[00:01:00] Gary Bisbee, Ph.D.: Good morning, Ben. And welcome.

[00:01:01] Ben Horowitz: Good morning, Gary. Good to see you.

[00:01:04] Dr. Gary Bisbee: So what did the young Ben think about leadership or at what point did you start thinking about leadership?

[00:01:10] Ben Horowitz: I’d say my first introduction to it was on the freshman football team at Berkeley high school. And we had this coach, Chico Mendoza, and when we first joined the team, he gave us a speech. And the speech was, I still remember it to this day. It was, like well, if you don’t wanna practice hard, turn your shit in. Which meant, turn your equipment in. You can refer to me as “Coach Mendoza,” or as “Coach,” or as “Mr. Mendoza.” If any of you guys call me “Chico,” turn your shit in. And the whole speech was like that, turn your shit in. And I just remember thinking, I got it. I was like, there’s no way that I’m not finishing the year I’m ever turning my equipment in. And yeah, and that team is a funny team because we played so hard. We didn’t even have any passing plays. We just ran the ball every time and we went 8-0 and won the championship. But it was a very kind of colorful, interesting kind of leadership that he had.

[00:02:05] Dr. Gary Bisbee: When did your interest in computer science develop?

[00:02:08] Ben Horowitz: I went to Columbia University in the early eighties and at that time, computer science really wasn’t so much a thing. A lot of universities around that time refused to consider it a legitimate major because they thought that the real thing was electrical engineering and software was just some minor tooling on top of the computer, complete misunderstanding of what was going on. They literally thought of it as like refrigerator repair or something like that. How can you major in refrigerator repair? And I remember taking this class where we learned Alan Turing’s proof that, basically, if you had a machine that was turning complete then that machine from a computational power standpoint, could do anything that any machine you could ever come up with could do. And that you could make ’em faster, more powerful or whatever, but that machine could do everything. And it struck me then, and this proof is from like 1941 maybe, but it struck me at the time that, oh my God, there’s gonna be one machine that kind of does everything. At that time we had tape recorders and calculators and alarm clocks and watches and video cassette players and, we had so many different machines, every machine for a different task. And I was like, wait a minute, there’s gonna be one thing that does everything? I was so intrigued by that idea and then the other thing is it really felt like a secret cause even though he figured it out so long ago, nobody knew that. Nobody, I knew that, and I was like, I’ve gotta major in that. That turned out to be a good choice for me.

[00:03:46] Dr. Gary Bisbee: After Columbia and UCLA, you had a career, both in established companies and startups. What was it about startups that attracted you?

[00:03:58] Ben Horowitz: I was just really excited to show what I knew and in a big environment, it’s just really easy to feel like people don’t see you, you’re not making an impact, that kind of thing. And so that’s what caused me to join. The first startup I joined, I was like, wow, I can, be in the center of things. Turned out to be not a smart career decision in that I was at a really great company called Silicon graphics and then I went to a company that turned out to be not so good called net labs. But I certainly learned a lot about what it meant to build a company and I learned a lot about leadership and that kind of thing, and what works and what doesn’t. And how you can really quickly lose credibility if you’re not careful.

[00:04:41] Dr. Gary Bisbee: You then met Mark, joined Netscape, and I’ve read that you said that you were fascinated by it because you thought they were gonna change the world. What did you mean by it? Change the world?

[00:04:54] Ben Horowitz: In those days, it was a slow period in computers, if you can imagine that. Windows 3.1 had become pretty dominant. Microsoft was, I would say, quite ruthless in that anybody who built an application on the PC that did well, they would clone and destroy it by bundling it with windows or using some special advantage. It was really hard to start a new company and get things going. At the time I was at a company called Lotus, makers of 1, 2, 3, and so forth. And they have this product Lotus Notes, which was intriguing in that it was a little bit like how you would build the internet in a proprietary way. But the fact that in order for it to actually manifest and have full value, everybody in the world, would’ve had to have Notes. And then I saw the browser and I was like, holy crap, this is it. This is the promise of everybody being able to work together through computers. But the whole problem that Notes had, which they had to sell to every company in the world and every consumer. Didn’t matter, cuz it was like, this thing was just open and it used what was available on the internet. So once I saw that I couldn’t unsee it, I was just like I was, I could stop thinking about it. So I literally called I tried everybody knew who might know somebody at that company, and I got myself an interview. And, thankfully I got the job. That definitely changed my life.

[00:06:18] Dr. Gary Bisbee: Yep. I could see that for sure. You became a CEO and you were CEO of tech company for roughly 20 years. You led IPOs, you engineered M and A, and you sold Opsware for 1.6 billion. Which by the way, in today’s dollars is almost two and a half billion, so well done there, but looking back on it, what were the main leadership lessons that you took away from that 20 years as a CEO?

[00:06:46] Ben Horowitz: There’s so many, and I’ve obviously written two books about ’em because there are so many, but I think one of the most difficult ones is which I see so many people struggling with now is, how do you get to the truth? Because as the leader, you’re always in a very dangerous area if you’re off of the truth. The truth about the product. The truth about the company. The truth about everything you’re doing. I see it a lot actually today in kind of the realm of how people deal with politics or diversity, where they do things that they know aren’t true. But they feel like they have to do them because that’s what people want them to do. Then they find themselves in like really dangerous positions, cuz they’ve taken a position on something that they don’t themselves believe in. So as a leader, you really have to work hard to get to what’s true. And then, the second thing, which I really learned from Bill Campbell is that, as the leader, you’re never talking to the person you’re talking. You’re talking to the whole company. So somebody comes and says, “Hey Ben, I need a raise.” , I can go, ” Gary’s good. Maybe he does deserve a raise. I’ll give him a raise like that.” I’m not talking to Gary. I’m talking to everyone in the company because the next thing that happens is, we’re at the company picnic or whatever, and Gary’s wife is friends with Jeff’s wife. He goes, “Hey, how’s it going? With Gary?” “Oh, it’s great. He just got a raise.” “What? He got a raise? Why didn’t Jeff get a raise? Oh, cuz he didn’t ask? He’s gotta stand up for himself.” And then, you get into these like weird politics. Was that really fair? Did you think about that? Everything is like that, how you organize a company to what you think about a given product or anything. You’re always talking to the whole company. And you always have to represent the people who are not in the room because they really need representation. It’s very important from a leadership standpoint that, just cuz I’m not here, doesn’t mean I’m not working. So you really have to think of it in those ways, otherwise you get into this weird clickish highly political environment.

[00:08:47] Dr. Gary Bisbee: But follow up on that. There’s always this longstanding discussion about there’s natural athletes, natural musicians, natural leaders. But there’s a lot of debate about that. What’s your thought? Are some people just naturally better leaders? Doesn’t mean that everybody doesn’t have to work to be a leader. Do you think some people are just more natural at it?

[00:09:09] Ben Horowitz: I think CEOs are much more Made than born. Which is why there are so many different kind of flavors. Mark Zuckerberg is nothing like Elon Musk is nothing like Brian Chesky is nothing like Jeff Bezos. So if they’re natural, then how did those four, being all so different, get to that point. I think that the truth of it is a lot of leadership starts, like I said, with truth and truth starts with being yourself. So if you think that, okay, there’s a, some natural way to do it. It actually becomes very self-defeating and a lot of it is like super unnatural. So for example I always likened it to boxing. So boxing is like a very weird, unnatural sport in that if you just do it the way, you would ordinarily fight, you’re gonna be terrible at it. Being a CEO is a lot like that. One, a kind of natural thing for humans is you want people to like you, just from an anthropological standpoint. It’s important to, tell people, things they want to hear so they don’t stab you in the head or whatever. And that’s a really bad quality and a leader – is telling people what they want to hear. That’s horrible. You’re not actually providing any leadership at that point. Every important decision you make, it’s gonna be controversial, cuz if it was what everybody wanted to hear, then you don’t even need a leader. Which is part of the problem with our political environment. Nobody’s willing to say what they think. They just wanna say what the polls told them to say. And that’s not a natural thing to go, “Okay. I realize you guys don’t want to go left, but we really do need to go right. But that’s what it takes. And so, that takes practice.

[00:10:47] Dr. Gary Bisbee: Yeah, well said. Let’s turn to a16z. What’s the backstory behind you and Mark founding Andreesen Horowitz?

[00:10:55] Ben Horowitz: It was funny at the time we really felt that venture capital hadn’t really changed in the 40 years since it began or in the technology version, there was an industrial revolution version of it with James Pierpont Morgan and others. But in this new version, it was very much like it began. And we thought there was just so much more opportunity to do more and do better than that. And the first thing that we noticed was to be a big function of venture capital at that time was replacing the kind of founder with a professional CEO. That was like a big, I would say it was the key competency of the best firms. And we thought, we had noticed that if you look at it historically, the very best tech companies that had the biggest runs had been run by their founders for a very long time. So if you looked at, Hewlett Packard or IBM, or Microsoft, or Apple, the Once in Future founder and then the modern companies like Facebook and Amazon, the founders were very involved. So why was the profession so focused on replacing them? And then, from our own experience, we felt like, ops would’ve definitely died if it wasn’t run by the founder, cause I was the one who screwed it up. So I was the only one who knew how to fix it. And that kind of led us to think what if we built a venture capital firm that was really designed to help the founder become a CEO rather than replace the founder. And we built the whole idea around that. We were like, okay, what doesn’t a founder have that a CEO has? And there were really two things. One was, a network that was as powerful as like Bob Iger’s or somebody like. And then, the second part was the skillset. And so we created this firm. We build very powerful network and it’s why we have over 400 employees today, and we’re the biggest venture capital firm, headcount wise, is cause we have so many people building that network. And then, on the other hand, we have people who have been CEO who have founded companies in the firm who can really know what it feels like to be in that position and develop somebody. So that was the original idea of the firm.

[00:13:05] Dr. Gary Bisbee: Yeah you were definitely a leader and ahead of your time, my observation is still are in that regard. So you’ve said that you bring to your portfolio company, CEOs skills and network, or access to a network and then marketing. Can you just describe how you think about those three?

[00:13:25] Ben Horowitz: So we have whole teams that do nothing but know every great executive in technology. And so that when you go to hire a CFO, first of all, you have to understand what is a CFO, what is a good CFO like and so forth? And we have a whole network for you to meet and draw upon and so forth. Then, similarly, we do the same thing around go to market. So what big, company CMOs or CIOs or CEOs do I need to know? We’ve mapped them and know all of them and so forth. And so any kind of network that you don’t know, the capital markets or, analysts. Whomever. We already know for you, so you can access that very easily. And it’s not just, one partner knows ’em, it’s the firm knows them and we’ve got a whole team around that. Then, the expertise comes in many flavors. It’s one is people like me who have okay, I’ve been a CEO, I’ve been a founder. I know what that is and I can help people learn the skillset. But also if you look at what we do in the world of web three a big thing that most founders don’t understand very well is this combination of how game theory and technology meet, in the form of this thing tokenomics, and we have, on our team to help you with those skills. Tim Rufgarden is leading a research team of the kind of greatest thinkers in the field so that you can get help thinking it through these kinds of things. What do you need, what skills do you need? What knowledge do you need? What networks do you need to run a company. Then on the marketing side, was interesting for us cuz at the time, venture capital firms didn’t market and like one thought we had as well, if they’re not doing it, we ought to do it. Just counterprogram it. So we quickly built a very big brand through that. But the bigger idea that we had was venture capital was very opaque in those days. So the idea with venture capital is a mystery, right? Why did Sequoia like fund all these great companies? Or why did Kliner Perkins fund all these great companies? We’re not gonna tell you , but there’s some secret magic fairy dust that they have. And if you want the fairy dust, then you have to go to them. That was the marketing strategy. And we thought what if we build a firm that was totally transparent where, all of our positions, all of our thinking on things we just published. Wouldn’t that be interesting because we get to see so many things, technologically, so many things operationally and from a management standpoint, and we ought to think of ourselves as making a contribution to the knowledge set of how you build a company. That was the original marketing idea. And yeah, we’ve been doing that ever since.

[00:16:03] Dr. Gary Bisbee: The website, the a16z website, is like a publishing company. And it’s just awesome for those that aren’t familiar with it, you should become familiar with it. It’s just it’s just very good. I think. So Mark said software is eating a world at one point, I’ve heard you say software is eating every industry. Tell us about that. What does that actually mean?

[00:16:28] Ben Horowitz: His argument was, there’s this tremendous growth that’s coming because software is eating the world and there were multiple forms of that. The first thing was software was becoming more important than hardware. And this is why the us made this huge comeback in electronics where it had all been in Korea and Japan and so forth. But all of a sudden, as we discussed at the beginning, if everything is a computer, then software becomes the most important and differentiated thing. And so now apple could play in that market, even though they could never manufacture as well as they could in Asia because software was the high value component. But then if you took that further, you’d go ” no, no, no.” Software is not just eating hardware, it’s eating all the industries. So the biggest bookstore, Amazon and the kind of most important new movie studio is Netflix. And at that time the biggest taxi companies can be Uber and the biggest hotel companies can be Airbnb because there’s no business that won’t be much better if there was a world class software team at the core making kind of everything from the, the customer experience to how efficient it could be and how profitable and so forth was software based as opposed to the way we built those industries initially. And that’s really played out. And then the next thing that’s happening is, on our bio team, software is eating biology. And what we mean by that is we’ve moved from a chemical model of the human body where we, build these molecules, we try them out, et cetera. And now we have an information based model. We can sequence your blood, we can sequence your DNA, we can sequence your microbiome. And then all of a sudden, there’s this information model. Why is that interesting? Oh, now you can apply software to it. You can take all your computer science techniques and AI and everything, and you get on that technology curve.

[00:18:24] Dr. Gary Bisbee: Yeah, there is the health side of that, you made reference to payment and outcomes and so on. Are there a lot of companies that you’re looking at on the health side, as opposed to the bio side?

[00:18:36] Ben Horowitz: Oh yes, definitely.

[00:18:37] Dr. Gary Bisbee: I’m just wondering if there,

[00:18:38] Ben Horowitz: For sure. Cause they really go together in that, if you go why are there so many fewer like VCs in bio and health than there are in regular tech. And it really ends up being that the answer is the go to market is so complex. You know, the technology is complex too, so you have to have kind of skills in the technology that, that very few people have, but the go to market is, in some ways, even more difficult in that, you don’t just have the customer. You have the customer, the doctor, the healthcare provider, the insurance company and the government. And they all can screw you up if you’re not careful. So we have a company, Alpha Health, that helps AI to just literally bill the insurance company correctly. But you need the most advanced AI in the world to do that. And so that’s an important healthcare problem. And then you have this very difficult issue where you’ve got insurance companies who are optimizing to pay as little as possible. And then you’ve got healthcare providers who only get paid per procedure that’s approved. And so then you’re going, “Am I gonna do the thing that’s gonna cure the patient, make them healthy, diagnose it correctly? Or can I only do that if I get paid?”

[00:19:58] Dr. Gary Bisbee: Final question is for those younger people who are interested in healthcare and they’re interested in founding or entrepreneurism, what advice would you have for them, Ben?

[00:20:11] Ben Horowitz: Well, I think that it’s really, really, really, really important to understand, what we refer to as “the go to market.” There are so many products that make perfect sense in healthcare and bio, right now, that are very buildable. The challenge that we see, like every company that we work with, if they get stuck, doesn’t get stuck necessarily in the product, but tends to get stuck on how you deliver it, how you get it through the FDA, how you get all the participants signed up. And the companies themselves aren’t traditional kinds of economic actors, so they’re more unpredictable. The way a hospital operates is very different than selling something to, say Federal Express. And understanding that and understanding what makes those things work and so forth is just a really essential part of being an entrepreneur in the healthcare space.

[00:21:06] Dr. Gary Bisbee: Well said. Thank you, sir, for your time and your wisdom today. Very much appreciate, Ben.

[00:21:11] Ben Horowitz: All right. It’s great seeing you, Gary. And thank you for having me.