[00:01:00] Gary Bisbee, Ph.D.: What about your parents, Ben? Did you think your leadership style came at all from your parents?

[00:01:05] Ben Horowitz: I don’t know, my parents were so different. My mom’s a nurse, and she’s pretty quiet by nature and would not consider herself a leader. She’s a great mom for me. And that she gave me a lot of confidence in myself, which is a key. A big key to leadership is just believing in yourself. My father was the exact opposite personality, but he’s, was then, and is now like a political rebel-rouser kind of thought leader / pundit / intellectual. And he was like, as people in politics are, he’s like super abrasive and direct like probably the most direct person that you’d ever meet. But it wasn’t so much of a leadership context as a winning the argument context. And it actually caused me, when I first started working, I had that style, and I would just go, that’s the stupidest fucking idea I ever heard, that kind of thing. And it wasn’t good in the corporate setting to talk like that. And it took me a while to learn that actually hurts people’s feelings, but I was so immune to it, because that’s just how we talked to each other at my house.

[00:02:10] 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?

[00:02:22] Ben Horowitz: I was just really excited to show what I knew and in a big environment, it’s just really easy. Feel like people don’t see you, you’re not making 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 it out to be not so good called Net Labs. But I did. I certainly learned a lot about what it meant to build a company. And I learned a lot about leadership, and what works and what doesn’t and how you can really quickly lose credibility if you’re not

[00:03:03] Dr. Gary Bisbee: Well, you became a CEO. You were CEO of tech company for roughly 20 years. You led IPOs. You engineered M&A, and you sold Opsware for $1.6 billion, which by the way, in today’s dollars is almost $2.5 billion. So well done there.

[00:03:23] Ben Horowitz: Yeah.

[00:03:24] Dr. Gary Bisbee: Do you view yourself during that timeframe as an operator or an entrepreneur or both?

[00:03:32] Ben Horowitz: I was just trying to survive. We started a company. We had an idea. We thought it was going to be really important. But we started in 1999, and we went right into the worst tech recession in history with the dot-com crash. And so we started off as a cloud computing business. We were really too early for that for a lot of reasons. And we had to switch it around, when we went public, when we were like 18 months old, and we were public. And we went public off $2 million in trailing 12 month revenue, planning to do 75 million the next year. So the whole thing was so crazy. I was trying to figure out how to be a CEO. I was really young into my entrepreneur career. And we were already a public company and things got more chaotic from there.

[00:04:16] Dr. Gary Bisbee: Right.

[00:04:16] Ben Horowitz: I don’t know if I thought of myself as anything, but just trying to keep everybody alive who joined that company keep it going.

[00:04:24] Dr. Gary Bisbee: Well, Looking back on it, what were the kind of the main leadership lessons that you took away from that 20 years as a CEO?

[00:04:32] Ben Horowitz: There’s so many, and I’ve obviously written two books about them, because there are so many, but like some of the ones, 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 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. And then they find themselves in really dangerous positions, because they’ve taken a position on something that they don’t themselves believe in. And 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 to. 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, like, 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, and 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, because he didn’t ask, like 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? And everything is like that from 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. They really need representation. It’s very important from a leadership standpoint that just because I’m not here, doesn’t mean I’m not working. And so you really have to think of it in those ways. And otherwise you get into this weird, clickish, highly political environment.

[00:06:35] Dr. Gary Bisbee: But follow up on that. There’s always this long standing 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, but do you think some people are just more natural at it?

[00:06:56] Ben Horowitz: I think CEOs are much more made then 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, like how did those four, being all so different get to that point? 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 some natural way to do it. It actually becomes very self-defeating. And then a lot of it is like super unnatural. So for example, I always liken it to boxing. So boxing is like a very like weird, unnatural sport in that if you just do it the way you would ordinarily fight, you’re going to be terrible at it. And being a CEO is a lot like that. So, one, a kind of natural thing for humans is you want people to like you. Just from anthropological stand, 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 in 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 is going to be controversial, because if it was what everybody wanted to hear, then they could make, 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 they think what the polls told you to say. And that’s not a natural thing to go, okay, I realize you guys all want to go left, but we really do need to go right. But that’s what it takes. And so that takes practice.

[00:08:33] Dr. Gary Bisbee: Yeah, well said let’s turn to a16z. What’s the backstory behind you and Mark founding Andreessen Horowitz.

[00:08:41] Ben Horowitz: Yeah. It was funny at the time, we really felt that venture capital hadn’t really changed much in the whatever 40 years since it began or that 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, a big function of venture capital at that time was replacing the founder with a professional CEO. It was the key competency of the best firms. And 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, Microsoft or Apple, the once and future founder. And then the modern companies like Facebook and Amazon and so forth, the founders were very involved. So like 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, because 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. So we were like, 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 or somebody like that. And then the second part was the skillset. And so we created this firm. We build a very powerful network, and it’s why we have over 400 employees, and today, we’re the biggest venture capital firm headcount wise is because we have so many people building that network. 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.

[00:10:47] Dr. Gary Bisbee: Yeah you were definitely a leader and ahead of your time, my observation is still are in that regard.

[00:10:53] Ben Horowitz: I appreciate that

[00:10:54] Dr. Gary Bisbee: you’ve said that you bring to your portfolio companies or 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?

[00:11:11] Ben Horowitz: Yeah. We have a whole teams that do nothing but know every great executive in technology. And 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. Then similarly, we do the same thing around go to market. Oh, what big company CMOs or CIOs or CEOs do I need to know? And we’ve mapped them and know all of them and so forth. And so any network that you don’t know, the capital markets or analysts or whomever, we already know for you. So you can access that very easily. And it’s not just one partner knows them. It’s the firm knows them, and we’ve got a whole team around that. Then the expertise comes in many flavors. 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 Web3, a big thing that most founders don’t understand very well is this combination of how game theory and technology mean in the form of this thing, tokenomics, and we have on our team to help you with those skills, Tim Roughgarden is leading a research team of the greatest thinkers in the field, so that you can get help thinking it through these kinds of things. So it’s just as, okay, 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, marketing was interesting for us because we had this at the time venture capital firms didn’t work

[00:12:47] Dr. Gary Bisbee: Right.

[00:12:48] Ben Horowitz: And one thought we had as well, if they’re not doing it, we ought to do it, just counter program it. So we quickly built a very big brand with that. But the bigger idea that we had was venture capital was very opaque in those days. So the idea with venture capital was 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 going to 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 we’ve been doing that ever since. And I get all the time, particularly at a time like now, I can’t tell you how many entrepreneurs go, Ben, I just reread the hard thing about hard things. It’s really helpful to get through this time. And it is so when you’re an entrepreneur, like without that, you’re really all alone without the actual practitioners telling you how things work. So that’s been how we’ve gone about it.

[00:14:09] Dr. Gary Bisbee: The website, 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 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?

[00:14:32] Ben Horowitz: Software is not just eating hardware, it’s eating all the industries. So the biggest bookstore is, Amazon, and the most important new movie studio is Netflix. And at that time in the biggest taxi companies can be Uber, and the biggest hotel companies can be Airbnb, because there’s no business that won’t be better if there was a world class software team at the core making everything from the customer experience with how efficient, 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 next thing that’s happening is on our bio team is 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. Well, why is that interesting? Well, 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, which is a really fast technology curve. And it also lets you engineer a solutions as opposed to, you know, we always joke, it’s like we do drug discovery. But if we did bridge discovery, we just build a thousand bridges, which everyone didn’t collapse, that’s the bridge, but we haven’t had the capability because of our model of humans to do a kind of engineer biology, and now we have that. So this is the importance of software and really goes back to the importance of the breakthroughs on information theory from Alan Touring and Claude Shannon, and how profound they’ve been in being able to solve just a massive, massive class of problems that we could never solve with physics and chemistry and mathematics alone.

[00:16:34] Dr. Gary Bisbee: How far along progressed is healthcare generally versus other industries in that whole regard of software or hardware content.

[00:16:44] Ben Horowitz: Well, in different places, it’s different I would say. So in diagnostics, it’s getting really, really sophisticated, really fast. We have a company Freenome, but we’ve seen kind of broadly the ability to do liquid biopsies and basically discover all kinds of cancers at like stage zero through a blood test. That’s really remarkable when you think about it and the danger of an actual biopsy. And at the stage you have to get a lump before you even know you have cancer. And of course, most cancer as you know is already curable as long as you catch it early enough. If you catch it late, it’s not so curable, but if you catch it at stage zero, stage one, you can cure it. In that regard, it’s far along the business model for diagnostics is tough because the way our healthcare system works is at a very systemic level, very broken with this payer-provider being separate model. And so, there’s work to be done there to align so that we really care about health outcomes more than cost of procedure or how many procedures or these other weird incentives that we have. But then, on the on the actual editing side, I think we’re in the very, very, very early days. Well, we have this very interesting company, Asma, that we’ve invested in that has taken this software program Virologue that you use to write like circuits on a chip, and-in-or-gates and so forth. And they’ve taken that approach, but they’re writing out these logic gates in biology. And so, they have this thing where they can program yeast to be stealth paint and these kinds of things, and really kind of program your body to cure itself. But it’s at that very early, you know, I think Virologue probably came around in the early 70s. So it’s very early compared to, you know, when you talk about actually programming biology, we’re at the beginning, which is like super exciting in that there’s going to be so much to to be done.

[00:18:42] Dr. Gary Bisbee: Yeah, for sure. And a16z has 12 focus groups of which one is bio and health. That’s really the one we’ve been talking about. The follow up question, 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?

[00:19:06] Ben Horowitz: 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. And then, they all, I would say, could use radical improvement. You would know better than I, but when you go to the doctor and you pay your bill, the amount that the actual healthcare provider gets compared to what they bill is like less than 50 cents on the dollar. What else works that way? I did the job, we had a price, and nobody’s going to pay me the price. You know and then, if it’s on the individual, they won’t pay it all. And the insurance company doesn’t pay the right amount. And then the billing codes and the systems around that are really complicated. 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, well, am I going to do the thing that’s going to cure the patient, make them healthy, diagnose it correctly. Or can I only do that if I get paid? And so, that is a really crazy situation. And we’ve got companies like Devoted Health that are addressing that by becoming what we call a pay-vider. And they really care about the outcomes for the patient, because they end up paying for it, which is the way it ought to work. And so there’s just so much on the health side that we’re working on, and it’s critical to the bio side, because you can invent like you could cure cancer, all cancers, and you might not ever get it approved or paid for, I mean, that’s the current state of the health system. So you do have to work on both sides.

[00:21:11] Dr. Gary Bisbee: Well said, thank you, sir, for your time and your wisdom today. Very much appreciate Ben.

[00:21:16] Ben Horowitz: All right. Well, that was great seeing you, Gary. And thank you for having me.