Wartime vs Peacetime: Ben Horowitz on Leadership

In this exclusive conversation from a16z’s Bio and Health BUILD Summit, founding partner Ben Horowitz sits down with general partner Jorge Conde. They discuss everything from the inspiration behind Ben’s book The Hard Thing About Hard Things, how the open Internet was secured, the difference between wartime and peacetime CEOs, scaling culture, and understanding how bio & healthcare differs from other forms of technology.

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

• 0:01Ben Horowitz?

  Culture is not a set of beliefs. In this is okay, it's a set of actions.

• 0:07Jorge Conde?

  And Ben says, "You owe 20 bucks." Okay, so I reach into my wallet and you know, the norm was you put the cash on the table.

• 0:14Ben Horowitz?

  Yeah.

• 0:15Jorge Conde?

  So I reach into my wallet and I pull out and I unfortunately only had a hundred dollars. And I kind of pull it out and Ben sees it and he's like, "We don't make change, motherfucker."

• 0:24Ben Horowitz?

  Yeah.

• 0:27Ben Horowitz?

  If you show up five minutes late, 10 minutes late, then you can say you have respect for what it means to build a company, but you don't really have respect for what it means to build a company. Cause you wouldn't do that if you did. You know what? It's better to be right than consistent.

• 0:44Steph Smith?

  Hello everyone and welcome back to the A16Z Podcast. This is your host Steph Smith and today we've got quite the treat for you. You'll get to hear some exclusive audio from our Bio and Health Build Conference and you'll hear directly from A16Z co-founder Ben Horowitz in conversation with Bio and Health GP Jorge Conde. They'll talk about everything from the inspiration behind Ben's book, The Hard Thing About Hard Things, which by the way includes a wonderful story about how the open internet was secured and how that wasn't always given. You'll also get to hear about some surprising leaders from history, the differences between wartime and peacetime CEOs, what building culture really means, and since this was

• 1:27Steph Smith?

  run by our Bio and Health team, you'll also get to hear what the differences are between bio and healthcare innovation versus other kinds of technology. I think you're really going to enjoy this episode.

• 1:40Steph Smith?

  As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please see a16z.com/disclosures.

• 2:09Jorge Conde?

  Morning.

• 2:12Ben Horowitz?

  Beautiful day today.

• 2:14Jorge Conde?

  So obviously, you know, Ben really doesn't need much of an introduction, but I will-

• 2:18Ben Horowitz?

  He is a Google.

• 2:22Jorge Conde?

  But you've done everything, right? You've been the founder of companies, you've been a CEO, venture capitalist, best-selling author. You know, one of the things that to me is incredible is as I go and visit founders, companies that we're fortunate to be investors in, more often than not, I see a copy of The Hard Thing About Hard Things or-

• 2:42Ben Horowitz?

  Yeah, when things go bad, it's my time.

• 2:47Jorge Conde?

  And I will tell you, on a personal note, I picked up The Hard Thing About Hard Things when I was, when I was a founder, when I was a CEO. I was about seven years into the struggle, the capitalist struggle, as you call it.

• 2:59Ben Horowitz?

  Yeah, struggle can last a long time.

• 3:00Jorge Conde?

  Yeah, man, it was painful. And for me, it was a hard read.

• 3:03Ben Horowitz?

  Yeah.

• 3:04Jorge Conde?

  You know, I will say like, that book, it wasn't even a book for me, it was like an intervention. Like, I needed it, you said the things that I was feeling that I couldn't articulate. So, thank you. Thank you for writing it.

• 3:14Ben Horowitz?

  Yeah, that was a lot of the book was, you know, the things that everybody was feeling and nobody was willing to talk about. It was too embarrassing.

• 3:21Jorge Conde?

  Was it hard to write? Or did it sort of flow out of you at some point?

• 3:24Ben Horowitz?

  No, no, no. I was just like so mad about how building a company was being described that it was easy to write. You know, when you write in a fit of rage, it's easy.

• 3:37Jorge Conde?

  It's inspired writing.

• 3:38Ben Horowitz?

  Yes, inspired writing.

• 3:39Jorge Conde?

  So, let's talk a little bit about, you know, sort of the underlying fire behind writing that book. What would you say are some of the biggest or most important lessons that you learned along the way in terms of being a founder, a CEO, a leader?

• 3:53Ben Horowitz?

  Yeah, so it's interesting. I was thinking about this. The biggest lesson is actually, and I'll spend some time on this, because it's a counter lesson to, I think, today's conventional wisdom. So- You know, like, one of the things that most people no longer agree with that kind of wants is this whole, like, great person of history theory, where, like, history is moved by certain people doing certain things, and it's kind of been replaced with these, you know, there are these big cultural forces that move it. And then there was a speech Obama gave a few years back, or maybe 10 years back now, where he said, you know, it's like, "You didn't build that." You know, and there's truth in both of them, which is, well, yeah, you can't build a company

• 4:33Ben Horowitz?

  by yourself, and yeah, like, there are cultural forces, but I think that neither is quite true, and that if you've kind of built companies, what you realize is, there's a lot of people who you can replace, and then there's a few people who, if they go, that's it, it's game over, that's the end of the company, and that's, you know, quite often the founder. And let me give you kind of like a couple of stories on how an individual effort in a moment in time kind of changes the outcome for the world. So, when we were at Netscape, and a lot of people don't remember this anymore, but the internet was not a fait accompli. Like, the internet wasn't like automatic, it was gonna happen regardless. That's not true at all.

• 5:18Ben Horowitz?

  In fact, if you go back, and if you can get your hands on the first edition of Bill Gates' book, The Road Ahead, which was published in 1995, right, many years after, like, the mosaic browser and all that, it's a book about the future, and it doesn't mention the word internet not one time. He refers to something else, which was called the information superhighway, which was something that he was trying to build, Larry Ellison was trying to build, in a proprietary way. And it was very competitive, kind of, at the time, in, you know, early 95, and most people, and most of the press, and most of the kind of people in the world, thought the internet wouldn't make it, because it was a weird academic network, you know, it

• 6:01Ben Horowitz?

  was a bunch of professors on it, and most of all, it had no security. And everybody knew then that you couldn't put security into a protocol after the fact, particularly if it was widely deployed, what are you talking about? It's never gonna work. And so, you know, Bill Gates was gonna own the internet in a proprietary way, much the way like Facebook owns social networking or that kind of thing. And I remember it clearly because, you know, we had this guy at Netscape by the name of Kip Hickman. And there was this legend behind him, which I knew very well because I was at Silicon Graphics with him, you know, years before. And Jim Clark, who was our kind of like very excitable founder. We couldn't get the kind of operating system to work on the SGI machine, on the new multi-processor machine.

• 6:45Ben Horowitz?

  And Jim kept hiring and firing engineers, including like Steve Bourne, who invented the Bourne shell, you know, for those of you who are Unix heads. And he fired Steve Bourne. He's like, no, he couldn't get it to work. And Kip Hickman got it to work. And so Kip Hickman's at Silicon Graphics. And Jim Clark says to him, "Kip, you have to secure the internet." Just like that. Like that was like, "You have to secure the internet." And Kip came back in three months with SSL like spec implemented in the product. And that changed it. And that was like basically the start of the internet beating the Microsoft proprietary network. If Microsoft had won, Nathan Mervald had already said, "We're gonna take a vigorish," which is a kind of mafia term,

• 7:29Ben Horowitz?

  basically a cut of every transaction on the internet. And you go, "Well, that would have been a very different world." And we've actually seen that play out, right? Like the smartphone could have been open. But like, nobody stepped up to that degree on the open thing. And we do pay a 30% tax on every single application we get on the smartphone.

• 7:49Jorge Conde?

  You mean through like, through the Apple Store?

• 7:50Ben Horowitz?

  Yeah, through the Apple Store. So things can really change. And you know, so, yeah, Elon Musk, you know, he didn't start Tesla and he couldn't build it with all those people. But like, if he hadn't like been so crazy and raised all that money and so forth and taken on Ford and GM, which was like the most psycho thing you could ever do, like how much longer for electric cars? Would have been, you know, 10 years, 20 years. And so, you know, a lot of the biggest lesson that I have is, if in that moment, the founder or the person doesn't step up, then the world is different. And look, for everybody here who's a founder, if you don't fix a healthcare system, if you don't kind of produce that drug... Like, maybe somebody will do it in the future, but how many people are going to die in the meanwhile?

• 8:35Ben Horowitz?

  And, you know, the world really does change on individual efforts. And that's probably the biggest reason, you know, I wanted to start the firm is just to get that message out.

• 8:45Jorge Conde?

  That's remarkable. And it is incredible that you can pick sort of specific examples of where a founder did change the world.

• 8:52Ben Horowitz?

  Yeah.

• 8:53Jorge Conde?

  That's a great lesson. Speaking of great founders, you make a lot of historical references in your work. You know, who's a surprising leader in history that you would highlight to folks here? And are there any sort of unique lessons that we can draw from an unsuspecting figure, if you will?

• 9:11Ben Horowitz?

  Yeah, so the one that I've probably written the most about is Toussaint Louverture, who was the founder of the Haitian Revolution, which is the only successful slave revolt in human history. I don't know if there's other species that have slaves.

• 9:27Ben Horowitz?

  But, you know, he was really remarkable in that he was born a slave, but the kind of very special thing that he figured out, and he, you know, he's very, like, a super smart guy. I mean, part of the reason he got into that position is he was so smart that the guy running the plantation was like, "Well, you're smarter than everybody else here. I'm just going to let you run it." You know, you kind of take over. And he became the guy's driver. And so he would go into town and meet all the various Europeans who were kind of fighting over the island at the time. And he basically learned European culture. And by understanding all the things in European culture and then all the things in slave culture, he was able to take, you know,

• 10:11Ben Horowitz?

  a culture that nobody had been able to create a military out of, because slave culture is very difficult. Military culture, because it's a very low-trust environment. And in a military, of course, you have to be able to trust the orders in order to get anything done. And so Toussaint was able to... Merge the two and by doing that, he ended up building with this massive army and defeating the British and the French and the Spanish on the island and take the whole thing. And it ended up actually being his downfall, very ironically, in that because he incorporated, you know, in doing it, he would incorporate Europeans into his army to kind of create this hybrid culture. And that's how his enemies unhucked him at the end and turned him over to Napoleon.

• 10:56Ben Horowitz?

  And that was the end of Toussaint. And they kind of ended that culture, which was a very advanced culture. So when Toussaint was running Haiti, they actually had more export income than the United States. So he had built like a pretty amazing economy and so forth, but oh, well.

• 11:11Jorge Conde?

  Remarkable.

• 11:12Ben Horowitz?

  It didn't work out in the end, but like it was that unbelievable story of how you build an organization out of, you know, kind of elements that people might not think would work.

• 11:22Jorge Conde?

  So I want to, of course, come back and touch on culture because one of the things that's been remarkable is over the course of this event, the importance of culture has come up on various panels. So I want to make sure we get back to that. But before we shift to culture, you're talking about the army in Haiti. So you've written a lot about wartime and peacetime, the wartime CEO and the peacetime CEO. So number one, for folks that may have not seen your words on that, you define what you mean by that. And then, of course, the obvious follow up question is, are we in wartime now? Are we, which I assume the answer is probably. And if so, you know, how should CEOs, founders be thinking about that?

• 11:57Ben Horowitz?

  Yeah. I had a rap quote on that post, which I think describes it well, which is, "You're lucky that I ain't the president because I'd push the fucking button, get it over with, fuck all that waiting and procrastinating and all that goddamn negotiating." And that's kind of like the mentality of the wartime CEO. Like, we're just going, we're done talking. Kind of the best way to think about it is imagine like you're building like a peacetime army to fight the Cold War against the Soviet Union. And, you know, you've got a profile for like what a soldier should look like and who should be a general. And you've got OKRs and KPIs and, you know, and a strategy for fighting the Cold War and all the kinds of things, the kinds of weapons you need to build and all this stuff.

• 12:42Ben Horowitz?

  And then one day you wake up and you're fighting ISIS. And like, how much of that old stuff is right? Maybe none of it?

• 12:50Jorge Conde?

  Uh huh.

• 12:51Ben Horowitz?

  How much of those old people are gonna be the people who can actually fight ISIS? Not all of them. But you know that, and nobody else knows that. And so, how do you get the army from there to here? And that's a little bit, kind of, what happens in these big macroeconomic turns, right? You set up this whole thing for this high-growth environment, and then all of a sudden, it's not a high-growth environment. But the team is still on the old strategy, the old KPIs, the old OKRs, the old organizational design. And how do you get them over there fast? And so, a lot of what wartime is, is like, how do you get the team very fast from the old plan to the new plan?

• 13:36Ben Horowitz?

  And it's not your old process. We're not gonna go like, you know, it tends to be like, no, we're not doing that, we're doing this.

• 13:43Jorge Conde?

  Uh huh.

• 13:44Ben Horowitz?

  Well, but you said last week, you know what? It's better to be right than consistent. So whatever I said last week, don't believe it. It's no longer true. It's over. And you have to be willing to do that, to be kind of wartime.

• 13:56Jorge Conde?

  And to be-

• 13:57Ben Horowitz?

  And in a time like this, it becomes very essential, because every day you delay could cost you the company.

• 14:03Jorge Conde?

  But to make that shift into like a wartime footing, two things have to be true, right? You have to recognize that you're at war, and then you have to be able to make the tough decisions.

• 14:11Ben Horowitz?

  So, I think that most people, like in my experience, most people recognize it, and they freeze.

• 14:18Jorge Conde?

  And they freeze. So they don't do the second part.

• 14:20Ben Horowitz?

  Because, look, there's two things that people don't want to do that are necessary in wartime. One, they don't want to be inconsistent. And that's very dangerous. And then the second thing they don't want to do is not listen to their team. And I know that sounds funny. Well, what do you mean, Ben? You're saying we shouldn't listen to our teams? Yes, you can't listen to your team, because they're on the old plan, in the old structure, with the old idea. And so, you have to, for that period, until they reset, you've got to dictate. And go, no, no, we're not doing that. And then they'll start using your cultural ideas against you.

• 14:54Jorge Conde?

  So let's talk about culture. Let's talk about your words.

• 14:57Ben Horowitz?

  Yeah.

• 14:57Jorge Conde?

  How do you define culture? You know, I think people have like a feeling of what culture is, but it's a hard thing to define. So help us define culture when you mean by it.

• 15:07Ben Horowitz?

  Yeah, so I love the Samurai from a cultural design standpoint, cultural implementation standpoint. It's an amazing thing in that if you go to Japan today, like it's laden with Samurai culture. Like, how did they build a culture that lasted so long? And one of their core ideas is a culture is not a set of beliefs. This is okay, it's a set of actions. And I think when you talk about culture, that's like where you have to start. Culture is all the behaviors that you have, how you treat each other. You know, like if somebody sends you an email, do you get back to them, you know, in an hour, in a day, in a week, in a month, in three months? But you know, like that's a cultural idea. You know, do you stay at the, you know, Four Seasons or at the Red Roof Inn when you travel?

• 15:52Ben Horowitz?

  Like, all these things are cultural. When you work with partners, do you actually care about their outcome or not? Like, all these things are part of your culture. And your culture ends up kind of defining a lot more of how the organization works than your mission statement or your KPIs or any of that other stuff. Because it's like daily how you're behaving. You know, every micro decision that everybody makes is kind of a reflection of the culture. Do you come to a meeting on time? Like, does that matter? Companies that aren't on time to meetings, like meetings start like 20, 30 minutes late, like consistently. And whoever shows up on time is just like sitting there on their laptop, whatever. But that's all like behavioral. It's not a belief.

• 16:36Ben Horowitz?

  And you know, people are trying to find things in terms of these beliefs, but they don't mean anything. It's like integrity, we're a culture of integrity. Well, okay, so let's get specific. So if it comes down to the integrity with your investors promising to make your plan, or the integrity with the employee promising that like it's going to be a great outcome, or the integrity with your customer on the deal, like which one gets compromised if they come into conflict? That's the real thing. Integrity, like it's pie in the sky.

• 17:08Jorge Conde?

  Yep.

• 17:09Ben Horowitz?

  Most companies define their culture in this pie in the sky concepts that can be interpreted however you want. But it's not the idea, it's the behaviors. And so you really have to define things in terms of like, how are we going to behave in a certain situation? And so like, we have many things like this. So like, you're late for a meeting with an entrepreneur? That's a real fucking problem. Like, that's the behavior. It's that, you know? And it's underneath the guise of first-class business, first-class boy. But what does it mean? And so, you know, one of the things we believe in, we believe in like, we're not dream killers, we're dream supporters. What does that mean? Well, if you get on Twitter and say an entrepreneur's idea is stupid, you're fired. Like, that's what it means.

• 17:53Ben Horowitz?

  And it doesn't have to be like any entrepreneur. Because we're like dream builders. We believe anybody who has a dream, we're for that. I don't care if we think it's a good idea or not, we're for that. And that's our culture. But there's got to be a behavior that goes with it. You see what I'm saying?

• 18:06Jorge Conde?

  Yeah.

• 18:06Ben Horowitz?

  Otherwise, like, people will misinterpret it. They'll reinterpret it, you know, they'll weaponize it against you. You know, when you talk about culture, you're talking about how are we going to behave? How do we show up every day? How do we treat each other? What is it like to interact with us? Are people better off or worse off for, you know, doing business with us? These are the things you have to ask yourself. And that's what it ends up meaning. And it's really important, but people, because it's so weird and abstract, people don't pay enough attention to it often, yeah.

• 18:34Jorge Conde?

  Yeah, and I think that focus on the what you do is what defines the culture.

• 18:37Ben Horowitz?

  Yeah. What you do is who you are.

• 18:39Jorge Conde?

  What you do is who you are.

• 18:39Ben Horowitz?

  People misinterpreted that title a lot, by the way. I'm not a salesman, it's like, that's what I meant. It's your behaviors.

• 18:48Jorge Conde?

  Well, you know, the firm famously, in the early days, would charge if you were late to a meeting with an entrepreneur, right? As a reflection of that.

• 18:54Ben Horowitz?

  Yeah, $10 a minute, yeah.

• 18:55Jorge Conde?

  $10 a minute. And there was a...

• 18:57Ben Horowitz?

  I got like $3,000 off Andreessen on that.

• 19:02Jorge Conde?

  Well, I remember I was once late by a series of very unfortunate and unforeseen circumstances. I was two minutes late to an entrepreneur meeting. And I walk in and Ben says, "You owe 20 bucks." Okay, so I reach into my wallet. And you know, the norm was you put the cash on the table. So I reach into my wallet and I pull out and I unfortunately only had a hundred dollars. And I kind of pull it out and Ben sees it and he's like, "We don't make change, motherfucker." So those two minutes cost me a hundred bucks. Never late again.

• 19:34Ben Horowitz?

  But you learned your lesson.

• 19:35Jorge Conde?

  Yeah, I was never late again. Also, I carry small bills now.

• 19:40Ben Horowitz?

  Very good. But that's really important in that putting like your cultural values in your like annual review, it's got to be something you hit daily, right? Like you have to be reminded of it constantly. And look, that one like, "Why aren't you late?" The big thing is, "Well, why can't you be late?" Well, because it's really hard to build a company. And if you show up five minutes late, 10 minutes late, then you can say you have respect for what it means to build a company, but you don't really have respect for what it means to build a company. Because you wouldn't do that if you did. And so everybody has to know that. And if everybody in a venture capital firm doesn't know that on a daily basis, then they'll lose that because the other behavior is,

• 20:24Ben Horowitz?

  "I have the money, you need the money, you show up to me to get the money. I decide if you want the money, I feel like the big person." You know, you're the small person. Like that can seep into a venture capital firm really easy. So you need a daily behavior to go, "No, we're not doing that. No, we're not doing that. We're gonna be on time, we're gonna get back to people, we're gonna... If we don't invest, we're gonna let them know why." Like all those things, all those behaviors, counterprogram this natural kind of dynamic that can make you somebody you don't want to be. And so when you talk about culture, that's what you're really talking about.

• 20:59Jorge Conde?

  You said something to me a long time ago that stuck with me. And it was around communication for as companies scale. I think you told me like after 50 people, the systems that you had to communicate with 50 break down. And you got to have a new system. Does culture scale?

• 21:14Ben Horowitz?

  It's hard to scale, right? So, look, you don't even have to write it down or say anything if it's, you know, the first 10 of you, because, you know, like, you get along, you do stuff. Somebody does something, like, they'll feel bad because they're not part of the group. You know, you want to be part of the group, all that. But like, if you're a thousand people, like, there are many subgroups. And then, worse yet, you hire people from another company. So you, you know, you could hire people from Novartis, or you could hire people from Merck, or wherever, and they're gonna come with that culture. And, you know, like, "Oh, we got into this vein of Google engineers, you know, who can do AI stuff, and we hired eight of them."

• 21:56Ben Horowitz?

  Well, those eight people, by default, are gonna behave exactly the way they did at Google, unless you force them to assimilate into your culture. And so, a really important thing is, like, mandatory cultural assimilation in a company is very important. And not to say there won't be kind of subculture variations within, you know, like, sales might be different than engineering in many ways and that kind of thing. But there are certain things, certain tenets, certain parts of the culture, that you can't compromise on. And again, if you do, it'll slip away very fast. And so that's why, like, you need the daily reminders. You need something that people go, "Oh, I can't do that. All right, I'm gonna, you know, play it your way."

• 22:40Jorge Conde?

  Can you change culture?

• 22:43Ben Horowitz?

  Absolutely. And so, we talked about Toussaint before. To me, his greatest accomplishment was changing the low-trust culture that he had into like, a super-high-trust culture. And he did a number of things to do it, and it really paid off. So like, one of the things he did is, he made a rule, like, "If you're an officer in the army, you can't cheat on your wife." And you'd go like, "Okay, that's like weird. Why'd he make that a rule?" It was a very mercenary war in Haiti at the time, or what's now called Haiti. And so, it was almost like salary was like pillaging and raping, all these kinds of things. And he was like...

• 23:21Ben Horowitz?

  No, any commitment you make, like I gotta trust that you're gonna keep the commitment. And so you may think that's okay, but you made a commitment to your wife, you have to keep that, or I can't trust you. And like that started the culture. And it's really interesting in how it helped him win the war, because what happened was, they were famous, actually. So, you know, like I said, you had four armies, the slave army, the British, the Spanish, the French. And Toussaint's army was known for, they didn't even have clothes, half a ton, right? Like, so these other guys are like, they're in their badges, they're running through pillaging, raping. The slave army didn't do any of that. Because of that behavior, they actually got the support of the white women on the island, protected the slave

• 24:04Ben Horowitz?

  army, hit them, did stuff like that, over the European armies, which is just like a remarkable thing to pull off culturally. And there's a great story, and you can't quite verify that it's true, but I believe it's true. So Napoleon hated Toussaint and wanted to get him, and he, in fact, assigned his brother-in-law to kind of run the operation in Haiti, because he was just so furious about it. And one of the things that he said, and remember, Toussaint L'Orateur, slaves didn't have last names. So like, where did L'Orateur come from? You know, he was born Toussaint, like, where did the last name come from? And the story goes, Napoleon's yelling at his generals, he's going, "How

• 24:43Ben Horowitz?

  in the hell can you not defeat this slave?" And one of the generals says, "Look, we back him up. We have him cornered. And just when we think we're gonna get him, there's an opening." So he became Toussaint L'Orateur, Toussaint the opening.

• 25:00Jorge Conde?

  Oh wow.

• 25:01Ben Horowitz?

  I think that, you know, that's a product of the culture, like, he could always get away, because he had so much support. Because, you know, he was culture first. He wasn't, "We're gonna win and be as destructive as these guys were to us. We're gonna win and be a different kind of army. We're gonna be the kind that you can trust." And, you know, that had all kinds of side effects. So it shows you, the paranoia, can you change culture, but how powerful it is when you do so.

• 25:29Jorge Conde?

  When we look at these, at potential investments, you know, we debate competitive advantage, we debate moats, you know, is data a moat, is technology a moat, et cetera, et cetera. Is culture a moat? Is it like the ultimate moat to beat competitors?

• 25:43Ben Horowitz?

  Yeah, so I think in a business context, if you build a culture that doesn't... Create competitive advantage is kind of a little bit of a waste, right? Because, look, cultural ideas aren't for every company. Like, different companies have different cultural ideas. And I'll give you an example. So, Amazon is like very famous for being cheap. You know, like, frugality is a big thing there. And in fact, in the old days, instead of giving you like a desk from wherever Ikea, they'd give you like an old door that they got, you know, on two by fours to just show you, like, we're cheap, we don't waste any money. That's the way it is. And that was a great idea for them because their whole thing was we're going to be the low-priced leader. That was the beginning of kind of the first competitive advantage.

• 26:26Ben Horowitz?

  And you need everybody in the company to be of that culture. Now, you look at Apple, their Cupertino campus, they have like $5,000 doorknobs and stuff like that. Like, they're the opposite of cheap. But they never want it to be cheap, you know, because they're high design, like, that's their competitive advantage. So, they have a culture that facilitates that. And I think, you know, cultural competitive advantage, and like, you work at Andreessen Horowitz, we do a lot of things, and there's a whole story behind what we do and, you know, why we do it and the way we do it and all this kind of thing. Culture is not like come from a person. The whole place has to kind of agree, believe in it because there's no way, I don't see every, I'm not in every meeting, like, how am I gonna enforce a culture?

• 27:11Ben Horowitz?

  And I rarely do it anymore because everybody else does it. Like, we had an incident where like somebody said, like, some entrepreneur or company had like an obvious like security bug that they screwed up on. And one person in the firm who was new wrote a tweet like that was an obvious mistake. And 30 people get them in the Slack channel, it's like, you gotta take that tweet down. We don't criticize entrepreneurs in their like moment of weakness. We don't do that. Like, what are you talking about? I didn't say anything. So, that it kind of is, you know, what is the place about? It's the most team thing that you have.

• 27:46Jorge Conde?

  So let's switch gears a little bit, if we could. We're very fortunate here that we have pretty much the entire cross-section of the healthcare and biotech or life sciences industry.

• 27:59Ben Horowitz?

  Yeah.

• 27:59Jorge Conde?

  We've got the payers, providers, we have regulators, we have, again, biotech companies and the like. To me, one of the most interesting cross-sections that we have in this room is we have startups and we have incumbents. And for me, having been in this industry for a long time, the interplay between startups and incumbents is one of the most fascinating things about the healthcare industry. Because on the one hand, our partner, Alex Rantel, has this great quote that, I'm going to screw it up, but it's the battle between startups and incumbents is can the startups get distribution before the incumbents get innovation?

• 28:33Ben Horowitz?

  Yeah.

• 28:33Jorge Conde?

  Right? In this industry, what's interesting is when you're competing, that's true. In many cases, startups and incumbents have to collaborate, right? Because the healthcare system is so complex. And so, when you're competing, it's can I get to distribution as a startup before the incumbent gets to innovation? But when you're collaborating, you're actually renting from each other, right? The startup is renting expertise, they're renting access, they're renting the ability to get to patients, and the incumbent, in many cases, is renting innovation, right? And that's a bargain, it's not a battle.

• 29:04Ben Horowitz?

  Yeah, so I would say, the big thing that's really different about bio and healthcare from kind of regular tech is both distribution and innovation are dramatically more difficult in bio than they are in other fields. Distribution is just so much radically harder. It's, I want to say 50 times harder, just because, look, you've got, somebody can see, you've got regulators, and you've got a very complex healthcare system with everything, you've got hospitals, you've got doctors, you've got patients, and to navigate through that before you run out of cash as a startup...

• 29:46Ben Horowitz?

  Like, it's really difficult to raise enough money to do that with no help. And then on the other end, you know, innovation is very difficult because you build an organization to do drugs in a certain way, and then all of a sudden, oh, you've got AI, you've got CRISPR, you've got gene therapy, like, well, none of your processes are built around that. And so like, either you're gonna do some like very radical surgery on your big company, or you're gonna go learn how to do that from somebody. So it is very, very different in that way. And it's unlike any other kind of field that we play in.

• 30:22Jorge Conde?

  Yeah, no, I think that's right. We started this conversation with you giving us the history lesson on the birth of the Internet and how it could have been the information superhighway with tolls on it and all that. A big theme of this meeting has been AI, and we've talked about that. How do you read this moment for AI? And how would you advise founders to think about how to navigate what is an incredibly rapidly evolving terrain?

• 30:49Ben Horowitz?

  Yeah, so it's really been fascinating. I actually studied AI, you know, graduate school. That was my focus. And the one part of AI we knew wasn't gonna work was neural networks.

• 31:01Ben Horowitz?

  Because in those days, you know, you'd make one to do like OCR, you know, character recognition, and it could recognize like the letter A and the letter Q and nothing else. It was kind of the irony of AI was it was like this general purpose thing that could only do the most specific thing you could imagine. So it's really been like startling. You know, kind of started in 2012, but really kind of picked up in the last, well, you know, massively since ChatGPT was released. So I think that the main thing is when there's this big a change that's so fundamental, you have to run at it. Like, do not think you know what it is. Don't try and get a quick assessment and go, well, it's good for this and not that.

• 31:44Ben Horowitz?

  Or, well, it's good for their business, but not our business. Or it's gonna like. Top out because we're out of data or whatever. Don't jump to a quick conclusion on it. You have to get far into the details to really kind of understand its implications. And what I always find on these things is closer and the more you understand it, what you'll find is most people are doing the thing I said not to do. And so it can very quickly become, you know, what looks like an existential threat to you, maybe will quickly become a massive competitive advantage if you understand it and master it. But like the most dangerous thing is to ignore it, dismiss it, or kind of give it short treatment.

• 32:26Jorge Conde?

  Great. We're nearing the end of our time, so I'll ask you two things to close this out. One is you're approaching the 10 year anniversary of the publication of Hard Thing About Hard Things?

• 32:39Ben Horowitz?

  Yeah, I guess I am, yeah.

• 32:41Jorge Conde?

  So if you were to write an epilogue for the 10th anniversary edition for that book, anything you would say?

• 32:48Ben Horowitz?

  Well, I think I wrote it, what you do is who you are.

• 32:53Jorge Conde?

  Fair enough.

• 32:53Ben Horowitz?

  That was the big missing part, I thought, of the hard thing about hard things. So just, you know, and then part of it, it's just like the advanced version. Like culture really starts to matter at scale because, you know, like you don't have, anybody's running anything at scale now. You don't actually any longer have command and control of the company. Right, you know, Vinit is smarter than me. I can't tell her what to do, right? Like there needs to be like, we need to be part of the kind of same idea. And so like the first book was for kind of any entrepreneur. I think that for the second book was more relevant for people who got to some scale.

• 33:29Jorge Conde?

  Fantastic. Well, in the first book, you started every chapter with a rap quote. Can you close this out with a quote in your mind that, you know, gives us some sage or wisdom, captures the moment?

• 33:43Ben Horowitz?

  Yeah, so I always considered like a founder quote, the most founder quote from Rakim, who was maybe the first, or one of the kind of first truly kind of great rappers, who turned it into kind of like a party music to an art form. And his line was, "You're just a renter rapper. Your rhymes are minute made. I'll be here when it fade and watch you flip like a renegade." And he was basically anticipating, it's like, "All you guys jumped into rap because it's hot now, but like, as soon as things go bad, I'll watch you go run to something else." You know, but I'm the real guy. And I think that this is a kind of a time we're seeing like founders kind of run away. It's like, "Oh, my God. I was doing this to get rich. Now I'm gonna leave."

• 34:25Ben Horowitz?

  And only the ones who are building something important are gonna stay in a time like this. So, listen to Rakim. And it was a song called "Follow the Leader," which is also a great leadership song, one of all-time great leadership songs.

• 34:37Jorge Conde?

  Thank you, Ben.

• 34:39Ben Horowitz?

  Okay, thank you. Thank you for coming.

• 34:46Steph Smith?

  If you liked this episode, if you made it this far, help us grow the show. Share with a friend, or if you're feeling really ambitious, you can leave us a review at ratethispodcast.com/a16z. You know, candidly, producing a podcast can sometimes feel like you're just talking into a void. And so if you did like this episode, if you liked any of our episodes, please let us know. I'll see you next time.