--:-- Lenny: Today, we've got a feed drop from Lenny's podcast, a conversation with Ben Horowitz, co-founder of A16Z, and Lenny Ritschitsky. It's Ben on founder psychology, hesitation as the enemy, how to think about hiring, firing, and managerial leverage, and why PMs are mini CEOs. Let's get into it.
--:-- Ben Horowitz: The worst thing that you do as a leader is you hesitate on the next decision. The thing that causes you to hesitate is both decisions are horrible. Probably one of my bigger ones on that was we went public with $2 million in trailing 12 months revenue at 18 months old. That's obviously a bad idea. But the truth of it was the alternative was going bankrupt. And that's the worst idea.
--:-- Lenny: It's very difficult and painful to be a CEO, to be a founder. In spite of that, so many people want to start companies.
--:-- Ben Horowitz: The psychological muscle you have to build to be a great leader is to be able to look in the abyss and go, okay, that way is slightly better. We're going to go that way. If everybody agrees with the decision, then you didn't add any value because they would have done that without you. So the only value you ever add is when you make a decision that most people don't like.
--:-- Lenny: You are famous for writing one of the most popular pieces of literature for product managers.
--:-- Ben Horowitz: What I was trying to get out in "Good Product Manager, Bad Product Manager" was the job is fundamentally a leadership job. And it's a tricky leadership job because nobody is actually reporting to you. There's always this kind of sense that the PM is not the mini-CEO. How dare you call yourself that? I actually think that's exactly what the PM is. It doesn't matter if you write a good spec or you have a good interview or you do this or do that. What matters is that the product wins.
--:-- Lenny: Today, my guest is Ben Horowitz. Ben is the Z in A16Z, the world's largest venture capital firm with over $46 billion in committed capital. They're investors in OpenAI, Cursor, Andrel, Databricks, Figma, basically every generational tech company. He's also the author of two New York Times bestselling books, *The Hard Thing About Hard Things* and *What You Do Is Who You Are*. Ben is endlessly fascinating. He started a rap group when he was younger. He started his career as a product manager and wrote the now famous "Good Product Manager, Bad Product Manager" piece. In our wide ranging conversation, we cover a ton of ground and Ben shares stories and insights that he's never shared anywhere else. With that, I bring you Ben Horowitz.
--:-- Lenny: I want to start with a question that a close friend of yours suggested I ask you, Shaka Singhor. So Shaka, he's like, we could do an hour just on how interesting this guy is in the face he's done. Three hours on Joe Rogan the other day. He's very, okay. So we're not going to do that. Just to give a glimpse, he was in prison for 19 years. He was in solitary for seven years. He led a huge prison gang. You wrote about him in your book as a great exemplar of great culture in the prison gang that he ran. So interesting. But something that he learned from you that he told me I need to ask you about is about success and how to be successful and how it's not what people think. And he said that you learned this lesson from a pilot. What is that story? What is that lesson?
--:-- Ben Horowitz: Well, it's a long life lesson, but the pilot story is... I actually ask people silly questions sometimes when I meet them. I met this gentleman who was a pilot, right around the time JFK Jr. crashed his airplane and ultimately died. I asked him, "What happened?" Because the story in the press is always the best narrative, not what's true. The story in the press was all about how he wasn't trained on instruments. Instrumentation was flying at night. I wanted to know, is that right?
--:-- The pilot said, "Really, all plane crashes are a series of bad decisions. None of the decisions by themselves is that bad, but when you add them up, it's bad." The first decision was he needed to get wherever he was going, and that was the priority. In flying, that can't ever be the priority because there are conditions, things that happen. The second one was his timing of when the sun would go down was wrong. He thought he'd be flying in sunlight and he wasn't. Once he got up there, when the plane was going down, making it go up was a bad decision because he was upside down. This guy had 17 steps, 17 bad decisions in a row.
--:-- The big thing for me that I felt was really true is that one decision leads to another. If you can psychologically take the sunk cost, that gets you out of a lot of bad paths. A little good decision may be difficult, but you have to believe it's going to lead to the next one. A lot of success is about that. It's a small thing that's hard to do that doesn't seem to have a high impact, but it leads to the next small hard to do thing, and eventually you get an outcome.
--:-- Lenny: So the lesson there is just success is just a bunch of little things. It's not this big thing.
--:-- Ben Horowitz: When somebody were to write a story about me, they would be like, "Then Ben did this really smart thing and blah, blah, blah, happy ending." But it really wasn't like that. I don't think it's like that for you or anybody. I spent a lot of time with Shaka on how your own psychology gets you. One of the most insightful things he said to me was, because he was in solitary for seven years. Most people, that's it. You're insane. You're never coming back from that. But if you study his story, he actually was massively self-improved coming out of solitary. He wouldn't recommend that for anybody, just to be clear. But as he changed in solitary, he was able to change a big set of beliefs he had about himself.
--:-- His conclusion from it, which I thought was really interesting, was: "Look, I was in prison for 19 years. I was in solitary for seven. I come out. I can't rent an apartment. I can't vote. I can't get a gun. I can't do anything. No rights. None of that was anything compared to what I did to myself." I think that's very true for CEOs in general and people in general. All the things you perceive that are happening to you that are bad—the systems against you, somebody undercut you, racism, sexism—is very small compared to what it means if you believe it. If you believe what people say about you, if you believe what they did to you, that destroys you. But if you go, "That's not me," you can overcome almost anything. He's got a new book out on that. I think that's the key to success.
--:-- Lenny: Something you, if you look at all the writing you've done, it's essentially about the struggle and pain and suffering of being a CEO. Your first book is *The Hard Thing About Hard Things*. There's a lot of talk these days about just how important struggle is and how valuable it is to go through struggle. Jensen's big on this. He talks a lot about just you have to go through pain and suffering to be a great leader.
--:-- Ben Horowitz: You don't really have a choice. That's true.
--:-- Lenny: There's something that I saw you share that I love, which is running towards fear versus running away from fear. Something that you tell all your leaders to work on. Easy to hear, hard to do. We don't like doing things that are scary. Why is this so important? Why is this something people need to learn to do?
--:-- Ben Horowitz: The biggest mistake you make, the worst thing you do as a leader—there are things in your control and things out of your control. Hesitation is generally the most destructive. I go through all the ways that it's destructive, but it's extremely bad. The thing that causes you to hesitate is both decisions are harmful. It's not business school where you're going through a case study and if you had done that, the company would have gone this way, but if you had done that, it's a great success. That's not what happens to you as CEO.
--:-- What happens to you as CEO is: "Okay, if we re-architect this product, the architecture is not going to actually get us to where we need to go. I kind of know that. But if we re-architect it, we're going to probably miss all the features, miss the quarter, have trouble raising money, et cetera. That's really bad. And not re-architecting is really bad." So I'm just going to try to avoid this subject because I don't even want to deal with either of those. That's the worst thing because if action is the better choice, then that's good. If you don't make an explicit decision, the whole company gets nervous because they know the architecture is whack and you have to fix it.
--:-- Probably one of my bigger ones on that was we went public with $2 million in trailing 12 months revenue at 18 months old. That's obviously a bad idea. There's no question that wasn't a bad idea. But the truth of it was the alternative, because where the private markets were, was going bankrupt. And that's the worst idea. If you look at that time, March of 2001, when we went public, just look at the number of CEOs that hesitated on that and didn't do it and went bankrupt. It's a lot.
--:-- Getting good at making a decision that everybody's going to go, "Wow, that was insane." The Wall Street Journal wrote a whole long story about how stupid I was. Businessweek wrote a story called "The ITO from Hell." That was the name of our idea, "The ITO from Hell," which was accurate in a sense. But it wasn't as bad. And this is why it's so scary. You make that decision because you know that's going to happen. I knew those stories would get written. There was no question.
--:-- The psychological muscle you have to build to be a great leader is to be able to look in the abyss and go, "Okay, we're going that way. Slightly better. We're going to go that way." It's very hard to do. It's a thing people struggle with. It begins with something like, "Should I fire the head of sales? I don't want to have that conversation. Then I'll have to replace them. Then there's going to be a bad PR story." You can quickly calculate all the bad stuff that's going to happen if you do it. But if you don't do it, that's probably going to be much worse. That's why you have to run towards the pain and darkness.
--:-- Lenny: What is the advice you share with founders? Because as you said, it's very hard to do this. Just like what helps them actually get better at this? Is it just Ben being by their side, telling them this is how it is? Is there anything else you could share?
--:-- Ben Horowitz: No, no, no. I would say this is one where I can't really coach you to be good at this. I can point it out so that you recognize that you were slow or whatever. But it's kind of like football. You could have a really fast, great athlete, but if they don't trust their eyes, if they don't run to the ball when they see it, if they think, "Oh, maybe that was a fake," then they're that step slower. They'll never be as good. CEOs are like that. If you don't trust what you see and you don't run at it, you're just not going to be good. It's hard to get CEOs not to hesitate.
--:-- One thing that does help is they look at it and I look at it, and I kind of confirm that it is as it appears. Sometimes they're afraid of the conversation, so that one I can help with. A CEO might be afraid. They want to do something but they don't know how to say it. They don't know how to have the conversation with the employee, so I can walk them through that.
--:-- I had an instance where the CEO said, "Hey, I need your help, Ben. My CTO, he's an asshole." I was like, "Okay, great. But you're not going to fire him because I know he's a good CTO. Or are you asking me, should you fire him?" He said, "No, no, I don't want to fire him." I said, "So you're asking me what to do because you don't know how to have that conversation with him about being an asshole without him quitting. That's what you're saying." He goes, "Yeah, that's the problem."
--:-- I go, "Well, why is he an asshole?" He says, "Well, he's an asshole because the other day he made a very junior young woman in our finance organization cry." I was like, "Oh, that's kind of... I got you." I said, "This is what I would say to him. I'd say, 'Look, you're a really good director of engineering because you do a great job of managing the team, getting the products out, all that. But you're not really a CTO because to be a CTO, you have to be effective with other parts of the organization. You can't just be effective only with engineering. Making somebody cry, she's never going to do anything you want. You lost all effectiveness with all the findings by doing that. So if you want to get good at that, I'll help you work on it. But if you don't, I'm going to have to hire a CTO at some point because obviously I need that.'"
--:-- Then he's like, "Oh, okay, I can have that conversation." I can't have the conversation that, "Hey, you're an asshole," because I don't want him to quit. But I can have the conversation that's more specific. A lot of getting people not to hesitate is just getting them over that. Early in a CEO's career, a lot of it is just not knowing how to have the conversation.
--:-- Lenny: There's also, I imagine, an element of, "I just want to be liked, I don't want people to hate me." You have this great line that you want to be liked and respected in the long run, not the short run.
--:-- Ben Horowitz: That's tricky because it's so... I have to deal with this in the firm too. People want to be entrepreneur friendly. I'm like, "No, it's not friendly. Respectful." But you have to be able to tell them the truth in a way that you probably don't tell most of your friends the truth. Anthropologically, we want people to like us so they don't throw us to the lion or whatever. So you say, tell people what they want to hear. But in dealing at a company level, in a context where you're on the board of somebody's company, you have to be able to tell them what they don't want to hear. That's the most important thing you're going to say. Yes, they're not going to like it when you say it. There's no question. But over time, it could save the company.
--:-- All the most important things I've said are things that I've said to CEOs that they did not want to hear. That's what leadership is about. If everybody agrees with the decision, then you didn't add any value because they would have done that without you. The only value you ever add is when you make a decision that most people don't like. That's where leadership comes in because you know that's where it's got to get to. That takes practice.
--:-- When Jensen talks about how you have to get to near death to get yourself to do that, that's true. It's hard to build that if everything's going great. The CEOs who had an easy run of it—they just launch a product that's an instant hit—it's very hard for them to develop that muscle compared to the ones that built a company like Jensen where he gutted it out for multiple decades before they had big success.
--:-- Lenny: Clearly, it's very difficult and painful to be a CEO, to be a founder. In spite of that, so many people want to start companies, so many people dream of having their own company. Who's not right to start a company? What advice do you share with folks that are thinking about starting a company that may not understand just what they're about to get into?
--:-- Ben Horowitz: It's funny. John Reed, who was the CEO of Citigroup when I started as CEO, said to me something I never forget. He said, "Ben, the only reason to start a company is because you have an irrational desire to do so because it's not worth the money." I was like, "Wow." He didn't even quantify how much money, and this guy's running Citi, a very numbers banking guy. He didn't quantify it. I remember when we sold LoudCloud for $1.6 billion dollars. I remember thinking, "Wow, that wasn't worth the money."
--:-- If you're doing it for the money, that's a very bad reason. It'll be extremely difficult to get to an outcome. You really have to have an irrational desire to do something larger than yourself, to improve the world in some way that is your purpose. If you don't feel that, you'll never get through it. Too many bad things happen along the way.
--:-- Lenny: So how do you think of founders that are kind of looking around for ideas, that brainstorm, that look for market opportunities versus come from, "I have this mission. I got to do this thing in the world"?
--:-- Ben Horowitz: My business partner, Mark, always talks about that. If you have a product that forces you to build a company, that is a great case of it. You built something and the world wants it, and you need a company to deliver it. You already have the right product. That's very helpful. There are cases of people—I think Hewlett Packard was built that way. They were like, "Okay, we got to build technology." It was that abstract. "We got to build technology for the world." Then they started with, "What do you need?" They called it the "next bench thing." What does the engineer sitting next to me need? The next engineer on the bench was how they defined the first set of products. So it can work the other way.
--:-- The thing that is in common is it's just a very abstract idea that you have to build something that's going to be important. People are going to like working there. People are going to benefit from the products. You have to have some weird concept other than, "Oh, this is going to be successful and I'm going to make a lot of money."
--:-- Lenny: On these lines, something else Shaka suggested I ask you about. Apparently there's a story where the CEO of Databricks asked you for $200,000 in the early days, and you said no, and it's not because you didn't want to invest, and it was more about helping him think bigger. What happened there?
--:-- Ben Horowitz: There were six of them. Six PhD students, and Jan Stoica was their professor. Jan is a super genius. When I met with them, they were like, "We need to raise $200,000." I knew at the time that what they had was this thing called Spark. The competitor was something called Hadoop. Hadoop had very well-funded companies already running towards it. Spark was open source. The clock was ticking. I don't think they quite knew what they had.
--:-- There's also a thing—although I wouldn't say Jan has this mentality—but professors in general, it's a pretty big win if you start a company and you make $50 million. You're a hero on campus. That's a pretty cool thing to have done. I'm always a little nervous about a company that comes out of academia thinking too small. I said, "I'm not going to write you a check for $200,000. I'll write you a check for $10 million. Because this company, you need to build a company. You need to really go for it if you're going to do this. Otherwise, you guys should stay in school." They were all graduating right then.
--:-- Ali actually was VP of engineering at the time. It was a while before I made him CEO. That was very good luck on my part because I had no idea that they had a guy that good inside the company who could become CEO when I invested. That was just God smiled on me and gave me that one.
--:-- Lenny: Speaking of Ali, I actually asked him what to ask you about. He immediately shared this story. I don't know if you remember this. In your first one-on-one with him after you made him a CEO, he was struggling with a bunch of low performers because he was coming in to lead the company. He was trying to turn things around, trying to coach them, trying to level them up. Your advice to him was, quote, "You don't make people great. You find people that make you great, that make the company great, that you learn from, not the other way around." And there's something that he called managerial leverage. What is that all about? What's the lesson there?
--:-- Ben Horowitz: Understand he had just become CEO. I was teaching him. He had been VP of engineering. CEO is different. I'll get into why and what I mean by leverage. I actually wrote a post about this with a little weighing quote. I think the quote was, "The truth is hard to swallow and hard to say too, but I graduated from that bullshit. Now I hate school." That was always my feeling about this particular idea.
--:-- If you're VP of engineering, you can develop people. You can teach them to be better engineers. You can teach them to be better engineering managers. That's very doable. But if you're a CEO, what do you know about being CFO? What do you know about being VP of HR? What do you know about any of these jobs? You might be VP of engineering. The idea that you're going to take somebody who isn't world-class at marketing and make them world-class, and you don't know anything about marketing, is a dumb idea. It just doesn't work. The company can't afford for you to be spending time on that because they need you to make very high-quality, fast decisions. They need you to set the directions for the company. They need you to have a world-class team.
--:-- It's a very hard lesson if you've been VP of engineering because if you're a good VP of engineering, you do develop your people. But as a CEO, it's not like you don't do any of it, but it is very, very small compared to it. I like to make things just very stark so you get what I'm saying. I don't like to hedge it.
--:-- Managerial leverage means this. It's very simple. If I had the ideas about what your department should do next, if I am kind of pushing you to move your organization forward, then that's no leverage. What's leverage is if you're telling me what you should do and how you can push the company forward. That's leverage. Then I'm getting more than I'd have if you weren't there. Otherwise, I could just manage a fucking team. That's the point. When you feel like you're not getting leverage, when you have to go say, "Hey, why aren't we doing this? Why aren't we doing that?" that's when you have to make a change.
--:-- By the way, he's unbelievable at that. As good as anybody I've seen. As a guy who's not callous as a CEO, he really cares about the people who work for him. He really wants them to have great careers and all that. But he does not hesitate. If he's losing leverage, he'll make a move.
--:-- Lenny: Going back to the origin story of A16Z, something you guys were really big on was helping founders stay CEOs, become great CEOs, not replace them with professional CEOs. I want to flip this question on you. When does it actually make sense to replace a CEO? When are people not going to make great CEOs?
--:-- Ben Horowitz: There's a very consistent thing that happens when somebody doesn't make it. It starts with confidence. If you invent a product, you recruit a team, and all of a sudden you're a CEO, but you don't run a big organization. You don't know how to do that. Most founders are like that. If you don't know what you're doing, you're going to make mistakes. They all make a lot of mistakes. When you make those mistakes, they're very expensive. They could cost you a down round. They could cost you a company. They could cost you a customer. You screw up the product. They're very high impact, not just on you, but on everybody who you talked into joining you. That kind of motion can really cause you to lose confidence.
--:-- If you lose confidence, what happens is you hesitate on the next decision. As we talked about, hesitation is very dangerous. One, it locks up the company. But even worse, if you have senior people working for you, they get very nervous. They feel like they need to jump into that void and make the decision for you. That's when it gets political, very political, because people are vying for power inside your little screwed up company. Now you've got a political dysfunctional organization. That's generally where the founder probably can't run this thing anymore. That's how it happens.
--:-- Most of what we do as a firm is try to help people with that confidence problem. There's a whole series of ideas that we have around that. You have to somehow climb the confidence and the competency curve together. It's very hard to do. Particularly if you're an engineer and you're used to getting things right, or if you've been a straight A student, it's very disconcerting.
--:-- Lenny: Well, I'm just better to have like CEOs who are like C-minus students.
--:-- Ben Horowitz: Why is that?
--:-- Lenny: Yeah, the little facetious. Well, like it's just good to be used to failing. So I think I wrote this, but like the median on the CEO kind of test is like 18. It's not like 90. And so you got to be comfortable getting a lot of D minuses because the D minus is fine. As long as you don't get the F, as long as you don't run out of cash, as long as you don't lose the whole thing, you know, okay, like you got through it, keep going. And that's a lot of the thing that we try to do as CEOs.
--:-- Ben Horowitz: Yeah, it comes back to your core message through your first book is just how much you will fail and how much you will struggle and how much pain you'll go through as CEO.
--:-- Lenny: Yeah, yeah. And a lot of why I wrote that book was just to normalize that. I think what happens is, particularly when I wrote it, and I think it's come back and been true now, is the way the narrative gets written on all these successes is like, "Oh, they came up with a genius idea and then they built this company and they hired all these smart people and it was all great." But that's not at all how it happens. I've spent enough time with everybody from Mark Zuckerberg to Sam Altman and so forth that they all go through that same thing that you, who has your struggling company, go through. You screw a lot of things up and they have massive consequences. But you have to kind of maintain your confidence.
--:-- Ben Horowitz: I was at a storytelling event last night and I was chatting with someone I ran into there. I told her I was chatting with you today, and she said how meaningful your first book was to her as a founder, exactly as you said, normalizing that it's very hard and painful and this is just the way it is.
--:-- Lenny: Yeah. And the feeling—look, if you think about organizational design or goals and objectives or OKRs or whatever management technique, you need a basic eighth-grade education to do any of that stuff. It's not that complicated. The difficult part is the feeling that you have when you have to do it. The hard thing about a reorg is you're redistributing power. So you're going to have people really freaking mad at you because somebody is losing power if you do it correctly, and that person may be a really good employee. Dealing with that is the hard thing. Knowing how the organization should work to make communication better is not that complex.
--:-- Ben Horowitz: I think about Airbnb. I was there for a long time, and Brian—I don't even know if he had a job before Airbnb.
--:-- Lenny: Oh yeah, no, no. I spent a lot of time with Brian. After COVID, it all kind of clicked for him. Then he did that, and he and Bob had a good talk on Founder Mode and so forth. But the reason that was so articulate is because he had screwed every one of those things up. He hired an LT and all this stuff. These are very senior people. He wanted to defer to them. But you can't defer as the CEO, because you know what Airbnb should be doing. He may know what finance should do, but you know what Airbnb should do. And then it gets really wild when you can't defer decisions as the CEO. You got to understand what people are saying and go, "Now we're going to do this." This again comes back to the point of you have to go through the struggle and pain and failure to learn those lessons.
--:-- Ben Horowitz: Yeah, they're really hard to learn without doing and often without paying the consequence. Even I make mistakes. I was having a conversation with Ali the other day. He's like, "How's it going, Ben?" And I was like, "Well, I'm finally dealing with something that I had put off for a very long time." He said, "Why'd you put it off?" I said, "Because things were going too good. I didn't have to deal with it." And he's like, "Yeah. I know that." I'd say Ali is one of, if not the, best private company CEO out there, and he's making a mistake and I'm making a mistake. So it's just tough.
--:-- Lenny: You said that one of the main reasons founders fail as CEOs is they lose confidence. And you had some ideas that you guys have to help founders work through that. Are there a couple you can share?
--:-- Ben Horowitz: Yeah, we do a lot of things on that. The design of the firm is about confidence. The first thing is, what would give you confidence? If you can get stuff done. So what if I could give you a network that's as good as Bob Iger's network day one, the day you stepped into the job? We have 600 people at the firm. Most of them are building that network for you so you can call any CEO or anybody in Washington or any executive and get them on the phone and they'll talk to you. That just makes you feel like a CEO. Then we have a lot of people in the firm like myself who you can talk to on a CEO-to-CEO basis, as opposed to an investor-to-CEO, and just kind of feel that.
--:-- Early in the firm's days, we used to do this thing—I think I'm going to bring it back in some form—called the CEO barbecue. A lot of people have these events where they bring in speakers and this and that. I always felt those were too many days, and sometimes what they said wasn't really applicable. So I said, "Why don't we just have a barbecue?" I would barbecue. We got everybody in my backyard. It was 500 people at the peak, which is why I had to stop. I couldn't cook that much food. Then we'd have Larry Page and Mark Zuckerberg and Kanye West. So you're a CEO in there. You're like, "Wow, I must be important. I'm here with all these guys and we're just hanging out, having a drink, eating barbecue." So when I go back to my company, I feel like I am somebody. Like, "Okay, I might not be perfect at all this, but I am really a CEO. I was at the CEO barbecues, for crying out loud." The whole idea was always, "Okay, do you feel like you can do it?" Because that's what it's about. Every CEO has been in a position where they feel like, "Maybe I shouldn't be the one running this thing. Maybe it's just too big for me." That's a bad place to go. Because, as we've said, founders can get to the next product. Almost no professional CEO is able to do that. There have been rare cases, but very rare.
--:-- Lenny: You've worked with a lot of companies and a lot of founders. Let me zoom out a little bit. What's the most counterintuitive lesson you've learned about building companies that goes against common startup wisdom?
--:-- Ben Horowitz: The common startup wisdom keeps changing. One of the early ones that was wrong—and Brian articulated it—and now I think a little bit of what people have gone to is also wrong. The first idea that was wrong was: "Build a team of senior executives as soon as you get product-market fit as fast as possible, and they can scale the thing." I think you got to build that team slowly and deliberately, paced to your ability to integrate and then manage them. If you bring in a bunch of senior people and you don't know how they match your company or how that function works, then you're going to start deferring. Once you start deferring, it's going to get out of control very fast because they're going to build empires. They're going to get political. So that was bad advice. You have to do it in a measured way.
--:-- I think Founder Mode—a lot of people have taken it to mean "never hire anybody with experience." That's also bad advice. Somebody who knows how to do something can really accelerate your thing. Very early on, one of the great founders, Arsalan at Databricks, was running sales. I'm like, "Ali, you're going to have to hire somebody who knows sales because Arsalan's a PhD in computer science. That's probably not where you're going to have to start if you're going to catch these guys before they take Spark and use it against you." I sat down with Arsalan and explained why. A lot of what sales is, there's a lot of knowledge in how to build a worldwide sales representation—knowledge of customers, territories, territory splitting, rep profiles. There's a litany of stuff that you can only learn by doing trial and error, and you don't know anything. So, "You're phenomenal, let's get you"—he's still a very senior executive in the company now—"but we need somebody who knows that." The idea that companies go, "Okay, we're just not going to hire that because we're in Founder Mode," that's also a mistake. It's more subtle than you think, and it's more complex than you think. You have to get all the way to the truth. These little snippets of advice that VCs give because they watch some podcast are all stupid. There's a lot of depth to these things. You have to know the answer to the next question, the next question, and the next question.
--:-- One of the funnier things that happened along these lines, just to show you how little you know as an investor about what it means to be CEO: We were at a board dinner, and one of our CEOs says to me, "Hey, Ben, that thing you told me a while ago about 'don't be CEO at home'—I was doing that and I stopped, and it really helped me." Then the other VC said, "Yeah, you got to unplug sometime." And I said, "What the fuck are you talking about? He's CEO. He's not unplugging. He's getting shit all the time. He's got to deal with that. That was not what I meant." I meant you can't go home and boss your family around. So you hear something from somebody who—if you haven't done it, you don't even know what that means. Then trying to transfer the advice to the next guy, that's not going to work. He was very innocent, I don't want to speak bad of him, but that's how it sounds. That's not what it is.
--:-- Lenny: That's an amazing story. So the advice partly here is just don't believe everything you see on Twitter in little sound bites of advice.
--:-- Ben Horowitz: Yeah. Actual CEOs know it. That's how people in my profession are going to get a bad rep. Giving advice that's not something that you know but something that you heard is very dangerous.
--:-- Lenny: Speaking of advice that you've shared that might be out of date now, you are famous for writing one of the most popular pieces of literature for product managers, called "Good Product Manager, Bad Product Manager." If you go to that post today, at the top you say, "This document was written 15 years ago and it's probably not relevant today for PMs. I present this merely as an example of a useful training document." Still, people link to it. I actually just link to it as something every PM needs to read. What is it that you think people should maybe not take away from it? And what do you think people still should take away from that piece?
--:-- Ben Horowitz: The reason I wrote it when I wrote it was I had a lot of product managers. Product management is a job that's completely different at every company, and there is no training for it. Everybody figures it out as they go. Depending on what's being emphasized, they'll get wrapped around the axle on—if it's an enterprise company, "I need to be really good with the press" or "I need to be really good at writing the product requirements document." None of those are the job. What I was trying to get out in "Good Product Manager, Bad Product Manager" was the job is fundamentally a leadership job. It's a tricky leadership job because nobody is actually reporting to you. It's this influence: "How do I get people to do what I want?" even though I'm not paying them, I can't fire them, I can't promote them. That's the essence of real leadership, because if you start to rely on promotion and firing for authority, you're never going to be good at being CEO or anything. I wanted them to get into the mindset that your actual job is to get a product into market that customers love, that's better than anything anybody else in the world puts in market. To accomplish that, you need engineering to understand you with clarity. You need to understand engineering with clarity. You need to have a really good view of the market, the competitors, and the technology. You need to put that all together and deliver the thing. All the other things are tasks that you may or may not need to do. You have to be the leader. You've got to get the thing done.
--:-- What I think it's still good on is the mindset: be the leader. The details of it, anything that was task-specific, was really for my group at Netscape in 1996, whenever I wrote it. It was a document I wrote out of frustration. I am glad that people still like it. Leadership in general is undervalued and underestimated. It's the most powerful thing. Most of the great companies—Jensen is a great example. What a phenomenal leader he is, not just of NVIDIA, but of the whole industry. He doesn't have authority over the industry, but he drives it for them. That's why "Good Product Manager, Bad Product Manager" is so important. If you learn how to do that, that's the thing.
--:-- Lenny: I didn't realize you wrote that initially as just an internal document, and then you made it public.
--:-- Ben Horowitz: It was kind of before blogging took off. It was just an internal thing, and I published it later. I was just getting so mad. By the way, my product management team at the time was very good, very talented people. They just were not getting that concept. David Sze from Greylock, Ragu Raghuram who went on to be CEO of VMware—the team was like that team. They were driving me crazy. I was like, "I can't yell at people anymore. I have to explain what I want." It's a good thing: if you find yourself yelling at people, you probably haven't explained what you want.
--:-- Lenny: That was the other big takeaway from that. Did you ever think that piece would be so long-lasting?
--:-- Ben Horowitz: No. I didn't even know. I thought it was kind of aggressive when I wrote it. You could tell I was mad because I called it "Good Product Manager, Bad Product Manager." It's like "Bad dog, bad product manager." That was the emotion I had. It's shocking some of the things that you write. The idea is that the things you write in five minutes end up being much better than things you write in five weeks. In talking to musicians or writers, everybody has that same experience. The thing that you've already synthesized so much that you just have to write it out—that's the best stuff.
--:-- Lenny: There's something you mentioned there about the PM being the leader. There's always this sense that the PM is not the mini-CEO. "How dare you call yourself that?" I actually think that's exactly what the PM is. They're basically the closest to the CEO. Their job is to think like the CEO within the team.
--:-- Ben Horowitz: Yeah, people get mad because everybody—this is the whole challenge of management in general. People get jealous over stupid shit. But from the perspective of the PM, it doesn't matter if you write a good spec or you have a good interview or you do this or that. What matters is that the product runs. You have to get all the way to there and work backwards from that. You can't do that without leadership because it is about, "Okay, we want to build that." You're not necessarily the person that comes up with every idea. You're just the keeper of the vision. That's true for CEOs too. You don't want every idea in a company coming from the CEO. It's a misunderstanding of what a CEO is, which is why people don't like that comparison. They don't know what a CEO is. A CEO isn't the one who has every idea, gives every order, does everything. That's not the way it works. The way it works is there's somebody who's got to consolidate all the good ideas, prioritize them, decide which good ideas we're going to do, and then get everybody on the same page so they have very high fidelity understanding of what that is. That is a CEO kind of function. It doesn't mean I'm better than you. It just means that's what I'm doing.
--:-- Lenny: Let's talk about AI. I'm very proud of us. It's been almost an hour and we haven't even mentioned AI.
--:-- Ben Horowitz: Yeah. I think that's a record.
--:-- Lenny: Okay, so I asked Adam Neumann, WeWork founder, now Flow founder, what to ask you about. He said you have some really interesting insights about how AI is impacting hiring.
--:-- Ben Horowitz: Adam is probably the single most controversial investment that we ever made. We got called everything from stupid to sexist to racist for literally just funding that. I think it's going to end up being one of the best investments we ever made. He's doing a phenomenal job there. There's an important principle in that, which we do as a firm, that I think is not widely done, but I would love it if people copied it. It's something I learned somewhat from Shaka: you don't judge a person by the worst thing that ever happened to them. We've all had bad things happen to us. We've all made bad decisions. Most of them don't make a miniseries about. To judge them on that—you want to judge people on what they do well, not what they screwed up. That's where you see the talent.
--:-- If you look at what Adam did well, it's truly spectacular. WeWork—everybody knows what WeWork is. Name a more important commercial real estate brand than WeWork. You can't. What an accomplishment. There were so many things that went into that, so many things he did right. If you unravel the things that went wrong, most of it was a combination of inexperience and nobody around him that would tell him the truth. Maybe he wasn't good at listening to the truth either at the time. But to throw away a guy on that—the world was so mad at us for not throwing him away, for believing in him. It's a big mistake. I credit Mark, because Mark is the one who called him up originally and just said, "Hey Adam, what are you doing?" Because we watched what you did at WeWork and we thought it was pretty impressive. That's probably the biggest secret there. It's not really about AI, but Judge Al Davis once said, "Coach players on what they can do." Judge people on what they can do. Coach people on what they can do. Help them take their strengths and use them, as opposed to over-focusing on their weaknesses and hand-wringing about the one thing they don't know how to do. Everybody's uneven.
--:-- Lenny: What you're describing is essentially the job of an investor: to find an underappreciated asset and invest in something people don't see.
--:-- Ben Horowitz: Yeah. Venture capital is really about investing in people. You have ideas as an investor, but what you're ultimately betting on is the entrepreneur and the entrepreneur's idea, because the initial idea isn't where they end up usually. It changes a lot. You have to make the judgment on the person. How you do that is really important. One of the things we emphasize inside the firm is we're investing in strength, not lack of weakness. I want to know, "How good are they? Do they have a world-class strength? Can that beat anybody?" Everybody's flawed. Let's help them deal with the flaws. Surround them with people who can handle that. Put the right person on the board who can talk to them. I go to all Adam's board meetings, even though Mark's on the board, because I'm the one who's good at killing a guy who's that confident when he's like, "Okay, that's not your best idea." That's a good world for me. That's how you deal with that. You don't throw him away and go, "Oh, we don't want to be called names, so we're not going to invest in Adam Neumann after we built WeWork." That's crazy.
--:-- Lenny: It's also why you guys invested in Clubhouse, I imagine. Similar.
--:-- Ben Horowitz: Yeah, right. If you look at what those guys did, that was some high-level marketing genius too. That's really something, plus the product is awesome.
--:-- Lenny: I'm going to bring us back to AI. Something a lot of people are talking about right now is this potential huge bubble we're in with AI. Sam Altman said we're in a big bubble, which is saying a lot. I'm curious how you think.
--:-- Ben Horowitz: First of all, I should qualify this by saying I'm an investor and Sam's a CEO. CEOs have to have much more purpose when they talk. Investors just have to be entertained. You got to give Sam credit. What is it in his interest to say? If it's a bubble, then the one thing you should invest in is him, and not all these guys chasing after him. That's very smart. The other thing that's smart about it is there's nothing you can say to the press that will make them love you more than saying all investors and entrepreneurs chasing this are idiots. The press are generally haters. It's red meat for the haters, which is also super clever. I think whether even he believes that or not, that was a super smart thing to say.
--:-- What I'm going to say won't be as smart, but it will be honest. I don't really have an axe to grind here. I could have an axe to grind and say, "Let's get all the other investors out. I'll say it's a massive bubble." But what I would say about that is: the one thing about bubbles is anytime everybody thinks it's a bubble, it's not a bubble. In order for it to bubble, you need capitulation. You need everybody to believe it's not a bubble, because then the prices really go out of control. As long as there are people who think it's a bubble, it's hard for that to happen. I had this debate in The Economist with Steve Blank in 2011 or 2012, when everybody thought it was a tech bubble, which it absolutely was not. There were 1,400 articles saying we were in a tech bubble. I knew because everybody was saying it was a bubble, it wasn't a bubble. The prices were higher, but the reason was we were getting to a global market.
--:-- AI prices are higher than prior prices. But if you look at the revenue growth and memories, we're not seeing anything like it. The products that work—ChatGPT, Sam's product—worked so amazingly. We've never seen that before. Not even Google, not anybody. That's real. We have companies that went from zero to 800 million in a year. So there's a basis for the prices going up. Now, I think the thing that's right about what Sam is saying is the landscape is early, really early. The technology is very immature, as amazingly as it works. There's a long way to go to improve it. When you have that much technological change, it's very possible that the positions these companies have achieved with their high revenue isn't sustainable. There will be a competitive change that either lowers prices or a new number one emerges. That's possible. But I wouldn't characterize that as being like a financial bubble.
--:-- If you go back to the great dot-com bubble, which I was CEO during, the thing that happened there was very different. It was the internet. Every smart investor knew the internet was a big deal. How could you not know that? But if you go back to 1996 at Netscape, we had 90% browser share and 50 million users. There were 55 million people on the internet in total, and half of those were on dial-up. To build a product like Evite, the greeting card company, had 300 engineers. That's how hard it was to build this stuff. The math didn't work on any of those ideas. But the investors kept pouring money in. Eventually everybody went bankrupt because there was no revenue coming in. When they figured that out, nobody would invest in anything. Then everybody realized the internet was actually real, and Paul Krugman didn't know what he was talking about, and it was going to be a big thing. Then Facebook and Google emerged. The thing that made it a bubble was the unit economics didn't work, the businesses didn't work. These businesses are all working, and they're being priced appropriately for how they're growing. So that's not a bubble. The thing you could say is they're not going to keep growing like that. I'm not sure about that. The products are working so much better than any technology product we've ever built. It's mind-blowing how good this stuff is. If I had to bet, I would bet not a bubble. I think there will be some dislocation. In venture capital, if you've got a run like this, the great company and the crap company both get funded. But that's just venture capital. That's not a bubble.
--:-- Lenny: For founders starting companies these days, when you look into the future of the AI industry in five or ten years, how do you think things will play out? Where do you think the biggest opportunities remain? Where are you guys looking to invest most?
--:-- Lenny: In infrastructure, I think that there is obviously like a real estate power cooling play. I think that's a little outside of kind of hardcore technology investing that we do. But there's another layer, which is like who can run, take a given open source model, who can run it the cheapest with the kind of lowest latency. And that's going to be extremely valuable, like whoever has that. And Google has been historically very good at that and so forth. And Sam is really trying to build that, now a Stargate. And so I think that's going to be a very important layer of value.
--:-- Ben Horowitz: I think that on the foundation model side, you have to be very selective as an investor. So in order to compete in foundational model world, our basic rule of thumb is you have to be able to, without much product progress, raise at least $2 billion because that's basically what it can cost you to train something that gets you competitive enough to make money. And they're just dirty chief founders like that. So Ilya is one of those. Mira is one of those. Fei-Fei is one of those. But that's the kind of class of person you need. And there's certainly less than 10 of those in the world. And so that's an important area, but a small area.
--:-- And then I think the application layer is going to be very, very interesting. And if you look at Sam, he's making most of his money off ChatGPT, almost all his money off ChatGPT now. And ChatGPT looks like it's got a real moat. It's very hard to knock it off its perch. There's a lot of people taking a shot at it—people with great distribution like Google, Elon, Zuckerberg, everybody—and that thing just keeps going like it is. So I think the applications are both more complex and kind of stickier than people thought they were originally.
--:-- The thing that people got very wrong is this whole "thin wrapper around GPT" idea. That's really vague. In fact, here's how wrong it is: back in the 80s, that same phrase was used, but it was "thin wrapper around an RDBMS." A database. So it meant companies like Salesforce were basically just a thin wrapper. And I think that's the mistake people made.
--:-- So we're in this company, Cursor. If you look under the covers in Cursor, they've built like 14 different models to really understand how a developer works—a high-end, real developer. And those models have tons and tons of interactions with how people talk to their friend, Cursor, about how they should design their programming. And that's real. That's not just a thin layer on a foundation model. And I think there are many, many applications like that.
--:-- So I think there's going to be a lot of opportunity at the application layer. There's going to be some opportunity at the foundation model, and of course you can invest in Sam, you can invest in Anthropic and so forth as well. But there will probably be a very small number of companies at that set, and then an almost unlimited number of companies at the application layer.
--:-- And then, as the technology advances, more things we can embody the AI. Already, autonomous cars are working really well now, after a long, long, long time. Sebastian won the challenge in 2006 when he drove the self-driving car across the country. And here we are 20 years later, and now they're deployed. So that was a long time. Robots, I think, is a harder problem than self-driving cars. So we'll see how that goes. But there's certainly a lot in that world as well.
--:-- Lenny: Wow. Okay. There's a lot to this answer. Something that is exactly what I was looking for. The Cursor example, it's something that comes up a lot on this podcast in the application layer specifically. The thought that the way to win in this space and to build a moat is, as you said, build your own model slash proprietary data that you build through people using your product. Thoughts on that?
--:-- Ben Horowitz: Yeah, I think that ends up just being what's required. It turns out that the universe is long-tailed, is fat-tailed, and humans are very fat-tailed in terms of human behavior, human conversation. To get to the real meaning of it and to get to the kind of essence of the problem in any domain turns out to be more complex than we thought.
--:-- The early things—people were running around saying, "Okay, there's going to be one big brain to rule them all." That's kind of not played out yet. In fact, if you look under the covers, you have LLMs which have generalized in fascinating ways, but they've also asymptoted. We have run out for the most part. So if you look at the GPT-5 LLM compared to the GPT-4-1 and how much more it costs to train, it's definitely not going linear anymore.
--:-- On the other hand, the reinforcement learning side has been linear, but it doesn't generalize. So if you build a great programming model, it may be an idiot at math. And that is very different than what people would have said three years ago. There's not something that's both scaling and generalizing yet. Maybe we'll get there, but that certainly opens the door to something that's more user-friendly, more effective in any number of domains than just the basic foundation model infrastructure.
--:-- Now, those models are incredibly important. I think OpenAI is probably 80% of the revenue in AI or something like that now. It's just massive. So that foundation model is really, really important. And the basic consumer app is really, really important—that just answers whatever the hell you want to know. Those things are very, very real.
--:-- But then if you get into enterprise stuff, it's no longer internet data, it's their data. That becomes very different. Databricks is having a lot of success there because once you're inside a company, guess what? You care about access control. And that's hard with an AI world. It gets trained on some stuff. How does it know who has access to that information, who doesn't? You have semantic issues. If you look at an enterprise, find 10 enterprises, they all have a different definition of what a customer means. You would think customer is a basic thing. Well, is it a department at AT&T? Is it AT&T? Is it a person at AT&T? What the hell is the customer? And it turns out to be very meaningful, particularly if you're trying to figure out important things like churn.
--:-- So the problem space is a lot bigger than you can just attack with a basic foundation model. Currently, maybe that will change. And if that changes, then certain prices will, in retrospect, look way inflated and others will look too low. But that is TBD.
--:-- Lenny: So a big takeaway from this is that there's still tons of opportunity for founders to start companies building AI products.
--:-- Ben Horowitz: I think so. You can solve so many things—everything that we couldn't solve with software, we can solve now almost. So it's a really big world.
--:-- It's funny, because we're investors in Waymo. One of the things when you get into what took so long to make Waymos as safe as they are now, it wasn't the things that everybody reported on the podcast. It wasn't sleet and heavy rain. It was people. It was the human who was driving 75 in the 25 zone. It was very hard for the AI to anticipate because it was rare but important. And the number of rare, important, crazy things that humans do is very high. I think that goes for all of AI. So to make things work really well, you have to understand this very fat tail of human behavior.
--:-- Lenny: Along this AI thread, something that is really important to you clearly, something you talk a lot about, is the U.S. being successful in AI and leading the world in AI. Why is it so important? Why is it something you spend a lot of time on?
--:-- Ben Horowitz: It starts with my view of the U.S. and its role in the world. My personal view is it's very, very, very important, not for society to be completely fair because it's not going to be completely fair or completely equal—we've never had one that's been completely equal. But it's important that everybody have a chance at life. You can't advance the world if you can't tap into all of your resources. If you take away motivation, you get into trouble.
--:-- If you look at every country today, you want the right amount of decentralized power. You don't want it to be completely concentrated. Concentrated power makes it very difficult for everybody to have a chance. This is the big lesson of communism over the last hundred years. We saw politicians showing it this way today: "Oh, it's power to the people." No, no, no. It's power to you because you're removing all power from the private sector and installing it into the government. And then you're putting yourself in charge of the government. So you become extremely powerful. This is why it didn't matter if it was Mao or Pol Pot or Ceaușescu or Stalin. Everybody died. Because when you give anybody that much power, nobody has a chance. There is no incentive. There's only stick. It's a systems problem, not a person problem. It's not that Stalin was evil or Ceaușescu was evil. That system is evil. And the same with fascism—be it Hitler or Mussolini, it doesn't matter. That level of power is evil.
--:-- The U.S. does the best job systematically. It's the best system. It's got all kinds of issues, it's got problems, people are starting to defeat it. But if you look at the Declaration of Independence or the Constitution, the language is very important. "We hold these truths to be self-evident." What does that mean? It means it's not my rule. It's not the president's rule. It's God's rule. So those rules are above the president. And you work in that context, and that distributes power because you're under the law, not under the person.
--:-- We see that now even with Europe, where the leaders are going, "Well, I have a rule. You can't say certain things or I'll throw you in jail." And the shield they hide behind is, "Well, we have to keep the kids safe." But if you say something that I don't agree with and the kids hear it, they're not safe. So the transitive property of bullshit is going to override.
--:-- It's really important that we have at least one society. And as flawed as we are, as flawed as the U.S. is, it's still the best. You can see it by the number of new company creations, the number of new ideas that come out of here. It's really important that the U.S. stays important and powerful in the world.
--:-- We know from the last century, who were the countries that had economic power, military power, cultural power? They were the ones that industrialized. The ones that industrialized first and best. Russia, China—they were slow on industrialization, and they fell into this very dangerous system. Looking forward, that's going to happen again, but it's going to be AI. So it is fundamentally important, not just to America, but to humanity, that America succeed at that. We don't have to be the one winner, but we do have to be in that tier.
--:-- As I go around the world and travel, I can't tell you—everybody was getting very worried about us earlier. And they say, "Look, we need you to succeed. Don't destroy the dollar. Don't fall behind in AI. Don't over-regulate it too early. Please, because we need you to win. We're all counting on that."
--:-- I think it's the most important work that we do. It's why we're so involved in policy. I think this is also going to be very true with crypto, which ends up being an incredibly important networking technology that complements AI. That work is beyond for the money. Although we will end up making a lot of money with the right policies, so I don't want to seem totally philanthropic. But it's more important than that. It's certainly more important than us succeeding. The country needs to succeed.
--:-- Lenny: Speaking of philanthropic and other passions of yours, something that I don't think most people know about you and I think will give them another insight into how interesting you are. You run an organization called Paid in Full, which is incredibly cool. Talk about what that's about, why this is so important to you.
--:-- Ben Horowitz: Our ethos as a firm is kind of "something from nothing." That's the greatness of entrepreneurship—you start with nothing and then you make something really important. That is also how hip hop started, where you have a bunch of kids who didn't even have instruments, and they created something out of nothing. The people in that world always talk about that.
--:-- One of the really unfortunate things that happens is the people who invent the art form—certainly in the case of hip-hop—don't get anywhere near the proportional benefit of their invention. A lot of the guys have been forgotten about or are struggling to make ends meet.
--:-- So we created this thing called the Paid in Full Foundation, named after Rakim Eric B. & Rakim. I did call Rakim and ask him for permission to use his name. We don't just take it. What we do is we give essentially pensions to the old rappers that enable them to continue their work. And then we have a big event—go to paidinfullfoundation.org for tickets, which is amazing—where they get the award and they're celebrated by all their peers. It's really phenomenal.
--:-- Some of the awardees have been Rakim, Scarface from the Geto Boys, Roxanne Shanté, Grandmaster Caz, Kool Moe Dee. This year we're honoring George Clinton, Biz Markie, Cool G Rap, and Grand Puba, and also Jalil from Whodini. I can't even describe how high impact it is on these guys.
--:-- I think Rakim was touring close to 200 nights a year. He got his award and came out with his first album in 15 years and is doing amazingly well. All of a sudden, everybody's going, "Oh yeah, that's the greatest rapper of all time." They're finally going back and remembering all the things he did. Roxanne Shanté—nobody had mentioned her in years and years. Six months after we gave her the award, the Grammys gave her a Lifetime Achievement Award, which is amazing. So it's super high impact. It's a great thing. As a hip-hop fan, it's a dream come true.
--:-- Lenny: What's the origin story of you and hip-hop? I imagine many people look at you and wouldn't imagine these records behind you—Nas gifted you. You're so deep into the community. How did this all begin?
--:-- Ben Horowitz: I actually wrote a blog post on it called "The Legend of the Blind MC," which is worth reading if you're really interested. It's a story of me becoming a rapper and how that occurred. But the very short story is, I was in New York when it was at the birth of hip hop, when it really became big, kind of '84 or '88. It's just the most exciting thing to see a new art form pop out, the creativity. Music kind of becomes mainstream. It's very shaped by business. In the early days, everybody's just coming out with whatever idea they have. The early days of rock and roll were like that, the early days of jazz were like that.
--:-- Lenny: I see now even more why you guys brought on Eric Thornburg beyond his many talents. He's also really big into rap himself.
--:-- Ben Horowitz: Yeah, yeah, yeah. I need to make sure he gets the Paid in Full award.
--:-- Lenny: Ben, this was incredible. Is there anything else that you want to leave listeners with or share before we get to our very exciting, quick lightning round?
--:-- Ben Horowitz: Yeah, I would just say, if you're a CEO listening to this, know that how you feel about yourself is going to end up meaning as much as anything. So take your time on that. Self-evaluation is... one of my favorite quotes is when my own manager told me, "From this day on, no credit will be given for predicting rain, only credit for building an ark." I think that's more true for CEOs than anybody. You have to build an ark. It doesn't matter if you predict you're going to fail—you still fail. It gets you nothing. So what you have to do is figure your way out of it and spend all your time on that.
--:-- Lenny: Well, with that, we've reached our very exciting lightning round. I've got five questions for you. Are you ready?
--:-- Ben Horowitz: Yes, sir.
--:-- Lenny: First question, what are two or three books that you find yourself recommending most to other people, not including your own books?
--:-- Ben Horowitz: Two that I learned a lot from. One is *The Weirdest People in the World*. It's a kind of big history book through an anthropological, cultural lens. It's really fascinating—explains an awful lot about how society works and how little changes in the rules completely change the culture.
--:-- He endeavors to explain why the West got ahead of the rest of the world. It comes down to a weird anomaly with the Catholic Church where they enforced monogamous marriage. It turns out the natural state of humans is polygamy. But the problem with polygamy is there's no cooperation among men. Everything is secret, so there's no sharing of knowledge because it's all kept in the family in what he calls kin-based culture. Even recipes won't be shared because it's a secret. So you can't build science, you can't build cities, you can't build big companies.
--:-- Because the West enforced monogamous marriage early, it was able to evolve into all these things. He does psychological tests today with people from monogamous marriage culture and kin-based culture. The psychology is completely different. He gives examples: if a person murders another person, is that still murder if that person who did the murder is your brother? In Western society, yeah, that's murder. In kin-based culture, it's not murder. It's just not. Morality is different. Everything comes off of that. So it's a fascinating book.
--:-- Another book I recommend a lot is Shaka's first book, *Writing My Rhymes*. He has a new book that I think is better, called *How to Be Free*. It's not quite out—it's releasing next month, so I recommend it. It goes through how he worked his way out of prison and solitary confinement to his current psychology, and what techniques he used. They're very powerful ideas.
--:-- People always ask me, "How do you deal with it? How do you deal with work-life balance?" And I'm like, "What are you talking about? Work like balance machines." Particularly entrepreneur CEOs. But what do you do? Do you meditate? Do you do this or that? He goes through the things you really ought to do. So if somebody's wondering how to deal with all this pressure, that's what I'd recommend.
--:-- Lenny: I love this, the whole idea of Shaka being this help for CEOs—someone that killed someone, went to prison, led a prison gang. I just love that. How valuable his lesson is.
--:-- Ben Horowitz: Prison gangs turn out to be really complicated things to manage. The problem with running a prison gang is you're dealing with people who all come from broken culture. In any organization, the fundamental thing is trust. So you're bringing in a bunch of no-trust people. It's kind of like a military organization. If you think about a military operation, if you don't have trust, people don't trust the order, then you're completely dysfunctional. So how do you build trust from zero is a very interesting problem. He's a genius at that. I learned a lot from talking to him about it. From a management standpoint, it's an important boundary case of how you build culture. You have to look at people about their greatness, not the worst thing they ever did.
--:-- Lenny: I know this is a lightning round, but can you just share one example of something he did that was like, "Wow, that's a really good lesson for someone trying to create a good culture"?
--:-- Ben Horowitz: One of the things he did that I thought was really smart—a simple thing—was he just made everybody eat lunch together in the gang to build rapport, relationship, trust. It's all one thing: "We're all together in that." Particularly in remote world, people really underestimate how powerful just that idea can be.
--:-- Another thing he did was he had very specific things about morality. You have to be good to your word internally and externally. Normally a gang is kind of a kin-based culture thing. But he made it much more powerful when he said, "You can't do devious shit outside the gang either." He had a bunch of examples of that in the book. Because you're building it from zero, you really have to take a hard line on things that I think people in companies don't even take a hard line on. Is it okay to lie internally? Probably not. Is it okay to lie to a customer? Well, in some organizations it is. But in Shaka's organization, that's as big a penalty as lying internally. These things end up being really important.
--:-- Lenny: We're going to link to this book. This is *What You Do Is Who You Are*. This is your second book that fewer people know about. And this is one of the stories you tell and just what the lessons are.
--:-- Ben Horowitz: Yeah, it's a more advanced book. You kind of have to survive to want to care about dealing with cultural issues. The survival book has a bigger audience.
--:-- Lenny: Amazing. Okay, we're going to keep going with lightning round. Is there a favorite recent movie or TV show you have really enjoyed?
--:-- Ben Horowitz: On TV, I really like *Slow Horses*, which is a show about the MI6 kind of cast-offs. And I haven't seen a lot of movies lately, but I watched *Sinners*. I went to the theater for it. The cinematography is unbelievable, the story is really original, the acting is incredible, the costumes are amazing. It's a great comprehensive piece of work. The craftsmanship on that thing is a lot beyond what most people making movies are doing these days. I really enjoyed it.
--:-- Lenny: Yeah, I hate scary movies, but I watched it and loved it.
--:-- Ben Horowitz: Yeah, it wasn't that scary.
--:-- Lenny: It wasn't that scary, but still, zombies popping out of corners. Not my jam usually.
--:-- Ben Horowitz: Yeah.
--:-- Lenny: Is there a product you recently discovered that you really love? It could be a gadget, it could be clothes, it could be something else.
--:-- Ben Horowitz: I bought a coffee machine called the Technivorm Moccamaster, which is freaking incredible. A friend of mine saw it and was like, "What is that?" I just bought it for him too because it's so awesome. This thing makes coffee—there's no bitterness. It's completely clean. It's amazing. Only comment with it is I can't drink coffee that it doesn't make anymore. I don't know if that's a good thing or a bad thing.
--:-- Lenny: That might come out someday in the AI future.
--:-- Ben Horowitz: Yeah, yeah.
--:-- Lenny: Two more questions. One, do you have a motto that you often come back to that you find really useful in work or in life?
--:-- Ben Horowitz: The thing that has had the biggest impact on me is something my father said to me years ago: "Life isn't fair." That seems really simple, but I think the thing that defeats people more than any other thing is the expectation of some fairness. It's just not fair. There are all kinds of stuff that are going to happen to you that don't happen to other people that are completely unfair. But it doesn't matter because that's the way it is. As soon as you get that idea out of your mind, you can just deal with it. "Oh yeah, of course it's unfair, but I'm going to—what should I do now?" That's the real question, not "How do I go back and get people to be fair?" Because nobody's going to be fair. It's not fair. It's the nature of it. If you think about it for more than five seconds, you'll realize that. As an individual, if you want to make the world a better place, whatever, but as an individual, do not expect anything to be fair. It'll only defeat you.
--:-- Lenny: Final question. This comes from Shaka, actually. You gave me so many great suggestions, I had to save this one for last. Okay, so the question is: if you had to build a business curriculum from two hip-hop albums and one funk album, what would they be and why?
--:-- Ben Horowitz: I think probably *Follow the Leader* by Rakim. The reason is what we had gotten into earlier—leadership. When he came out with that song, which was maybe the greatest hip-hop song ever written, he's telling people to follow him. "Follow the leader." Just to have the idea that he was the leader of the entire art form is an amazing idea. The way he expressed it was incredible. He's got other great concepts in there. It's hard to listen to that record and not have confidence.
--:-- From a purely competitive standpoint, *Stillmatic* from Nas. That's the one with "Get Yourself a Gun," that's the one with "You're da Man." The idea of competition is kind of encapsulated in that album, so that would be the other one.
--:-- And then funk—*One Nation Under a Groove* for sure. Because it's about how do you initiate people into a concept or an idea, and how do you infuse them? "One Nation Under a Groove" is all about joining the nation. It's so musically interesting, getting people to be part of that. If you ask me tomorrow, I probably have three other ones.
--:-- Lenny: Incredible. I'm going to go listen to these. Ben, final question, how can listeners be useful to you?
--:-- Lenny: If you get something that makes you better, please take it. If you need more advice on it, let me know. My job is to help everybody build something great. So if you're an entrepreneur, thank you for that.
--:-- Lenny: Also check out paidinfullfoundation.org if you want to learn more about that nonprofit. We would love to have you.
--:-- Ben Horowitz: Amazing.
--:-- Lenny: Ben, thank you so much for being here.
--:-- Ben Horowitz: All right, awesome. Thank you, Lenny. Bye, everyone.
--:-- Lenny: Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at lennyspodcast.com. See you in the next episode.
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