← Long Strange Trip: CEO to CEO with Brian Halligan
Loading summary
Transcript158 lines
- [00:00]
Ben Horowitz
I think really good companies, the very, very, very best companies, tend to have founders and CEOs who ask pretty aggressive questions. Zuckerberg, Larry Page, those guys who have kind of gotten all the way to the mountaintop, they're pretty blunt. If you're running away from the truth to preserve feelings, that's a very dangerous thing in a tech company. And the kind of corollary to that is it's really important that, like, bad news travels fast, that know if something's wrong, that as CEO, you find out about it. And so you need that bluntness.
- [00:51]
Brian Halligan
Hey, everybody. Today's guest is Ben Horowitz of A16Z fame. Few reasons I wanted to have him on first. I wanted to get the behind the scenes look on why Andreessen passed on HubSpot back in the day. And there's a funny story behind that. He's seen so much. He's backed some amazing CEOs and some CEOs that went down in dust. Like, what do they have in common? What are the great ones? What do they do? What do they. Like, what's the patterns there? And same with the ones who failed. I read his book like a hundred years ago when I was running HubSpot. I thought it was really good. I think he published it in 2014. I wanted the updated. You know, what's changed since he wrote the Hard thing about hard things back in the day? The convo, I think, is really good. One of the things I've always liked about Ben is he is completely unfiltered and gets after it. I think there's a lot of nuggets in here. I'll come back at the end and give you my summary. You probably don't remember when we first met.
- [01:48]
Ben Horowitz
Can I, Can I. Yeah, remind me.
- [01:50]
Brian Halligan
Can I tell you about it? It's. It's stuck in my mind. Kind of a long story. HubSpot pitched you on the series D.
- [01:56]
Ben Horowitz
Okay, I remember that. Yeah.
- [01:58]
Brian Halligan
Three of us came in for the pitch. Our very newly hired COO, J.D. sherman, myself and my co founder at Dharmesh. And we walked in the room, we had a nice welcome. Because there's a guy that worked for you, that was your sales guy named Mark Cranny. That was a former colleague of mine. And then we had just written a book called Inbound Marketing and two of your marketers had the book. So we were like, this is a hometown. We got this. We sat down and JD Sat here and I sat here and Dharmesh sat here. I remember, like it was yesterday and we started with intros. JD Barely got a sentence out of his mouth. Like, wait, you're the COO? Tell me about your background. You spent like 15 minutes on JD. You spent like 15 minutes on J.D. and then went to me, and then it's about 15 minutes on me. Like, you're such a knuckle. Why'd you hire a COO and then Dharmesh? Anyway, you guys passed, as did everyone two weeks later. Everyone. I read your book, and I saw in the book that you're not a fan of the idea of hiring a coo. So I guess my question. And by the way, I think chips on the shoulder are really valuable. You put a chip, a ginormous chip on J.D. sherman's shoulder.
- [02:59]
Ben Horowitz
Oh, good.
- [03:00]
Brian Halligan
It was incredibly beneficial. How do you feel about COOs these days? Same thing or change your mind?
- [03:06]
Ben Horowitz
Well, no, I mean, I think that generally when a company is small, flatter is better. In the early 2000s, it was a very popular construction, and it was kind of Mr. Outside, Mr. Inside, that kind of thing. You know, if you're really scaling and you're not kind of wrestling with product market fit, like, it can work for a time on a product cycle, but when you hit the end of the product cycle, it's, you know, so much about a company. A tech company is kind of the communication architecture, and it just makes that worse. Generally, it's a little like two people in charge. Not to say it can't work. And, you know, it depends on the definition of coo. And if COO is really, really just a big title for the sales guy, like, that's fine. You know, COO in the sense that I'm running the company and you're like Mr. Thought man outside. I think that's not a great thing for a startup.
- [03:58]
Brian Halligan
Yeah, you've invested in tons of CEOs at this point, Coach. Tons. What, like, what are you looking for? What's like a major green flag, red flag? How's it changed over time?
- [04:07]
Ben Horowitz
Like, what's your filter on a CEO?
- [04:10]
Brian Halligan
Founder CEO? So you're looking at the company in the market, but the person, not the co founder, the CEO.
- [04:16]
Ben Horowitz
The thing about founder CEOs is that there's definitely not what I would consider, like, a canonical one. So if you look at Mark Zuckerberg and Ali Gozi and Elon Musk, they're all, like, extremely different types of people. So, you know, you try not to get into, like, anything about the look and feel or sound or like, you know, are they very extroverted? Are they very introverted or this kind of. None of that, I think matters. There's a few things in common. One is, you know, anybody great really thinks for themselves so they don't feel like they're reading the room or influenced by what I'm gonna say or anything like that.
- [04:57]
Brian Halligan
And you can probably figure that out during the pitch.
- [04:59]
Ben Horowitz
You think, well, you can figure out if they're not that during the pitch for sure. And then, you know, do they have like truly original thinking on things. So, and then from a leadership standpoint, I really like the Colin Powell definition, which is leadership is ability to get people to follow you, if only out of curiosity. So I think, well, would I want to work for this person? How interesting are they? And if you don't have that right, you're not going to bring in the super high end talent, which is kind of a momentum thing. If you can't hire the very, very top talent, then you're not very unlikely to be a great company. It's kind of, you know, how good is your talent density and all that kind of thing.
- [05:41]
Brian Halligan
So we just had our Sequoia off site and I got into not an argument, but discussion with Sean McGuire, one of our partners. Yeah, he's very outspoken, very outspoken. And he got up and he said what we should be looking for are these founders that won the Chess Olympiad or the Math Olympiad in high school and surrounded by other of those folks. And he was very articulate on it, made a good point. A lot of people shook their head and I thought about it and I was like, well, HubSpot's no Tesla, but it did pretty well. And my co founder and I, we're Sloan people, not, you know, and then we hired crap, tons of people from Northeastern and I was like, it worked out pretty well. And then I just think like early in the cycle maybe you need those PhDs and those, you know, chess champions, match champions. But as it moves up the stack of Salesforce and ServiceNow kind of look like us. Do you have a take on my disagreement with Sean?
- [06:33]
Ben Horowitz
Well, I think it depends a little on the era and the market. So if you look at HubSpot, right, like it was a marketing sales idea as much as it was a technological idea. So you have to have great people on that side who tend not to be Math Olympiads.
- [06:51]
Brian Halligan
Yes.
- [06:52]
Ben Horowitz
And so for that company, I don't think that's right for other companies. That's right. The other thing is, you know, Math Olympiad is very specific. The very best companies are, are founded by exceptionally smart People, there's no question about that. I agree with him on that angle of it, you know, like, how smart is Elon? Extremely fucking smart. Was he Math Olympiad? Probably not. Like, I don't think so, but just like, raw horsepower is pretty important. Like, Larry Page is probably, you know, one of the smartest people in the world. That ends up mattering if you're gonna build something Google sized. It's very hard to imagine that without somebody like Larry Page who could even think of something that big.
- [07:29]
Brian Halligan
Yeah, you've worked with a lot of CEOs. Who's the best?
- [07:31]
Ben Horowitz
Probably the best one that I personally work with right now is Ali Goetzi at DataBricks. He's a PhD in computer science. He's extremely smart, so he kind of meets the Sean McGuire test. But he's like an exceptionally good. For an enterprise software CEO, he's exceptionally good at go to market. Able to compete with Snowflake, which was a very, very good go to market organization. And then he's just absolutely paranoid. The only person I ever known as paranoid as Ali. I mean, I guess Elon is this level of paranoid, but Andy Grove was this level of paranoid.
- [08:05]
Brian Halligan
He wrote a book about it.
- [08:06]
Ben Horowitz
Yeah, yeah, exactly. You know, I think some of that comes from him being. And he's a refugee. He grew up in Iran, and then when the Ayatollah Khomeini came in, he had to flee to Sweden. Hopefully that's correcting now, finally, after all these years. But you know, that having everything taken away from him really informed his psychology in a way that's, I'd say, very beneficial for a founder.
- [08:32]
Brian Halligan
Okay. I work with a lot of founders. Their companies are growing fast. And I'm kind of new to this. What's the pattern of mistakes these folks make on the way up? What are the common traps?
- [08:44]
Ben Horowitz
So look, I think the universal one is kind of starts with. It's kind of confidence is the way kind of in a word. But it starts with the fact that nobody knows what they're doing, as you probably have experienced yourself. You have an idea, you invent something. You know how to run a company.
- [09:03]
Brian Halligan
No idea.
- [09:03]
Ben Horowitz
And so you start building the company and you make a lot of mistakes. Those mistakes are extremely damaging. You feel terrible about it because you hired all the people, you sold them on this great idea. Then you make a mistake, you and everybody gets hurt. And if you've not kind of been in a position like that, which almost no founder has, it can be like highly psychologically challenging. And you see people react to it in two very dangerous ways. One is they overly defer. So, okay, I hired a lot of smart people. I'm going to be very open to their input on all the decisions to the point where I'm not really making the decision myself. I'm kind of doing a poll. But nobody other than the CEO has the context to make that decision. Nobody kind of sees the whole picture. And so that can lead you into not only bad decisions, but a very dangerous political environment where people go, oh, there's a vacuum here. I can step into it. And then the second thing that you see often is just hesitation. I don't know what the right answer is. I have a suspicion. I'm like, 52, 48 on it. But I'm afraid of making mistakes, so I'm going to not decide. And then the other kind of hesitation is, well, I'm going to avoid it. Like, I see something bad. I really need to fire the head of sales. What is the press going to say? What is my board going to say? What is this going to be? Da, da, da, da. And you're thinking about everything that you should not be thinking about, rather than, can this person do the job? And. And those things are really what cause founders to fail at the CEO job. That lack of confidence, that hesitation. You know, when I talk to CEOs, I'm like, look, if you were like a linebacker in the NFL and you were really fast, but you didn't trust your eyes, you would get cut because you wouldn't get to the. No matter how fast you are, you're not gonna get to the ball, carry in time. And if you don't trust your eyes as CEO and go run at the problem and make the decision, you're going to fail. You're going to, like, that's what's going to get you replaced.
- [11:07]
Brian Halligan
It resonates with me. At HubSpot, we had all kinds of debt. Culture debt, product debt. We had decision debt. At times, I would call it.
- [11:16]
Ben Horowitz
Yeah, yeah.
- [11:17]
Brian Halligan
And when the company was.
- [11:18]
Ben Horowitz
Decision debt is the worst debt, by the way, because it paralyzes a company.
- [11:22]
Brian Halligan
I had it. So I fell in your trap. And the way it kind of worked was I would see the company slowing down and just like a lot of debate and a lot of just stuff on my desk. And then once every, like, four or five, six months, be like, I need to make some frigging decisions. And then once I made some decisions, it just. Everything just started moving and flowing.
- [11:45]
Ben Horowitz
Yeah.
- [11:46]
Brian Halligan
So I felt that very much. Yeah. What other mistakes that they made talk about the team building. Like, you've hired a lot of VP of sales. Like people up their VP of sales hires all the time.
- [11:56]
Ben Horowitz
More than anything else. Yeah, more than anything else. So kind of more generically hiring executives.
- [12:01]
Brian Halligan
Yeah.
- [12:01]
Ben Horowitz
Is also something you don't know how to do. Right. Like, it's a lot of times you don't know what the job is. Like, what is a cfo? What's a control structure? You know, what are these systems they speak of? And yep. People go into hire them, like, with that level of knowledge and think they can, like, smell it out from talking to a person. And it's a little like trying to hire a Japanese interpreter and you don't know Japanese. Like, they're all going to sound pretty good and it's going to be very hard for you to distinguish. So preparation, I would say, is very important in terms of. Okay, have you spoken to enough CEOs? Have you asked them, like, what's the difference between a good CFO and a great cfo? Like, you know, how would you hire this person? What would you ask them? What would you want to see? You know, these kinds of things and just understand the job. I always say, if you have a chance, just try to do the job yourself. Act in that role so that you can get a feel for what the challenge is in your company. And it's also right, like, you don't want a generic cfo. You want one for your business. Then when you get into sales. So the problem that we have all the time is we have engineers running the company, and then they're hiring a head of sales. You could not be culturally different between, like an engineer and a head of sales. The main thing is, like, right down to how they talk to you. So engineers, if you ask them a question, a hundred percent of them will try and think of what is the correct answer to that question. That's how they think about it. If you're a salesperson, your first thought isn't, what's the answer? It's why the fuck are you asking me that question? Right? Because that's a clue. And so if you ask an engineer, like, does your product have this feature? The answer is yes or no. If you ask a sales guy, it's like, okay, what competitor was in here that planted that trap for you? What's their weakness? And how do I get to that? And so if you have an engineer talking to a good sales guy, it's going to upset them because they're often not going to answer the question. They're going to try and figure out why they're being asked that question. And so then I like this, by
- [14:16]
Brian Halligan
the way I thought of it this way.
- [14:17]
Ben Horowitz
Yeah, but the guys who are good at the job get rejected because you don't like them. And then the people who are terrible at it, those are the ones that end up getting hard. Mark Cranny used to say, you know, these CEOs, they just want to take a guy who failed the engineering test, put a clean shirt on him and like make him ahead of sales. And there's a real truth to that. It's funny, I had this conversation with Sujay when he was at Dropbox. He goes, how do I, like, deal with the fact that our engineers are upset that we're going to pay the sales guys commissions?
- [14:49]
Brian Halligan
You know, by the way, Guaranteed. Guaranteed they're going to be upset.
- [14:52]
Ben Horowitz
Yeah. And I said, well, it's very simple. Tell them if they want to make commission, then they can fucking grab a bag and sell some fucking software. And if they don't hit their number, you're going to fire them. And if they want that job, they can get a commission, but otherwise, shut the fuck up. He said, oh, okay, I never thought of it that way. I was like, look, the other question you can ask him is, do you have engineers that on the weekend might write some software for fun, like as a hobby? And he goes, yeah. And I said, I guarantee you don't have a single fucking sales guy on the weekend who's selling software as a fucking hobby. Like, that is not a fun job. There has to be a. It's a prize fight. There is no fight without a prize. And I think that the whole mentality, the whole cultural difference between like what founders are and what salespeople are is so vast that somebody's gotta have a conversation with them about like, okay, what are you really looking for? Because otherwise you're just gonna get somebody who's not good at sales.
- [15:54]
Brian Halligan
Okay, I'm the head of, I'm the engineer. I'm CEO of your brand new company. I'm likely to screw the higher up. What's your advice to me?
- [16:02]
Ben Horowitz
Yeah, well, it's funny. So one of the companies that both Sequoia and we were invested in is a company called okta, which ended up doing very well. It's actually Pat Grady. I was on the board with Pat Grady on that one.
- [16:15]
Brian Halligan
I love those guys.
- [16:16]
Ben Horowitz
Yeah. And you know, the very first, like big mistake that Todd almost made was hiring the head of sales. There were two candidates, one I forgot his name. And the other was Adam Ahrens, who was PTC guy. You know, we knew everything about Adam because, you know, he had worked for Cranny, you know, he had worked for McMahon. Like I knew everybody in the tree and I called them all and they were like, this is a guy. And then this other guy, you know, I got front door references on him and they came out okay, like, not great. But Todd wanted to hire this other guy. And the reason that he wanted to hire him was he was much more enthusiastic about Okta, whereas Adam was like, well, I don't know about this company. Let me talk to some of your customers and so forth and that kind of thing. And so, you know, the conversation I had with Todd was, I was like, Todd, you don't want the sales guy all enthusiastic. You want them to be qualifying you. Because when you're selling good sales guys don't just answer the damn questions they're being asked. They qualify the customer. Do you really have the money? Do you really have the need? Do I really have a shot here or am I politically already boxed out? You need that. And I said, but beyond that, I got guys who owe me favors more than they owe Adam favors, telling me he's great. And this other guy, who all the guys owe him favors and don't owe me anything, say he's a B and so do not fuck this up. I'd never forget it. And I don't talk to founders like this anymore because I'm more mature.
- [17:50]
Brian Halligan
But I said, todd, sure, I'm still working on that.
- [17:54]
Ben Horowitz
I said, todd, look, if this hire doesn't work. Cause we were in a lot of trouble at the time, you realize what's going to happen is this is the end of your company. Like this is it. So you gotta be 100% confident because I'm telling you, you're wrong and I have more experience at this than you and so forth. So I really put pressure on him and he hired Adam and you know, it ended up really making the company.
- [18:16]
Brian Halligan
So I have a bunch of questions,
- [18:18]
Ben Horowitz
but that's how important is. Like, I think if we had hired the other guy, Octa would have gone bankruptcy.
- [18:22]
Brian Halligan
Ooh, I have a couple questions on that. It sounds. Well, just the takeaway of I'm that engineer whose CEO, I'm getting some traction hiring, that is sales. It's one, blind references really matter, and two, get up sales.
- [18:37]
Ben Horowitz
By the way, it's the whole thing.
- [18:39]
Brian Halligan
Yeah.
- [18:40]
Ben Horowitz
Also, who are you bringing with you? That's what I always ask who are you bringing with you? Okay, you're bringing this to that, the other. Okay, can I call them and find out if they're coming? Because any great sales leader has big set of followers and anyone who's not great.
- [18:58]
Brian Halligan
Nobody.
- [18:59]
Ben Horowitz
Nobody. Because the one thing sales guys are, they're savvy about the leader.
- [19:03]
Brian Halligan
Yes.
- [19:04]
Ben Horowitz
Like I've never met even a mediocre salesperson knows who's a good leader.
- [19:08]
Brian Halligan
Okay, you brought up ptc. You've hired people from ptc. I came from ptc. First of all, who's the equivalent of PTC now building on the sales leaders that are filling Silicon Valley? I can't figure that out. And two, what do you think it was about the PTC mafia that worked so well? And by the way, for listeners, PTC was a great, still a great company. But in the 90s it ripped and was fastest growing company in the world for a while. And we sold CAD Cam, we sold PLM software to manufacturers. Hard sell, but we were very good at it. And the diaspora of PTC sales execs throughout Silicon Valley was very interesting and compelling.
- [19:44]
Ben Horowitz
There was a number of things about ptc, but one of the underrated things was the product wasn't that great, particularly the windshields. The hoop didn't work. Yeah, anybody can.
- [19:55]
Brian Halligan
So you like when you, you like to hire a sales guy that had a hard sale. You don't like to hire somebody who was like, yeah, he crushed his numbers, but anyone could have sold that.
- [20:02]
Ben Horowitz
Yeah, like hire somebody selling Google AdWords. Like, you know what that job is. How much do you want? Okay, you're not going to build the.
- [20:13]
Brian Halligan
You see someone from databricks though, and they were a VP of databricks. You're looking for a CRO in your new company. I'm not saying that's easy to sell, but they have a brand, they have like a lot of mojo. Is that someone you're looking for an early stage startup or no?
- [20:24]
Ben Horowitz
Well, you know, I can't comment on that because you know databricks.
- [20:28]
Brian Halligan
Well, you know the analogy.
- [20:30]
Ben Horowitz
Yeah, it's like the early days of Oracle, those guys were different than an Oracle salesperson today.
- [20:36]
Brian Halligan
Right.
- [20:36]
Ben Horowitz
And I think that like as it gets more established, it's harder to tell because you can survive on that. But I will say this, if you have a product that's complicated to sell, then that's when you get to the PTC level. The thing about PTC that was so amazing, other than the culture and the attitude. So there's a culture and the attitude and we talk about that, which was unique and probably illegal today. I would say almost certainly illegal today. But the thing that I think is very replicable, but only if you have a difficult product to sell, is the discipline. And the discipline really came down to, okay, you're going into an account. You know, there are competitors. And how systematic are you about laying the traps for the competitors? You know, making sure you make a comprehensive technical case, a comprehensive business case, making sure that. That you've charted everybody in that organization who's in that decision process. And it was a very complicated decision process for ptc, getting assurances that they're all, like, lined up. And that's so complicated and requires so much courage and effort and competitiveness that that translates into anything. Whereas, look, if you're walking into an account and they're already predisposed to buy, you can skip steps, you can get away with shit. You just have to call in, show up, hey, I'm the salesperson from blah, blah, blah. And away you go. Like right now, I think with OpenAI and anthropic and so forth, it's like that. It's like everybody wants to buy AI. They're already predisposed to buy. Very, very different than who the hell are you? I never heard of ptc. Okay, now I'm in the door. Why should I buy this? I can't get it to work. Well, like, let me walk you through how it's going to work. Like, these kinds of things. Yeah, that's invaluable if you have that, actually. So the Ron Gabrisco who's kind of the original head of sales at Databricks, we got him. I had never heard, like, I had never heard of the company he was at, which was a public company. Imagine that. A tech sales guy that I had never heard of his company. And the company was literally selling FTP.
- [22:55]
Brian Halligan
Okay.
- [22:56]
Ben Horowitz
But secure FTP.
- [22:57]
Brian Halligan
Okay.
- [22:57]
Ben Horowitz
Like, think about how good at selling you have to be to make your number as a public company selling that.
- [23:03]
Brian Halligan
Yep.
- [23:03]
Ben Horowitz
And so this guy, like, obviously had the discipline forced upon him, and he was extremely smart. And that combination, you know, I'll take that all day.
- [23:13]
Brian Halligan
Yeah.
- [23:13]
Ben Horowitz
You know, if you've got that. And so you'd rather have, you know, a successful company is fine. But some kind of playbook that was harder to write, you know, some product that was harder to build. And that's another big one, is can you run a playbook? Are you somebody who, like, joined VMware when it was on fire and got a big position, but you Ran the playbook that was set up for you? Or are you the person who wrote the playbook, who figured out how to sell this very complicated piece of software? Who figured out how to lock out the competition to train the salesforce to discipline them to do all that kind of thing? That's a much harder find. And you know, depending on the complexity. Look, if you've got an easy product, then that's one kind of thing. If you've got a hard product, that's another.
- [23:59]
Brian Halligan
Some of my takeaways were I was the first, basically BDR and spent 10 years. It was in a lot of ways contrarian to the way people thought about selling. We sold an application, we sold it one way and then we moved into the platform business. Totally changed the way we sold. Very disciplined on both sides and very process oriented. Like really manage the process tightly.
- [24:25]
Ben Horowitz
Yeah.
- [24:25]
Brian Halligan
So we're very good at that. And just very tight on the profile of sales rep. Yeah. And very, very well the profile, by
- [24:33]
Ben Horowitz
the way, that's when I interview sales guys, I always ask them, what's the profile of your rep?
- [24:39]
Brian Halligan
Yes.
- [24:39]
Ben Horowitz
And it's amazing to me that guys who are very senior and very big jobs have sometimes very loose profiles, whereas the ones who really have to compete, it's extremely tight. What they're looking for is so specific and often surprising.
- [24:59]
Brian Halligan
One of the things we just sticking on sales for a sec. One of the things we got right got a lot wrong at Hudspot. One of the things we got right was the process to interview a replacement. And what we found out was reps who are good learners did well inside of HubSpot. And so we got lots of resumes. We like people on their second sales shop, not their fifth, not their first or second. So they had done something. And if they had gone to a half decent school, not Harvard, not mit, State school, State school B average. Yeah. An competitive athlete. If they could fog a mirror and they did those things, they came in and we didn't overthink it. We came in for a half hour and the half hour was, Ben, welcome. And I would give you a scenario and I would be the customer and I would say, sell me HubSpot and I'd give you 12 minutes to sell me. Like literally watch 12. I'd say, that's very good, Ben. Here's my feedback. A couple minutes of feedback. Why don't you think about it and let's do it again. And if the person internalized that feedback and sold it better the second time, 99% of the time we hired them.
- [26:03]
Ben Horowitz
Oh, that's interesting.
- [26:04]
Brian Halligan
I thought that was. And it scaled really well.
- [26:07]
Ben Horowitz
Yeah, yeah, yeah, right. Can they. How good are they at listening? This is, by the way. That's the other, I think, mistake people make. They look for somebody who's good at talking. You really want somebody who's good at listening?
- [26:19]
Brian Halligan
Yeah, it's important.
- [26:22]
Ben Horowitz
Subtle difference. Yes.
- [26:24]
Brian Halligan
Okay. While we're on this type of thing, you were the recipient of maybe my favorite email in the history of emails. May I read it to you?
- [26:31]
Ben Horowitz
Yeah. Oh, sorry, sorry.
- [26:32]
Brian Halligan
And the background of this was you had a big product launch coming, you were excited about it, and you had a press tour coming up in a couple weeks, and Marc Andreessen front ran it and you sent him an email. I guess we're not going to wait until the 5th to launch the product then. And the response to Ben Horowitz from Mark Andreessen. Apparently you don't understand how serious the situation is. We're getting killed, killed, killed out there. Our current product is radically worse than the competition. We had nothing to say for months. As a result, We've lost over 3 billion in market cap. We're now in danger of losing the whole company. And it's the server management's fault. And then I love the ending. Next time, do the fucking interview yourself. Fuck off, Mark.
- [27:15]
Ben Horowitz
Yeah, yeah, yeah, yeah.
- [27:17]
Brian Halligan
Are we out of the fuck off era? From Mark, everyone. Like this is emails. I would get a btc.
- [27:25]
Ben Horowitz
Oh, yeah.
- [27:26]
Brian Halligan
And are we too soft now?
- [27:27]
Ben Horowitz
You know, Elon's not soft.
- [27:29]
Brian Halligan
Nope.
- [27:30]
Ben Horowitz
And I think there's some of that, like, I don't think it's quite at PTC level. So in Cranny's interview with McMahon, I think McMahon said to him, what would you do if I hit you in the face right now? And I think Cranny's response was, well, first of all, you better knock me out. And then McMahon says, well, like, but what would you do? He says, is this a question? Are you testing my intelligence or my courage? Good answer. And that kind of thing. You want to ask somebody that in an interview, My first interview, I walked
- [28:03]
Brian Halligan
in, my suit on, and Harrison, who originally had a sales, says, I wouldn't wear that suit to a shit fight.
- [28:11]
Ben Horowitz
I think really good companies, the very, very best companies, tend to have founders and CEOs who ask pretty aggressive questions. Zuckerberg, Larry Page, those guys are pretty. Who have kind of gotten all the way to the mountaintop. They're pretty blunt. And look, I think that's important in that one of the most critical things in a company, culturally, is one you give direct feedback and you can have it out. Mark was wrong on that feedback. To me, I was right. But, like, it's important that he'd be able to say that, and then it's important that I'd be able to stand up to it. Otherwise, the truth doesn't come out. Like, you've got to. Like, if you're running away from the truth to preserve feelings, that's a very dangerous thing in a tech company. And the kind of corollary to that is it's really important that, like, bad news travels fast, that you know if something's wrong, that as CEO, you find out about it. And so you need that bluntness. Andy Grove used to call it constructive confrontation, and he was. By the way, that's another one where one of my favorite Andy Grove anecdotes was somebody was late to a meeting. And then this is when intel was a monster and Andy was God and all that kind of thing. And they come in late to the meeting, and he. He just looks at them and he goes, all I have in this life is time, and you're fucking wasting it. Which is, like, the meanest thing you could ever say to somebody. But particularly as the company grows, you need to reset the culture. Like, if it's starting to fray at the edges, you can't just let that go. And by him saying that, it might crush that person's feelings. But everybody's telling that story to the point where I heard it, I didn't work for Intel. Right. And that. That's a culture center. Like, we're not fucking late to meetings here. Like, that's not what we do. And. And that's. Look, not every company has that culture, but in. If you have that culture, you need to. To maintain it, kind of.
- [30:15]
Brian Halligan
Speaking of that, I coach all these CEOs. Well, one thing I've noticed is Paul Graham wrote that Founder Mode memo. It's. It strikes me as relatively standard operating procedure now. It's really. Well, is that your reaction to.
- [30:29]
Ben Horowitz
Well, yes, although there's a part that's wrong to it.
- [30:31]
Brian Halligan
Okay.
- [30:32]
Ben Horowitz
Or there's a part that I would say is a little misleading to it, you know, And I think it came originally from Brian Jesket.
- [30:37]
Brian Halligan
Sure.
- [30:38]
Ben Horowitz
And so Brian, like. So there's part that's very right about it, which is what happened to Brian is he hired, like, extremely senior people. And then he did the thing that, you know, we talked earlier, which he overtly deferred, and then that created Fiefdoms, politics, all kinds of, like, weird stuff. And then he kind of, after Covid, took the company back by going into, quote, founder mode, and just was like, I'm being much more dictatorial. And I think that that part is all correct. I think the danger with the idea is people are taking it to the point where they're going, well, I don't want to hire any senior people.
- [31:16]
Brian Halligan
Yeah, I see that.
- [31:17]
Ben Horowitz
It's like, well, okay, so you're going to go compete with. And you need a worldwide sales organization, and you're going to try and grow a motherfucker from scratch to do that. Well, let me tell you all the things that that person doesn't know that they're going to have to learn on your nickel that you could just buy today. What's your profile? How do you split territories? Like, how do you open up international? How do you. Like, there's just like, years and years of experience and relationships that are required to do that. Right. And so because you're in founder mode, you're so fucking afraid to do that. It's like, no, you need to be able to hire that person too when you need them, but you need to be able to manage them. And that's very different than avoid, avoid, avoid. And I think people have taken what Paul wrote and it's like, oh, no. Like, no experienced people. Like, screw that and so forth. And I, you know, particularly, you know, if you're an enterprise company, I think that definitely doesn't work. Like, even on a consumer company, it's going to be shaky. You know, like positions like CFO and so forth. Like, outside knowledge is just valuable. You have to understand enough about that. In founder mode, you've got to learn enough about that job that you feel confident managing that person and telling them what to do and not having them tell you what to do, because that's when you lose the company. So I think it's good. It's like an overcorrection from where things were.
- [32:42]
Brian Halligan
By the way, I think you're spot on on that. One of my favorite CEOs is Jensen Huang, and he's got a unique playbook. He's got 60 direct reports. He gives feedback in public, and everybody knows the story. The interesting thing about the CEOs I coach, none of them really do that. They don't have 60 direct reports. They haven't followed his playbook. I kind of scratched my head on it.
- [33:03]
Ben Horowitz
People also haven't followed Elon's playbook.
- [33:05]
Brian Halligan
Right, Exactly. No one uses the algorithm outside Of Elon's companies, I don't get it. You notice the same thing.
- [33:11]
Ben Horowitz
So most of the companies you recruit out of don't run like that. And so they don't think of it that way. And then also I think that to run it like Jensen does, by the way, you know, that's a little bit, like, I would say, closer to how I run. Andreessen Horowitz is more like how Jensen operates. But you gotta like the. I think what founders are lacking is the level of confidence that you have to. Have to do that, because you have to be able to say, if you're reporting to me, you gotta be like, basically, CEO caliber, autonomous. I'm not developing you, which is something that I highly believe in. CEOs can't really develop executives. They either can do it or they can't.
- [33:58]
Brian Halligan
I agree with you on that.
- [34:00]
Ben Horowitz
And then you have to have. Feel like you've got enough knowledge to just be able to like, walk in and understand what's going on and so forth and kind of be able to evaluate how the company's going from, you know, at that level. You know, Elon is the most competent and has the most confidence of anyone. And, you know, Jensen is kind of at that caliber. I think that a lot of people, you know, need to develop that as they go. I would say, like, when I observed Zuckerberg, he didn't have that the whole way. He's kind of over time getting more like that. But, you know, like, he deferred like half the company to Sheryl for a while until he could kind of build his confidence over there. And I think that's a little more the normal path. It's hard to go from zero to Jensen. Yeah, you know, like any. You know, it's interesting. Jensen's been doing it now for 30 years. Yeah, 30 plus years. So, you know, what was he like four years on? I suspect he wasn't quite at this level of master of the universe.
- [35:02]
Brian Halligan
What can the CEOs listening learn?
- [35:04]
Ben Horowitz
And Elon, of course, got fired early. Like you do. Like, there is a learning curve to the job, even for the best.
- [35:10]
Brian Halligan
What can CEOs learn from Zuckerberg? You work with him pretty closely here.
- [35:14]
Ben Horowitz
Well, I think Zuck, he's very, very, very good at operating from kind of first principles thinking, not being overly influenced by one anybody else's ideas or just like the way things are. Um, like he. He's very, very good at just looking at it. And then also, you know, they were amazingly disciplined at looking at things through A data lens. Like, okay, what does the data say? And do that. And, you know, that's how they were able to grow it so fast, overcome the competition and these kinds of things. And he. He definitely stays, like, extremely curious, which I think all the. All the great CEOs are, like, very just interested in everything all the time. You know, I think people underestimate him. And Elon and Jensen and so forth on. They're like, oh, those guys are nerds. Their people skills are astoundingly good.
- [36:06]
Brian Halligan
And do you think they always were. Zuckerberg struck me as that not being the case early.
- [36:10]
Ben Horowitz
He was so introverted that you couldn't see it, but I felt like it was going on inside his head. If you look at, like, the M and A deals he's done, he's like, a really outstanding psychologist, and I think that he always had some of that in it. His mom's in that profession, and she's very smart about it. Karen. I think it was always in there, but he needed the confidence to get it out. I mean, he started that company when he was a little kid, 20. Yeah.
- [36:40]
Brian Halligan
You wrote a whole book about culture. What are people getting wrong?
- [36:44]
Ben Horowitz
I think people don't know what it is. That's the main thing. The main thing that particularly founders don't know, which is why I wrote the book. Although it's funny, the people who really liked that book were like, Ted Sarandos, you know, like. And I realized after I wrote it, you really don't have the cultural issue till you get big. And so at the startup phase, you may be sowing the seeds of your own cultural, like, problems, but there are no cultural issues in the beginning because the thing is small. You're saying it. You're kind of managing the culture by hand, unconsciously. So the big thing that people. People think of culture is values. They think, oh, it's, you know, like, we have a culture of integrity or we have a culture of, you know, whatever.
- [37:32]
Brian Halligan
All the same. Everyone's got the same ones.
- [37:34]
Ben Horowitz
Yeah, we have each other's backs or, like, whatever it is. And those things aren't really anything. They. They're just platitudes. The actual thing is behaviors. And so when you think about your culture, you kind of want to think about, like, what are the behaviors that put you in a place where you're the kind of company that you want to be and give you the advantage that you want to have? Okay, we're in venture capital. What does everybody invest? Well, we really love entrepreneurs. Like, everybody in venture Capital fucking loves entrepreneurs. But then you get down to the way entrepreneurs talk about a lot of VCs, and they're like, these guys are fucking arrogant. They're assholes. They talk down to me this and that. Well, like, well, if you want to be this, why are you that? And it gets down to the behaviors. Are you on time for a pitch meeting? Are you on your phone during pitch meeting? Do you get back to the entrepreneur if you're not going to invest in them? Like, these behaviors end up setting the culture. Whether you're like, care about entrepreneurs, have respect for them, or you think you're above them. And it doesn't have anything to do with what you said. It has to do with what you do, which is why I called the book what you do is who you are. But that's really the core thing. But it takes a lot of thought to say, okay, if I want to be this, how must I behave to get there? And you can say, like, oh, treatment the company's money like it's your own. Okay, great. But what does that mean? Well, where are you staying? What hotel? You know, how are you traveling? What's your thing? And like, so if you want that, then that has to be systematic.
- [39:13]
Brian Halligan
Let me ask you about.
- [39:14]
Ben Horowitz
Now, you may not want that.
- [39:15]
Brian Halligan
You know, there's one cultural gotcha that I see a lot where there's a brilliant, brilliant 100x engineer in the company that's an asshole.
- [39:27]
Ben Horowitz
Yeah. Not sometimes, but by the way, versus capital is more like that than engineering organizations. There's more of those?
- [39:37]
Brian Halligan
Yes.
- [39:38]
Ben Horowitz
Well, like, I mean, and I think that on an engineering team, you kind of have to have the parameters of. Okay, like, what does asshole mean? If means that in the code review, I don't say anything, and then I go in the middle of the night and I rewrite your code. That's going to be tricky as you grow. Like, that's hard to manage if ASL is, I expect, like a super high standard. That's another thing. And so you kind of want to define, like, okay, what is it that we're not going to do here? And the thing about engineers is they're, like, amazing at following rules. So if you make clear, like, what the parameters are on it. And I find that in venture capital too, like, we have that. That's a venture capital problem if I ever heard one.
- [40:20]
Brian Halligan
Yes.
- [40:20]
Ben Horowitz
You know, you get a lot of very smart, spiky personalities. And, you know, Mark and I talk about this sometimes. It's like, well, was Steve Jobs so mean to People. Because that just goes with being so brilliant. Or because he could get away with it because he was so brilliant. Right.
- [40:37]
Brian Halligan
Like, where'd he come out? Oh, I've had the same debate.
- [40:41]
Ben Horowitz
Yeah. So I think it's a little bit more the latter. And so I think that if you're running an organization.
- [40:48]
Brian Halligan
Wait, which one was the latter? I forgot.
- [40:50]
Ben Horowitz
That he could get away with it. Right? Like, he didn't have to do that. Like, but he could do that. And, you know, like, it's his company. He can do what he wants. I think that the problem with founders modeling themselves after Jobs, I mean, you know, to some extent after Elon, is, well, if you're not Jobs or Elon, maybe you can't get away with that. And, like, maybe people just walk out the damn door in a way that they weren't with those guys. And it's very hard to have, like, the highest performing talent without, like, them coming with some of those behaviors, you know, and it doesn't matter, like, in engineering and BC and whatever. And so you kind of have to be very specific about, okay, we're not going to have this, but we'll have that. You know, one of the things that I've outlawed at the firm, which a lot of, you know, kind of people of this ilk would do, is like, look, you can't make yourself look smart by making somebody else look dumb. Like, that doesn't. That fucking doesn't count here. And if you do it, by the way, with an entrepreneur, like, if you get on Twitter and say, oh, that business sells dollars for 85 cents. Ha, ha, ha. I'm so smart. Fuck you, you're fired. Like, I'm not dealing with that at all. Because that's just like, not who we're gonna be. We love that you're smart. You can be as smart as you wanna be. Like, that's fine. You don't have to get there through that method. And then once people know that, they're fine, like, not doing that. But I couldn't say. I think it would be hard to say. Just don't be an. Because, look, sometimes, you know, the smartest, like, they're just like, I'm not going to suffer through this dumbass conversation. Like, you know, it's. People who are extremely smart are going to do that. And it can't be like, no, you have to suffer through every dumb conversation. Like, that's not going to work. Okay.
- [42:33]
Brian Halligan
But there's Ben. Horace isn't like, don't tolerate it. Zero tolerance for this thing.
- [42:38]
Ben Horowitz
It's no. I think that no asshole role is never going to work. Yeah. Yeah. So what is it that you don't want him to do? Like, what's over the line and what's not over the line? And, like, I think even, like, very spiky people can live in that kind of context.
- [42:52]
Brian Halligan
He's very spiky.
- [42:53]
Ben Horowitz
Yeah.
- [42:53]
Brian Halligan
Yeah. What percentage I like? You brought this up in another pod that I wanted to follow up on. Like, When I was CEO of HubSpot, I didn't know what I was doing a lot of time. I was confused a lot. And when you were CEO, you felt the same way. Like, what percentage of the time do you feel like, I really don't know what I'm doing versus I kind of got a handle on this thing. And today, running Andreessen Horowitzer through your journey, like, founders pretend like they know what they're doing.
- [43:18]
Ben Horowitz
Yeah, well, everybody pretends. And this is kind of part of that challenge. So I think it takes a while. I mean, like, I now, like, I had to grow up very fast. We went public when we were 18 months old, right?
- [43:29]
Brian Halligan
Yeah.
- [43:29]
Ben Horowitz
So that'll grow you up in a hurry.
- [43:33]
Brian Halligan
Yes.
- [43:33]
Ben Horowitz
But I. I didn't really feel like I knew what I was doing there probably till four years into it, you know, when I rebuilt the sales force, I brought in cranny, all that kind of thing, maybe three and a half, four years into it. And I was never as confident at that as I was as I am now. And it's different for different people. But, like, you need, like, enough reps at it to have, like, the more confident you are in your judgment, the faster the decisions you can make, the less you care about what people think, the less you care about making a mistake. And those are all the things. That's why Jensen is so magical, right? Like, he sits in the room, he talks to everybody. He knows exactly what he wants. Same with Elon. Right? Like, he can just sit there and go, I guarantee you, neither of them started that way. You build it into that.
- [44:29]
Brian Halligan
I see silly things on Twitter where people say venture capital is easier than entrepreneurship or entrepreneurship's easier than venture capital. People ask me that venture capital is easier.
- [44:41]
Ben Horowitz
Everybody's talking about way easier. Like, that's not even close. Like, who the fuck would think venture capital is harder than entrepreneurs?
- [44:49]
Brian Halligan
A lot of people, I think the venture capital, there's a lot more luck involved. Like, if you join Andreessen Horowitz today, you have Amazing platform, or Sequoia. Amazing platform. And you may do three deals, you know, maybe one turns into a trillion dollar company. There's a fair amount of luck around that.
- [45:05]
Ben Horowitz
Yeah, yeah. I, I mean, I think that entrepreneurship
- [45:09]
Brian Halligan
doesn't have a lot of luck. It's just some luck and also a
- [45:11]
Ben Horowitz
lot of bad luck. Yeah. You know, entrepreneurship, you have one shot and you have to make it work. And then you really, really pay for your mistakes much more directly. And then the clock is ticking. In a way, it's like there are no quarters in venture capital. So like, venture capital is just kind of like an easier kind of business now. Look, there's a lot of people. I'm saying that as you know, someone who succeeded in it, I suppose if you failed in, might have looked harder in a different way. But I think the pressure level and the stress level is not close. Because if you have a small venture capital thing and it fails, it's never a lot of people. Like you can get a tech company up to thousands of people and then have them lay them all off. That is common.
- [46:05]
Brian Halligan
Yeah.
- [46:06]
Ben Horowitz
And it's brutal. And then the people that you're raising money for have a much tighter eye on you because you could have one funding source, whereas in venture capital you always have, you know, many funders, very generally have many funders. Yeah.
- [46:24]
Brian Halligan
I appreciate your coming on the pod.
- [46:26]
Ben Horowitz
Yeah, no, it was fun. All right.
- [46:28]
Brian Halligan
Yeah. Thank you very much. I think all the CEOs who watch are going to really like it. Thank you.
- [46:32]
Ben Horowitz
All right. Good, good, good.
- [46:33]
Brian Halligan
Okay. I hope you liked that episode with Ben. I really liked it. Learned a lot. Something I thought about while he was talking is one of my bugs. The CEO of HubSpot was. I'm pretty conflict averse. I think a lot of CEOs are particularly first time founder CEOs Andreessen Horowitz and Sequoia back a lot of first time CEOs who haven't really managed before. And it's just uncomfortable. Confrontation is uncomfortable unless you kind of grew up with it. It's just not natural. Ben's got a good term that I'm going to borrow. He calls it constructive confrontation. I like that. You need to have a constructive level of confrontation with most people inside of your organization. I think kind of related to that. Ben talks about decision debt and we had this at HubSpot. You had a VP of sales, you know, you need to fire them, but you kick the can down the road hoping they nail the next quarter. You know, your pricing model, not really working in scaling, but you kick the can down the road a couple quarters to fix it. There's all kinds of stuff kicking around your head like that. And you know, I think it's a lack of confidence. I want to be a popular CEO. I think that was another bug of mine, kind of related with that conflict averse thing. All of this also rhymes, I think with hiring and there's a lot of talk around founder mode and you know, people hiring and deferring to people and now they're micromanaging. I think when you're a first time founder CEO and you're hiring a been there, done that, person that's more senior than you has done more stuff in their career, you're a little nervous about truly managing them and you end up deferring to them. And that's where the problems start. And so I think a lot of this idea around constructive confrontation that Ben talked about is really productive. And if you're a little risk averse like me, if you're a little, you want to be popular like me, maybe you need to be a little bit more constructive in your confrontation. The last thing I would say that he talked about and I agreed on is being a CEO is pretty uncomfortable, particularly from one of these hyper growth CEO companies today, they're growing so fast, everything's breaking, everything's changing. I think it's just fine if in your head you think you don't know what you're doing because Ben didn't think he knew what he was doing when he was running Loudcloud and I didn't think I knew what I was doing when I was running HubSpot. So if you're feeling that as a CEO, I'm here for you. Hope you liked it. Let's keep the convo going. I'm B. Halligan on X. See you over there.