Boss Talk with Ben Horowitz

We share the second installment of Boss Talk, a weekly live show on Clubhouse, where a16z cofounder Ben Horowitz and Databricks CEO Ali Ghodsi discuss CEO stuff, leadership stuff, management stuff… you know, boss stuff.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Hi and welcome to the A16Z Podcast. I'm Doss and this episode is Boss Talk with A16Z co-founder Ben Horowitz and Databricks CEO Ali Godsey, all about leadership and management. Their conversation originally took place on social audio app Clubhouse, where they host a live chat every Tuesday at 5:00 PM Pacific. You can find more of their and other conversations on our separate feed, A16Z Live. Here, though, we're sharing the second installment of their show. In it, Ben and Ali cover Conway's Law and Shipping Your Org Chart, Making the Transition From Being a Boss to a Boss of Bosses, Silicon Valley Post-Pandemic, and more.

• 0:38Ben Horowitz?

  Okay, so today on Boss Talk, we've got, we're gonna have a special beginning because many of you know my background because I wrote a book which went through my whole background. But you might not know Ali's background as well, and his is even more interesting. And I think that it's, it's really relevant because when you get into these discussions about how to run an organization and, and how to make decisions and all these things, they're all very situational. There is no kind of one way to do any of it. And it's really important that you know where people are coming from to, to know what to do with what they're saying. So this is going to be a kind of a very kind of important

• 1:21Ben Horowitz?

  basis for the show. So Ali, could you take us back to Bran? And your uncle was one of the founders of OPEC?

• 1:36Ali Ghodsi?

  Yeah, wow. I didn't, I didn't even know you remember that. Yeah, he was. Yeah, he was, you know, one of the like five oil directors. And, you know, they, you know, that part of the family had it well. But actually, not so much on my parents' side. They were sort of in the opposition. And I was born right around the revolution. And, you know, pretty common, you know, 1979, there was, you know, the Ayatollahs took over.

• 2:07Ben Horowitz?

  Yes. And the Shah, the Shah, the Shah was kind of exiled by You know, with help of the United States, interestingly, yeah.

• 2:15Ali Ghodsi?

  Yeah, he came over here and, you know, soon died in cancer. Uh, you know, the mullahs took over. Uh, my parents were in opposition. And actually, what was interesting is that they, around that time, the Iran-Iraq war started. Um, which put the country in a really tense situation because suddenly, like, you know, there was this revolution. These people have taken over the country, but they, you know, they're just scrambling to figure out how to run the country, the mullahs. Uh, and suddenly they're being attacked, uh, by this foreign nation. Uh, so, um, you know, so it was sort of take no hostages kind of situation. Uh, especially when, uh, the Iraqis started bombarding, uh, Tehran, which was where I was, uh, uh, living at the time as a kid.

• 2:58Ali Ghodsi?

  Um, you know, the aerials attacks started against the sort of capital of Iran. Uh, you know, everything just changed, right? It was like, sort of, uh, suddenly the government was sort of like, you know, we're, we're not messing around, like, this is wartime. Um.

• 3:14Ben Horowitz?

  And, and you, you, your family ended up being, you know, one of those that, uh, was not going to be a hostage. So tell us about that.

• 3:21Ali Ghodsi?

  Yeah, I mean, look, so first of all, it's like the war is going on in the background. So like, you know, every now and then, you know, at, at nighttime, um, the sirens go off. So you hear this like sound, and then, you know, our house, we're actually overlooking all of Tehran. So when you could see the city. And it's kind of interesting, they actually shut off all the, all the sort of electricity in the whole city when the bombardment starts. So that the fighter jets can't find, find the houses. Uh, you know, and, uh, and then, you know, your parents scrambled, they freak out, they tell the kids to get under the tables and, um, you know, and they turn on candles and they turn, tune in on the radio to see what's going on. And, you know, and they'll tell you like, you know, which locations are being attacked.

• 4:05Ali Ghodsi?

  And you know, I quite a few times, actually, we had bombardment in our neighborhood. One night, actually, I remember, uh, it felt like they actually hit our building. I felt like the whole building just collapsed. But they didn't. It was actually, yeah, it was actually a building, you know, put it down on the block.

• 4:22Ben Horowitz?

  And you were a kid, you were like five, and you remember that, yeah?

• 4:24Ali Ghodsi?

  Yeah, four or five. You remember very clearly. The thing you remember very clearly is your parents were always super cool and calm. Just freaking out, like crying, screaming, running around like losing their shit. Um, and, uh, yeah, so windows smashed. I felt like they hit our building, but they actually didn't. It was like a building next door. Uh, next day we walked outside, the whole building had just collapsed, the, the one next to our house. Um, yeah, I, to me, I, I thought it's a skyscraper, but probably I was a little kid, so it was probably just a three-story building or something like that. Uh, but you know, it's collapsed, you have all these people like crying, uh, you know, there are all these women crying, you know, I, I remember I asked, uh,

• 5:04Ali Ghodsi?

  my dad, you know, why are they crying? And said, you know, they lost their, their sons, you know, and they're sitting there crying and there's rumbles and so on. So that's going on in the background. So as a result of this, the government started sort of hitting back on any opposition that was in the country, right? You know, because they were not messing around. This was wartime. Uh, and my parents happened to be in opposition. Uh, so, um, you know, so very suddenly, you know, uh, the going got rough, kind of, uh, against any opposition group.

• 5:33Ben Horowitz?

  So when you say the going got rough, what happened?

• 5:36Ali Ghodsi?

  Well, I mean, like pretty much anyone that's in opposition, they were captured, right? And either jail or kill, or, you know, they would disappear. So, um, so basically one day, one of these, so they had this, you know, pretty ghetto, uh, techniques back in the day where they would sort of call each other to see if, you know, everybody answered the phone. If they do, you know, you're fine. If you're not, you've been, they assume you've been captured. Uh, so if someone doesn't answer the phone, you just assume that they've been captured. And you assume that they won't tell anyone anything for twenty-four hours, so you'll. You assume you're safe for twenty-four hours, but after twenty-four hours, it's kind of. You know, anything goes, anyone can say anything, so you're no longer, your location, nothing is safe. Um, so. This one woman didn't answer the phone call at five P M, uh, one day.

• 6:20Ali Ghodsi?

  And, and you know, my parents were like, that's it, we gotta, we gotta get out, like, we gotta leave right now.

• 6:26Ben Horowitz?

  Yeah, get out of Dodge, wow.

• 6:27Ali Ghodsi?

  Yeah, so they said, you know, we, so, you know, twenty-four hours to get out of the country, um. I remember they had a. Kind of event, not event, they sort of told their friends, come over, take whatever you see in the house, because we're like, we're just leaving. And, you know, and, uh, and, you know, they got the paperwork and so on, and the next day we were on a flight out of the country. Uh, so just like that, it's, uh, you know, it's, uh, that whole kind of. World you live in is, uh, is behind you and you're in a new country.

• 6:56Ben Horowitz?

  Amazing, and then, tell me about the flight, because there, there, there was something, uh. There, I, I, I remember a, a thing with, with makeup on the flight or something.

• 7:05Ali Ghodsi?

  You have a good memory. Yeah, you have a good memory, yeah, I mean, the interesting thing is, so, so you get on this flight. Uh, all the women have, you know, it's, it's Islamic Republic, right, so. All the women have like, you know, they have their, uh, headscarf on and all that, right?

• 7:19Ben Horowitz?

  Mm-hmm.

• 7:19Ali Ghodsi?

  And, and then they announced suddenly, like, you know, that we've left Iranian, you know, airspace at some point, right? And immediately, you see all the women in the airplane, you know, take their headscarfs on. Pull out their mirrors and start putting on lipstick and ma- makeup, you know. Uh, like, you know, all together, like, it's as if it's like synchronized, you know.

• 7:40Ben Horowitz?

  That's incredible.

• 7:42Ali Ghodsi?

  So, you know, so that was, that was, you know, actually, my uncle stayed behind and said, there's nothing, and, you know, eventually, he got, you know, captured and killed. Uh, so it was, it was a serious, we, we actually had to leave, and it was actually wise of my parents to actually act on that. Um, so, you know, so suddenly we were in Sweden.

• 7:59Ben Horowitz?

  And then you landed in Sweden.

• 8:01Ali Ghodsi?

  Yeah.

• 8:01Ben Horowitz?

  And, and not in the nice neighborhood of Sweden.

• 8:05Ali Ghodsi?

  Yeah, I mean, first of all, they're just type of choosers. So like, my parents wanted to end up in the United States, but uh, you know, when you're, you just, you know, you have twenty four hours, you you go wherever you can get in.

• 8:14Ben Horowitz?

  Yeah.

• 8:15Ali Ghodsi?

  Uh, so end up in Sweden. Uh, actually, initially, we didn't actually have, I haven't actually told you this, but initially, since they didn't have that much money with them, because they just left everything. Uh, they started by just uh, living in these um, dorms. So it was like these dorms with uh, you know, shared kitchen, and there's like, you know, a bunch of eighteen year olds running around in college.

• 8:37Ben Horowitz?

  Yeah.

• 8:37Ali Ghodsi?

  Uh, and then there's this family with two kids, you know, really, really suspect, you know. Uh, with with, you know, two little kids and, you know, and, uh, you know, dad's got a big mustache. Uh, and, you know, they're so, you know, that's how we started, you know, we left, I think we lived for a month or two like that, they they evicted us eventually, right, they're like, you know, you're not students, you can't live here, you know, get out of here. Uh, so then they found another dorm, so they moved into another dorm. And uh, so we lived there for a little while. I think I uh, I managed to sort of uh, um, destroy their, the communal TV in the, in the common, common room there, so.

• 9:15Ben Horowitz?

  Yeah.

• 9:15Ali Ghodsi?

  So we got evicted again. Uh, so we kept giving, getting evicted for like two years like, like this, and uh, eventually they found us a place uh, in uh, you know, in the suburbs, and in Sweden, the way it works in the suburbs, at least many of the suburbs are, that's, those are uh, not so good neighborhoods.

• 9:31Ben Horowitz?

  Uh. Yeah, yeah, yeah, no, and it's funny, so this was confirmed by um, Q D three, who's Quincy Jones's son, who also grew up in Sweden, and he was like, oh yeah, Ollie grew up in the bad neighborhood.

• 9:44Ali Ghodsi?

  Yeah, actually, it turns out we were very close. Actually, we were not far away from each other, though, we were probably five years apart, but. Uh, yeah, so you end up going to school there, and it's like, so suddenly it's completely different, right? So I went from, you know, in Iran, I was in private schools, and you know, uh, you know, top end, posh, here, you're suddenly in a ghetto, you know.

• 10:02Ben Horowitz?

  Yeah.

• 10:02Ali Ghodsi?

  And, you know, uh, people are bringing knives to school, and there's knife fights, and there's police and all that. Um, so it's sort of, you know, it's a big shock to the system, like all the stuff that worked back over there, the rules are completely changed now, it's, you know, you don't even speak the language. So, you know, you have to learn to adapt to that. Um, so that's how kind of the, the transition happened to Sweden.

• 10:24Ben Horowitz?

  And then there was the, you know, kind of a racism as well, where they call you black tops.

• 10:32Ali Ghodsi?

  Blackheads.

• 10:33Ben Horowitz?

  Yeah, blackheads, blackheads, yes.

• 10:34Ali Ghodsi?

  Yeah, yeah, and Sweden they had this expression, uh, blackheads for, for people, I mean, you know, because most people are blonde, so.

• 10:41Ben Horowitz?

  Yeah.

• 10:41Ali Ghodsi?

  You know, the immigrants, many of the immigrants came actually from Turkey, or from other parts of the world, they, you know, have black hair, so they were called blackheads. Uh, and you know, all the immigrants live in these suburbs, uh, and then the nice neighborhoods are like in town or other places, uh. So, you know, there's like, heavy tension, it's actually not very dissimilar from here in the United States where, you know. Those of us who are out there in the ghetto, kind of, there was like, sort of, us versus them, uh, you felt that you really not, you're never really part of society. Um, and you know.

• 11:14Ben Horowitz?

  Police brutality.

• 11:16Ali Ghodsi?

  Yeah, you know, there's like, you know, you don't trust the police, um, you don't, uh, you know, you, you know, you're not gonna get a job, you know, it's not gonna be fair. You know, it's like, sort of, there's this whole, and you know, a lot of it is also like, you know, it's, uh, I mean, it's, a lot of it is true. A lot of it is also self-inflicted, because you know, you grew up there and you know, it becomes a self-fulfilling prophecy. Um, so, um, so yeah, that was, that was the sort of, probably my, uh, first, um, ten years of my life, uh, in Sweden.

• 11:47Ben Horowitz?

  Yeah, no, amazing, and then, I mean, what a crazy story, so you, you got into the technical university there. You somehow made it here to Berkeley.

• 12:01Ali Ghodsi?

  Yeah, so, yeah, you know, so, you know, eventually got into computers, eventually got in, you know, and, you know. Eventually, you know, was able to get into, you know, PhD program and, you know, just geek out on computers and, you know, you kind of, uh. You know, soon find yourself in a completely different world, that's very different from, um, you know, the, the suburbs you grew up in. Um, and different type of people, and you know, they have different, again, they have a different value system and they're doing other things and you learn from them and. You adapt to that environment, uh, and suddenly you're an academic.

• 12:36Ben Horowitz?

  Suddenly you're academic and then just as suddenly you're CEO of a company.

• 12:42Ali Ghodsi?

  Yeah, I mean, it didn't happen like that overnight, right?

• 12:46Ben Horowitz?

  Well, there are no overnight successes.

• 12:48Ali Ghodsi?

  Yeah, as you know, I mean, you you saw the the bricks story from the very beginning. Uh, but yeah, I mean, we we were at, you know, UC Berkeley and we were lucky because Silicon Valley for tech companies were giving a lot of funding to UC Berkeley. Uh, mostly because they wanted to hire the talents.

• 13:04Ben Horowitz?

  Yeah.

• 13:05Ali Ghodsi?

  And so we got to see the projects they were working on. And uh, we saw that they were doing amazing things, uh, you know, things are very different from what the rest of enterprises or even people in academia were doing. They were basically they figured out they had just figured out how you could take classic machine learning AI algorithms from the seventies that everyone knew uh, were broken and they don't work. I mean, everyone in academia knew they don't work. And they, you know.

• 13:30Ben Horowitz?

  Couldn't do anything, yeah.

• 13:31Ali Ghodsi?

  Yeah, from the seventies and it turned out that if you took massive amounts of data, orders of magnitude more data and threw it at, you know, modern hardware. Those crappy algorithms that don't work, they become superhuman. And they actually can do better than even humans on a lot of tasks.

• 13:48Ben Horowitz?

  Yeah.

• 13:48Ali Ghodsi?

  Uh, and we were kind of blown away by this. So, uh, you know, so as Berkeley hippies, we wanted to democratize this and so we want to open source it, give it away to the world and, you know, change the world with open source. Uh, but you know, the the world was not very receptive, you know, the sort of at that time it was all about Hadoop and, you know, other technologies. So they were not interested at all in what we were doing. So, uh, two thousand thirteen was sort of when we were two thousand twelve, actually, was when we knew that we had these ideas that maybe we should maybe do something with it and you came along. And I remember you just said, hey, you guys are just idiots. Uh, you know, this this thing won't take off by itself. You have to do it.

• 14:30Ali Ghodsi?

  Uh, you know, uh, so, so you gotta either start a company and be serious about it and do it. Uh, or it's not gonna happen by itself. Like, you know, you just, you know, you guys messing around in academia, UC Berkeley, that's like, that's all nice and handy, but. It's gonna change, you know?

• 14:44Ben Horowitz?

  I, I, I was also from Berkeley, so I knew what that was about.

• 14:48Ali Ghodsi?

  Yeah, so you're like, you know, that's all nice and handy, but if you wanna actually have impact, uh, we gotta do this. And I think we were like, okay, so give us some seed funding, give us like a hundred K. And we'll do this. And, um, and you were like, no, no, no, I'm gonna be on your board. And we were like, okay, give us a hundred K and sit on our board. They're like, no, no, you don't understand. If I'm gonna spend my time on this, I, you know, I have to ask him in the game, so, uh, so first investment was fourteen million dollars there. Uh, and we're off to the races. I actually remember when we got the fourteen million in the bank accounts. It said fourteen, comma, zero, zero, zero, comma, zero, zero, zero, zero. And all the co-funders were just looking at it and they were like, wow.

• 15:30Ali Ghodsi?

  That's, you know, that's a lot of money. And then someone said, hey, if we put it in a bank account, uh, how much interest will we get from this? You know, and someone said, wow, that would pay our salaries. We could just put it in the bank and like this, you know? Um, so that's how it started. So you're the one that kinda nudged us and said, you gotta do this. If you wanna really, you know, if you wanna really, uh, make an impact, uh, you know, go big.

• 15:52Ben Horowitz?

  Yeah, no, I remember we, we, we had to wait to, uh, incorporate the company, cause everybody had to like finish, um, their PhD. And do their dissertation or whatever. You know, they're all exams.

• 16:04Ali Ghodsi?

  Exactly, exactly. Yeah, they were, you know, they were taking six months off here and there to finish the PhD. That is true.

• 16:11Ben Horowitz?

  Yes. So now that, you know, you, you, you built the company to a tremendous sized, over two thousand employees. Um, and you've seen kind of, you know, managers in your own company, you've seen other CEOs in the industry. What do you feel like, you know?

• 16:30Ben Horowitz?

  The advantages that you got from your very, very unusual background, you know, being a refugee, kind of showing up in Sweden, being in the hood, being the kind of press member of society and then, and then kind of finding yourself on the other side. Like, what does that bring you that, you know, maybe somebody who went to Exeter Academy and then, you know, went to Harvard or something like that, uh, doesn't, you know, would struggle with?

• 16:55Ali Ghodsi?

  Yeah, I mean, I don't know. They might be able to do it as well, but I think what was valuable for me was the change of environment all the time. Uh, you know, the sudden change and, you know, you go from one environment to another where the value system might be different. And, you know, you know, in this particular school that you're in now, you know, it's not about who wins the fistfight necessarily suddenly. So you're like, you're confused. You're like, wait, wait, you know, I'm gonna fistfight. And they're like, no, that gets me in trouble, like, you know. So constantly changing the environment on you, I think, uh, helps you understand different people's perspectives. And lets you kind of cross culture barriers inside the organization. Because let's face it, every organization, there are different cultures within your company.

• 17:37Ali Ghodsi?

  Can you transcend them? Can you empathize with them? Can you understand their perspective? Can you even maybe, you know, camouflage yourself to speak their language? And, you know, so they feel like you represent them and you're one of them. If you can do that, I think it's really powerful. I think you said it really well. You had a lecture on Toussaint. Uh, at some point, before you wrote your second book, uh, I don't know where it was, maybe it was.

• 18:00Ben Horowitz?

  Yeah, Culture and Revolution. Yeah, yeah.

• 18:02Ali Ghodsi?

  Yeah, Culture Revolution. Yeah, it's my favorite talk. Uh, where you said, you know, the thing Toussaint did so well was he could put himself in pretty much anyone's shoes. And he could then emulate how they're thinking. And that gave him immense power because then he knew exactly what he needs to do to get them to do whatever he wanted them to do. So he even put himself in, you know, uh, the slave driver's mindset. And he understood that, okay, if I want these guys, you know, who I hate, you know, and, you know, they destroyed my life. But if I want them to do the right things for me, this is, these are the buttons I need to push. And that's how he led that whole revolution.

• 18:37Ben Horowitz?

  Yeah, no, that's right, a great insight and you know, and he was able even able to do it, you know, with, you know, the American diplomats and, you know, the kind of French colonial hierarchy and all these kinds of things. It is really, really remarkable, but I think that's right. You know, he kind of had this dual background like yourself where he grew up a slave and then, you know, because he, you know, became such great friends with his, with the person running the plantation, he became kind of that guy's valet and went to him with all the meetings and so forth and, you know, mastered multiple cultures and, and the same way that you had

• 19:19Ben Horowitz?

  to, kind of coming from Iran to Sweden to Berkeley and then into the, into kind of Silicon Valley. So really great insights. Let me pause there and just, because Mark's been sitting there quietly, I just want to make sure, Mark, do you have any questions for Aliya on his background before we get into some of this boss stuff?

• 19:40Marc Andreessen?

  Yeah, so I would love, so let me ask Aliya a very direct question, which is you have personal experience in what you might describe as, or what I might describe as like three very extreme cultures.

• 19:50Ben Horowitz?

  Yep.

• 19:50Marc Andreessen?

  And so, you know, Iran being obviously extreme in its way and then Sweden, I would say is, like Sweden is generally considered, at least from the US perspective, kind of, you know, peak Europe in the sense of like, you know, the Scandinavian model, you know, is like a really important thing. And then obviously, you know, Sweden is, you know, has its own startup ecosystem and, you know, very innovative, you know, companies coming out of there and so forth. But like, it's, you know, it's kind of a canonical kind of European country and culture. And then, you know, the US obviously is extreme in many ways. And, you know, of course, you know, the US has been a destination for, you know, immigrants from all over the world for a very long time. And, you know, but then in the last like several years, there have been these kind of big questions about, you know, will the US continue to be as welcoming, you know, culturally, you know, to kind of, you know, newly arrived people, you know,

• 20:33Marc Andreessen?

  from different backgrounds and so forth. And, you know, people are, you know, different people are worried about that from different perspectives. I'd be really curious if, if, if I were, you know, a kid who you knew, growing up, you know, in any one of like, you know, dozens of places around the world, like, how would you advise me about how I should think about like whether I should leave where I am and then, and then where I should go if I want to, you know, kind of be able to follow in the footsteps of somebody like you?

• 20:58Ali Ghodsi?

  Interesting. I mean, it really depends on the person. Um, you know, how they're wired. Um, you know, the advantage, I mean, someone like me, the advantage I think I have is I feel like I'm outside the system. Like, I, I don't feel like I'm, you know, Swedish, American, Persian, or anything. I just, these are just different systems. You, you know, you move between them and you analyze them, you know. It's, you know, I don't feel like, you know, I don't pigeonhole myself into any of these categories. I just observe it. So I would just say they have different pros and cons, these systems. The United States is high, high variance, uh, country, which means everything is at the extreme. You can find the best universities here, you can find the worst universities here. You can find the, you know, richest person on the planet here, you can find the poorest man on the planet here.

• 21:41Ali Ghodsi?

  You can find the extremes in a way that you can't find in Europe. The variance is much lower, you know, and, you know, so it depends on where you end up. So if your personality is, it's, you know, if your personality is you want to really excel, you want to go far. Um, you know, I think obviously, you know, there's, the ceiling is much higher here. And you can go much further here. Um, the second thing I would say is, um, the nature of, the nature of kind of, it depends on your background. Like if you're, for instance, an immigrant, or if you're, if you're from a different background, uh, the nature of social problems are different here from, say, Europe in a fundamental way, which I think very few people kind of understand.

• 22:25Ali Ghodsi?

  Um, in the sense that, uh, here, you know, there's a lot of issues here too, right? I mean, there are, there are issues in all societies and there are lots of problems here that we've seen in the last year. Uh, and, you know, before that, and, you know, there's crazy history right here that the United States has that almost, you know, no other country can even, you know, have those kind of horrors. But, uh, when you look at it, it's kind of a country made by a bunch of people that came from other places. So, you know, even when you, even when you find people that are really racist, they'll tell you, "Yeah, but I'm a proud, like, fourth generation Polish." You know, and you kind of laugh like, you know, in Sweden, no one would say that ever. You know, there it's like I'm through and through Swedish like I, you know, my ancestor were here.

• 23:09Ali Ghodsi?

  They created this country. This is my country. This is my country. You know, you're a guest here. You know, and you're not welcome here. Whereas here it's a little bit like, you know. No, we don't like you because we, you know, and then they stereotype you. You're this way or that way. Whereas I think in Europe, sometimes you can find a different type of racism, which is. No, you're not welcome here because this is not actually your place. This is not your country. You're, you know, my ancestors built this thing with their, you know. With your hand that they're like, we've been here forever, which of course is a myth. Like, you know, they also, there's been so much movement between these places. So I think the acceptance for different is much higher here. You can be very different in this, in this society uh here in the United States. Again, back to the variance point. Uh, but you know, things can also go really, really wrong here.

• 23:54Ali Ghodsi?

  And you can end up, you know, getting the short end of the stick in a way that you couldn't get. And maybe Sweden, um, you know, and then, you know. Iran is a completely different matter because, you know, it's not really a first world country. So, you know, their connections matter and, you know, you can, you know, you really have to be lucky in life. You know, just being smart and just working hard, you know, won't take you. Really anywhere necessarily, uh, which is true for many countries like, you know, in first world countries. If you just do really well, and if you know, if you get, you know, you need a little bit of luck in life and so on. But there are opportunities there for you. Of course, there are problems. But, you know, in, in, in, in many of the third world countries, there's no chance whatsoever, like at all. If you don't have connections or if you're not, you know. Um, so it depends a little bit, I would say it's a good question, but it's a, you know, we probably need the whole clubhouse just for that.

• 24:41Ben Horowitz?

  Yeah, that is a great question. Go ahead, Mark.

• 24:44Ali Ghodsi?

  No, no, that was great. That was, that was great. But uh, uh, thank you for that.

• 24:49Ben Horowitz?

  All right. So we're gonna, yeah, this is such a good conversation, but um, since this is boss talk. We're going to take a, a, a left turn and then we're going to talk a little bit about um. Some of these uh questions that, that, that founders have asked us. Um, and this one, um, Ali, you start by answering it and uh. Think about the cultural answer, given what we've been talking about. So we just hired our first VP of. Sales recently. Any thoughts on how founders can effectively support and manage? Their VP of Sales would be helpful insight. Any obvious mistakes to avoid?

• 25:30Ben Horowitz?

  So um this this actually turns out to be a cultural question.

• 25:34Ali Ghodsi?

  Yeah, a hundred percent, assuming the founder is a tech founder or the person who created the product. And they come from that side of the house, which is usually the case if the question is formulated that way.

• 25:44Ben Horowitz?

  Um. Yeah, definitely a tech founder, yeah.

• 25:47Ali Ghodsi?

  Yeah, I mean, the biggest mistake you can make is you look at this other person, right, the salesperson, who's a very different persona from you. There's a different culture, different background, you know. Uh typically, a lot of them come from sports background, they're talking about, you know, baseball, football, how they used to do that. And they're bragging about their records and stuff and and you know that while you were maybe a coder or someone who was sort of not doing those kind of things. The biggest mistake people make is they say, you know, they'll try to use their own framework of thinking and their own logical way of thinking and the way they are constructed. And analyzing how this salesperson thinks. And then there's a clash of cultures. And then usually they arrive at, no, this doesn't make any sense, like, you know, he said stuff that didn't like, you know, I don't think that was truthful what he said here.

• 26:30Ali Ghodsi?

  Or I don't think this that made any sense or this didn't, this thing that he said didn't logically follow from the other statement and so on. Uh so I don't think we should hire this person, I'm a no. So then they pass on all these kind of people and then they hire and they say, you know, I finally found a salesperson that's really awesome. I'm gonna show you. And then it's like an engineer type guy, you know, who's who's kind of like them or gal and super cerebral. You know, maybe even introverted, uh but guess what, they'll probably suck at sales.

• 27:01Ben Horowitz?

  Yeah.

• 27:02Ali Ghodsi?

  Cause you basically hire yourself, uh you know, uh in a role, but you actually need a different culture to succeed.

• 27:09Ben Horowitz?

  Yeah.

• 27:10Ali Ghodsi?

  Uh so I think that's the biggest problem.

• 27:11Ben Horowitz?

  Yeah, no, that's, I definitely agree. And then and then the management of that person is also interesting, you know, one, there's a really interesting thing that I find with engineers trying to hire salespeople is if you ask an engineer a question. The engineer will always ask himself, okay, what's the answer? So I don't care what it is. Like you ask an engineer any question. And they will say, okay, well, here's the answer. Salespeople never do that.

• 27:41Ali Ghodsi?

  Yeah.

• 27:42Ben Horowitz?

  They go, why are you asking this?

• 27:45Ali Ghodsi?

  Yeah.

• 27:45Ben Horowitz?

  That's what they want to know. They want to find out, why are you asking me that question? You know, what are you trying to get at? And they're kind of suspicious by nature if they're good. And, you know, in sales, you need that because like you roll an engineer into account and they say, hey, do you have this feature? And the engineer will go yes or no.

• 28:02Ali Ghodsi?

  Yeah.

• 28:03Ben Horowitz?

  But the sales guy will go, why is he asking me about that feature? Which competitors have that feature? Who planted that fucking idea in his mind? Like, I need to know that before I say anything to this guy. Because, you know, he could be out to get me. This, I may have just identified an enemy.

• 28:21Ali Ghodsi?

  Yeah, I mean, they're here to sell, right? And they want to have the job. So they want to know what's the question behind the question? And where are you going with this? And what are the answers I give? What impact will they have on you?

• 28:32Ben Horowitz?

  Right, right, right.

• 28:33Ali Ghodsi?

  Because I'm here to get a job. Like, so what's the, you know, are you trying to ask this to find out if I can do this and that? Because I definitely can do that, you know?

• 28:41Ben Horowitz?

  Yeah. And they'll do that to you in the interview. And this makes CEOs who are engineers really uncomfortable. Because they'll ask them a question, they won't tell them the answer.

• 28:52Ali Ghodsi?

  We had a.

• 28:52Ben Horowitz?

  They'll get a question back.

• 28:54Ali Ghodsi?

  Yeah. We had a sales guy and we used to do the stupid thing where we would ask, in the early days, the sales leaders, these very cerebral math questions, you know, which makes absolutely no sense. So, you know, at that time, we're trying to figure out a pricing model and pay as you go was a thing. You know, elastic pricing and all that. So we asked this kind of sales candidate, what do you think about pay as you go pricing? And he just looked at us and said, I like when it goes up.

• 29:23Ali Ghodsi?

  And then we all laughed like you, right? And then, but then it was okay, but what, what, when it goes down? He said, don't like it then.

• 29:32Ali Ghodsi?

  You know, you know, I didn't want to answer the question like he doesn't want to. He doesn't know what, and actually he was smart because it was a very, uh, that question had divided the founders. And there was a right answer and a wrong answer, and he knew it. And he's like, I'm not going to tell you like, cause if I say this, who knows? Maybe I, is that the right answer or the wrong answer? So I'm not going to answer that question that way. So I'll just, you know, I'll say, you know, I like when it goes up, but I don't like when it goes down. What do you guys think?

• 29:55Ben Horowitz?

  Yeah, yeah, no, that definitely, definitely. Um, and then once, once you get them on board, um, what are kind of mistakes that you see? Or like, what are the things that you had to figure out? You know, when you brought on, when you brought on Ron, um, you know, like, cause he was really different than everybody you had in the company at that point.

• 30:18Ali Ghodsi?

  Yeah, I mean, he had been selling really shitty products, uh, you know, his whole life, right? He was.

• 30:23Ben Horowitz?

  Yeah, so you gotta say what he was selling, because it's.

• 30:26Ali Ghodsi?

  Well, he was selling FTP, right? Which is like, you know, file transfer protocol from the eighties, which is free, by the way. And he was selling it for millions of dollars, uh, to healthcare companies. Cause he was selling like the secure version, SFTP, right? And, and you know, the way you do it is like, you know, how important are your health records to you? Is it okay if you lose them if they don't arrive at the other destination, you know? Um, so, uh, which is good. I think, uh, you know, the, the best sellers are the ones that didn't have an amazing product, uh, to sell. Um, but I think, you know, I mean, sales leaders have, you know, there are a lot of skill sets they have. And we could talk about a lot of those things, but one of the skills that most great sales leaders have, uh, is that they're really good negotiators. Uh, so they'll be negotiating with you.

• 31:10Ali Ghodsi?

  So, you know, you gotta be prepared for that. Uh, if, if, if they're not doing that, uh, I think there's a, there's a problem. Like for instance, when you're hiring a sales guy and in the finish line, if they don't make obnoxious, uh, demands on equity and salary and comp, that's a big red flag.

• 31:30Ben Horowitz?

  Yeah.

• 31:30Ali Ghodsi?

  Yeah, right. You know, so it started, so with Ron, it started already with that, right? With completely obnoxious, outrageous demands on, uh, you know, compensation, which meant, okay, he's a good sales guy, right? He, he's, he's gonna go, he's gonna get big deals for us. Uh, but then that continues, right? When you're setting the targets for the year, uh, when you're setting the, you know, uh, when you're setting up the plans for the year, um, if you, if you have an amazing salesperson, you're, uh, you know, you're basically negotiating with a person who loves negotiations, and that's what he does for a living from, you know, seven AM till, you know, eight, nine PM every night, every day of his life for forty years. Uh, he's been talking to procurement departments, negotiating stuff.

• 32:13Ben Horowitz?

  Yeah.

• 32:14Ali Ghodsi?

  Um, can you get comfortable doing that? Uh, or do you think it's just bullshit as a, as an engineer guy and say, you know, I can't deal with this and, you know, let's just go get someone? You know, this other guy seems much more, uh, a straight shooter or, you know, logical.

• 32:28Ben Horowitz?

  Yeah, yeah, yeah. And, and what I always say is, you know, you have to learn to manage diversity, and there are different kinds of diversity and the probably, in a, in a kind of enterprise software company, the salesperson is gonna be the most first person who gets hired off the bat, you know, coming from a really different way.

• 32:49Ali Ghodsi?

  Yeah, culturally, culturally, I mean, the, the sales, sales, sales in pretty much every company is actually a distinct culture. You know, uh, distinct from the rest of the company, whether you like it or not. You can try to change it, but it actually is distinct. Just start with something as simple as, you know, you try to make everything homogenous in the company.

• 33:09Ali Ghodsi?

  Except compensation for sales is just completely different.

• 33:14Ben Horowitz?

  Right.

• 33:15Ali Ghodsi?

  And start with that, right? Yeah, but it's just different, right? It's already there, you've changed the culture by saying, these guys get paid completely differently from everyone else in the company in a radically different way. Who, you know, very little equity and they get huge packages and they might make millions of dollars, but most of it is variable and they have to earn it.

• 33:34Ben Horowitz?

  Yeah, yep, yep. Yep, and, uh, what I always used to say, you know, when engineers would bring that to me, I would say, oh, so you wanna be paid on commission? You know, yeah, I wanna get commission when we make a sale. And I was like, okay, and then when you miss a schedule, I'm gonna fire you, is that cool? And that always ends that conversation.

• 33:58Ben Horowitz?

  But yeah.

• 33:59Ali Ghodsi?

  It's a long term and short term.

• 34:00Ben Horowitz?

  Yeah, there's a lot of CEOs that don't want to pay, you know, they don't want to pay commission and

• 34:09Ben Horowitz?

  which is crazy in sales because I remember I had this conversation with one of my CEOs and I was like, look, I said, tell me this, do you have any engineers that ever like on a weekend will actually like write some software or do something like that? And he goes, yeah, I have people like that. I said, well, I guarantee you, you don't have any salespeople who sell fucking software for fun on the weekend. You know, it's not that kind of thing.

• 34:34Ali Ghodsi?

  Exactly.

• 34:35Ben Horowitz?

  Um, so you have to, it has to be competitive. There has to be a president's club. There has to be commissions because it's a prize fight and no prize, no fight. And yeah, so.

• 34:46Ali Ghodsi?

  Yeah. And the prize has to be, you know, I mean, just to make it very clear to founders, you know, if they're listening, the prize every year has to be millions of dollars. So like, you better have, if you're successful, you better have salespeople that are making a million dollars a year. You know, so that you can hold them up and you can say, this guy made, you know, a million last year. Uh, and you know, and this guy did too. And you could be him or her. Um, and that's really important, I think, uh, for, for really competitive sales cultures.

• 35:14Ben Horowitz?

  Yeah, because that, that's why you do it. I mean, I think that it is, it's the thrill of the hunt and the, you know, the size of the kill. And without that, but you know, it's, it's not fun at all. So, so there you go.

• 35:28Ali Ghodsi?

  Yeah. Hundred percent.

• 35:31Ben Horowitz?

  So, um, follow up question was, we're looking to hire our first marketing leader. Um, we're a B to B API SaaS company. What advice do you have on the profile we should be seeking? What's the, when's the right time?

• 35:50Ali Ghodsi?

  Yeah, so.

• 35:52Ben Horowitz?

  And then, and then there is a follow up question to that, which is should you hire a marketing leader or a sales leader first, pros and cons?

• 36:01Ali Ghodsi?

  That, that's, that's a good one, and I'm curious what you think. Uh, but for sure, marketing and sales, especially in a B two B company, go hand in hand. Uh, so, uh, so if you already have a sales leader, it's really, really important that that person gets along with whoever you're going to hire in marketing. Uh, in some sense, sales is the customer in many ways for marketing. So, marketing generates the leads and delivers those leads to their customer, which is sales. Sales then runs with it. And if sales says these, these leads are crappy, then it doesn't matter, like, you know. Uh, or they say, hey, this message you gave me is useless, like, I'm not going to use it, I'm going to come up with my own. Then why do you have a marketing department? Uh, and that happens, it's very common. Uh, so really making sure that those two departments work really well together, I think is really, really crucial.

• 36:45Ali Ghodsi?

  Uh, so I would, I would make the, so if you already have a sales guy, make sure that he or she is a really integral part of that search process when you're getting the marketing leader.

• 36:54Ben Horowitz?

  Yeah, right, because if they hate each other, then you're breaking up that fight all the time, yeah.

• 36:59Ali Ghodsi?

  Yeah, and it has to match. So, different companies have different go to market motions. You know, a company like Tableau was selling desktop licenses for $2,000. Uh, you know, a company like Palantir, I suspect, is selling contracts that are, you know, uh, always at least seven figures and maybe eight figures, right? Um, so the kind of leads you need and the kind of marketing you need is different for these different ones. So, make sure that also the marketing leader you're getting, uh, fits what you have on the sales side. These two have to really gel well together, these two departments. Uh, but it also depends, yeah, go ahead.

• 37:37Ben Horowitz?

  Yeah, that, yeah, that's a, a really good point in that, you know, when you hire an executive. You're paying a lot of money in equity and you're buying knowledge. And so if you hire, you bring in a head of marketing and you're a B two B API SaaS company. And that head of marketing is from whatever Palantir, then you've screwed up because you need somebody who's from a company like yours because you're buying that. You just paid them for knowledge they don't have.

• 38:12Ali Ghodsi?

  Yeah.

• 38:12Ben Horowitz?

  And that, you know, that, that's insane because what you're really doing with these executives is you're accelerating the entire company's time to learn how to go to market. Um, because you could just take your junior people if you're going to go with zero knowledge. Um, and this is a mistake people make. They're like, well, do they really have to come from the domain? Yes, they really have to come from the domain. Do they really have to know the customers that I'm selling to? Yes, they really have to know the customers that you're selling to. Because that's what you're buying.

• 38:41Ali Ghodsi?

  It's worse, actually, if you, it's, it's you're almost better off getting someone that's not, you know, an expert.

• 38:49Ali Ghodsi?

  But like that because they're now going to go ahead and spin up a demand machine and a whole like marketing. You're going to hire a whole bunch of people that are specialized in doing that thing. And it turns out that's not even what you need.

• 38:58Ben Horowitz?

  Right. You're right. They're going to run their old playbook.

• 39:00Ali Ghodsi?

  Yeah. So that's, it's, it's really crucial. The other mistake a lot of companies do, and I think Databricks did in the early days, which is you sit down and say, okay, but what kind of go to market would I want to, who would I, who would I want to be? Oh, I'd like to have, you know, million dollar deals or I'd like to have $10,000 deals. So at Databricks, we made the mistake early on where we said, oh, we don't even want to have salespeople. It's better if it's like super automated and people just swipe a credit card and it just grows like that. That's the one we pick as if it's like a choice you can just make.

• 39:29Ben Horowitz?

  Yeah.

• 39:30Ali Ghodsi?

  From a menu.

• 39:31Ben Horowitz?

  Sales organization as opposed to, I've got this product, I'm selling it to that customer. What kind of channel do I need to connect the two? It, it starts with, oh, I want this kind of channel.

• 39:42Ali Ghodsi?

  Yeah. In Databricks case, we take massive amounts of data and do machine learning on it. And if we improve by one percent some metric, that could mean hundred million dollars of improvements for some company. But that means we need to work with companies that have lots of data and where one percent improvement matters a lot to them. That happens to be big enterprises and you know, the channel you need to talk to those are enterprise sales. And that's a different game than if you're selling startups or you know, Excel users, uh, you know, who just want to plot something, which might be the tableau user.

• 40:14Ben Horowitz?

  Yeah, no, it's amazing how many CEOs will make that mistake. Um, and it always comes in the form of, well, you know, I don't want to hire a Rolex wearing salesperson or something like this. And it's like, well, like, because you don't like Rolexes, I mean.

• 40:29Ben Horowitz?

  It's kind of like if you were going like, okay, I'm taking a trip um to Australia and I'd like to get there on a motorcycle. It's like, well, you can't get to Australia on a motorcycle.

• 40:44Ben Horowitz?

  It's not, that's not what determines the vehicle, what you want to fuck him right.

• 40:48Ali Ghodsi?

  I want to have really, really low CAC, customer acquisition cost. That's what I'm going to go with. Yeah, who wouldn't? Uh, but maybe that doesn't get the job done for the product you have and for the market you're trying to reach.

• 41:00Ben Horowitz?

  Yeah. Okay. So this next question is kind of gets at what you were saying, which is should marketing and sales report to the sales leader or to the marketing leader or to the CRO or to the CEO? How to avoid finger pointing between the marketing leader and the sales leader if both report to the CEO? Um, and then Mark also get ready because I know you have opinions on this one too, but let's start with Ali.

• 41:27Ali Ghodsi?

  Yeah, well, I don't think one size fits all and like, you know, here's exactly, I have the canonical org chart. I'll send it afterwards and everybody just run their company based on that org chart they send them. So it kind of depends. Also, titles can mean anything in any company, especially, you know, I find it funny. You find these tiny startups with 10 people and they have like a CRO and a COO and you know, all kinds of fancy C level titles and EVPs. Uh, but uh, which actually it's, it's okay. It's not under the world if they do that though. I don't, I don't think it's a good idea. Um, I, I think, uh, what's, one thing just that's weird in the question is, oh, you know, we can avoid this finger pointing if we just like. You know, if we just put it all under the carpet, this like, you know, make the problem go away. Yeah, awesome, great job. No, actually, the finger pointing can be good.

• 42:11Ali Ghodsi?

  I actually think one of the reasons it's good if it reports to the CEO is that you get to see these conflicts and they can actually figure out how you want to configure your company because you're figuring stuff out. It's a startup. It's not a set in stone gigantic corporation. So, uh, I actually always preferred not having a COO or someone between me and all these different functions. I had them always reporting to me because then I would actually find out what's going on, like, you know, the salesperson would say, hey, these leads are not great. And I would say, why not? And they could, I could dig into it. And then the marketing leader would say, yeah, but he says the leads are not great, but actually they're not actually spending their time on the leads because they're actually focusing this other thing which makes them more money right now and so on. And that, that helps you configure it.

• 42:54Ali Ghodsi?

  Now, maybe you have an amazing leader that can do that instead of you and you suck at this, all this stuff that we talked about. Yeah, then maybe it makes sense to make it all, you know, just go to one person that does it for you. But that's a lot of power in someone's hands. And if, if you just started your company, um, and you get one of these COO, CRO that owns all of go to market, that's a lot of trust in one person. If they're that amazing, that's great if you found that person. Uh, but more often than not, they probably don't understand your product as well and they kind of don't know what kind of company you're creating. They might just run with an existing playbook. So I'm not a fan of doing it that way.

• 43:29Ben Horowitz?

  Yeah, well, and it's interesting because the other thing that that ignores is marketing is also connected to engineering. Um, and so there are going to be conflicts and communication breakdowns there. And then you've made that one actually harder to, uh, unravel. And the good thing about sales and marketing is they're tend to be both extroverted and loud. So they're going to really point fingers, whereas once you get into engineering, it could just be like a silent war. Um, which is extremely destructive. So that's a, that's a really good point. Um, let me, let me bring in Mark. Mark, you have some thoughts on whether sales should report to marketing or marketing should report to sales or to the CEO and not gonna think.

• 44:13Marc Andreessen?

  Yeah, so you know, you guys may have covered this. Um, I'm sort of, I'm, I'm, I'm multitasking a little bit with a five, five year old, so.

• 44:21Ben Horowitz?

  No worries.

• 44:22Marc Andreessen?

  I'm tuning in and out a little bit. I would say, look, like, the other thing is, did you guys talk about air war, ground war?

• 44:27Ben Horowitz?

  No, no, we didn't talk about that.

• 44:29Marc Andreessen?

  Yeah, so that's the other thing that's like really important to, to, to think about here. Um, is basically the, the, the two functions basically operate on very different clock cycles. Um, and so, sales is typically, you know, executing against, um, you know, quarterly, uh, you know, quarterly targets and, and then, you know, ultimately annual targets and so forth. And, and marketing has some of those, but like, marketing generally is playing a longer game. Um, and they're trying to like, you know, do kind of long-term brand development and corporate communications and then even, you know, lead gen, like, sometimes lead gen plugs straight into sales, but, you know, they're kind of doing a lot of other stuff that maybe is a little bit more amorphous or high level around long-term demand creation. And so, you know, the, the metaphor that gets used a lot is, is, you know, marketing is air war and sales is ground war. And, you know, it's a little bit like the army and the air force, which is like, the air force like doesn't, you know, if you talk to like air force officers, like,

• 45:13Marc Andreessen?

  they may say something like, I don't know why those guys are always running around, you know, with their boots in the ground, getting their, you know, getting their, getting their feet wet, why can't we just bomb from the air? And the army guys are like, well, you know, these air force guys, they're up and they're literally up in the clouds and they, they like, actually don't know what's going on and they're, they're not at like point of contact with the enemy. And there's a similar dynamic that can develop between marketing and sales where the marketing people think the salespeople are kind of the grunts and the salespeople think the marketing people are just like out to lunch. Um, and so, like, it's a real cultural difference. Um, and by the way, like, you often see it all in their private lives, you see the difference also. They, you know, they, the salespeople are like having weekend barbecues and like, you know, the, the marketing people are going to like, you know, art, you know, art fairs. Um, you know, pretty, pretty different things.

• 45:55Marc Andreessen?

  And so, you know, they don't, they do naturally go together in the sense of there's a direct connection, which is they're all about go to market, but they also don't go together in these really important ways. And, and so, and, and so I guess I would say like typically, typically in a company, and see what you guys think of this, I think if marketing reports to sales, typically you have very weak marketing. Um, if, um, sales reports to marketing, typically you have no revenue. Um, and then if they don't, you know, if, if they're, if they're peers, they, they generally like argue a lot. And I, I think those might be like the three choices.

• 46:27Ben Horowitz?

  Yeah, yeah.

• 46:28Ali Ghodsi?

  Yeah, absolutely.

• 46:30Ben Horowitz?

  I, I think that's right. And you're lucky. The other thing that Ali brought up that I think is something that CEOs have to deal with is, look, within a function, things always run well if you have a reasonably good leader on the function. You know, because they meet together, they've got aligned goals and objectives and so forth. And so, you know, that generally isn't where the CEO has to be the chief executive. It's usually cross-functionally, where things break down and need to be defined and ties need to be broken and conflicts need to be resolved because that's where there's mismatches in the company that are going to prevent it from succeeding.

• 47:14Ben Horowitz?

  And so, you know, it's really hard to do that if there are layers between you and the people who actually own those functions.

• 47:23Ali Ghodsi?

  Yeah, yeah, they'll mask it at every level. They'll do their pre-meetings and they get on the same page and, you know, and then you get, you know, a very sort of, sort of fake, sort of picture of like, everything is great here and there's no problems and we're aligned. So I, I think as a CEO, it's actually good to surface that finger pointing. Now, it can get toxic and you can make it really bad culturally, that's a separate problem. But, but at least you want to know exactly what are the issues that are going on so that you can actually figure out how you want to configure it for your, for your strategy long term.

• 47:56Ben Horowitz?

  Yeah, yeah, yeah, for sure, for sure.

• 48:00Ali Ghodsi?

  And I, and I agree with Mark's point of view. If you make, you know, if it's very sales, anything that's very sales oriented, so if you put marketing under sales and it's really sales driven, it's going to end up being very short term. So your sales leader will look at all the stuff marketing is doing and they're going to only fund the stuff that is really guaranteed ROI in the short term. You know, so ends up being like lead gen and programs and events and those kind of things that immediately turn into revenue. And they're not going to invest in the long-term branding stuff that you need and the thought leadership and the things that kind of over time actually is more important uh that you need to do. They're not, they're going to start product marketing, uh you know, that if it sits in the marketing and so on.

• 48:40Ben Horowitz?

  Right, yeah.

• 48:42Ali Ghodsi?

  Yeah.

• 48:43Ben Horowitz?

  Yeah, and the brand thing is so underestimated by enterprise CEOs because, you know, they don't realize, and you can actually hear it from salespeople, interestingly, like, you know, we walk in the door and nobody knows who we are. So every meeting is we've got to explain who we are. And you think about what that does to your sales cycle because you have no brand. Um, and yet you're still not willing to invest in the brand and it's, it's really, uh, it's a super common thing in enterprise CEOs and it's a, it's definitely a big deficit.

• 49:12Ali Ghodsi?

  Yeah. By the way, the analytics would not be aware of this today if it wasn't for, when, when we started, this SPARK technology was very well-known.

• 49:19Ben Horowitz?

  Yeah.

• 49:20Ali Ghodsi?

  And we would go, we were so, you know, the founders were so pissed off always because the sales guys would go to every account and instead of explaining what we do, they would just say, "Do you know SPARK?" "Yeah, I know it." "We created it." You know, "We're those guys." "Okay, now you know who we are." And they would just lean on that. And so we created it, we know it better than anyone else, you should buy our software. And we would, you know, it would infuriate us because it would be like, no, understand, pitch it, but, no, they were doing the right thing, right? They were going on that brand value. And they were getting the foot in the door that way. And it opened up so many doors that otherwise would have been completely shot. And that's how they got all those leads. So it's like, hey, this SPARK thing, do you have a strategy for it? Okay, we created it. I created it. You know, it's me, me, me. Like, let me come in, like, you know, I'm one of the creators of it. Um, so yeah, that, that was actually brand awareness.

• 50:05Ben Horowitz?

  Yeah, yeah, yeah. It was it, right. It actually saved you because, uh, originally, marketing didn't work that well at data bricks, I'll just say, without giving any blame. Um, so, so the next, the next question is, uh, how do we know when we need HR slash people roles?

• 50:33Ali Ghodsi?

  I mean, very early on, the founders are doing HR all the time. They maybe don't think of it as HR, but you're doing HR kind of from, you know, from the, from, from being 10 people.

• 50:44Ben Horowitz?

  Yeah, yeah.

• 50:46Ali Ghodsi?

  Yeah, go for it.

• 50:48Ben Horowitz?

  Well, I, I'd say there's a couple of things that um make it really critical. So, yeah, you are, I mean, there, there's certain like basic thing, you know, things you might just regard as personnel, which is like, okay. You know, what's the salary scale, you know, hiring uh people, all that kind of thing. But then you get into, you know, it goes critical in a couple of places. One is, you know, once you get like 50 people, I think the law is you have to have sexual harassment training. And, you know, that's, the way you think about that, and this gets into the other thing. And that's also when you start to have managers.

• 51:28Ben Horowitz?

  Um, and if you have managers who have not been trained in sexual harassment, it's basically the equivalent of having accountants who aren't trained in accounting. Because it's a legal apparatus that if they don't know, it's going to cause huge problems for the company.

• 51:48Ben Horowitz?

  Because it's not like the law, the law is well-written, but it's not, you know, it's like accounting law. There are nuances to it, that you're not just, not everybody's getting into it, particularly when they come from all different cultures and all different kind of walks of life, where these rules vary. Um, and so you have to know the rules of the land. And so that's like, it's absolutely critical that like you have real HR at that point. And, you know, I've seen companies get into trouble on this all the time. And a lot of it is, you know, managers like just don't know what they're doing.

• 52:20Ben Horowitz?

  But then it becomes broader than that, in that if you've got managers managing people, how do you know, you have an idea, hopefully, if you're a CEO, you start to have an opinion on, okay, what is it like to work at Databricks? How do I, what kind of people do I want? What do I want their experience to be like? What do I want their career path to be like? How do I want them to be treated? All these kinds of things, which result in a bunch of management practices from, you know, how you interview to like, whether you have one-on-ones, how you conduct a meeting and all this stuff.

• 52:58Ben Horowitz?

  And how do you know if you're getting them? Like, how do you know, as CEO, you're so busy, you know, building the executive team, running the company, figuring out the strategy, talking to customers, all this stuff? You don't know how your managers are doing. So without HR, you know, really good HR that can help inform you on, "Yeah, Ali, you're getting exactly what you want out of these managers, but not that manager." Then you don't have any quality control at all. And your company is not going to be a place that you even want to work in.

• 53:29Ali Ghodsi?

  Yeah, that's a great point. I mean, a lot of people say, you know, HR is, you know, the people organization. It's for all of your employees. They're there for all of the employees. That's bullshit. HR is not there for all the employees. The people in your organization, they report to their bosses. And the bosses decide if they're, you know, happy or unhappy or all that kind of stuff. They don't report to HR. Okay, so HR is really there outside of recruiting to make sure that those leaders are doing their job and that they're good and they're getting the training they need. And that's really it. It's like you're, it's the tool you have as a CEO to make sure that all your leaders are great, that they're doing the right thing. Not all the employees, all the, each employee reports to some boss, reports to some boss. And those are the people that have the power.

• 54:11Ali Ghodsi?

  So that's, that's really, actually, that's, that's a really great point.

• 54:15Ben Horowitz?

  Yeah, and then, and it's bad when, like, employees misinterpret that because then you get into this weird politics with HR, right? Where the employees are trying to use HR against the manager.

• 54:27Ali Ghodsi?

  Yeah.

• 54:27Ben Horowitz?

  You know, in some weird way. Like, there's certain things, like, there's, if you've been abused, then of course you'd go to HR and, you know, whistleblow and that kind of thing. But, you know, you don't want it to be, "Oh, he gave me a bad review." Can you talk to him? Like, that's not the job of HR. It's your job to get a good review.

• 54:46Ali Ghodsi?

  Yeah, I mean, you're right. There is also tactical reasons to get HR and get, you know, legal and security team. This is a tactical reason, but... To protect your ass. You know, you want to do the exit interviews and you know, and talk to people, you know, you'll, you probably don't know how to do that, right? And you know, you're going to end up on Glassdoor and people are going to say that, you know, the CEO said some really outrageous things to me when I was about to, you know, leave. Um, you know, why not have a professional do that? Who knows how to do that for a living?

• 55:15Ben Horowitz?

  Yeah, that's exactly right. You know, and look, the, the CEO job is emotional. Um, and you know, there's certain, you can't put yourself in a situation where you feel like somebody betrayed you or this and that, and you're having a conversation that's going to make it a thousand times worse. So it's a, it's really good point.

• 55:33Ali Ghodsi?

  Start early, start early, get a Charlie early. And actually I will say this, most HR designers aren't that great. So it's actually a very difficult search. So it's actually going to take you very, very long time to find someone as awesome as Amy that I have at Databricks.

• 55:47Ben Horowitz?

  Yeah, no, Amy is great. And but you know, the, the, one of the things that makes her great is like the real head of HR at Databricks is, is Ali. And, you know, Amy ends up being

• 56:01Ben Horowitz?

  the person who makes you what you, all you can be as head of HR. Because like the most important thing in any tech company for sure is the talent. And so if the CEO doesn't have a very, very strong point of view on how that talent is brought in, assessed, managed, promoted, you know, moved along in their career, which is the HR life cycle, then no head of HR is going to save you. That's not a, that's not a possible thing.

• 56:29Ali Ghodsi?

  I think it's, it's not, it's not about Ali. I think every startup founder and CEO, that should be their primary job to make sure that you're hiring the right people and you have very opinionated way of how you want to hire and who you want to get in. But those are, those are the people that are going to run your company. You can come up with whatever strategy you want. But if you hire the wrong people, you're not going to go where you want it and they're not going to implement your strategy because you've got the wrong people in the boat. So, uh, so of course that should come from the CEO. The other one is culture. A lot of people like, you know, once you get ahead of HR, you know, you can delegate culture to them and they can figure out, they can do surveys and come up with what is our culture? You know, this is, this is my thing, like, you know, oh, we should do a survey of what the employees think, what should our culture be? What is it? Uh, no, you know, that's not how it works.

• 57:12Ali Ghodsi?

  Culture is actually a strategic weapon. The CEO should decide it. And then it should be implemented.

• 57:19Ben Horowitz?

  Yeah, yeah, no, like your culture is your number one. If you if done right, it should be your number one strategic competitive advantage.

• 57:27Ali Ghodsi?

  Yeah.

• 57:29Ben Horowitz?

  Be the reason people buy from you, even when your product might be behind, because they know because of your culture, they're going to get what they want out of the company over time. And it's, you know, it has to be designed. I totally agree. So we are actually, oh, go ahead.

• 57:45Ali Ghodsi?

  Yeah, I mean, a great example of that is that it's absolutely a strategic weapon is look at Amazon. Amazon has a culture principle called frugality. And that means, you know, everybody's gonna, nobody's gonna splurge in that company ever. And they're going to be very careful with how to spend their money. And that ensures that fits their whole strategy of going to be the low cost option. It's going to be super cheap and your margin is my opportunity. And I'm gonna basically out compete everyone else on price.

• 58:11Ben Horowitz?

  Right. And you know who totally doesn't have that cultural value? Apple.

• 58:16Ali Ghodsi?

  Yeah.

• 58:16Ben Horowitz?

  Because they've got a $5 billion like campus. And they've got doorknobs that probably cost more than anything at Amazon. And, you know, that, but that goes with their strategy. They're building premium, beautiful products that you're gonna, are not only going to be fun for you to use, but give you status.

• 58:38Ali Ghodsi?

  And they're not cheap.

• 58:39Ben Horowitz?

  And they're not cheap. And, you know, they'll never make a product as cheap as Amazon and Amazon will never make a product as beautiful as Apple. And that's just fine, but they're different cultures for different strategies. Exactly right. Okay, well, that's the end of our time on Boss Talk. We're right at 6:00 PM and we always like to save something for next week. So thank you, everybody, for coming. Thank you, Ali, for telling us an amazing story and articulating the value of, which I think every CEO has to know is like, how do you? How do you deal across culturally? How do you, how do you be multi multicultural lingual? I don't know what a word for that is, but you have to be multicultural to do that job.

• 59:25Ben Horowitz?

  And you did a great job of articulating why that's true. So thanks, everyone. Thanks for all the great questions again.

• 59:31Ali Ghodsi?

  Thanks, Ben. Thanks, everyone. Thanks, Mark.

• 59:33Ben Horowitz?

  Okay, thank you.

• 59:34Ali Ghodsi?

  Thanks, Ali. Yep, good night.