Horowitz at the TechCrunch Disrupt conference on May 24, 2010
June 13, 1966 |
|Residence||Silicon Valley, California|
|Alma mater||Columbia University (B.A.)
|Occupation||Co-Founder of Opsware and Andreessen Horowitz|
|Spouse(s)||Felicia Wiley Horowitz|
As a company gets big, the information that informs decision-making gets massive. Depending upon the prism through which you view the business, your perspective will vary. If two people are in charge, this variance will cause conflict and delay.
I think when companies are struggling, they don't want to talk to the press. The guys who write business books aren't interested in it because nobody wants to learn what it's like to be a mess, you want to learn how to be successful. That's slanted the whole thing quite a bit.
It is very helpful to me, in my job, for people to know me better. A lot of that is, it's a communication job.
Big companies have trouble with innovation. Innovation is about bad ideas, or ideas that look like bad ideas. That's the fundamental thing.
As companies move to web-based computing they get a lot more servers, which are difficult to manage and control. All kinds of problems can arise – security, quality and worms.
It helps to have founded and run a company if you're going to help somebody run a company who is a founder.
The hardest thing about starting a company and running a company is, there's just so many expectations on you, and there are so many people who have things that they want you to do. It's a lot like life about that.
In my own experience as a C.E.O., I would find myself laying awake at 3 A.M. asking questions about my business, and there weren't management books out there that could help me.
The first rule of the C.E.O. psychological meltdown is 'Don't talk about the psychological meltdown.'
Going public today is fraught with peril on many levels. One is earnings guidance. If you miss guidance, the stock price becomes very volatile. Short sellers can put a tremendous downward pressure on the stock.
Most books on management are written by management consultants, and they study successful companies after they've succeeded, so they only hear winning stories.
When the value of the company clearly has fallen below what its assets are worth, having a shareholder who says, 'Let's get a better board' can be helpful.
I was an executive running a pretty substantial group before becoming CEO, and I had no idea what it was like. When something goes wrong, people say, 'It's all your fault.' Your reaction is, 'It's not my fault.' But what do you mean? I was the founder, I hired everybody in the company, I was managing it.
Most companies that go through layoffs are never the same. They don't recover because trust is broken. And if you're not honest at the point where you're breaking trust anyway, you will never recover.
In order to build a great technology company, you have to hire lots of incredibly smart people. It's a total waste to have lots of big brains but not let them work on your biggest problems.
Shareholder activism works when activists understand something about the characteristics of the business that the board doesn't.
The important thing about mobile is, everybody has a computer in their pocket. The implications of so many people connected to the Internet all the time from the standpoint of education is incredible.
With communication technology in general, there's a kind of certain critical mass of people. Once you get to 15% of the world's entire population using one communication technology, that's a big deal. It's beyond the theoretical at this point. The people who think it's a fad have probably not been paying that much attention.
The big value of the founder running the company is really two things: the knowledge and the commitment.
In my experience as CEO, I found that the most important decisions tested my courage far more than my intelligence.
Hire sales people who are really smart problem solvers, but lack courage, hunger and competitiveness, and your company will go out of business.
I do think a lot of people are trying to do important things still, and I think it is really a great thing that entrepreneurship is getting easier. When I started, it was just much harder to begin a company.
Here's Kanye, the great musical genius of his generation in hip hop, but, like, society really can't even deal with him because he's always saying something that people go, 'Oh, I can't believe Kanye said that. I can't believe he did that.'
The implications of so many people connected to the Internet all the time from the standpoint of education is incredible.
As long as people are clear on what they need to do and what's going on, you're very likely to succeed. When nobody is clear, then you're guaranteed to fail.
In life, you don't have a level of confrontation and the nonsense you run into when you're a CEO. CEOs aren't born.
If somebody's going on your board, and you're going to be C.E.O., it will help if that person knows how to be C.E.O., who has done it before.
I described the CEO job as knowing what to do and getting the company to do what you want. Designing a proper company culture will help you get your company to do what you want in certain important areas for a very long time.
I think there's a lot to be said about just enjoying your work. It can be very contrived when people say their work is for the good of mankind.
The thing that's confusing for investors is that founders don't know how to be CEO. I didn't know how to do the job when I was a CEO. Founder CEOs don't know how to be CEOs, but it doesn't mean they can't learn. The question is… can the founder learn that job and can they tolerate all mistakes they will make doing it?
The key to high-quality communication is trust, and it's hard to trust somebody that you don't know.
A good engineering interview will include some set of difficult problems to solve. It might even require that the candidate write a short program. In addition, it will test the candidate's knowledge of the tools she uses in great depth.
The laws of business physics have been broken in terms of how many customers you can acquire and how fast. No one in history has ever acquired 450 million customers in the same amount of time that WhatsApp did.
A wartime C.E.O. may not delegate. They make every decision based on the next product release. They may use a lot of profanity.
In all the difficult decisions that I made through the course of running Loudcloud and Opsware, I never once felt brave. In fact, I often felt scared to death. I never lost those feelings, but after much practice, I learned to ignore them. That learning process might also be called the courage development process.
In Silicon Valley, when you're a private company, the entrepreneur can do no wrong.
The bad thing about young people starting a company is that sometimes they do it for the wrong reasons or because they have the wrong skill set, but the good thing is that they don't have any of the old paradigms baked into them, so they have a lot of the bright new ideas that are harder to come by as you get older.
Most of my job and most of what I do is to mentor people. There are a lot of people I work with that I don't have investments in.
Some libertarians say, 'Well, if people work harder, they can make more money.' But, you know, my mother is a nurse and I am a venture capitalist. I think no matter how great a nurse she is, she wouldn't earn a one-thousandth of what I can make, if that.
I would have never wanted to write another management book. There are so many of them, and everybody says the same thing about them, and they are all the same – they give the exact same advice. It's like a diet book; they all say eat less calories, exercise more, and every single book has the same conclusion.
In a company, hundreds of decisions get made, but objectives and goals are thin.
From a systematic standpoint, I think that capitalism is the best system. I can spend a lot of time explaining why I like communism, but it is actually not a good solution. Nor is socialism. So, capitalism is the right model.
If the employees fundamentally trust the C.E.O., then communications will be vastly more efficient than if they don't. Telling things as they are is a critical part of building this trust.
One person is never as stupid as a group of people. That's why they have lynch mobs, not lynch individuals.
I emphasize to C.E.O.s, you have to have a story in the minds of the employees. It's hard to memorize objectives, but it's easy to remember a story.
If I'm in my position at a company, I may not have the knowledge of the C.E.O., I may not know what's possible, or I may not have the creativity, but if I can identify a problem, that's a valuable thing.
Groupon looked like a very high valuation, but any investment in a great company at any stage is almost always a good investment.
Nobody knows how to be a CEO. It's something you have to learn. It's a very lonely job.
When I was a CEO, the books on management that I read weren't very much help after the first few months on the job. They were all designed to give you directions on how not to screw up your company.
How do you make your company a good place to work in general? That's a really, really, really large and complex set of skills. A lot of it is on-the-job training, combined with excellent mentorship.
Many of the people that you lay off will have closer relationships with the people who stay than you do, so treat them with an appropriate level of respect.
John D. Rockefeller said that he found friendships based on business to be far more long lasting and profitable than the reverse. I think there's something to that. A company can end up being very Confucian, where the good of the individual is subjugated to the good of the whole.
I had a terrible time hiring rich people. It sounds funny, but the problem is when things go wrong they can ask, 'Why am I doing this?' You don't ever want anybody asking that question. You want them to say, 'I know why I'm doing it, I need the money, let's go' or whatever it is that draws them.
Every time you make the hard, correct decision you become a bit more courageous, and every time you make the easy, wrong decision you become a bit more cowardly. If you are CEO, these choices will lead to a courageous or cowardly company.
In life, everybody faces choices between doing what's popular, easy, and wrong vs. doing what's lonely, difficult, and right. These decisions intensify when you run a company, because the consequences get magnified 1,000 fold. As in life, the excuses for CEOs making the wrong choice are always plentiful.
When screening engineers from other companies, its smart to value engineers from great companies more than those from mediocre companies.
In boxing, you get hit, it's painful, then you sit on the stool when the adrenaline is gone and you feel that pain. And then you fight the next round.
To succeed at selling a losing product, you must develop seriously superior sales techniques. In addition, you have to be massively competitive and incredibly hungry to survive in that environment.
Every employee in a company depends on the C.E.O. to make fast, high-quality decisions.
When you found a company, you have the original vision, you make all the original decisions, you know every employee, you kind of know every aspect of the product architecture and its limitations.
You can't worry about the mistakes, because you're going to make a lot of them. You've got to be thinking about your next move.
Good shareholder activists have incredible interest in the company because they own a lot of it.
Look – this is the terror of being a founder & CEO. It is all your fault. Every decision, every person you hire, every dumb thing you buy or do – ultimately, you're at the end.
You read these management books that say, 'These are the hard things about running a company.' But those aren't really the hard things. The hard things are when you have to layoff half your company, or you have to fire your best friend. Or you have to figure out a way not to go bankrupt.
When I was CEO, and I'd listen to music, a lot of people listen to music and you get inspiration from it. And a lot of things in hip hop are very instructive for being in business. Particularly, hip hop is a lot about business, and so it was very useful for me in any job.
You have to be responsible when you're running an organization, and firing people who are your friends is part of that responsibility.
By far the most difficult skill I learned as a C.E.O. was the ability to manage my own psychology. Organizational design, process design, metrics, hiring and firing were all relatively straightforward skills to master compared with keeping my mind in check.
I think that business book reporting, it's all Jim Collins, it's the story of victory; it's success bias over and over again.
When you look at a company that's already succeeded or is at the very top of its game, it isn't necessarily when it's executing well. It tends to be peacetime – you've defeated the competition, you have the highest margins, the highest multiple.
Do you have a real interest in people who work for you? Most good leaders have that – it's hard to get someone to follow you if they feel like you hate 'em.