What It Takes to Win as a Founder | Ben Horowitz

What does it take to build a company when AI is changing the rules this quickly? Ben Horowitz argues that technology may make companies easier to start, but the hardest parts of entrepreneurship, making decisions under uncertainty, building momentum, and managing your own doubts, aren't going away. Speedrun's Andrew Chen sits down with Ben to discuss why AI feels different from previous technology shifts, whether billion-dollar companies can be built with tiny teams, and why Ben thinks the application itself may eventually become less important as agents work directly against data. They also get into defensibility in AI, what founders should look for in an investor, how venture capital is changing, and why the best entrepreneurs aren't defined by a lack of weaknesses, but by having a strength or insight that's genuinely exceptional.

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

• 0:00Ben Horowitz?

  You're not a great entrepreneur unless you feel like you don't have a choice but to build a company. You don't take out a competitor with an equally good product. You need something dramatically better. We went public on $2 million in trailing revenue. $2 million going to 75, that was the forecast. That's clearly a bad idea. The doubts are going to be there. Ignore the doubts. The worst doubts aren't the ones people put on you. It's the ones that you put on yourself. If your guts aren't boiling, you're not even trying.

• 0:28Erik Torenberg?

  AI may make it dramatically easier to build a company, but it doesn't make being a founder any easier. In this episode, Andrew Chen sits down with A16Z co-founder Ben Horowitz to talk about what AI changes and what it doesn't about entrepreneurship. They discuss why AI companies can reach massive audiences faster than previous technology waves, whether billion-dollar businesses can be built with timely teams, and what actually creates defensibility when everyone has access to similar models. But they also get into the part of company building that technology can't automate, making hard decisions when you don't know if you're right, maintaining confidence through uncertainty, and continuing to bet on yourself when the doubts inevitably show up.

• 1:12Andrew Chen?

  I don't know if you remember this, but many, many years ago, when I first met you, so I visited Ben at the LoudCloud turned then Opsware offices. Every conference room was named after a hip-hop artist. I remember that and I was like, all right, this is going to be a unique guy, unique culture. And I remember asking you, since you were about to sell the company to HP, what you were going to do next after. And I remember you told me that you were going to retire next. That's what you said.

• 1:45Ben Horowitz?

  I was tired.

• 1:46Andrew Chen?

  And so the funny thing is, of course, Ben has done exactly the opposite of that, like literally the opposite of that. So my first question is like, yeah, what happened? You decided not to retire. You decided to do the opposite. Like, how did that come about?

• 1:59Ben Horowitz?

  I had another idea. Like, that's a lot of what life is about, is getting your ideas out. So, you know, I had an idea. And I think that's what makes an entrepreneur, right? Like, you have an idea and you believe in your idea and you want to get it out. You know, as an entrepreneur, that's who I am. That's what I got to do. Well, I don't have a choice at that point. So you're not a great entrepreneur unless you feel like you don't have a choice but to build a company. Because otherwise, you're going to quit anyway, so forget about it.

• 2:28Andrew Chen?

  You've seen so many stages of the internet. We've had desktop software, then the web, and then mobile and cloud, and then now this AI thing. What is unique and special about AI that makes it maybe similar or also just different to some of the other stuff?

• 2:43Ben Horowitz?

  So the thing that's very reminiscent of the early days of the internet is when the internet first happened, like every day you would look out on the internet and there would be some very new awesome thing that was going on. And that's definitely the case with AI. So that's what's really similar, I think. Everything else is kind of different, though, in that, you know, AI is... So if you think about the history of computing, the history of the industry, it's always been networks and computers. And so, you know, we had microwaves and integrated circuits and, you know, mainframes and SNA and PCs and LANs and, you know, smartphones and the internet.

• 3:25Ben Horowitz?

  And they're very different technologically and have very different adoption curves, but then they really enhance each other. And I think in this era, AI is the new computer, like very clearly. You know, it's a probabilistic computer where we, you know, previously had deterministic computers. And so, you know, in that way, it's very different than the internet, which was definitely a network. And networks have these adoption curves that can start, like, can get very high on the hype cycle too early because there's not enough people on the network. You can see where it's going, but until it gets there, it's not there. And so particularly with the internet, if you go back to kind of the great dot-com crash

• 4:08Ben Horowitz?

  that led to the great telecom crash, what happened was, you know, there were... Everybody, every investor was like, oh, this is the biggest thing ever. It's, I'm going to put all my money into it. But the truth was, there was only like, at Netscape in 1996, we had 90% browser share and we had 55, you know, million users. And so the whole internet wasn't that big. And then half of those people were on dial-up. You know, so you could build, you could go build an internet app and it would cost you a lot of money because you had to use some microsystem servers and EMC storage and all this. But there were, you know, like you could get to like 30 million people or something. So good luck with that. That's not really a business. And so the whole thing kind of collapsed before it rebuilt.

• 4:53Ben Horowitz?

  But eventually, it was going to get there. Whereas with AI, like when it works, instantly, you know, almost instantly, you can get to a giant number of users. We've seen companies grow faster than any companies we've ever seen because you don't need more people on the network. You know, like, that's not a thing. The internet's already here. Everybody's on it. And all you have to do is put your thing up and they can get to it. So it's very different in that way.

• 5:18Andrew Chen?

  One of the amazing things that I think everyone in the industry is so shocked by is how good LLMs are at writing code.

• 5:27Andrew Chen?

  And, you know, who would have thought? And so there's this idea that maybe building software, writing software, becomes as easy as creating content on the internet. There's the idea that maybe you end up with a bunch of billion-dollar companies being built with, you know, much smaller teams. Maybe it becomes even further geographically democratized or the, maybe there's going to be solopreneurs with, you know, billion-dollar, you know, all those variations. Do you agree with that? What risks do you think come with that? What, you know, do you think that's a lasting trend? Or do you think you need to still scale businesses ultimately?

• 5:58Ben Horowitz?

  Well, I think we're going to see. You know, it's funny because I think Ray Kurzweil predicted like everybody was going to be a solo entrepreneur. Like, it could get to there. I would say, you know, like Instagram was 13 people and sold for a billion dollars. But like Meta's got like a ridiculous number of employees. You know, would Instagram have just been that many employees if they hadn't got bought by Meta? Probably. And so I think you can get to a giant audience and a ton of money with a very few number of people. Like, I think that that's for sure true. And then the question is, can you sustain it? Or will you get taken out by somebody who's kind of doing more things?

• 6:38Ben Horowitz?

  I would tend to think, like, just historically, that, you know, people always want more. Like, the standard just goes up in terms of what people want. John Maynard Keynes had like this very famous, or it was his worst paper, but he had this paper that he wrote in, I think it was like 1934, 35, which basically said, as soon as people's needs are met, so once they had like shelter, food, and clothes, people would start to work maybe no more than 15 hours a week. And that's your now to be spectacularly wrong because, of course, then all of a sudden, everybody needed a car. And then everybody needed a car for everybody in the family.

• 7:23Ben Horowitz?

  And everybody needed a television. Then everybody needed a television in every room in the house. And now everybody needs a smartphone and everybody needs air conditioning. And none of that stuff even existed when he wrote that. And so now people are working like, I'm sure nobody here is working 15 hours a week.

• 7:42Ben Horowitz?

  I think like what people need does tend to expand almost infinitely. So to fulfill that need, sometimes you have to build a bigger company, but we'll see.

• 7:51Andrew Chen?

  Software gets so easy to build that you kind of have like fast fashion, SaaS. You know, like you kind of get copycats all the time that kind of get cloned. The other version that has kind of been predicted is sort of, you know, sort of bespoke software. Maybe everybody uses a different, slightly different, you know, version of software that gets generated, that's instantiated at basically at runtime, that's personalized to you. I mean, this is all very sci-fi, but like, you know, maybe we'll get there.

• 8:19Ben Horowitz?

  It's funny how humans are, though, because like even in fashion, we do have fast fashion. I'm looking at a lot, a lot of people are wearing kind of similar stuff.

• 8:30Ben Horowitz?

  And so I'm not saying that that'll totally go. The other question on kind of software is like, how much will be like what we consider software today and how much will just be like, okay, well, just use the AI differently. And it won't even be an application.

• 8:44Andrew Chen?

  Right.

• 8:45Ben Horowitz?

  Just ask the AI to do it. And so I, I think that's a little bit TBD, but I, I think the paradigm of an application may be the thing that fades the most. You organize your data and then you have agents that you ask to do stuff against the data.

• 9:01Andrew Chen?

  Right.

• 9:02Ben Horowitz?

  And that's how business applications work and personal applications work too.

• 9:06Andrew Chen?

  How, how do you think about defensibility in kind of especially for AI apps? You know, there's sort of an argument that, hey, a lot of the products right now, they don't really have very much in the way of, you know, network effects, maybe they're GPT wrappers, you know, there's all these kinds of critiques. And, and so what, what do you think of as kind of, you know, the, the durable advantages that, um, you know, founders should be?

• 9:28Ben Horowitz?

  GPT wrapper thing was always a bit of a dumb idea, um, in terms of not, not to build one, but to call it that. And what I mean, so if you go back, if you're as old as me, you remember when relational databases came out and relational databases, right? Oh, you've got this declarative language and then you just tell the database what to do and then it does it. And so why the heck would you need SAP or, you know, you know, in those days, Siebel or Salesforce or whatever, like that's ridiculous. There's nothing there. It's just a RDBMS wrapper. But of course that turned out to be wrong.

• 10:07Ben Horowitz?

  And when I look at the applications that are built on LLMs today, they themselves have many models. You know, I think cursors, this is 14 models now, like, like fairly sophisticated models on top of, you know, the kind of foundation model. And so I don't think they're right. Like I think they're pretty sophisticated kind of models and applications and so forth. And those models have a lot of data and understand, you know, like if you're talking to like super high end programmers all day about how to design their program, that's a lot of information into your system and into your model that nobody else has. And so that becomes, I think, part of the differentiation.

• 10:49Ben Horowitz?

  And then possession is nine tenths of the law and like competing on software. So if you get the customer, like how much better is ChatGPT than Grok right now? Like if you were starting from scratch, it's, it's like kind of marginal. It's not like a massive differentiator and it's not a network effect yet. It's like just the fact that you're using that one, I'm used to it. It's not even a complicated interface. You're just talking to it, like to switch it, but it doesn't matter. If that's what you're using, that's very likely what you're going to continue to use. And to get you off that, you need something dramatically better. So like, you don't take out a competitor with a equally good product or a slightly better, it's like a 10 times better product.

• 11:32Ben Horowitz?

  You know, if you get the, if you take the market, I think that's, that's probably the most obvious, most significant thing. And then of course with AI, if you take the market, you do get more data about your particular kind of user.

• 11:45Andrew Chen?

  Yeah. I mean, it seems like maybe the market is just gonna naturally evolve in phases and, and you know, we're kind of in this like land grab phase where it just, the, the most important feature is the it works feature. Right? And then we'll get to the unique UX innovations and to the, uh, to all the, you know, collaboration network effects features over time.

• 12:05Ben Horowitz?

  You know, when you have a new computer and you can solve problems that nobody could solve before, then that like, that's like pretty interesting regardless if there's a network effect. I think in the, in the network era, which is the internet era, that the network effect thing became super powerful for a lot of things and it probably will again. But yeah, I think for right now, and it'll be interesting to see with like the rise of like crypto is probably a money network for AI. So how does an agent pay another agent or get money? And, you know, cause it turns out AIs aren't allowed to apply for credit cards. So how, how does that work? And so, you know, does that become a crypto network?

• 12:49Ben Horowitz?

  And then do you have network effects from value exchange?

• 12:52Andrew Chen?

  Right.

• 12:53Ben Horowitz?

  And that kind of thing, I think that'll start to emerge and, and other ideas like that.

• 12:58Andrew Chen?

  Yeah, I think on the phases too, it's so interesting to see how the backgrounds of founders changes so much because, um, you know, for all, all the folks that were around then, it was like, you know, when the web first came out, you literally had Stanford PhDs building Yahoo, like a directory of links, right? Like that's, you know, cause you had to write your own web server, you had to write your own info, you know, like the whole thing.

• 13:20Ben Horowitz?

  And then many years. There was no such thing as, yeah. I mean, in those days, there was no application servers, no load balancers, no, it was very hard to scale software.

• 13:28Andrew Chen?

  That's right.

• 13:29Ben Horowitz?

  For that size. And nobody ever had built, like the biggest piece of software, like the audience was however many employees they had at IBM. And so nobody thought about, okay, I gotta build something that, you know, 500 million people are gonna use.

• 13:40Andrew Chen?

  That's right.

• 13:41Ben Horowitz?

  That wasn't a thing.

• 13:41Andrew Chen?

  That's right. And then it took like 10 years to get to the Lamp stack and, you know, kind of, you know, non CS major, just coders. And then eventually like Airbnb, the kind of design dominant, UX dominant people sort of, you know, building the most interesting application. So you could, you know, maybe make the argument that all these AI apps will follow some kind of a similar trajectory. You have tons of PhD CS talent right now. And then, you know, it may be, maybe years before. I mean, it's very interesting, obviously, you know, these days, like I think the mainstream developer is actually able to build AI apps in a way that was not true five years ago.

• 14:16Ben Horowitz?

  Yeah. And like, you know, and when do things plateau is, uh, is a big question. So right now, like, you know, and so the, the language models are plateaued quite a bit in terms of, um, you know, just the pure LLM. And then the, the reinforcement learning side is scaling. So like code is getting way better, but the regular kind of, you know, chatbot is not that different. How many more AI breakthroughs will we get? And that'll, you know, every time there's a breakthrough, that's an architectural change. It'll change the entire application layer, the whole infrastructure layer. You know, when will those plateaus happen? When will those breakthroughs occur? And that's kind of how the opportunities line up.

• 14:57Andrew Chen?

  You know, you could kind of make the argument that as the tech landscape has changed, like having social media, having, you know, podcasts and the whole thing, that's really changed the VC industry. And maybe these, you know, the, the, the landscape and the way that you reach founders is kind of very intertwined. And so in this next phase of everything that'll happen with AI and maybe, you know, people being able to build big companies with small teams and that kind of thing. How, how do you think this might affect, you know, venture as an asset class or as a, you know, as, as a sort of just the VC industry as a whole?

• 15:30Ben Horowitz?

  Yeah. So, so it's funny, cause the VC industry kind of was the same from like 1970 to 2008, 2009. We started in 2009, kind of a little bit, the way VCs were set up, they were kind of built not to change. And that's just kind of how it rolled. And so companies got easier to build with, build with the internet. Like that, that was the first big change is that, like if you're talking about building some micro systems or tandem computers and so forth, like before you even sold product one, you needed to build manufacturing, you needed to build professional services, you needed a kind of direct sales force and so forth like that. That was a pretty complicated just corporation to build.

• 16:15Ben Horowitz?

  Now, you know, and then like, if you fast forward to Twitter, you know, five people with laptops and AWS and very different. And then, okay, with AI, there, there's kind of the next step of that. So I think that, um, it's almost certainly going to change the VC landscape again. You know, in the old days, like the, you know, you could only do so many, every bet was very expensive, it's hard to do. They, they were very likely to fail and so forth. And then kind of the hit rate, at least for the promising companies went up. So that's a big change. And then kind of how, um, you know, like a big value in a VC is, okay, you have company

• 16:58Ben Horowitz?

  A and company B, and they have both the exact same idea and both really good teams, which one wins? It turns out that you're kind of traveling as an entrepreneur through this complex adaptive system, you know, path dependent system. And so whoever gets more momentum ends up winning. And so a big role of a VC is to kind of help you get that momentum. So, oh, I raised money from the best VC, therefore like smart engineers will join my company and not their company. So then I have better engineers and I have a better product, then I pick up more customers and then like I have more money and I get raised the next round faster and away I go. And that's how you win. If there are like just dramatically more companies or they don't need as much money

• 17:43Ben Horowitz?

  or that kind of thing, then that, that'll be an interesting change. And, but I, I think like a lot of it is still, like a lot of the function of VC is gonna be, how do you give momentum? And that's like momentum and, you know, how do you help them build a higher quality company? How do you make that company more attractive to customers and employees and follow on investors and so forth? And that, that part will be the same, but I think that everything underneath the feature set is going to be different.

• 18:13Andrew Chen?

  Well, and we often encounter companies that are, you know, wildly profitable or doing very well.

• 18:19Ben Horowitz?

  Yeah.

• 18:19Andrew Chen?

  But they still, they still want to work with, you know, VCs for, for, yeah, for all, all the reasons that you're.

• 18:25Ben Horowitz?

  Yeah. Cause you have to win. I mean, like the, the building, uh, you know, the greatest thing is kind of having a great idea that makes the world a better place and doing something larger than yourself and building a team, building a company. Like if that works, like there's nothing better than that. Like it's, it's so awesome. But if it doesn't work, like that's like very high degree of misery. Like it's just tough. Like you hired all the smartest people you know, like you went out and raised money. Your mom invested in the company. She's pissed. You know, like it sucks. It really does. So you, you know, anything to kind of help you succeed at that, I think is always going to be attractive.

• 19:05Andrew Chen?

  So most of the speed rent companies here in October, they're going to be doing their demo day in front of a thousand investors in San Francisco and they're going to be kind of speed dating a ton of angel investors and seed funds and all that. Do you have any tips and thoughts on how to evaluate? You know, who, who, who the best partner might be at, at that seed stage?

• 19:27Ben Horowitz?

  The thing that you always don't have is you don't know how to do that CEO job. No founders we work with who haven't been CEOs of giant companies like know how to do that. And it's a, it turns out to be like a really complicated skillset because you're, you know, you have to select the right talent. Sometimes you're selecting talent for jobs, you know, like I, I had never been a CFO. I didn't know what the hell that was. Like what's a control structure? What's a, like, how do you talk to Wall Street? Like, how would I know any of that? Right? Like, so, but you still have to hire that person. Which I always liken to, it's like hiring a Japanese interpreter. If you don't know Japanese, it's like, they all sound good.

• 20:05Ben Horowitz?

  And so like, like you have that problem and then you've got, you know, like, and everybody's got their own career ambitions and, you know, and then, you know, Mark Zuckerberg is offering your people a billion dollars. Like, so it's a really hard job and you don't know how to do it. A lot of the times, like, when I watch founders who kind of fail at kind of doing that job, it always comes down to a crisis in confidence. So

• 20:34Ben Horowitz?

  you know, you don't know what you're doing. You know, it's hurting the company, but yet you still have to make decisions. Having the confidence to make that decision when you don't know what you're doing. And you don't know if that decision is right, but not like hesitating. And then, you know, when you hesitate, it makes the company nervous. It slows everything down. It creates politics because people try and fill that void. So how do you do that? How do you kind of get to the right confidence level where you can make high quality decisions on time? If there's an investor that can help you do that, like that's invaluable. So, you know, those are probably the two things I'd look for. Somebody who can really give you momentum in hiring and getting to the next round and all that. And then somebody who you can work with, who goes, wow, like this person

• 21:19Ben Horowitz?

  not only knows what they're doing, but like is helpful. Cause like every, by the way, every angel investor, every VC will give you advice, even if they, like motherfuckers who have never been CEO. I see telling people how to be CEO and they give them these crazy ideas. You know, like you have to build a whole executive team right now. And it's like, what's, what are you talking about? Like that's going to wreck the company, you know, but they have, like, they have great confidence with their advice. Well, my favorite piece of advice I got is a, and I got it like 27 times. I'm like, look, here's the key, you know, like, hire eight players.

• 21:53Ben Horowitz?

  And I was like, okay. It's like, I, like, I, yeah, my plan was to hire a bunch of fucking morons.

• 22:00Ben Horowitz?

  But now I'm going to hire eight players. So like, you know, that's not a, it's just like the, the level of like not good insight that's out there is high.

• 22:12Andrew Chen?

  Well, and, and I really think it's, it's part of a strength of the Bay Area tech ecosystem that over the last 20 years, it kind of went from, you know, like a lot of VCs, especially out in, out in Europe and other places are often really like former finance, you know, folks. And that's kind of like all, like that's the, really their background. And they're often coming in from maybe private equity. And so then they decide, oh, I'm going to also, also do some VC. And one of the big strengths, I think of the Bay Area is that you end up working with a lot of former operators. And the whole industry has kind of moved towards that model of, of, of, you know, trying, trying to mostly get investors that, that have done something, mostly. Not, maybe not.

• 22:55Ben Horowitz?

  Not universal and then different levels. There are levels to the game.

• 23:00Andrew Chen?

  For you, how has A16Z changed and evolved? You know, kind of the biggest, biggest beats of kind of evolution. And what are you most excited to, to build at the firm over the next decade? I know it's a long time, but.

• 23:13Ben Horowitz?

  Yeah. I mean, so when we started, like the idea, the idea was very simple, which was, you know, the VC product we thought was very good for investors, but not nearly as good for entrepreneurs in that. The, the kind of model was, okay, you get like a very smart person on your board, not much more than that. Like they, they, you know, they had a network, but it was that person's network. You know, a lot of them were very smart at product, but product advice runs out, you know, really in the first three months, because you know, when you're doing the initial kind of product. And then once you get past that, the knowledge gap between you who's been working on it like all day, every day and a person showing up at a board meeting, be it once a month or once a quarter or whatever.

• 23:58Ben Horowitz?

  It's just so vast that, you know, it's hard to get good advice in that way. You know, I had thought of it as like, okay, as a founder who had tried to build a company and build a company, like what did I actually need? And I was like, well, I could use a whole lot more than that. And, and the biggest thing, you know, and I keep, I go back to it is just like confidence. And so like, could I, like, what would make you feel like a CEO? And so like, we did a lot of things. So like, how do you make somebody feel like, it's well, what if you could call like any senior executive who might buy your product, like at FedEx or Citibank or wherever, like, could you do that? So we built like a whole team to make it easy to do that. And then, you know, how could you

• 24:40Ben Horowitz?

  like know how to hire an executive and like, what was the process for doing that? And so like, can we, we built a team to kind of help with that. Like, how do we introduce you to like five great CFOs and you can just sit down with them and say, hey, what would you hire in this position? And like, why would you do that? And how would you test for it in an interview? And, and that kind of thing and kind of like skill you up. So you knew how to do the job. So, so, so that, that was kind of like the first idea. And then, you know, as we got into it, one of the things, you know, and Mark wrote about it in, I think 2011, he said, look, software is going to eat the world. Our takeaway from that was, okay, if that's going to happen, then kind of VC

• 25:24Ben Horowitz?

  up until that point was this idea that there were 15 companies in a given year that would ever get to a hundred million in revenue. And you're, the whole idea of the firm would be to kind of get into as many of those 15 as you could. But we're like, well, if software is going to eat the world, that's not going to be 15. That's going to be 150. And so how do you actually scale a VC firm? You know, kind of without losing all the things that make it a VC firm, like very, very personal, but can scale up. And so that was kind of the verticalization idea. So we're like, well, can we build like a firm that's better than Andreessen Horowitz original in infra, in apps, in crypto, in bio, and, you know, in games and

• 26:07Ben Horowitz?

  you know, and kind of defense and public safety and that kind of thing. You know, that was kind of like, I would say quite the major change in the firm. And then, you know, the, the kind of thing that we've run into now is like, companies are getting very big as private companies. And there's a whole nother layer of stuff that they need how to do. How do you go international like efficiently? You know, can we walk you into Japan and get you your first three deals? You use our brand and we'll enable you to lever off that so that you can win. You know, how do you add channels? Cause you have to be kind of multi-country, multi-channel, multi-product as you go.

• 26:49Ben Horowitz?

  How do you do all that? And what can we as a firm do to enable that kind of thing? So we're, you know, playing with a lot of those ideas and, and other things that'll hopefully make us better.

• 27:00Andrew Chen?

  Well, I think we have maybe 25 minutes to do some audience questions.

• 27:06Ben Horowitz?

  Yeah. So I think the biggest thing that I have concluded that I'm feeling pretty sure about is AI kind of video and entertainment and so forth is a new medium. So there was kind of like plays and then there was film. And then there's going to be AI film. And I think it'll be as different from film as film was from plays. So in the beginning of the movie industry, they would just film plays. And, you know, they like fix camera, do the play and we'll record it. And that was the idea. And then it obviously changed dramatically over the intervening decades.

• 27:48Ben Horowitz?

  And I think that's going to happen. I think that's like in the beginning, it'll just be using AI to kind of generate certain scenes in movies and this kind of thing and so forth. But I think what's going to happen is there's going to be a whole new set of creators using the new medium to do things, you know, like it's interesting. Like if you think about it in the context of social media, social media is like storytelling where the main character is always you, right? So that kind of carves out a lot of people who are either less comfortable or less narcissistic, or if you want to say, who doesn't want to be the main character, you know, all over social media, like that kind of is a constraint. With AI, you know, you can have characters that aren't you and be telling stories.

• 28:33Ben Horowitz?

  So it's a new storytelling medium is the way I would think about it. And so I think it's a mistake to try and just completely replicate the movie experience or the TV experience or that kind of thing and kind of move it. And like, it may start off being more interesting and like podcasts and like, how do you jazz up podcasts or whatever? But I, I don't know exactly, but the one thing I'm pretty sure about that we, I don't think we really covered in that podcast was this is a new thing. This isn't the same. This isn't just generating the old thing automatically. This is a new thing. I think a lot of it, you know, for me, it was always like, can you bring the focus back to,

• 29:15Ben Horowitz?

  you know, what you can do. Cause like the, the thing that overwhelms you is what you can't do and like all the problems and everything. When I think about like the decisions I made as CEO, the ones that I'm most proud of and would have cost us most weren't actually difficult decisions. They were just difficult to make. And that was like a psychological thing. So for example, when we went public, like we went public on $2 million in trailing revenue, trailing 12 months revenue, $2 million, like IPO, $2 million going to 75. That was the forecast.

• 29:53Ben Horowitz?

  That's clearly a bad idea and we were only 18 months old, 18 months from founding, 2 million trailing revenue, like we went public. The other choice, and we had kind of gone through, we talked to like literally every investor in the private markets, was bankruptcy. So that was obviously a worse choice than going public. To be able to do such a bad choice like going public and not hesitate, just go, okay, I'm going to do it. That was the, like, that was the magic of that decision. By the way, like I saw so many of, like, I can't tell you how many companies went bankrupt at that point because they didn't go do that. Like, a lot of it is like, okay, just do the thing you can do. And it may look horrible, but don't, you know, you gotta trust your eyes.

• 30:38Ben Horowitz?

  You have to go do it and not hesitate. And I see like this is where, you know, kind of people really get into trouble with their psychology. So they'll be like, oh my God, you know, like, I kind of know that we need to re-architect the product, but like, that's going to make it very hard to raise money. That's gonna, you know, we're gonna miss our numbers. We're gonna like not have any features and this and that. But I know we're wrecked if we don't. So then they hesitate and then they, then they're gonna be wrecked. And so it's like all these really, or like something simple, like I really need to fire the head of sales, but like, I don't even want to have that conversation.

• 31:18Ben Horowitz?

  So I'm gonna look this way, you know, and that's, you know, running at the problem like, yeah, it's gonna be bad. You're not gonna have a head of sales, like you may whip the quarter, there's gonna be nobody to blame but you, blah, blah, blah, blah. All that is true, but it's not as bad as leaving that motherfucking place, right? Like, so you gotta go do it. And so I always kind of came back to that, that what can I do? And I better do that right now. And that's a lot how you work your way through those very bad. And the worst thing is like, you think about like, what are all the implications of it? It doesn't matter. It's like, is that the best choice I have? If that's it, I'm doing it, you know? Like, if I think about all the things that are gonna happen to me when I went public,

• 32:00Ben Horowitz?

  and they all did happen to me, by the way, like, I would have just shot myself in the head. I mean, that was, that was a bad time. When you're CEO, when you're founding, you're the boss. So like, you know, you, you do have to keep that in mind. So like, I do think that nobody's gonna train you to be a CEO. Like, there is no training for that, you know? And actually, the reason I wrote the book the way I did was, it does tend to be very situation-specific. I spent a lot of time on like, this was my situation. And the reason for that was so that people could go, okay, if you're there, then you do this, as opposed to here's the five steps for being a CEO. There are no five steps. I think that what you look for in a mentor is not, it's not really instruction.

• 32:44Ben Horowitz?

  It's like somebody to have a conversation with who knows what they're talking about. You know, when I talk to CEOs, I'm just like, okay, like, what's on your mind? What do you work on? That kind of thing. You know, we get to like something that they're stuck on. And then I, like, the good thing is I've made all those mistakes before. So like, I can go, okay, like, this is how it went. As an example, like, I had CEO and he said, well, you know, like, I need your help on this, you know, my, how would you think about this? You know, my CTO is an asshole. And I said, okay, you know, like, and there's a lot of ways you could react to that, right? You could imagine how like many advisors react to that. And I said, well, you're not asking me if you should fire him because he's a good CTO, right?

• 33:28Ben Horowitz?

  Like, I mean, like, everything I've heard from you is he's like executing way better than everybody you've had before. He's like, yeah, yeah, I'm not gonna fire him. So I said, you're, you're really asking me, how do you talk to him? And he goes, yep. And I said, well, because you don't want to lose him. So you don't want to like say something and piss him off, you're not gonna fire him, but you don't want him to be an asshole. So like, how do you deal with that? And I said, well, tell you, tell me why he's an asshole. And he says, well, you know, the other day, he was talking to a young woman in finance and he made her cry. And I was like, okay, that's kind of asshole-ish. And I said, look, here, here's the way I would have the conversation if I was you. I'd just sit him down. I would say, look, you're a great director of engineering.

• 34:13Ben Horowitz?

  Amazing, ship products on time and so forth. But you're not like really effective as a CTO and like, at some point, I'm gonna have to hire somebody who is an effective CTO until you can do that. And by that, I mean, like, you can't just work with your own people effectively. You have to work with other functions. You've got to orchestrate the company to get the technology part of the company what they need. And if you go into a meeting and make like a little kid cry, like, you're never getting what you want out of her or her boss or her boss's boss, like, like, that's just totally ineffective. So like, if you want, like, we can work on helping you get more effective or like, like, that's gonna happen one day. And, and so like, that's the kind of conversation.

• 34:58Ben Horowitz?

  I know it's a lot of detail, but you kind of want somebody who can have a conversation like that, where you can go, okay, like, that's actually like some functional advice that makes sense that I can use as opposed to just no asshole rule, you know, or like some dumbass shit that they fucking heard at Harvard Business School. It's very situational, like, everything is situational. Everything is your company, your product, your people. How do they work? Can you, can you get to that? And so like, I would like to just, you know, people who you know, who you can talk to about that, they could be a peer. You know, it doesn't have to be like an old person like me. It could be like somebody who's just one step ahead of you. Yeah, so, you know, everything's so easy now compared to when I was building LoudCloud.

• 35:43Ben Horowitz?

  Pushing the company forward, you know, gets harder in some ways because you have a lot of people who've been there a long time, who did a good job, you know, a great job at one time, but maybe like, we're in a new era that's passed their skill set. Venture capital is very like that, you know? We don't invest in any consumer internet companies anymore, you know, like mobile apps or, you know, SaaS companies. Like, there's a whole category of experts that we've had in a firm that, that expertise is no longer relevant. So if they don't become, you know, world-class experts in something else, like, that's a problem. The whole way we did marketing originally, you know, that, that doesn't really work well for most companies and it definitely can't work for us because we're too big,

• 36:27Ben Horowitz?

  you know, like, nobody's writing a puff piece about Andreessen Horowitz. They're, you know, like, we're, Rupert Murdoch could be easier to get a puff piece than we could, like, it's that kind of thing. And so like, that's not gonna work. So how do we market? And that's turns out to be like a whole new skill set and going direct and like, you know, building, you know, a massive podcast network and presence and so forth. And so making those changes and just going, look, you know, you did a great job, but now we gotta go this way is probably the, you know, the thing that I enjoy the least, but you know, you gotta do it. Too many times, I think people look at what the technology is as opposed to what it's going to be.

• 37:08Ben Horowitz?

  That's tricky because sometimes you can extrapolate things that shouldn't be extrapolated. So like a big example of that is, you know, when we looked at 3D printers, everybody was like, oh my God, this is the future. You're gonna be able to print anything. But it turned out like 3D printers don't follow Moore's law. So more compute power didn't make them better. Like, you had to get into like really complicated material science, which doesn't kind of follow that trajectory. So actually, 3D printers weren't gonna change that fast or that much. So it was a little harder to kind of build a new company that was gonna be giant than them. People looked at AI and they're like, oh, well, like, fine, but it hallucinates on this and that. And we're like, yeah, like, that's not that tough a problem to deal with.

• 37:53Ben Horowitz?

  And sometimes the hallucinations are good. If you go, okay, these things that seem like a problem aren't really a problem. Or like, you know, with the smartphone, it's like, well, this thing, great. It's a bad phone. Like, if you look at the 2007 reviews of the iPhone, it's a bad phone. It's a way worse computer than normal computer. The keyboard is much worse than a BlackBerry. Like, it's like, and you can go through all the things it was bad at. There was a camera and a GPS in your pocket, right? Like, so you can't build Uber on a PC even now, right? Like, so you only need one feature or one thing that kind of makes a breakthrough and creates a new future. Like, it just has to be unbelievable at something.

• 38:38Ben Horowitz?

  It doesn't have to be better than the last thing at everything. And so a lot of times when we think about it and we think about entrepreneurs, we always say it's like, we're not looking for lack of weakness. Like, every, there's something wrong with every entrepreneur. And like, you know, including all you, including me, like, there's something like horribly wrong. But that's not the question. The question is, are they world-class at a thing? Are they the best in the world at something? Do they have a secret that nobody else has? Do they have something really special? So you're always looking for like, what's really special? What's the magnitude of the strength? Not like, do they, is there something wrong with them? And, and, and I think the future is a lot like that. Like, how strong is the strength?

• 39:22Ben Horowitz?

  How, how different is this technology? Oh, we now have a computer that you can talk to in English? Like, that's kind of important, you know? Like that, like that, that's a, that's a hell of a thing.

• 39:33Erik Torenberg?

  Any, any parting words of wisdom in, in many of that kind of year one projects here?

• 39:38Ben Horowitz?

  Yeah, I would just say this, congratulations on betting on yourself because that's what this is all about. You know, your job is to like make your bet pay off. So like, you believed in yourself enough to do it. You gotta, there are gonna be many times when you question that bet and you question that belief, but like, that gets you nothing. Don't worry about it. Like, it's, it's a nothing. You just gotta do your thing and keep going and focus on what you can do and not worry about, you know, like, the doubts are gonna be there. Ignore the doubts. And the worst doubts aren't the ones people put on you, it's the ones that you put on yourself. Every entrepreneur has them. Like, there's nobody, you know, I spent a lot of time with Mark Zuckerberg when he was

• 40:23Ben Horowitz?

  like 22 years old and like, he had tremendous doubt about whether it was gonna make it. So that's not, everybody has that. It's not what you feel, it's like what you do. And so just focus on what you do. Like, you're gonna feel scared. If your guts aren't boiling, you're not even trying at this thing. Don't worry about it.

• 40:46Erik Torenberg?

  All right, what a way to end. Thanks for listening to this episode of the A16Z Podcast. If you liked this episode, be sure to like, comment, subscribe, leave us a rating or review, and share it with your friends and family. For more episodes, go to YouTube, Apple Podcasts, and Spotify. Follow us on X at A16Z and subscribe to our Substack at A16Z.substack.com. Thanks again for listening and I'll see you in the next episode. 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.

• 41:29Erik Torenberg?

  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.