Ben Horowitz on Leadership and Culture

In this talk from the American Dynamism Summit, a16z Cofounder and General Partner Ben Horowitz speaks with a16z General Partner David Ulevitch about the qualities that make strong CEOs, the importance of being mission-driven, and the need for a strong alliance between government and the tech sector.

• 0:08Speaker 1

  Okay, so we we have your book in the lobby, The Hard Thing About Hard Things. It sold a trillion copies, multiple reprints. Probably not a trillion,

• 0:17Speaker 0

  but yeah.

• 0:18Speaker 1

  A lot. And you're an expert in making tough decisions in business, helping others navigate those moments that matter. I would say Washington is going through just an incredible moment of transformation. So I want to start talking about leadership. And you know, we have well, let me first start with some founders. You know, you had Ali up here earlier today. You have other founders in your portfolio, Ariel from uh Navan, uh who was like a tank commander. You have these very, very special founders. So what what is it about these founders that really makes you believe that they were going to create great companies?

• 0:55Speaker 0

  Yeah, so I think it comes back to like the CEO job and like what is that and you know, why is it difficult? And so the way to think about it is okay, you invent something. It's something the world may want. So now you start a company. Um, you hire every person you know that you think is good or and kind of respect. You know, raise money from people, you go sign up customers, the customers depend on you to succeed. So a lot of pressure, but you don't actually know what you're doing. You've never been a CEO. You've never run a big organization. And so you get in, you get yourself into these situations where, oh, maybe that executive isn't good enough, or maybe like the product architecture needs to be reworked and so forth.

• 1:45Speaker 0

  And you know everybody's depending on you, you're all you do is work. So you don't have any life outside of this. So your life is basically over if this company fails. And you and you don't know that that's the right thing to do. Um, you only think it, and then you have people around you telling you no, it's not the right thing to do. So, how do you kind of trust your eyes, trust what you think, and go do it? It's a very difficult problem, and that's where basically I see CEOs fail all the time is in that hesitation between, okay, I see it, but I can't act on it because there's just too much scary stuff between me and that. Uh and the advantage you have with Ali or REL is they understand the value of urgency and the danger of hesitation.

• 2:36Speaker 0

  You heard Ali's story, like he hesitated, you know, like one more hour, like he's probably dead. Um and he he lives his whole life with that in his mind. Um and REL as a tank commander also gets that. So even though they kind of had that same situation, same problem, they got through the hesitation problem faster because they're like, well, look, there's the cost of action, but the cost of inaction is so intense that like I've I know I have to make a move. And so that's why those kind of uh those backgrounds are at least helpful in learning how to be a CEO. And

• 3:15Speaker 1

  do you think that

• 3:16Speaker 0

  you know this from your days as CEO?

• 3:17Speaker 1

  This is true.

• 3:18Speaker 0

  Yeah.

• 3:18Speaker 1

  Uh do you think that with all the people coming into Washington who are not traditional Washington insiders, they're gonna bring are they gonna be able to bring that kind of an approach, or they you think they're we're gonna have a brick wall experience where they run into the bureaucracy? Because I don't I don't think we've seen really a moment in Washington in a long time where you've had this many people that are not career bureaucrats coming into administrative roles, presidential appointed positions.

• 3:45Speaker 0

  Yeah, well, it's interesting, a lot of people from our firm uh are are in Washington now. You know, I think that um you know, culture can change fast. Uh and there's always any time there's change in any organization, there the antibodies come out. And then the question is like, you know, what force is stronger? Is the force of the new direction stronger or are the antibodies stronger? And I think that, you know, particularly in the case of the the White House and the administration, because Trump was president before, uh, I think their experience that time in talking to Jared and and talking to uh the president was well, we didn't go hard enough. You know, we we kind of were too deferential to the system, which is probably shocked a lot of people because they're like they were deferential.

• 4:37Speaker 0

  Um but they they were in term one much more than they are in term two. So I think that I think change is gonna happen at a pretty fast rate. I mean, we'll see where it goes, and you know

• 4:49Speaker 1

  uh

• 4:49Speaker 0

  how positive the changes is still TBD, but um they're definitely going for it.

• 4:55Speaker 1

  Absolutely. We uh I know we I gotta be careful how I ask this question, but I think General Fenton's still listening to what I'm saying. So I do want to talk about DoD and culture and change, because you are both uh a student of organizational culture, but you are also a teacher of how to change culture and how to create the culture that that you want and what and what culture really is. So, you know, we know that the DoD now is trying to really reassess what how do they set themselves up for the next hundred years, what do they want culture to be. Yeah. How would you advise the DOD to think about changing their culture and how to think about culture and what it really means?

• 5:30Speaker 0

  Yeah, so you you know, my favorite um kind of definition of culture comes from the samurai, which is you know, culture is not a set of beliefs, it's a set of actions. And I think if you think of it through that lens, it's like okay, what do we do on a daily basis that kind of constitutes the culture and how we operate and how we think about things and so forth. And I think that um, you know, the the the bad thing that's happened to the culture in the DOD is it's become kind of you know politically or and bureaucratically driven as opposed to mission-driven. That's the complaint at least that I hear all the time is well, we used to be about winning, now we're about like everything else.

• 6:15Speaker 0

  Uh and to change culture, you know, probably the best story um of culture change that that I've that I ever read about as I studied it was the the story of the Haitian Revolution, where uh Toussaint Love Current, it was the only successful slave revolt that resulted in an independent state in the history of humanity, so like a very rare event. And the w the reason it was so rare is that slave culture is not military culture. It's like it's the opposite in that if you're a slave, there's no tomorrow, you don't own tomorrow, you don't own anything. So long-term planning and kind of strategy and kind and trust in particular comes from that long-term thinking, right? I'm gonna do something for you today, David, because I trust that in a month from now you'll do something for me.

• 7:06Speaker 0

  Well, like what if there is no month from now, then there's no trust. So you have this low trust, very kind of difficult culture to build an army against, and so there were no successful slave revolts. Tell Tucson, how did he do it? Well, he changed, he shocked the culture into a new culture. Um, and he did it in kind of several ways, and I just give you two examples, which I think are probably relevant for the DOD is one is like let me just make a rule that shows you yesterday has nothing to do with today. And one of the rules that he made, which is, and this is you know, Haiti in the 1790s, so it's raping and pillaging and like a very kind of aggressive mercenary type of warfare.

• 7:51Speaker 0

  And he just made the rule look officers in my army can't cheat on their wives, otherwise you're dismissed. No concubines, no none of that. And everybody's completely shocked because it's just so antithetical to the culture that was running. And his point was look, I have to be able to trust you. Um, and if if if your wife can't trust you, then like how am I gonna trust you? And it was just a very simple rule that indicated this is where we're going. Trust is the most important thing in the army, and that's the one thing I'm gonna dismiss you on. Second thing he did was he changed out a lot of the leadership for the guys he captured. So he would capture uh kind of generals from the French army, from the Spanish Army, uh from the British Army, and he would put them in officer position.

• 8:43Speaker 0

  So he had he brought in the culture of the enemy military to refine the thing. And I think that, you know, not necessarily that we would bring in um a Chinese general to the DoD or something like that, but just bringing in uh leadership from a different culture from the culture you want and adopting that into your own are kind of two mechanics that I think uh at least historically were very, very effective. And he ended up building, you know, quite an astonishing, like if you look at kind of the history of military strategy, like a lot of the things they did were super novel because he was able to mix techniques from from different fighting forces.

• 9:26Speaker 1

  Awesome. Let's talk about the firm for just a minute here. Um I think people know because they're here at this event that we are not a small boutique for four or five person shop. Um not anymore. Not anymore. So, you know, you you and Mark have always had this view toward you know, orienting the firm uh tr toward the future, really building for the infrastructure that serves the best founders. Uh and you know, we're we've had lots of conversations, and we certainly see in the news about how the government's focused on slimming down and efficiency and things. You didn't take that path with with Andrees. And Horowitz, you know, we we are, I think we're the largest venture capital firm. You're saying we're

• 10:03Speaker 0

  inefficient?

• 10:04Speaker 1

  No, but we're not small. Yeah. And uh I think we are the largest venture capital firm in the world. Is that yeah that's right. Um so tell us like how you think about, you know, when you and Mark were starting the firm, and even till to up to today, how how did you decide to build this massive platform with hundreds of people? Um we'll talk about how we have a DC office here in just a minute. But what you were doing things that no other venture capital firm has ever done. You know, most people, if you don't know how the our industry works, it's usually like five or six people that sit at a table and just kind of wait for deals to show up to them and talk about deals and maybe they do this deal, maybe they go play golf, but that that's not exactly how it works at Andreas and Horowitz.

• 10:42Speaker 0

  Yeah, so you know, it's funny, coming from being an entrepreneur, um, it was there were kind of two things that were different about how we thought about the first was we're just kind of naturally mission-oriented as opposed to just purely kind of money or return oriented, uh, which turned out to be unique in venture capital. I didn't know that when we started, but but it turned out to be that way. And our mission was always we thought that um every important new company was going to be a tech company, and the way those tech companies were gonna get built was gonna be really, really important, and we needed to kind of help build the best companies in the world, kind of in Silicon Valley in America, and so we needed to set up for that. And the second idea that we had was um the product of venture capital, you know, they had two customers, investors.

• 11:33Speaker 0

  The product to investors was good, the returns were high, but the product to entrepreneurs was bad, and that all you got was some advice from a smart person and some money. Um hopefully a smart person, but generally the venture capitalists are pretty smart people. Uh and we thought, whoa, like having built a company, a much better product would be help me know the people that I need to know, help me meet the people I need to meet, help me get confidence in myself to do this very difficult CEO job and all these kinds of things. And that just ended up creating a much bigger platform to go do that. And so that that's sort of how we got to the idea. Um and look, I think it's you know, the the core thesis turned out to be true. Like tech has become extremely important.

• 12:18Speaker 0

  I think it's important to the survival of the country and certainly the thriving of the country, and so we're in you know, we find ourselves in a really important spot now.

• 12:28Speaker 1

  Yeah, I think it's I mean for me it's always been amazing. You know, we we have watched Catherine and I talk about this all the time. Other firms, you know, were investing in China and had all this other activity, and you know, now they might be a little bit Johnny Come lately and like excited about defense, but they used to say no way to defense, no any of those things, but but you and Mark have have always worked, I mean, even even from your netscape, you know, doing SSL and security days, you guys have always been very, very keen on supporting uh the national interest, and that that's been something you want to talk about that for just a minute.

• 12:57Speaker 0

  Yeah, well, I think you know, and we got criticism for it early on. Um, but you know, for me, and I I think the talk that I gave at our all hands, I I still would stand by, which is look, we're you know, you can say you don't want to you've got some philosophical thing, you're against all violence and so forth, but like you gotta understand the people who are out there protecting us daily, whether they be in public safety, whether they be in the the military and so forth, deserve the very best technology in the world. Like they're out there risking their lives to save ours, and you won't want me to deny them the best technology because you so you can feel better about yourself. Like, I'm not doing that.

• 13:43Speaker 0

  And if you don't like that, you don't have to work here. And you know, I say the same thing to the press when you know they come at us at it. Uh and it's just I I think it's an unrealistic view of the world, and look, we have to stand on what we believe in and what our principles are. And you know, to this day, like we're grateful to them. And by the way, we have you know, probably you know, close to two dozen veterans working in our firm. Um, and I think it would just be it would feel very wrong to them for us to say we're not gonna invest in this tech because you know it's for military purposes. That's crazy to me.

• 14:22Speaker 1

  That's right. That's right. Um so look, this is our third American dynamism summit, third time you've been on stage. Thank you for that. Um and every time you've come back, our firm's presence in DC has grown. We now we do have an office here, it's just just down the street. Well, what now we're

• 14:39Speaker 0

  involved in politics

• 14:40Speaker 1

  too. Right. So, you know, but but you and Mark have said, look, you you don't want to have to be here, but you have to be here. Um so you know, are we are we at the point now where tech just needs to be in DC for good? Um and what what is what are we doing here and what is the best way for tech to engage in and uh with engage with the government.

• 15:01Speaker 0

  Yeah, so I think there's no question that um look in the in the early days of tech when we started, um, when you started even and you're much younger than me, we used to build tech products for tech people, right? Like we build a disk drive for somebody making a PC, or we build a network for people connecting computers, or you know, these were the products, and they didn't kind of come into the consciousness or kind of pervade the world really till the kind of mid-2000s, when you okay, now here comes Google and Facebook, and now every consumer is all of a sudden using technology products. Um then that started to affect, oh, this is gonna change the way the world works. This changes how people get their information. This is you know, everything is different, and this is how we educate people.

• 15:50Speaker 0

  And so naturally that became a concern of Washington, D.C. Because you know, this is this is the job of government to set policies and kind of help guide the way society works. So all of a sudden, like they became intertwined, and I don't think there's any going back. I mean, I think we're becoming kind of more kind of technology-oriented society, and and it's affecting everything from the military to education to health care to defense to anything the government cares about, like we care about. Uh and so, you know, the philosophy of our firm, you know, one of our kind of most maybe the most important uh kind of cultural underpinnings of the firm is we take a long view of relationships because we're in the relationship business.

• 16:35Speaker 0

  And what that really means is like we're never gonna be transactional uh because we expect to be here a long time and we want to work with people who are also kind of working towards the long future. And so, you know, we have to be in DC to explain ourselves. We you know, like we're the biggest venture capital firm in the world. We know more about new companies and new technologies and you know certainly almost anybody in the world. So it's important that we come here and say what we have to say, but it's also very, very important that we come and we listen to what the policymakers have to say and what they know from their constituents and so forth, and not just come in with an agenda, and that means having an office in DC, it means having you know dedicated people and so forth.

• 17:23Speaker 0

  And you know, yeah, that's never gonna change. I mean, I it was something I never wanted to do because my politics is my family business. Um, you know, my father, my grandparents, so it's not you never want to go into family business if you're an entrepreneur, it's terrible. Uh but I think we're stuck. I think we're stuck.

• 17:43Speaker 1

  Um Yeah, and it's great. And look, we we uh I think people know who who work with us, we bring our founders to DC, and we have a whole team of people that set up meetings and set up interactions with them, and if you're in the audience and you work in government and we haven't met with you and haven't brought founders to you, we certainly will. You can just you can just reach out to us, we'll do it. Yeah. Um, so you brought up the politics things. We're in politics. Uh so I think I think this is uh fair game. So actually last night, uh I won't say which member of Congress, but uh, and it wasn't Richie Torres who who was up here on stage earlier. Yeah, but he he reached out to me uh last night. We were we were out uh at a restaurant, and uh he said, Hey, you know, do you think we can get Ben back? And I was like, what do you what do you mean?

• 18:30Speaker 1

  Ben's here. And they said, No, no, no, no, the Democrats can we can we can we get Ben back? And uh and so you know, I think the this person, this member of Congress uh recognizes that a lot of people are disappointed with where the Democratic Party has shifted their focus, what they've where they've landed on so many issues, um, even simple ones like what we think of startups and entrepreneurship and capitalism maybe um so I'm gonna ask you uh, you know, what what are the Democrats need to do? And not just for you, but the other people that think like you.

• 19:01Speaker 0

  Yeah, so I I think it kind of needs to, you know, you have to go back to like how'd they lose us. And I'll take me personally out of it for a second, but like how did they lose us as a firm? And it really, you know, look, our role, everybody's got a role in society, and our role in society is kind of helping America win in technology, helping our companies win. Um, yeah, that's what we're here for. That's why we built the firm. So the whole reason for us existing is is to do this. And what happened to us in the Biden administration was just like it was something that you know I'd never experienced in my career, and was both hard to understand and then impossible to negotiate out of. And so just to take you through it, if you just take one piece of technology, which is um crypto, and it's like, okay, well, why do you care about crypto, Ben?

• 19:53Speaker 0

  Well, you know, our job is to understand the future. Um it turns out that tech Technologically, if you look at the history of technology, technology has evolved along basically or you know, information technology along two axes, kind of computers and networks. And they always go together. So, you know, there was uh, you know, microwave and the transistor, and then there was you know the PC and local A, the mainframe and SNA and the PC and local area networks and the iPhone and the internet or the smartphone and the internet and all those kinds of things. Um and now we have AI. And what's the networking technology that's necessary to make AI work for society? Well, what are the problems with AI? One, um, who's a robot and who's a human?

• 20:39Speaker 0

  Like, how do you tell? You're not going to be able to tell without basically crypto and blockchain, which already has a great proof of human technology, by the way, which was founded in the U.S., which is not allowed in the US or hadn't been allowed in the U.S. Um. Secondly, you need to know what's real and what's fake. Who's going to be the arbiter of what's real and fake? Is it going to be Donald Trump, Joe Biden? Is it going to be Google? Is it going to be Meta? Or is it going to be the game theoretic mathematical properties of the blockchain? Very important problem. Thirdly, how are these AIs going to add value to society? How are they going to pay each other? How are they going to buy things if I have a power wall and I have too much energy in it and I want to sell it to David, how does my power wall sell David energy?

• 21:30Speaker 0

  Well, turns out robots aren't allowed to have credit cards. The technology for that is crypto. So everything about an AI future. By the way, what is AI also do? It makes it very easy to break into things. So if you keep if consumers are forced to keep all of their data in the cloud, um, guess what's going to happen? You know, they're just going to get rated and robbed all day long. What's the solution to that? Well, the solution to that is I shouldn't have to um give up my bank account information to show I'm credit worthy. I should be able to deliver a zero knowledge proof. That's also crypto blockchain technology. So every piece of network infrastructure you need to make AI work is in this new technology that's invented. And the Biden administration did not pass any laws.

• 22:18Speaker 0

  They didn't uh even say anything out loud, but they would not take a meeting with us. Like, you know, none of the people in charge of those agencies, Gary Gensler won't meet with us, Elizabeth Warren wouldn't meet with like nobody to even hear why we might need this technology. And so, you know, we had no choice. We're like, we're gonna America is gonna lose the AI future entirely because the administration doesn't care, won't listen, um, is unwilling to go through any kind of process. And you know, so we just defaulted to the other side. Like it wasn't you know, and then I I called Mark, I was like, Mark, let's call Jared, let's see if we can get a meeting with Trump, let's see what he says. And we went and met with him, he's like, no, like I'm all for crypto, like let's do it.

• 23:07Speaker 0

  I'm for AI with America asked to win, this and that and the other. We're like, okay. Um and that was it. And so to get us back, I mean I think you know, a rational technology, j just a technology policy that you're willing to explain, um, that you're willing to have a conversation about. Like I'm not saying I won't understand it, um, but I don't even know why you did that to us. And so that would, you know, that's kind of what led to us, you know, being in the spot where we're in. And you know, as far as the firms concern, you know, we don't speak on, you know, every like I have opinions on everything from you know Israel to Ukraine Russia war to all that stuff. But I'm not the expert in it. But on tech policy, for startups, like I'm as close to an expert as you can get, and the idea that my opinion has no value in that conversation, and you're just gonna do what you want to do, like we just are never going to support that.

• 24:05Speaker 0

  And so that that would be the way to kind of come back, I think.

• 24:10Speaker 1

  Excellent. Yeah. Excellently said. All right. We're gonna shift to public safety. Uh I think that uh actually I actually don't think people know. They might get a taste of it walking out in the hall out there and seeing some of the demos, but um we we are the largest public safety venture capital investors in the world. Um uh you have uh even before that really happened, you've been a huge supporter of law enforcement and public safety uh groups, uh, and you've really turned Las Vegas into a test bed of the best and newest technologies uh for public safety. So what what are you doing in Las Vegas and how's it going?

• 24:48Speaker 0

  Yeah, so it's uh it's pretty interesting. So I you know, I uh kind of build a relationship with the uh Las Vegas police force um really because they you know I I've been very interested in this issue of policing because it's been a very tricky cultural problem in the U.S. I think we uh you know the there were a lot of things that led to the issues and then the kind of backlash against the police where we had these movements like defund the police and so forth, kind of vilified the job, which is you know, at least historically a heroic job to kind of you know provide public safety, um, to the point where like recruiting got very difficult and so forth and the police forces degenerated. I think that you know, Las Vegas was interesting first because uh it had the highest murder solve rate in the country with 94% of murders get cleared in Las Vegas, and if you compare that, like San Francisco's like 70 percent 75 percent, uh Chicago's in the 30s, and you know, when I got into it, okay, why is that?

• 25:50Speaker 0

  Um, and it turns out it's very, very interesting. It's an expression of how good the community policing is because when somebody gets murdered, it turns out somebody always knows who did it. And if you have a relationship with the community, then they will tell you. But if not, like they don't tell the police anything. And so I think Chicago is really representative of that road, nobody's gonna say who killed anybody. Um, but in Las Vegas, uh the police always find out, and so they have a very high murder clearance rate. At the same time, um, it's a high crime city, partly because there's like crime to people will come from LA to commit crimes in Vegas. Um, so there's a lot of crime. So a really maybe maybe like Tupac.

• 26:35Speaker 1

  Yeah, yeah. I mean, the people that killed Tupac.

• 26:38Speaker 0

  Yes, yes, they did come from LA. Um we know that now. There's another long story about how uh we got the uh Tupac murder case reopened after 27 years. Uh but I'm not gonna get into that now, you can ask me afterwards. Um so it was a really good kind of test bed uh for public safety. So we you know, we've been deploying the technologies uh and it's really been amazing. So we've deployed uh prepared 911, Flock Safety, SkyDEO drones. Uh and so basically, so the way to think about it is if a gunshot goes off or if an emergency call comes in, or if you kind of show up on a uh flock safety camera, you know, and you've kidnapped a baby in your car or whatever, then there will be a drone deployed and on you in the high crime areas within 90 seconds.

• 27:26Speaker 0

  Um so what's happened is it's actually created a lot more safety for the suspects as well as for the police. Um and the reason is turns out on the old technology is somebody calls in a crime and they say, hey, there's a black man in the alley with a shotgun. And it turns out, according to the police, every time that's never true. They go into the alley, it's a Mexican guy with a broom. Um, but you've already created a very dangerous situation by saying that he's got a shotgun. But if you send a drone in ahead of time, you know who it is. Uh if a car shows up on a flock safety camera, it's not, oh, that guy was driving a Honda 1997 Honda Civic. It's it's this exact car. Um, so you always have the exact right person.

• 28:13Speaker 0

  Um so you minimize the confrontations with people who shouldn't be confronted. You minimize the profiling of people who shouldn't be profiled, and you're able to solve these crimes. So technology's been really, really great for actual public safety. You know, it gets criticized as you know, this surveillance and so forth, but it never gets deployed unless a crime is reported, or a gunshot goes off or something happens, so it's not surveillance. Uh, and it's a great increase in public safety and great decrease in kind of race-related incidents and these kinds of things that happen. Uh, you know, because look, people get scared and they make stuff up and all that kind of thing.

• 28:57Speaker 1

  Yeah, I think people really don't appreciate how it really does make policing much more objective. And those communities that care about you know that want to have a great relationship with the police where they talk about you know community policing, they're the biggest fans of this technology. Um and we've just seen this in community.

• 29:14Speaker 0

  Right, people who live in high crime areas never said default. Yeah, they always like it right. The people

• 29:18Speaker 1

  in high crime areas, they love it. Yeah, yeah. They want it's all the people who live in gated communities that like.

• 29:23Speaker 0

  I've got my own police, I don't need to. Yeah,

• 29:25Speaker 1

  that's

• 29:25Speaker 0

  right. Okay.

• 29:26Speaker 1

  So look, Ben, thank you for doing this. Thank you for doing this on extremely short notice. Uh you've built an incredible industry defining firm. Uh and uh we certainly feel your ambition uh are excited to see uh what comes up in the next uh year and the years ahead. All right, thank you. Okay, thank you.