debt is the worst debt, by the way, because it paralyzes a company.

Brian Halligan: We had—I had it.

Ben Horowitz: Yeah.

Brian Halligan: So I fell in your trap. And the way it kind of worked was I would see the company slowing down, and just like a lot of debate and a lot of just stuff on my desk. And then once every, like, four, five, six months, I’d be like, “I need to make some friggin’ decisions.” And then once I made some decisions, everything just started moving and flowing.

Ben Horowitz: Yeah.

Brian Halligan: So I felt that very much.

Ben Horowitz: Yeah.

Brian Halligan: What other mistakes have they made? Talk about the team building. Like, you’ve hired a lot of VP of sales. Like, people fuck up their VP of sales hires all the time.

Ben Horowitz: More than anything else. Yeah, more than anything else. So kind of more generically, hiring executives is also something you don’t know how to do.

Brian Halligan: Yeah.

Ben Horowitz: Right? Like, it’s a lot of times you don’t even know what the job is. Like, what is a CFO? What’s a control structure? You know, what are these systems they speak of? And people go in to hire them, like, with that level of knowledge and think they can, like, smell it out from talking to a person. And it’s a little like trying to hire a Japanese interpreter and you don’t know Japanese. Like, they’re all gonna sound pretty good.

Brian Halligan: Yeah.

Ben Horowitz: And it’s gonna be very hard for you to distinguish. So preparation, I would say, is very important in terms of okay, have you spoken to enough CEOs? Have you asked them, like, what’s the difference between a good CFO and a great CFO? Like, you know, how would you hire this person? What would you ask them? What would you want to see? You know, these kinds of things. And just understand the job. I always say, if you have a chance, just try to do the job yourself, act in that role so that you can get a feel for what the challenge is in your company. And it’s also like you don’t want a generic CFO, you want one for your business.

And then when you get into sales—so the problem that we have all the time is we have engineers running the company.

Brian Halligan: Yes.

Ben Horowitz: And then they’re hiring a head of sales. You could not be culturally different between, like, an engineer and a head of sales. The main thing is—like right down to how they talk to you. So engineers, if you ask them a question, a hundred percent of them will try and think of what is the correct answer to that question. That’s how they think about it. If you’re a salesperson, your first thought isn’t what’s the answer, it’s why the fuck are you asking me that question, right? Because that’s a clue. And so if you ask an engineer, like, does your product have this feature? The answer is yes or no. If you ask a sales guy, it’s like, okay, what competitor was in here that planted that trap for me? What’s their weakness and how do I get to that? And so if you have an engineer talking to a good sales guy, it’s gonna upset them because they’re often not gonna answer the question. They’re gonna try and figure out why they’re being asked that question. And so then …

Brian Halligan: I like this, by the way. I hadn’t thought of it this way.

Ben Horowitz: Yeah, but the guys who are good at the job get rejected because you don’t like them. And then the people who are terrible at it, those are the ones that end up getting hired. Mike [inaudible] used to say, you know, “These CEOs, they just want to take a guy who failed the engineering test, put a clean shirt on him and, like, make him the head of sales.” And there’s a real truth to that. It’s funny, I had this conversation with Sujay when he was at Dropbox. He goes, “How do I, like, deal with the fact that our engineers are upset that we’re gonna pay the sales guys commissions?”

Brian Halligan: Guaranteed, guaranteed they’re gonna be upset.

Ben Horowitz: Yeah. And I said, “Well, it’s very simple. Tell them if they want to make commission, then they can fucking grab a bag and sell some fucking software. And if they don’t hit their number, you’re gonna fire them. And if they want that job, they can get a commission. But otherwise, you know, shut the fuck up.” You know, he said, “Oh, okay. I never thought of it that way.” I was like, “Look, the other question you can ask him is do you have engineers that, like, on the weekend might write some software for fun, like as a hobby?” And he goes, “Yeah.” And I said, “I guarantee you don’t have a single fucking sales guy on the weekend who’s selling software as a fucking hobby. Like, that is not a fun job.” There has to be a—it’s a prize fight. There is no fight without a prize. And I think that the whole mentality, the whole cultural difference between, like, what founders are and what salespeople are is so vast that, you know, somebody’s gotta have a conversation with them about, like, okay, what are you really looking for? Because otherwise you’re just gonna get somebody who’s not good at sales.

Brian Halligan: Okay. I’m the head of—I’m an engineer. I’m CEO of your brand new company. I’m likely to screw the hire up. What’s your advice to me?

Ben Horowitz: Yeah. Well, it’s funny. So, you know, one of the companies that both Sequoia and we were invested in is a company called Okta. Which ended up doing very well. It’s actually Pat Grady. I was on the board with Pat Grady on that one.

Brian Halligan: I love those guys.

Ben Horowitz: Yeah. And, you know, the very first, like, big mistake that Todd almost made was hiring the head of sales. There were two candidates. One, I forgot his name, and the other was Adam Aarons, who was PTC guy. You know, we knew everything about Adam because, you know, he had worked for Cranney, you know, he had worked for McMahon. Like, I knew everybody in the tree and I called them all. And they were like, “This is the guy.” And then this other guy, you know, I got front door references on him and they came out okay, like not great. But Todd wanted to hire this other guy. And the reason that he wanted to hire him was he was much more enthusiastic about Okta, whereas Adam was like, “Well, I don’t know about this company, but let me talk to some of your customers.” And so forth and that kind of thing. And so the conversation I had with Todd was, I was like, “Todd, you don’t want the sales guy all enthusiastic. You want them to be qualifying you. Because when you’re selling, good sales guys don’t just answer the damn questions they’re being asked. They qualify the customer. Do you really have the money? Do you really have the need? Do I really have a shot here, or am I politically already boxed out? You need that.” And I said, “But beyond that, I got guys who owe me favors more than they owe Adam favors telling me he’s great.”

Brian Halligan: Yeah.

Ben Horowitz: “And this other guy who all the guys owe him favors and don’t owe me anything say he’s a B. And so do not fuck this up.” I’d never forget it. And I don’t talk to founders like this anymore because I’m more mature. But I said, “Todd …”

Brian Halligan: Sure. I’m still working on that.

Ben Horowitz: I said, “Todd, look, if this hire doesn’t work—” because we were in a lot of trouble at the time, “—you realize what’s gonna happen is this is the end of your company. Like, this is it. So you gotta be a hundred percent confident, because I’m telling you you’re wrong, and I have more experience at this than you.” And so forth. So I really put pressure on him, and he hired Adam and, you know, it ended up really making the company. So it worked out.

Brian Halligan: I have a bunch of questions.

Ben Horowitz: But that’s how important it is. Like, I think if we had hired the other guy, Okta would’ve gone bankrupt.

Brian Halligan: Ooh. I have a couple questions on that. It sounds—well, just the takeaway if I’m that engineer who’s CEO, I’m getting some traction, hiring the head of sales, it’s one, blind references really matter, and two, get a board …

Ben Horowitz: Oh, and sales, by the way. It’s the whole thing.

Brian Halligan: Yeah.

Ben Horowitz: Also, who are you bringing with you?

Brian Halligan: Yeah.

Ben Horowitz: That’s what I always ask. Who are you bringing with you? Okay, you’re bringing this, that, the other. Okay, can I call them and find out if they’re coming?

Brian Halligan: Yeah, yeah.

Ben Horowitz: Because any great sales leader has a big set of followers, and anyone who’s not great …

Brian Halligan: Nobody.

Ben Horowitz: Nobody. Because the one thing sales guys are, they’re savvy about the leader.

Brian Halligan: Yes.

Ben Horowitz: Like, I’ve never met—even a mediocre salesperson knows who’s a good leader.

Brian Halligan: Okay, you brought up PTC, you’ve hired people from PTC. I came from PTC. First of all, who’s the equivalent of PTC now building on the sales leaders that are filling Silicon Valley? I can’t figure that out. And two, what do you think it was about the PTC mafia that worked so well? And by the way, for listeners, PTC was a great—still a great company, but in the ‘90s it ripped and was the fastest-growing company in the world for a while. And we sold CAD/CAM, we sold PLM software to manufacturers. Hard sell, but we were very good at it. And the diaspora of PTC sales execs throughout Silicon Valley was very interesting and compelling.

Ben Horowitz: There was a number of things about PTC, but one of the underrated things was the product wasn’t that great, particularly the windshields.

Brian Halligan: Didn’t work. Yeah.

Ben Horowitz: Anybody can say …

Brian Halligan: So you like to hire a sales guy that had a hard sale. You don’t like to hire somebody who was like, yeah, he crushed his numbers, but anyone could have sold that.

Ben Horowitz: Yeah. Like, hire somebody selling Google AdWords.

Brian Halligan: Fine.

Ben Horowitz: Like, you know what that job is? How much do you want? Okay. You’re not gonna build the …

Brian Halligan: You see someone from Databricks, though, and they were VP at Databricks. You’re looking for a CRO in your new company. I’m not saying that’s easy to sell, but they have a brand. They have, like, a lot of mojo. Is that someone you’re looking for in an early-stage startup or no?

Ben Horowitz: Well, you know, I can’t comment on that because, you know, Databricks is …

Brian Halligan: Well, you know the analogy.

Ben Horowitz: Yeah, it’s like the early days of Oracle. Those guys were different than an Oracle salesperson today.

Brian Halligan: Yeah.

Ben Horowitz: And I think that, like, as it gets more established it’s harder to tell, because you can survive on that. But I will say this, if you have a product that’s complicated to sell, then that’s when you get to the PTC level. The thing about PTC that was so amazing—other than, like, the culture and the attitude. So there’s a culture and the attitude—and we talk about that—which was unique and probably illegal today. I would say almost certainly illegal today. But the thing that I think is very replicable, but only if you have a difficult product to sell, is the discipline. And the discipline really came down to okay, you’re going into an account, you know there are competitors, and how systematic are you about laying the traps for the competitors, making sure you make a comprehensive technical case, a comprehensive business case, making sure that you’ve charted everybody in that organization who’s in that decision process—and it was a very complicated decision process for PTC—getting assurances that they’re all like lined up. And that’s so complicated and requires so much courage and effort and competitiveness that that translates into anything.

Whereas look, if you’re walking into an account and they’re already predisposed to buy, you can skip steps, you can get away with shit. You know, you just have to call in, show up, “Hey, I’m the, you know, salesperson from, you know, blah, blah, blah.” And, you know, away you go. You know, like right now, I think with OpenAI and Anthropic and so forth, it’s like that. It’s like everybody wants to buy AI. They’re already predisposed to buy. Very, very different than “Who the hell are you?” “Oh, we’re PTC.” “I never heard of PTC.” Okay. Like, now I’m in the door. Why should I buy this? I can’t get it to work. Well, like, let me walk you through how it’s gonna work. Like, these kinds of things. Yeah, that’s invaluable if you have that, actually. So Ron Gabrisko, who’s kind of the original head of sales at Databricks, we got him. I had never heard—like I had never heard of the company he was at, which was a public company. Imagine that, a tech sales guy that I had never heard of his company. And the company was literally selling FTP.

Brian Halligan: Okay.

Ben Horowitz: But secure FTP.

Brian Halligan: Okay.

Ben Horowitz: Like, think about how good at selling you have to be to make your number as a public company selling that.

Brian Halligan: Yep.

Ben Horowitz: And so this guy, like, obviously had the discipline forced upon him, and he was extremely smart. And that combination, you know, I’ll take that all day.

Brian Halligan: Yeah.

Ben Horowitz: You know, if you’ve got that. And so you’d rather have—you know, a successful company is fine, but some kind of playbook that was harder to write. Some product that was harder to build. And that’s another big one is can you run a playbook? Are you somebody who, like, joined VMware when it was on fire and got a big position, but you ran the playbook that was set up for you? Or are you the person who wrote the playbook, who figured out how to sell this very complicated piece of software, who figured out how to lock out the competition, to train the sales force, to discipline them, to do all that kind of thing? That’s a much harder find. And, you know, depending on the complexity, look, if you’ve got an easy product, then that’s one kind of thing. If you’ve got a hard product, that’s another.

Brian Halligan: Some of my takeaways were I was the first basically BDR, and worked and spent 10 years. It was in a lot of ways contrary to the way people thought about selling.

Ben Horowitz: Yeah, yeah.

Brian Halligan: We sold an application, we sold it one way, and then we moved into the platform business. Totally changed the way we sold. Very disciplined on both sides, and very process-oriented, like, really managed the process tightly.

Ben Horowitz: Yeah.

Brian Halligan: So we’re very good at that, and just very tight on the profile of sales rep.

Ben Horowitz: Yeah. [inaudible]

Brian Halligan: And [inaudible] very, very well.

Ben Horowitz: The profile. By the way, that’s—when I interview sales guys, I always ask them, “What’s the profile of your rep?”

Brian Halligan: Yes.

Ben Horowitz: And it’s amazing to me that guys who are very senior in very big jobs have sometimes very loose profiles, whereas the ones who really have to compete, it’s extremely tight. What they’re looking for is so specific and, you know, often surprising.

Brian Halligan: One of the things we—just sticking on sales for a sec—one of the things we got right—got a lot wrong at HubSpot—one of the things we got right was the process to interview a rep. And what we found out was reps who are good learners did well inside of HubSpot. And so we got lots of resumes. We like people on their second sales job, not their fifth, not their first, their second. So they had done something. And if they had gone to a half decent school—not Harvard, not MIT, state school …

Ben Horowitz: State school, B average.

Brian Halligan: And they—yeah.

Ben Horowitz: And competitive athlete.

Brian Halligan: If they could fog a mirror and they did those things, they came in. And we didn’t overthink it. We came in for a half hour, and the half hour was, “Ben, welcome.” And I would give you a scenario, and I would be the customer and I would say, “Sell me HubSpot.” And I’d give you 12 minutes to sell me, like literally watch 12. I’d say, “That’s very good, Ben. Here’s my feedback.” Couple minutes of feedback. “Why don’t you think about it and let’s do it again?” And if the person internalized that feedback and sold it better the second time, 99 percent of the time we hired them.

Ben Horowitz: Oh, that’s interesting.

Brian Halligan: I thought that was—and it scaled really well.

Ben Horowitz: Yeah, yeah, yeah. Right. Can they—how good are they at listening? By the way, that’s the other, I think, mistake people make. They look for somebody who’s good at talking. You really want somebody who’s good at listening. Yeah. It’s an important, subtle difference.

Brian Halligan: Okay. While we’re on this type of thing, you were the recipient of maybe my favorite email in the history of emails. May I read it to you?

Ben Horowitz: Yeah, sure, sure.

Brian Halligan: And the background of this was you had a big product launch coming. You were excited about it, and you had a press tour coming up in a couple of weeks. And Marc Andreessen front ran it, and you sent him an email. “I guess we’re not gonna wait until the 5th to launch the product. Ben.” And the response to Ben Horowitz from Marc Andreessen, “Apparently you don’t understand how serious the situation is. We’re getting killed, killed, killed out there. Our current product is radically worse than the competition. We had nothing to say for months. As a result, we’ve lost over $3 billion in market cap. We’re now in danger of losing the whole company, and it’s the server management’s fault.” And then I love the ending. “Next time, do the fucking interview yourself. Fuck off. Marc.” [laughs]

Ben Horowitz: Yeah, yeah, yeah, yeah.

Brian Halligan: Are we out of the “Fuck off” era?

Ben Horowitz: From Marc?

Brian Halligan: Everyone. Like, this is the emails that we get at PTC.

Ben Horowitz: Oh, yeah.

Brian Halligan: And are we too soft now?

Ben Horowitz: You know, Elon’s not soft.

Brian Halligan: Nope.

Ben Horowitz: And I think there’s some of that. Like, I don’t think it’s quite at PTC level. So in Cranney’s interview with McMahon, I think McMahon said to him, “What would you do if I hit you in the face right now?” And I think Cranney’s response was, “Well, first of all, you better knock me out.” And then McMahon says, “Well, like, but what would you do?” He says, “Is this a question? Are you testing my intelligence or my courage?” And that kind of thing.

Brian Halligan: In my first interview …

Ben Horowitz: You wouldn’t ask somebody that in an interview.

Brian Halligan: My first interview, I walked in with my suit on and Harrison, who was originally head of sales, says, “I wouldn’t wear that suit to a shit fight.” [laughs]

Ben Horowitz: I think really good companies, the very, very, very best companies tend to have founders and CEOs who ask pretty aggressive questions. Zuckerberg, Larry Page, those guys are pretty—who have kind of gotten all the way to the mountaintop, they’re pretty blunt. And I think—look, I think that’s important in that one of the most critical things in a company culturally is, you know, one, you give direct feedback. And, like, you can have it out. Like, you know, like, Mark was wrong on that feedback to me. I was right. But, like, it’s important that he’d be able to say that. And then it’s important that I’d be able to stand up to it. Otherwise, the truth doesn’t come out. Like, if you’re running away from the truth to preserve feelings, that’s a very dangerous thing in a tech company.
And the kind of corollary to that is it’s really important that, like, bad news travels fast.

Brian Halligan: Yeah.

Ben Horowitz: That, you know, if something’s wrong, that as CEO, you find out about it. And so you need that bluntness. Andy Grove used to call it “constructive confrontation.” And he was—by the way, that’s another one where one of my favorite Andy Grove anecdotes was somebody was late to a meeting, and then this is when Intel was a monster and Andy was God and all that kind of thing. And they come in late to the meeting, and he just looks at them and he goes, “All I have in this life is time and you’re fucking wasting it.” You know, which is like the meanest thing you could ever say to somebody. But particularly as a company grows, you need to reset the culture, like, if it’s starting to fray at the edges. You can’t just let that go. And by him saying that, you know, it might crush that person’s feelings, but everybody’s telling that story to the point where I heard it and I didn’t work for Intel, right? And that’s a culture setter. Like, we’re not fucking late to meetings here. Like, that’s not what we do. And look, not every company has that culture, but if you have that culture, you need to maintain it.

Brian Halligan: Kind of speaking of that, I coach all these CEOs. Well, one thing I’ve noticed is Paul Graham wrote that “Founder Mode” memo. It strikes me as relatively standard operating procedure now. It’s really—is that your reaction to it?

Ben Horowitz: Well, yes. Although there’s a part that’s wrong to it.

Brian Halligan: Okay.

Ben Horowitz: Or there’s a part that I would say is a little misleading to it. And I think it came originally from Brian Chesky.

Brian Halligan: Sure.

Ben Horowitz: And so Brian—like, so there’s part that’s very right about it, which is what happened to Brian is he hired, like, extremely senior people. And then he did the thing that we talked about earlier, which he overly deferred. And then that created fiefdoms, politics, all kinds of, like, weird stuff. And then he kind of after COVID took the company back by going into, quote, “founder mode,” and just was like, “I’m being much more dictatorial.” And I think that that part is all correct. I think the danger with the idea is people are taking it to the point where they’re going, “Well, I don’t want to hire any senior people.”

Brian Halligan: Yeah, I see that.

Ben Horowitz: It’s like, well, okay, so you’re gonna go compete with—and you need a worldwide sales organization, and you’re gonna try and grow a motherfucker from scratch to do that. Well, let me tell you all the things that that person doesn’t know that they’re gonna have to learn on your nickel that you could just buy today. What’s your profile? How do you split territories? Like, how do you open up international? How do you—like, there’s just, like, years and years of experience and relationships that are required to do that right. And so because you’re in founder mode, you’re so fucking afraid to do that. It’s like, no, you need to be able to hire that person too when you need them, but you need to be able to manage them. And that’s very different than avoid, avoid, avoid. And I think people have taken what Paul wrote and it’s like, “Oh no, like, no experienced people. Like, screw that and so forth.”

And, you know, particularly if you’re an enterprise company, I think that definitely doesn’t work. Like, even on a consumer company, it’s gonna be shaky, you know, like positions like CFO and so forth. Like, outside knowledge is just valuable. You have to understand enough about that, you know, in founder mode, you’ve got to learn enough about that job that you feel confident managing that person and telling them what to do, and not having them tell you what to do, because that’s when you lose the company. So I think it’s good. It’s like an overcorrection from where things were.

Brian Halligan: I think you’re—by the way, I think you’re spot on on that. One of my favorite CEOs is Jensen Huang. And he’s got a unique playbook. He’s got 60 direct reports. He gives feedback in public, and everybody knows the story. The interesting thing about the CEOs I coach is none of them really do that. They don’t have 60 direct reports. They haven’t followed his playbook. I kind of scratch my head at why.

Ben Horowitz: People also haven’t followed Elon’s playbook, right?

Brian Halligan: Exactly. No one uses the algorithm outside of Elon’s companies. I don’t get it. Have you noticed the same thing?

Ben Horowitz: So most of the companies you recruit out of don’t run like that.

Brian Halligan: No.

Ben Horowitz: And so they don’t think of it that way. And then also, I think that to run it like Jensen does—by the way, you know, that’s a little bit like I would say closer to how I run Andreessen Horowitz is more like how Jensen operates. But you gotta, like—I think what founders are lacking is the level of confidence that you have to have to do that, because you have to be able to say, “If you’re reporting to me, you gotta be, like, basically CEO caliber.”

Brian Halligan: Autonomous.

Ben Horowitz: I’m not developing you, which is something that I highly believe in. CEOs can’t really develop executives. They either can do it or they can’t.

Brian Halligan: I agree with you on that.

Ben Horowitz: And then you have to feel like you’ve got enough knowledge to just be able to, like, walk in and understand what’s going on and so forth, and kind of be able to evaluate how the company’s going, you know, at that level. You know, Elon is the most competent and has the most confidence of anyone. And, you know, Jensen is kind of at that caliber. I think that a lot of people, you know, need to develop that as they go. I would say, like, when I observed Zuckerberg, he didn’t have that the whole way. He’s kind of over time getting more like that. But, you know, like, he deferred, like, half the company to Sheryl for a while until he could kind of build his confidence over there. And I think that’s a little more the normal path. It’s hard to go from zero to Jensen.

Brian Halligan: Yeah.

Ben Horowitz: You know, it’s interesting. Jensen’s been doing it now for …

Brian Halligan: Thirty years.

Ben Horowitz: Yeah. Thirty-plus years. So, you know, what was he like four years in? I suspect he wasn’t quite at this level of master of the universe.

Brian Halligan: What can the CEOs listening learn?

Ben Horowitz: And Elon, of course, got fired early. Like, there is a learning curve to the job, even for the best.

Brian Halligan: What can CEOs learn from Zuckerberg? You worked with him pretty closely here.

Ben Horowitz: Well, I think Zuck, he’s very, very, very good at operating from kind of first principles thinking, not being overly influenced by, one, anybody else’s ideas, or just like the way things are. Like, he’s very, very good at just looking at it. And then also, you know, they were amazingly disciplined at looking at things through a data lens, like, okay, what does the data say? And do that. And, you know, that’s how they were able to grow it so fast, overcome the competition and these kinds of things. And he definitely stays, like, extremely curious, which I think all the great CEOs are, like, very just interested in everything all the time.

You know, I think people underestimate him and Elon and Jensen and so forth on—they’re like, “Oh, those guys are nerds.” Their people skills are astoundingly good.

Brian Halligan: And do you think they always were? Zuckerberg struck me as that not being the case early.

Ben Horowitz: He was so introverted that you couldn’t see it, but I felt like it was going on inside his head. You know, if you look at, like, the M&A deals he’s done, he’s like a really outstanding psychologist. And I think that he always had some of that in him. You know, his mom’s in that profession and she’s very smart about it. Karen. I think it was always in there, but he needed the confidence to get it out. I mean, he started that company when he was like a little kid.

Brian Halligan: Twenty. Yeah. You wrote a whole book about culture. What are people getting wrong?

Ben Horowitz: [laughs] I think people don’t know what it is. Like, I mean, that’s the main thing. The main thing that particularly founders don’t know—which is why I wrote the book—although it’s funny, the people who really liked that book were like Ted Sarandos, you know? And I realized after I wrote it, you really don’t have the cultural issue until you get big. And so at the startup phase, you may be sowing the seeds of your own cultural problems, but there are no cultural issues in the beginning, because the thing is small, you’re seeing it, you’re kind of managing the culture by hand unconsciously. So the big thing that people think of culture is values. They think, oh, it’s like we have a culture of integrity or we have a culture of whatever.

Brian Halligan: All the same, everyone’s got the same ones.

Ben Horowitz: Yeah, we have each other’s backs or, like, whatever it is. And those things aren’t really anything. They’re just platitudes. The actual thing is behaviors. And so when you think about your culture, you kind of want to think about, like, what are the behaviors that put you in a place where you’re the kind of company that you want to be, and give you the advantage that you want to have? Okay, we’re in venture capital. What does everybody—well, we really love entrepreneurs. Like, everybody in venture capital fucking loves entrepreneurs. But then you get down to the way entrepreneurs talk about a lot of VCs and they’re like, “These guys are fucking arrogant, they’re assholes, they talk down to me,” this and that. Well, like, if you want to be this, why are you that?

And it gets down to the behaviors. Are you on time for a pitch meeting? Are you on your phone during the pitch meeting? Do you get back to the entrepreneur if you’re not gonna invest in them? Like, these behaviors end up setting the culture whether you, like, care about entrepreneurs, have respect for them, or you think you’re above them. And it doesn’t have anything to do with what you said, it has to do with what you do. Which is why I called the book What You Do Is Who You Are. But that’s really the core thing. But it takes a lot of thought to say, “Okay, if I want to be this, how must I behave to get there?” And you can say, like, “Oh, treat the company’s money like it’s your own.” Okay, great. But what does that mean? Well, where are you staying? What hotel? You know, how are you traveling? What’s your thing? And, like, so if you want that, then that has to be systematic.

Brian Halligan: Let me ask you about …

Ben Horowitz: Now you may not want that, you know?

Brian Halligan: There’s one cultural gotcha that I see a lot where there’s a brilliant, brilliant 100x engineer in the company that’s an asshole.

Ben Horowitz: Yeah, yeah, yeah. Not sometimes. By the way, venture capital is more like that than engineering organizations. There’s more of those.

Brian Halligan: Yeah.

Ben Horowitz: Well, like, I mean—and I think that on an engineering team, you kind of have to have the parameters of okay, like, what does “asshole” mean? If “asshole” means that in the code review, I don’t say anything, and then I go in the middle of the night and I rewrite your code, that’s gonna be tricky as you grow. Like, that’s hard to manage. If “asshole” is I expect a super high standard, that’s another thing. And so you kind of want to define, like, okay, what is it that we’re not gonna do here? And the thing about engineers is they’re, like, amazing at following rules. So if you make clear, like, what the parameters are on it—and I find that in venture capital, too. Like, we have that. That’s a venture capital problem if I ever heard one.

Brian Halligan: Yeah.

Ben Horowitz: You know, you get a lot of very smart, spiky personalities. And, you know, Marc and I talk about this sometimes. It’s like, well, was Steve Jobs so mean to people because that just goes with being so brilliant, or because he could get away with it because he was so brilliant, right?

Ben Horowitz: Where’d he come out? I’ve had the same debate.

Ben Horowitz: Yeah, so I think it’s a little bit more the latter. And so I think that if you’re running an organization …

Brian Halligan: Wait, which one was the latter? I forgot.

Ben Horowitz: That he could get away with it, right? Like, he didn’t have to do that, but he could do that. And, you know, like, it’s his company. He can do what he wants. I think that the problem with founders modeling themselves after Jobs and, you know, to some extent after Elon, is well, if you’re not Jobs or Elon, maybe you can’t get away with that. And, like, maybe people just walk out the damn door in a way that they weren’t with those guys. And it’s very hard to have, like, the highest performing talent without them coming with some of those behaviors, you know? And it doesn’t matter, like, in engineering and VC and whatever.

And so you kind of have to be very specific about okay, we’re not gonna have this, but we’ll have that. You know, one of the things that I’ve outlawed at the firm, which a lot of, you know, kind of people of this ilk would do, it’s like, look, you can’t make yourself look smart by making somebody else look dumb. Like, that fucking doesn’t count here. And if you do it, by the way, with an entrepreneur, like if you get on Twitter and say, “Oh, that business sells dollars for 85 cents, ha ha ha, I’m so smart,” fuck you, you’re fired. Like, I’m not dealing with that at all, because that’s just not who we’re gonna be. We love that you’re smart. You can be as smart as you want to be. Like, that’s fine. You don’t have to get there through that method. And then once people know that, they’re fine, like, not doing that. But I couldn’t say—I think it would be hard to say, “Just don’t be an asshole.” Because look, sometimes, you know, the smartest, they’re just like, “I’m not gonna suffer through this dumbass conversation.” Like, you know, people who are extremely smart are gonna do that. And it can’t be like, “Oh no, you have to suffer through every dumb conversation.” Like, that’s not gonna work.

Brian Halligan: Ben Horowitz isn’t like, “Don’t tolerate it. Zero tolerance for this thing.” It’s …

Ben Horowitz: No, I think the “no asshole” rule is never gonna work.

Brian Halligan: Yeah, yeah.

Ben Horowitz: So what is it that you don’t want them to do?

Brian Halligan: Yeah.

Ben Horowitz: Like, what’s over the line and what’s not over the line? And, like, I think even, like, very spiky people can live in that kind of context.

Brian Halligan: He’s very spiky.

Ben Horowitz: Yeah.

Brian Halligan: Yeah. What percentage—I like that you brought this up in another pod that I wanted to follow up on. Like, when I was CEO of HubSpot, I didn’t know what I was doing a lot of times. I was confused a lot. And when you were CEO, you felt the same way. Like, what percentage of the time do you feel like I really don’t know what I’m doing, versus I kind of got a handle on this thing? And today, running Andreessen Horowitz or through your journey, like, founders pretend like they know what they’re doing.

Ben Horowitz: Yeah. Well, everybody pretends, and this is kind of part of that challenge. So I think it takes a while. I mean, like, I—now I had to grow up very fast. We went public when we were 18 months old, right? So that’ll grow you up in a hurry.

Brian Halligan: Yeah.

Brian Halligan: But I didn’t really feel like I knew what I was doing there probably until four years into it. You know, when I rebuilt the sales force, I brought in Cranney, all that kind of thing, maybe three-and-a-half, four years into it. And I was never as confident at that as I was—as I am now. And it’s different for different people but, like, you need, like, enough reps at it to have—like, the more confident you are in your judgment, the faster the decisions you can make, the less you care about what people think, the less you care about making a mistake. And those are all the things. That’s why Jensen is so magical, right? Like, he sits in the room, he talks to everybody, He knows exactly what he wants. Same with Elon, right? Like, he can just sit there and go. I guarantee you neither of them started that way. You know, like, you build it into that.

Brian Halligan: I see silly things on Twitter where people say venture capital is easier than entrepreneurship, or entrepreneurship is easier than venture capital. People ask me that.

Ben Horowitz: Venture capital is easier. What are you talking about?

Brian Halligan: Way easier! [laughs]

Ben Horowitz: Like, that’s not even close.

Brian Halligan: I agree.

Ben Horowitz: Who the fuck would think venture capital is harder than entrepreneurship?

Brian Halligan: A lot of people. I think the venture capital, there’s a lot more luck involved. Like, if you join Andreessen Horowitz today, you have an amazing platform, or Sequoia, amazing platform. And you may do three deals. You know, maybe one turns into a trillion-dollar company. There’s a fair amount of luck around that.

Ben Horowitz: Yeah. Yeah. I mean, I think that …

Brian Halligan: Entrepreneurship doesn’t have a lot of luck. It’s just some luck.

Ben Horowitz: It’s also a lot of bad luck. You know, entrepreneurship, you have one shot and you have to make it work. And then you really, really pay for your mistakes much more directly. And then the clock is ticking in a way. It’s like, there are no quarters in venture capital. So, like, venture capital is just kind of like an easier kind of business. Now look, there’s a lot of people—I’m saying that as, you know, as someone who succeeded in it. I suppose if you failed in it, it might’ve looked harder in a different way. But I think the pressure level and the stress level is not close, because if you have a small venture capital thing and it fails, it’s never a lot of people. Like, you can get a tech company up to thousands of people, and then have them lay them all the fuck off. Like, that is common.

Brian Halligan: Yeah.

Ben Horowitz: And it’s brutal. And then the people that you’re raising money for have a much tighter eye on you, because you could have one funding source, whereas in venture capital, you always have many funders. Very generally have many funders.

Brian Halligan: I appreciate your coming on the pod.

Ben Horowitz: Yeah. No, it was fun. All right.

Brian Halligan: Yeah. Thank you very much. I think all the CEOs who watch are gonna really like it. Thank you.

Ben Horowitz: All right. Good, good, good.

Takeaways

Brian Halligan: I hope you liked that episode with Ben. I really liked it. Learned a lot. Something I thought about while he was talking is one of my bugs as CEO of HubSpot was I’m pretty conflict averse. I think a lot of CEOs are, particularly first-time founder CEOs. Andreessen Horowitz and Sequoia back a lot of first-time CEOs who haven’t really managed before, and it’s just uncomfortable. Confrontation is uncomfortable. Unless you kind of grew up with it, it’s just not natural. Ben’s got a good term that I’m gonna borrow. He calls it constructive confrontation. I like that. You need to have a constructive level of confrontation with most people inside of your organization.

I think kind of related to that, Ben talks about decision debt. And we had this at HubSpot. You had a VP of sales, you know you need to fire them, but you kick the can down the road hoping they nail the next quarter. You know your pricing model’s not really working in scaling, but you kick the can down the road a couple quarters to fix it. There’s all kinds of stuff kicking around your head like that. And, you know, I think it’s a lack of confidence. I want to be a popular CEO. I think that was another bug of mine, kind of related with that conflict-averse thing.

All of this also rhymes, I think, with hiring. And there’s a lot of talk around founder mode and, you know, people hiring and deferring to people, and now they’re micromanaging. I think when you’re a first-time founder CEO and you’re hiring a been-there-done-that person that’s more senior than you, has done more stuff in their career, you’re a little nervous about truly managing them, and you end up deferring to them, and that’s where the problems start. And so I think a lot of this idea around constructive confrontation that Ben talked about is really productive. And if you’re a little risk-averse like me, if you’re a little—you want to be popular like me, maybe you need to be a little bit more constructive in your confrontation.

The last thing I would say that he talked about—and I agreed on—is being a CEO is pretty uncomfortable, particularly from one of these hypergrowth CEO companies today. They’re growing so fast, everything’s breaking, everything’s changing. I think it’s just fine if in your head you think you don’t know what you’re doing, because Ben didn’t think he knew what he was doing when he was running Loudcloud, and I didn’t think I knew what I was doing when I was running HubSpot. So if you’re feeling that as a CEO, I’m here for you. Hope you liked it. Let’s keep the convo going. I’m @bhalligan on X. See you over there.