SOME

MORE
THINGS

SELECTED POSTS
2013 - 2016

BEN HOROWITZ
Some More Things
select posts 2013-2016 (& other posts)

Ben Horowitz

Andreessen Horowitz
copyright: Andreessen Horowitz
produced using: Pressbooks
 Contents

PART I. SELECTED POSTS 2013-2016 (NEW OR NOT

IN THE HARD THING ABOUT HARD THINGS)

1. Why Founders Fail: The Product CEO Paradox 3

2. Little Things 8

3. The Sad Truth About Developing Executives 11

4. Do You Feel Pressure or Do You Apply Pressure? 15

5. The Prophets of Rage 21

6. Shared Command 25

7. Through the Looking Glass: Hiring Sales People 29

8. How to Ruin Your Company with One Bad Process 33

9. Cash Flow and Destiny 39

10. Capital Market Climate Change 42

11. Why I Did Not Go To Jail 47

12. Shareholders' Best Interests 52

13. Can Do vs. Can't Do Cultures 55

 PART II. BONUS TRACKS (OLDER POSTS NOT IN
THE HARD THING ABOUT HARD THINGS)

14. No Credit for Predicting Rain 63

15. Second Startup Syndrome 65

16. Is Now the Time to Hire MBAs? 67

17. On Micromanagement 71

PART III. TRIBUTES

18. Andy 77

19. Bill 86

20. Where Do Leaders Come From? 89

PART IV. BACK PAGES

21. Don't Follow Your Passion 95

22. The Legend of the Blind MC 103

23. Why I Will Give 100% of My Book Earnings to 111

Women in the Struggle

Where to Buy Ben's Book 117

[PART I]

Selected Posts 2013-2016

(new or not in The Hard
Thing About Hard Things)
[1]

Why Founders Fail: The Product

CEO Paradox

Because I am a prominent advocate for founders running

their own companies, whenever a founder fails to scale or
gets replaced by a professional CEO, people send me lots
of emails. What happened, Ben? I thought founders were
supposed to better? Are you going to update your “Why We
Prefer Founding CEOs” post?
In response to all of these emails: No, I am not going to
rewrite that post, but I will write this post. There are three
main reasons why founders fail to run the companies they
created:
The founder doesn’t really want to be CEO – Not every
inventor wants to run a company and if you don’t really
want to be CEO, your chances for success will be
exceptionally low. The CEO skill set is incredibly diZcult to
master, so without a strong desire to do so the founder will
fail. If you are a Founder who doesn’t want to be CEO, that’s
Xne, but you should Xgure that out early and save yourself
and everyone else a lot of pain.
The board panics – Sometimes the founder does want to
be CEO, but the board sees her making mistakes, panics and
replaces her prematurely. This is tragic, but common.
4 Some More Things

The Product CEO Paradox – Many founders run smack

into the Product CEO Paradox, which I explain below.

The Product CEO Paradox

A friend of mine led his company from nothing to over $1

billion in revenue in record time by relentlessly pursuing
his product vision. He did so by intimately involving
himself in the intricate details of his company’s product
planning and execution. This worked brilliantly up to about
500 employees. Then, as the company continued to scale,
things started to degenerate. He went from being the
visionary product founder who kept cohesion and context
across and increasingly complex product line to the
seemingly arbitrary decision maker and product bottleneck.
This frustrated employees and slowed development. In
reaction to that problem and to help the company scale,
he backed oW and started delegating all the major product
decisions and direction to the team. And then he ran smack
into the Product CEO Paradox: The only thing that will
wreck a company faster than the product CEO being highly
engaged in the product is the product CEO disengaging
from the product.
This happens all the time. A founder develops a
breakthrough idea and starts a company to build it. As
originator of the idea, she works tirelessly to bring it to life
by involving herself in every detail of the product to ensure
that the execution meets the vision. The product succeeds
and the company grows. Then somewhere along the line,
employees start complaining that the CEO is paying too
much attention to what the employees can do better
without her and not enough attention to the rest of the
company. The board or CEO Coach then advises the
founder to “trust her people and delegate”. And then the
product loses focus and starts to look like a camel (a horse
built by committee). In the meanwhile, it turns out that the
 Why Founders Fail: The Product CEO Paradox 5

CEO was only world-class at the product, so she eWectively

transformed herself from an excellent, product-oriented
CEO into a crappy, general purpose CEO. Looks like we
need a new CEO.
How can we prevent that? It turns out that almost all the
great product-oriented founder/CEOs stay involved in the
product throughout their careers. Bill Gates sat in every
product review at Microsoa until he retired. Larry Ellison
still runs the product strategy at Oracle. Steve Jobs famously
weighed in on every important product direction at Apple.
Mark Zuckerberg drives the product direction at Facebook.
How do they do it without blowing their companies to bits?
Over the years, each one of them reduced their level of
involvement in any individual set of product decisions, but
maintained their essential involvement. The product-
oriented CEO’s essential involvement consists of at least the
following activities:

• Keep and drive the product vision – The CEO does not
have to create the entire product vision, but the product-
oriented CEO must drive the vision that she chooses. She
is the one person who is both in position to see what
must be done and to resource it correctly.
• Maintain the quality standard – How good must a
product be to be good enough? This is an incredibly
tough question to answer and it must be consistent and
part of the culture. It was easy to see the power of doing
this right when Steve Jobs ran Apple as he drove a
standard that created incredible customer loyalty.
• Be the integrator – When Larry Page took over as CEO
of Google, he spent a huge amount of his time forcing
every product group to get to a common user proXle and
sharing paradigm. Why? Because he had to. It would
never have happened without the CEO making it
happen. It was nobody else’s top priority.
6 Some More Things

Make people consider the data they don’t have – In today’s

world, product teams have access to an unprecedented set
of data on the products that they’ve built. Lea to themselves,
they will optimize the product around the data they have.
But what of the data they don’t have? What about the
products and features that need to be built that the
customers can’t imagine? Who will make that a priority?
The CEO.
But how do you do that and only that if you have been
involved in the product at a much deeper level the whole
way? How do you back oW gracefully in general without
backing oW at all in some areas? At some point, you must
formally structure your product involvement. You must
transition from your intimately involved motion to a
process that enables you to make your contribution without
disempowering your team or driving them bananas. The
exact process depends on you, your strengths, your work
style and your personality, but will usually beneXt from
these elements:

• Write it; don’t say it. If there is something that you want
in the products, then write it out completely. Not as a
quick email, but as a formal document. This will
maximize clarity while serving to limit your involvement
to those things that you have thought all the way through.
• Formalize and attend product reviews. If teams know that
they should expect a regular review where you will check
the consistency with the vision, the quality of the design,
the progress against their integration goals, etc., it will
feel much less disempowering than if you change their
direction in the hallway.
• Don’t communicate direction outside of your formal
mechanisms. It’s Xne and necessary to continue to talk to
individual engineers and product managers in an ad hoc
fashion, because you need to continually update your
 Why Founders Fail: The Product CEO Paradox 7

understanding of what’s going on. But resist the attempt

to jump in and give direction in these scenarios. Only
give direction via a formal communication channel like
the ones described above.

Note that it is really diZcult to back oW of any non-essential

involvement yet remain engaged where you are needed.
This is where most people blow themselves up: either by
not letting go or by letting go. If you Xnd yourself where
my friend found himself—you cannot let go a little without
letting go entirely—then you probably should consider a
CEO change. But don’t do that. Learn how to do this.
[2]

Little Things

I have seen far too many people who upon recognizing today’s
gap try very hard to determine what decision has to be made to
close it. But today’s gap represents a failure of planning some
time in the past.
— Andy Grove

When you run a company, big things stay on your mind.

Will we make the quarter? Did we hire the right engineers?
Will the release be on time? Do we have a quality problem?
Do we have enough money in the bank?
The Catch 22 is that if you attempt to act on those “big
things,” you will usually do big damage. In order to move
big things in a positive direction, it’s generally best to focus
on little things.
If you are worried about the quarter, you might think that
it’s a good idea to call your head of sales twice a day to get
the status. By doing so, you might think you are creating
the appropriate sense of urgency. In reality, you are just
distracting her from closing the quarter twice a day. In fact,
by radically overemphasizing the quarter, you will likely
cause your sales leader to begin focusing on the cover up —
the byzantine set of excuses that she will deploy in the case
that she actually misses her number.
These excuses will then cause a new set of problems. She
 Little Things 9

might say, “Why did we miss the quarter? We really did

not get the right support from the product organization.” So
now you go over to the head of products to harass her. She’s
responds: “What? If the VP of Sales wasn’t getting enough
support, then why didn’t she say something to me?” Do
you see what you did there? Not only did you fail to make
progress on the sales issue, but you created a new political
issue which will contribute to you missing the next quarter.
While it’s correct to worry about the big issues, you must
resist the urge to act on them directly. Before acting, you
should Xrst translate the big thing into a related set of little
things. For example, if you are worried about making the
quarter, then you should go on a few sales calls and see
if you are selling your product in the most eWective way
possible. Are your sales people properly trained? Do they
run a process that puts your product in the very best light
and sets appropriate traps for your competitors? Are you
selling at the right level in the organization? Is your product
truly competitive? As you get the answers to these questions,
you will develop more constructive little things to take
action on. These little things might not help you make this
quarter, but they will certainly help you make next quarter.
Similarly, if you are deeply worried about engineering
throughput, lamenting that your engineers don’t work as
hard as other companies that you’ve heard about will
achieve very little other than making your engineers think
they are the “B” team. On the other hand, spending time
going through their day and really understanding what’s
slowing them down in the code base, where their build
environment is working against them and how the
communication overhead between groups slows them down
might help a great deal.
This is true for almost anything in your company. You
should set high-level goals, but those goals will or will not be
achieved by the organization that you assigned them to. If
10 Some More Things

you want to help them reach their goals, do so by focusing

on the little things.
My old boss Jim Barksdale used to say that all of the
knowledge was with the individual contributors and the
customers. As CEO, you need to hire the right people and
set a clear direction. Once you do that, you should Yy low
and fast rather than high and slow. Focus on the little things
and the big things will take care of themselves.
[3]

The Sad Truth About Developing

Executives

The truth is hard to swallow, and hard to say, too

But I graduated from that bullshit, now I hate school
—Lil Wayne, “CoCo”

My greatest disappointment as CEO was the day I realized

that helping my executives develop their skill sets was a
bad idea. Up to that point in my career, I prided myself
on my ability to develop people and get the most out of
them. In my jobs running product management, product
marketing and engineering, developing young talent was
the most rewarding part of the job. Helping them learn to
manage, improve their judgment and be more eWective in
their domains made my organizations better, and people
genuinely appreciated the eWort.
How could a great practice for a functional manager be a
destructive one for a CEO? Let me count the ways.

You don’t have the skills.

The Xrst question that you must ask yourself is how are you
going to develop a poor performing head of sales into a
good one if you have never run sales? What exactly are you
12 Some More Things

going to teach them? Would a sales VP who became a CEO

be able to develop you into a better engineering manager?

You don’t have the time.

A company depends entirely on the CEO for an important

set of functions, which includes timely and high-quality
decisions, clear direction, hiring a great team, and
architecting and implementing a super-high-functioning
communication architecture. Any time wasted trying to
develop executives when you don’t even have the skills to do
it takes away from the essential CEO functions.

They don’t have the time.

A leader’s eWectiveness is largely a function of how much

conXdence her followers have in her. If someone is running
a large organization and doesn’t show competence
immediately, her people will quickly write her oW, and she
will never recover. Executives have no time to be developed
before they become useless.

Your results will suck while you work on a task that you
cannot complete.

It’s bad enough that you will work on something that you
will add zero value to, but as you are doing that, the
organization in question will continue to be awful. You will
lose time and ground in the marketplace while you try and
fail to Xgure it out. Meanwhile, everyone who works for that
executive will be working in a crappy organization, doing
crappy work and developing a crappy reputation for being
part of it.
Executives are compensated for their existing ability, and
therefore should not be evaluated on their potential.
While it’s common practice and a good idea to take
 The Sad Truth About Developing Executives 13

potential into account with regular employees, this

methodology does not work well for executives. When you
hire an executive, he will demand around 1 percent of the
company. How do you explain to a great engineer with less
than one-Xah that amount of stock that you are waiting for
the executive’s potential to kick in?

Trying to help can make things far worse.

If an executive is failing and you keep him around, thinking

that you will develop him, things will get ugly quickly. You
know he’s incompetent, so you will likely discount
everything he says. When he raises a point in a meeting that
contradicts a high-performing executive, you will take the
high-performer’s side 100 percent of the time.
This will make your failing executive feel badly, but more
importantly, it will completely destroy the credibility of the
function that he is running. If the exec is, for example, the
head of marketing, everyone in the rest of the organization
will draw the conclusion that marketing is unimportant in
your company. That conclusion will be surprisingly long-
lasting.
While you cannot develop an underpowered executive
into a high-performing one, there are several things that
you can do in your role as his manager that will help all of
your executives succeed.

Provide the proper context.

When you hire an executive, she may know her function,

but she does not know your company. She does not know
your management philosophy, the top performers, the
history of the decisions that were made, how product Yaws
were created and Xxed, etc. This information will be
invaluable to her success and you should invest heavily to
make sure that she quickly gets all the context she will need.
14 Some More Things

Be very clear about the rules of the game.

You should be extremely clear up front that you expect your

executives to be world-class in their functions. If they are
not, they will not keep their jobs. Furthermore, you will
not be able to make them world-class, because you are not
world-class in their areas.

Know what you want, and be clear about it.

Tell them what you think world-class performance is. If you

don’t know, go Xnd out by interviewing some world-class
CEOs and world-class executives, and then tell them.

Be clear about relative performance.

If you think your marketing is not as good as other

companies in your sector, then let your head of marketing
know. If you know that other companies generate Xve times
the number of qualiXed leads than you do and you don’t
understand why, then say something. This will make it
much easier for you to make a swia decision if your
executive does not know what he is doing.
In the end, a CEO has got to know her limitations.
[4]

Do You Feel Pressure or Do You

Apply Pressure?

To whoever think their words aWect me is too stupid

And if you can do it better than me, then you do it
—Kanye West, “Cold”

One obvious yet under-appreciated law of business physics

is: For any given company, the larger the company becomes, the
more opportunities emerge to screw it up.
Another obvious, but not well understood law: The more
screwed up your company, the more people will complain about it
and blame you.
If we take these two together, it is easy to see that without
intervention the larger your company becomes, the more
people will complain and blame you.
This seems simple enough, but CEOs oaen fail to
understand the logic, become overwhelmed by the
criticism, lose conXdence in themselves, and decide that
they are no longer capable of running their own companies.
This can be tragic as I explained in “Why We Prefer
Founding CEOs”.
If you are a logical and open-minded person, it is diZcult
not to take a 10X increase in criticism seriously. More
importantly, it’s diZcult not to take a 10X increase in
16 Some More Things

criticism personally. So how can a CEO keep from getting

ground into sawdust by complaints from her own people?
The answer comes from a simple CEO aphorism: You either
apply pressure or you feel pressure.
Let’s begin by looking at the overwhelming spiral. As your
company grows, people start complaining about everything
from your sales eWorts being underwhelming to there not
being enough organic snacks in your free food section. In
the meanwhile, you are trying to wrestle serious product
strategy questions posed by scary competitors to the
ground. You don’t know the answers to most of the
complaints, so you defer them and focus on what you know.
The problems related to the complaints fester and grow.
Your employees get frustrated that the issues are not being
Xxed and complain louder. They begin to lose conXdence in
you as CEO.

The Best Defense is a Good O<ense

The key to breaking the cycle is to stop feeling pressure

and to start applying it. The most basic way to do this is
to assign the problems to your team. This transfers the
pressure from you to the organization and has the added
beneXt of empowering the team.
At this point, those of you who have read my book are
thinking: “Ben, that’s not the hard thing about this. The hard
thing isn’t delegating, the hard thing is when the executive
disagrees that there’s a problem or there is no logical owner
or the problem is cross-functional or the executive tries to
give it back to you.” Let’s take these in order.

The executive fundamentally disagrees that there is a

problem

Imagine that your employees are complaining about the

number of bugs in your product and you ask your head of
 Do You Feel Pressure or Do You Apply Pressure? 17

engineering to improve quality. Chances are that he will not

say: “Sure thing, boss.” He will much more likely say: “By
what deXnition?” He will likely have way more data than you
about product quality and it will be diZcult for you to win
the argument. Yet you know the employees are right, which
is why you didn’t explain to them they were wrong in the
Xrst place.
The reason for the stalemate is that quality in the abstract
is an intractable problem. In fact, most problems in the
abstract have this property. If you want it Xxed, you must be
speciXc. Doing so is tricky in this case because no soaware
organization has ever produced bug-free soaware in every
version. So if you don’t want zero, then how many bugs are
too many? The best way to start is to frame it in terms of
something that you know well. Sometimes this will mean
moving to a more qualitative argument. For example, pick
your 3 favorite bugs and use them as examples. Describe
why they are particularly damaging and try to classify them
as best you can. Let your executive know that bugs like that
should not ship and if they do accidentally ship then the
company should not rest until they are Xxed. Then ask him
to do something speciXc: have him tell you exactly how
many bugs are outstanding in the classes that you identiXed
and report back on when they will be Xxed. Then ask him
to make a proposal about how he will systematically do a
better job on this in the future. Finally, let him know what
you are willing to give up in terms of other work (schedule,
features, etc.) to make this a priority. Getting speciXc will
help energize the team as it will give them a problem they
can actually solve. It will also clearly communicate that you
are super serious about the issue.

The problem is cross-functional

Imagine that your sales people keep complaining that there

aren’t enough leads. You feel as though they are Jack
18 Some More Things

Lemmon in Glengary Glen Ross. But then you go to your

head of marketing and he demonstrates that he’s generated
150% of the leads that he was supposed to generate based
on his objectives. What do you do? There are many possible
issues: the deXnition of a lead diWers, the proXle of the
target customer diWers, somebody is lying, etc. As tempting
as these possible solutions may be, resist the temptation to
solve this one yourself. Instead, get both executives together
and let them know that you need them to agree on a
common deXnition of a lead, a method for determining
whether any given lead meets the description and an
objective for the head of marketing to hit next quarter that
both he and the head of sales will be happy with. Give
them a Xrm deadline and let them know that you will take
no excuses, because you have a whole Xeld Xlled with
demotivated sales reps and you will not stand for that. Apply
pressure.

There is no logical owner

Sometimes a problem has no owner. Customer churn has

increased in the past 2 quarters. It’s an important issue and
lea unchecked it could become mission critical. However,
it’s not the top priority in the company today. To further
create CEO procrastination, it’s not clear whether it’s a
customer support problem, a sales problem, a services
problem, a product quality problem or some combination
of all four. In reality, it’s probably a CEO problem, but if
it’s not the top priority in the company, having the CEO
personally drive it to resolution may not be the best idea.
So, what do you do? You assign the problem to an illogical
owner. In this case, you might assign it to the head of sales,
because she has the highest incentive to Xx it
properly—otherwise she has to resell all those deals to make
quota. You empower her to dig into each churned account,
Xnd the root cause analysis, and report back to the team on
 Do You Feel Pressure or Do You Apply Pressure? 19

a frequent basis. Once the root cause has been determined,

she should propose a cross-functional plan to Xx the
problem.
This is an imperfect strategy in many ways. The problem
might be entirely with sales setting poor expectations and
she might cover that up. The various groups might not
get along well and not want to listen to a peer. The head
of sales might not have a great idea of what’s possible in
engineering or customer support. Imperfect yes, but far
better than doing nothing, which is generally what happens
when the CEO has too much on her plate and doesn’t apply
pressure.

The assigned executive tries to give it back

Your company’s engineering schedules are unpredictable

and your engineering throughput is poor, so you ask your
VP of engineering to Xx the problem. She complains: “The
schedule keeps slipping because the product management
team keeps changing the priorities and thrashing the
engineers back and forth across the various projects.” You
say: “Great. I will work with product management to get
them to cut that out.” The VP of product management
replies: “I’d love to stop with the requirements, but we need
certain things to close large deals and make the quarterly
number.” You then go to the head of sales and she says: “Do
you want me to make my number or not?”
In this case, everyone is under empowered to make the
right decision and get you what you want. The key to
delegation is better empowerment. You could simply give
the head of engineering the ability to say “no” to everything,
but you may well miss all your sales forecasts and cause
yourself an even bigger problem. A better approach would
be to formalize the change process. You can say that once
a project begins, you can alter its deXnition, resources,
priorities, or schedule, but doing so requires a formal
20 Some More Things

meeting with all the stakeholders and the CEO. At that

meeting, all changes and their potential consequences will
be discussed and a decision will be reached. If you
implement such a process, you will Xnd that the number of
changes drops by an order of magnitude. By simply making
it more diZcult to make a change, you will apply pressure
to the team to Xnd another way to make the sales number.
At this point, you haven’t empowered the head of
engineering to control her own destiny, but you have
empowered the team to give you what you want.

Using Pressure to Evaluate Executives

Founding CEOs oaen Xnd it diZcult to evaluate executives.

How do I know if my head of marketing is world class? I’ve
never run marketing. Applying lots of pressure is a great
way to sharpen your instincts when evaluating executives.
If you consistently apply pressure to an executive and
get no results, then you very likely need to upgrade that
position. The whole point of paying an executive all that
money and giving her that fat stock option package is to
take the pressure oW of you and give you some leverage.
If she can’t do that, then she must go. She may be a Xne
executive for another CEO, but not for you.
On the other hand, when you have a problem that you
have no idea how to solve and you delegate it to an executive
and she solves it, then she’s extremely valuable.

Final Thoughts

If you are feeling overwhelmed and under competent, then

you are very likely not applying enough pressure.
[5]

The Prophets of Rage

You’re quite hostile,

I’ve got a right to be hostile,
my people been persecuted.
—Public Enemy

A while back I wrote a post called “When Smart People are

Bad Employees.” In that post, I wrote about employees that
you think will be incredible, but turn out to be destructive.
The other day, my partner Lars and I were talking about
the opposite: employees who appear to be destructive, but
if properly managed can be spectacular. In reference to hip
hop’s great prophet Chuck D., I call them “The Prophets of
Rage.”
If you’ve worked in a company for any length of time,
you’ve probably seen one of these prophets. People refer to
them as glass breakers, cowboys, toe stompers, or just plain
assholes. Yet it’s diZcult to get rid of them, because they
produce massive amounts of high-quality work. Beyond
that, they have indomitable will. No obstacle is too great, no
task too large, no problem is too hard and they do not care
who they oWend, upset, undermine, or piss oW to get the job
done. In fact, they are so self-righteous that it’s diZcult to
even have a conversation about the right way to do things,
because in their minds if they are doing it, it must be right.
22 Some More Things

If you are not them or not on their team, you are very likely
“a lazy idiot” or worse. Even if they don’t call you names
outright, they will deliver searing, totally impolite insights
that will cause you to question your own motivations. They
specialize in making people uncomfortable.
Their backgrounds are almost never consistent with the
typical hiring proXle. They do not come to you right from
central casting. Oaen they grew up poor and went to the
wrong schools. Or they were the “wrong” religion, sexual
orientation, or skin color. In general, they believe that they
grew up on the wrong side of the tracks and everybody is
judging them on that all the time. They will walk through
Xre to prove everyone wrong. They have to succeed and are
willing to do whatever it takes.
This is not to say that everyone with this background is a
Prophet of Rage, just that Prophets of Rage tend to have this
background.
These employees are the corporate version of W.M.D.s.
The ultimate weapon in any arsenal, but their deployment
can lead to highly unpredictable consequences. How can
they be used as a force for good? How can you prevent them
from destroying your culture and possibly your company?
When managing a Prophet of Rage, the Xrst thing to
understand is that they oaen dish it out much better then
they take it. While they won’t hesitate to viciously attack
their peers and bring them to tears, even the slightest
criticism from a prophet’s manager may cause him or her to
go into a deep funk and become incredibly depressed. Most
managers will Xnd this behavior to be totally ridiculous and
give up when they see it. Most managers will forfeit
greatness at that point.
Prophets of Rage are perfectionists. They work harder
than anybody in the organization and expect total
perfection from themselves and everyone around them.
When they see others deliver sub par work or sub par
thinking, the Prophets become enraged and lose all control
 The Prophets of Rage 23

of themselves. But it’s the same dynamic that enrages them

and causes them to stomp on other people’s toes that makes
them recoil at any criticism: they have dedicated their entire
life force to doing great work; any rejection of their work is a
rejection of them personally. Keep in mind that a prophet’s
background makes her a bit paranoid about you wanting her
there in the Xrst place, so if she doesn’t become depressed,
she will certainly question your motives.
In my experience, there are at least three keys to
managing these super high performing, super volatile
personalities.
1. Don’t give them feedback on their behaviors, give
them feedback on what their behaviors mean
If you tell a prophet, “It is totally unacceptable to scream
at your peers in meetings,” he will hear: “It’s totally
unacceptable for you to scream at people in meetings, but
others can do it all they want, because I am out to get you.”
In the prophet’s mind, everyone is out to get him, so this is
the logical reaction.
A better approach is to focus on how the behaviors were
interpreted by the other people in the room. “You have a
very important mission, but when you screamed at Andy
that his team was blocking you from your goal, his response
wasn’t to work harder to unblock you. His reaction was to
get you back for embarrassing him in public. Your method
was totally ineWective.” He will initially bristle at the
criticism, but when he thinks it through, he will realize that
you were right and he will work extremely hard to Xx it,
because he is, aaer all, a perfectionist.
2. Realize that they will never be completely accepted in
polite society
No matter how clearly and eWectively you coach a
prophet, you will be unlikely to completely transform her.
She has spent her entire life getting to this point, so words
from her manager won’t get her to the point of corporate
acceptance. The more people don’t accept her, the worse the
24 Some More Things

behaviors will become, because the rejection will reinforce

her life narrative and increase her rage. The more eWective
approach will be to do your best to moderate your prophet
while letting the rest of the team know that you expect them
to accept her due to her incredibly high productivity. If they
believe that you won’t Yinch, they will meet her half way. It’s
absolutely critical that they do this, because she will never
be completely congenial.
3. Coach them on what they can do
If you keep in mind that your prophet is paranoid, then
you will realize that giving entirely negative feedback will
not work. Rather than focusing on what he is having trouble
with or can’t do, spend most of your time working with him
on what he can do. This will enable his true super powers
to come out and take your company’s production out of the
stratosphere.
Even with the best coaching, it’s quite possible that a
prophet has too much rage to function in an organization as
it grows. At this point, they become smart people who are
bad employees and there may be nothing that you can do.
In the end, realize that a talented Prophet of Rage may
be the most powerful human force in your company. Your
challenge is to help that be a force for good.
[6]

Shared Command

Cause two suckers can’t agree on something

a thousand mutherfuckers die for nothing
—Geto Boys, “Fuck a War”

Battle is a highly Yuid situation. You plan on your

contingencies, and I have. You keep your initiative, and I will.
One thing you don’t do is share command. It’s never a good
idea.
—Major Vic Deakins (played by John Travolta), Broken Arrow

Zynga recently put a new management structure in place

where Don Mattrick is the CEO and my friend Mark Pincus,
the founder and former CEO, will be the Chairman of the
Board and the Chief Product OZcer. My friend Fred Wilson
encourages entrepreneurs to consider this structure and
wrote that the new Zynga organization is analogous to
LinkedIn’s with founder Reid HoWman as Chairman and JeW
Weiner as CEO. I think Fred is wrong. The Zynga structure
is quite diWerent. At LinkedIn, the chain of command is
clear: JeW Weiner runs the company. If you want a decision
made and JeW weighs in, that’s it. Game over. Reid never
overrides JeW. Contrast this to Zynga, where Mark reports
to Don who reports to the board where Mark is Chairman.
Who makes the Xnal decision on products? If a product
26 Some More Things

decision impacts revenue, who makes that decision? I do not

know the details, so I do not know for certain, but the Zynga
structure smells much more like shared command. If it is
indeed shared command, that will be a big problem.
Shared command always seems really attractive to the
people at the top of the organization like the CEO and
the board: “we have two world-class people, this gives us
the best of both worlds! We shouldn’t get caught up in the
conventions of years past. We’re all adults. We can get
along.” It looks much less attractive to those who do all
the work in the organization. To them it looks more like
frustration, chaos, and delay.
As a company gets big, the information that informs
decision-making gets massive. Depending upon the prism
through which you view the business, your perspective will
vary. If two people are in charge, this variance will cause
conYict and delay. Every employee in a company depends
on the CEO to make fast, high quality decisions. Oaen any
decision, even the wrong decision, is better than no
decision. These decisions are pulse of the organization.
Sharing command almost guarantees that the CEO position
will perform poorly in this dimension.
Let’s look at the problem from the point of view of the
employee. Imagine you are an engineer and you need to
know if you should optimize what you are doing for IOS
or Android. Both platforms are “Xrst class” as far as the
company is concerned, but you are going to have to make
a trade-oW for this particular function. So, you run the
decision up the chain and it gets to the CEO. Excuse me. It
gets to Chief Product OZcer/Chairman. Excuse me, which
one must it get to? It impacts revenue, but it’s a product
decision. Or is it? Whomever she checks with will have to
check with the other who may be in China and unreachable
at the moment. Maybe the Chief Product OZcer/Chairman
and the CEO are at odds and need to wait until they are
face-to-face to resolve it. It the meanwhile, she waits and
 Shared Command 27

waits. Now multiply this by thousands of employees and

that’s what it means when you share command.
If shared command is so bad, why do people keep trying
it? Basically, the people in charge need to make one
decision: who should run the company. They cannot decide,
so they compromise. And now, because they couldn’t make
one decision, every single decision that the company makes
from this day forward will be slower than it would have been
otherwise. It sucks to work for that place.

The Great Exception

You may be reading this and asking, what about Workday?

Aren’t Dave DuZeld and Aneel Bhusri co-CEOs? Isn’t
Workday the greatest new enterprise soaware company
known to man? The answer to all of those questions is yes.
Workday is the great exception to the rule. Why is Workday
able to do it? What makes them the exception that proves
the rule? In speaking with Aneel, several factors make
Workday’s command structure unique.

• Aneel and Dave have been working together for over 20

years–They are not just co-workers or friends; they are
family. They comprehensively know and agree upon
each other’s strengths and weaknesses. The have total
trust.
• Dave is 26 years older than Aneel – There is no chance
for a sibling rivalry. Dave is far more excited about
Aneel’s success than his own and vice-versa. Dave sees
Workday as Aneel’s company eventually and is there to
help Aneel succeed. To a large extent it is Aneel’s
company now in terms of command structure.
• Command is not actually shared at Workday, command
is partitioned. Because Dave and Aneel know each other
so well, the division of decision making is natural and
28 Some More Things

obvious to them and everyone in the company. Beyond

that, since Aneel is the eventual lone CEO, the decisions
are his to make and get Dave’s advice when he needs it.
Aneel gets the bonus of being able to completely delegate
whole categories of decision-making and responsibility
to Dave whenever he needs to.

So, if you’ve worked together for 20 years, have already

selected who will eventually run the company and have a
track record of being two of the greatest entrepreneurs of
the past 2 decades, then go ahead and share command.
Otherwise, it is never a good idea.
Footnote: Some people perceive that Marc and I share
command at Andreessen Horowitz. This is not true. The
operational decision making process is run by Scott Kupor.
The investment decisions are decided (as in other Xrms) by
the General Partners.
[7]

Through the Looking Glass: Hiring

Sales People

He’s a big bad wolf in your neighborhood

Not bad meaning bad, but bad meaning good
—Run DMC, “Peter Piper”

Perhaps the most common mistake that I see a technical

founder make when building her sales organization is she
applies strategies that worked in building the engineering
team to the sales hiring process. This may sound shocking,
but sales people are diWerent than engineers and treating
them like engineers does not work well at all.
It starts with the hiring process. If you attempt to hire
sales people using the same assumptions that worked with
engineering, then here are some of the things that will go
wrong:

The Interview

A good engineering interview will include some set of

diZcult problems to solve. It might even require that the
candidate write a short program. In addition, it will test the
candidate’s knowledge of the tools she uses in great depth.
A small portion of the interview may address personality
30 Some More Things

traits, but smart managers will tolerate a very wide variety

of personalities to Xnd the best engineers.
A good sales interview is the opposite. You can quiz them
on hard sales problems all day long, but only a horrible sales
rep won’t be able to bluW her way through the most intricate
quiz on how to sell a complex account. On the other hand,
great sales people tend to have very speciXc personality
traits. SpeciXcally, great sales people must be courageous,
competitive and hungry. They also need enough
intelligence to get the job done. That’s the magic formula.
Hire engineers with that proXle and you’ll fail. Hire sales
people who are really smart problem solvers, but lack
courage, hunger and competitiveness, and your company
will go out of business.
Dick Harrison, CEO of Parametric Technologies, home
of perhaps the greatest enterprise sales force ever built,
interviewed Mark Cranney, the greatest sales manager I
have ever met, as follows:

Dick: “I’ll bet you got into a lot of Xghts when you were a youth
didn’t you?”
Mark: “Well yes, Dick, I did get into a few.”
Dick: “Well, how’d you do?”
Mark: “Well, I was about 35-1.”
Dick: “Tell me about the 1.”
Mark tells him the story, which Dick enjoys immensely.
Dick: “Do you think you could kick my ass?”
Mark pauses and asks himself: “Is Dick questioning my
courage or my intelligence?” Then replies: “Could or would?”

Dick hires Mark on the spot.

Ask an engineer that same set of questions and at best
she’d be confused and at worst she’d be horriXed. By asking
Mark those questions, Dick quickly found out:

• If Mark had the courage to stay in the box and not get
Yustered
 Through the Looking Glass: Hiring Sales People 31

• That Mark came from a rough environment and was

plenty hungry

• That Mark was super competitive, but smart enough to

calculate his answer

Hiring sales people is diWerent.

The Background

When screening engineers from other companies, it’s smart

to value engineers from great companies more than those
from mediocre companies. All things being equal, always
interview the Google engineer over the Quest Soaware
engineer. Why? Because, as an engineer, you have to be way
better to get a job at Google than at Quest. In addition,
Google’s engineering environment and techniques are
state-of-the-art, so engineers who come from there will be
well trained in an environment with high standards.
In contrast, anybody with a pulse can sell a massively
winning product like Google Ads or VMware hypervisors,
but people who consistently sold Lanier copiers against
Xerox were elite. In fact, it might be a good sign that a sales
rep was successful at a bad company. To succeed at selling
a losing product, you must develop seriously superior sales
techniques. In addition, you have to be massively
competitive and incredibly hungry to survive in that
environment.

The Cost of Making a Mistake

Great engineering organizations strive never to make hiring

mistakes as hiring mistakes can be very costly. Not only
do you lose the productivity that you might have gained
from the hire, but you might well incur severe technical
debt. To make matters worse, even when an engineering
32 Some More Things

manager recognizes she’s made a mistake, she’s oaen slow

to correct it, leading to more debt and delay. In addition,
building an engineering organization too quickly will cause
all kinds of communication issues, which makes slow hiring
in engineering a really smart thing to do.
On the other hand, you oaen can’t aWord to build out
your sales force too slowly, especially if you have signiXcant
competition. Sales people, when compared to engineers,
work in relative isolation, so there’s productivity loss, but
relatively little long-term debt or fast growth issues. Sales
managers generally don’t have issues with Xring poor
performers, so sales people go fast. I have a friend who was
fond of saying, “We have two kinds of sales people: rich and
new.”

The Conclusion

Applying engineering hiring techniques to a sales

organization is like eating poison ivy to get more green
vegetables. You will get the opposite of what you want.
[8]

How to Ruin Your Company with

One Bad Process

Real quick, whole squad on that real sh*t

0 to 100, n***a, real quick
—Drake, “0 to 100/The Catch Up”

I am a giant advocate for technical founders running their

own companies, but one consistent way that technical
founders deeply harm their businesses is by screwing up
the budgeting process. Yes, the budgeting process. How
ridiculous is that? How does it happen and why is it
particularly problematic for engineers?
I’ll begin by describing how I screwed it up in my
company. Our sales were growing so fast that the biggest
problem that we faced was that we literally could not handle
all the customers that wanted to sign up for Loudcloud.
To combat this and enable us to grow, I worked diligently
with my team to plan all the activities that we needed to
accomplish to expand our capacity and capture the market
before the competition. Next, I assigned sub-goals and
activities to each functional head. In conjunction with my
leadership team, I made sure that each goal was measurable
and supported by paired metrics as well as lagging and
leading indicators. I then told the team to Xgure out what it
34 Some More Things

would take to accomplish those goals and return with their

requirements for headcount and program dollars. Finally,
I made adjustments to their requests based on industry
benchmarks (mostly reductions) to get to a plan that I
thought made sense.
Here’s the basic process:
1. Set goals that will enable us to grow
2. Break the goals down so that there is clear ownership
and accountability for each goal by a speciXc team
3. ReXne goals into measurable targets
4. Figure out how many new people are required to hit the
targets
5. Estimate the cost of the eWort
6. Benchmark against the industry
7. Make global optimizations
8. Execute
Unless you are an experienced manager, you may not
even see what’s wrong with this process, but it very nearly
led to my company’s demise. In fact, the above process is
completely upside-down and should only be followed if you
wish to bloat your company to the brink of bankruptcy and
create a culture of chaos.
When I asked my managers what they needed, I
unknowingly gamiAed the budgeting process. The game
worked as follows: The objective was for each manager to
build the largest organization possible and thereby expand
the importance of his function. Through the transitive
property of status, he could increase his own importance as
well. Now you may be thinking, “That wouldn’t happen in
my company. Most of my staW would never play that game.”
Well, that’s the beauty of the game. It only takes one player
to opt in, because once someone starts playing, everybody
is going in — and they are going in hard.
Gameplay quickly becomes sophisticated as managers
develop clever strategies and tactics to improve their
chances for winning. One common game technique is to
 How to Ruin Your Company with One Bad Process 35

dramatically expand the scope of the goals: “When you said

that you wanted to increase our market presence, I naturally
assumed that you meant globally. Surely, you wouldn’t want
me to take a U.S.-centric view.” To really motivate the CEO,
another great technique involves claiming dire
circumstances if the company fails to achieve its metrics:
“If we don’t increase sales by 500% and our top competitor
does, we will fall behind. If we fall behind, we will no longer
be No. 1. If we’re not No. 1, then we won’t be able to hire
the best people, command the best prices, or build the best
product, and we will spin into a death spiral.” Never mind
the fact that there is almost no chance that your competitor
will grow 500% this year.
Another subtle problem with this process is that when I
asked my team what they needed to achieve their goals,
they naturally assumed they would get it. As a result, my
team deeply socialized their ideas and newly found money
with their teams. This has the added gaming beneXt of
inextricably tying their demands to company morale.
When the VP of marketing asked me for 10 headcount and
$5M in program expenses, then shared that plan with his
team, it changed the conversation. Now a major cutback to
his plan would alarm his team because they had just spent
two weeks planning for a much more positive scenario.
“Wow, Ben greatly reduced the plan. Should I be looking for
a job?” This kind of dynamic put pressure on me to create
a more expansive expense plan than was wise. Multiply this
by all my managers and I was on my way to burning up all
my cash and destroying my culture.
My core problem was that my budgeting process did not
have any real constraints. We were private and did not have
a speciXc proXt target that we needed to hit and we had
plenty of cash in the bank. Drawing the line on expenses
seemed rather arbitrary. In the absence of a hard constraint,
I had no constraint.
An excellent constraining principle when planning your
36 Some More Things

budget is the preservation of cultural cohesion. The enemy

of cultural cohesion is super-fast headcount growth.
Companies that grow faster than doubling their headcount
annually tend to have serious cultural dria, even if they do a
great job of onboarding new employees and training them.
Sometimes this kind of growth is necessary and manageable
in certain functions like sales, but is usually
counterproductive in other areas where internal
communication is critical like engineering and marketing. If
you quadruple your engineering headcount in a year, you
will likely have less absolute throughput than if you doubled
headcount. As an added bonus, you will burn way more
cash. Even worse, you will lose cultural consistency as new
people with little guidance will come in with their own way
of doing things that doesn’t match your way of doing things.
Note that this does not apply to you if you have very small
numbers. It’s Xne to grow engineering from one to four
people or from two to eight. However, if you try to grow
from 50 to 200, you will cause major issues if you are not
extremely careful.
Starting with the cultural cohesion principle, a far better
way to run the budgeting process is to start with the
constraints. Some useful constraints are:

Run rate increase

– Note that I say “run rate increase” and not “spend

increase”. You should set a limit on the amount by which
you are willing to increase what you are spending in the last
month of the coming year vs. the previous year.

Earnings/Loss

– If you have revenue, another great constraint is your

targeted earnings or loss for the year.
 How to Ruin Your Company with One Bad Process 37

Engineering growth rate

– Unless you are making an acquisition and running it

separately or sub-dividing engineering in some novel way,
you should strive not to more than double a monolithic
engineering organization in a 12-month period.

Ratio of engineering to other functions

– Once you have constrained engineering, then you can set

ratios between engineering and other functions to constrain
them as well.
Aaer applying the global constraints, the following steps
will provide a better process:
1. Take the constrained number that you created and
reduce it by 10-25% to give yourself room for expansion, if
necessary.
2. Divide the budget created above in the ratios that you
believe are appropriate across the team.
3. Communicate the budgets to the team.
4. Run your goal-setting exercise and encourage your
managers to demonstrate their skill by achieving great
things within their budgets.
5. If you believe that more can legitimately be achieved in
a group with more money, then allocate that manager extra
budget out of the slush fund you created with the 10-25%.
At this point, some readers may think that I’ve lost my
mind. As a technologist, you know that the worst thing that
you can do is over-constrain the problem before you start.
You’ll kill creativity and prevent yourself from getting a
truly great outcome. That’s precisely why I, as an engineer,
struggled with this process: the human factors muck up the
logic. SpeciXcally, local incentives, if not properly managed,
will sharply motivate human behavior and defeat the global
goals.
It’s critical to recognize this so that you don’t turn your
38 Some More Things

agile, small company into a slow, big company before its

time.
[9]

Cash Flow and Destiny

Wait ’til I get my money right

Then you can’t tell me nothing, right?
—Kanye West, “Can’t Tell Me Nothing”

If you are an entrepreneur, you have probably heard some

crusty old CEO or investor say something like “cash is king.”
You probably read the Twitter S-1 and thought to yourself:
“What the hell are those old guys talking about?” Twitter is
still burning cash six years aaer founding and they, not cash,
seem to be king.
In a situation such as this, I usually just say to myself:
“That’s the problem with wisdom, you can get it, but you
cannot share it.” But this particular nugget is so
fundamentally important that I will attempt to represent
the old guys in this imaginary conversation.
I was a founder/CEO during the period when cash
seemed more like a serf than a king in 1999 and 2000. It
was the era of “go big or go home.” Investors loved anything
Internet and could not care less about proXts. I grew my
company and I grew it fast. In less than nine months aaer
founding, I booked a $27 million quarter. I was going big
and deXnitely not going home.
Then the dot com crash happened and investors changed
40 Some More Things

their collective minds. Investors hated anything Internet

and wouldn’t fund anything that couldn’t fund itself.
Aaer two years of struggle, three layoWs and very little
sleep, we got the company in a position to potentially
generate cash. But at that point, doing so was still an open
question. We had tough competitors and lots of work to do
and still had plenty of time before becoming insolvent. Still,
when Marc Andreessen, my co-founder and chairman of
the board, said we should start generating cash, something
told me that he was right.
When I sat down with my team and told them that we
would generate positive cash Yow no later than Q2 of 2003
and I planned to commit that to Wall Street, one of the best
people on my team questioned the direction. He pointed
to our low cash burn, money in the bank and long list of
urgent features to be completed. He asked, “Why draw a line
in the sand if we don’t have to?” Sometimes it takes a tough
question like that to gather one’s thoughts. My response
then is my response now to entrepreneurs who ask me this
question:
“We should Xrst decide how much we like laying people
oW, because if we love it then lets stay cash Yow negative,
because when we don’t generate cash, the capital markets
decide when we have to lay people oW. In fact, we will have
to listen very carefully to investors on everything because as
soon as they stop liking us, we will start dying. I don’t know
about you, but I do not want to live my life that way. I do
not want to have to tell all of our employees that we will do
what we think is right until investors tell us we have to do
otherwise. I want to control my destiny.”
The manager didn’t even have to reply, because his eyes
told me that he knew what I was talking about. This wasn’t
about strategy or tactics; this was about freedom. The
freedom to build the company the way we thought was best.
Over the next Xve years, investors wanted us to do lots of
things. Some things they wanted were smart and some very
 Cash Flow and Destiny 41

stupid. We listened to what they had to say, but we always

did what we thought was right and we never worried about
the consequences. Investors did not control our destiny.
Over those Xve years the company’s value grew 40-fold as a
result of controlling our own destiny and being able to make
our own decisions.
There are many examples of companies that Xnance their
way through massive proXtless growth. In the right
circumstances and with the right company, this can be a
good strategy. For companies like Twitter, it’s a good
strategy for two reasons. First, they’re building something
massively important with every rational expectation that it
is spring-loaded to generate huge amounts of cash in the
future. Second, the capital markets over the last six years
have been willing to support them (as compared to the
capital markets between 2000 and 2006 which wouldn’t
have). So, if you are just like Twitter and if you are in this
era, everything works beautifully.
However, if you are not Twitter or if times change, then
be careful. Until you generate cash, you must heed investors
even when they are wrong. If investors wake up one day
and think you are toast, you are indeed toast. When you
generate cash, you can respond to silly requests from the
capital markets the way Kanye would:

Excuse me, is you saying something?

Uh uh, you can’t tell me nothing
[10]

Capital Market Climate Change

Hope that you feel this

Feel this way forever
You can plan a pretty picnic
But you can’t predict the weather.
—Outkast, “Ms. Jackson”

If you run a startup and are currently raising money, you

probably planned for a somewhat diWerent fundraising
environment than the one you Xnd yourself in today. You
probably thought that valuations would be roughly the
same as they were the last time you raised money. But
they most certainly are not. Perhaps you are caught in the
“Series A crunch” or perhaps you are a consumer company
and expected that you would be valued on users rather
than revenue like the last time. Or maybe you are a lucky
enterprise company and are pleasantly surprised—this
time.
How could this be? What about the eZcient market
hypothesis? Aren’t markets rational? Won’t we just return to
the “normal” environment that we experienced before? To
Xnd out, let’s look at the Price/Earnings (P/E) ratio of all S&P
500 IT companies at various points over the past 18 years.
If markets behave rationally, one might expect the ratio of
 Capital Market Climate Change 43

price to earnings to be reasonably stable over the period

(click here for complete data set). One would be wrong:
3/31/1995: 21.0
3/29/1996: 22.3
3/31/1997: 23.3
3/31/1998: 30.8
3/31/1999: 49.7
3/31/2000: 73.4
3/30/2001: 26.3
3/29/2002: 82.5
3/31/2003: 44.6
3/31/2004: 31.6
3/31/2005: 22.8
3/31/2006: 22.8
3/30/2007: 22.6
3/31/2008: 19.1
3/31/2009: 14.5
3/31/2010: 18.8
3/31/2011: 15.4
3/30/2012: 15.5
So, the average company on the S&P 500 IT index with
$10M in annual earnings would be worth $210M in March
of 1995, $820M in March of 2002, $310M in March of 2004
and $155M in March of last year. And those are big
companies with real earnings, so you can imagine how a
private company’s valuation might Yuctuate. If you have no
imagination, consider my experience. In June of 2000, I
raised money at an $820M post-money valuation. By the
end of the year and despite more than doubling bookings,
I could not raise money at any price in the private markets
and was forced to take the company public at a $560M post-
money valuation. Things change. Why do things change?
Because markets are not logical; markets are emotional.
Now that we’ve established that climate change is real,
what should you do if the current environment is much
worse than you expected?
44 Some More Things

In some sense, you are like the captain of the Titanic.

Had he not had the experience of being a ship captain for
25 years and never hit an iceberg, he would have seen the
iceberg. Had you not had the experience of raising your last
round so easily, you might have seen this round coming. But
now is not the time to worry about that. Now is the time to
make sure that your lifeboats are in order.
Before we begin doing that, let’s understand the depth of
the problem. First, if you did not understand how radically
the fundraising environment might change, then there is
no chance that your employees would have understood it.
In fact, if you are like most companies, your managers
probably implied to your employees that your stock price
would only rise as long as you were private. They might
have said something ridiculous like: “Based on the current
price of the preferred stock, your oWer is already worth
$5M.” As if the price could never go down. As if the common
stock were actually the same as preferred stock. Silly them.
As a result, if you raise money at a lower price, your people
will likely not only freak out, but possibly believe they were
lied to. Note that they may very well have been lied to. As
Scooby Doo once said, “Ruh roh.”
Now about those lifeboats.
If you are burning cash and running out of money, you
are going to have to swallow your pride, face reality and
raise money even if it hurts. Hoping that the fundraising
climate will change before you die is a bad strategy because
a dwindling cash balance will make it even more diZcult to
raise money than it already is, so even in a steady climate,
your prospects will dim. You need to Xgure out how to stop
the bleeding, as it is too late to prevent it from starting.
Eating shit is horrible, but is far better than suicide.
When you go to fundraise, you will need to consider the
possibility of a valuation lower than the valuation of your
last round, i.e., the dreaded down round. Down rounds are
bad and hit founders disproportionately hard, but they are
 Capital Market Climate Change 45

not as bad as bankruptcy. Smart investors will want the

founders and employees to be properly motivated post-
Xnancing, so there may be a way to a reasonable outcome
for both you and your people. Make sure that you Xgure
out what kind of deal is better than bankruptcy and be sure
to communicate to both your existing and potential new
investors what you think makes sense. In this situation, it’s
better to start low and get one bidder that may lead to many
and the market-clearing price than have no bidders and the
dream of a high price.
Once you begin your process, keep in mind that you are
looking for a market of one. You don’t need every investor
to believe that you can succeed. You only need one. If 20
investors tell you “no”, that does not mean that there is no
market for your deal. You just need one to say yes and she
will erase all 20 no’s.
Aaer, God willing, you successfully raise your round and
it’s a down round or a disappointing round, you will need
to explain things to your company. The best thing to do is
to tell the truth. Yes, we did a down round. Yes, that kind of
sucks. But no, it’s not the end of the world. We can probably
re-price your options. If we took too much dilution, we
will work with our new investor to make sure that every
employee is still highly Xnancially motivated. We are the
same company that we were yesterday and if you believed
in that company, then you should believe in this one.
If your managers intentionally or accidentally lied, then
you will need to address that too. Find out what happened
and deal with the damage as best as you can. Do not ignore
these things or stick your head in the sand, as you cannot
aWord to lose any more trust than you have already lost.
If you by some miracle make it through this process, then
the most important thing to learn from your experience is
this: The only sureXre antidote to capital market climate
change is positive cash Yow. If you generate cash, investors
46 Some More Things

mean nothing. If you do not, then your success will depend

upon the kindness of strangers.
[11]

Why I Did Not Go To Jail

I just tell the truth so I’m cool in every hood spot

21 years and I ain’t ever met a good cop
—Drake, “I’m Goin In”

Aaer we transitioned the business from Loudcloud to

Opsware, we needed a head of Xnance. Therefore, when
the CFO from one of the best-run enterprise soaware
companies became available, I jumped at the chance to hire
her.
Michelle (note: her name has been changed)
comprehensively understood soaware accounting, business
models, and best practices, and she was beloved by Wall
Street in no small part due to her honest and
straightforward reporting of her previous company’s
business. In my reference checking, at least a dozen
investors told me that they made far more money when
the numbers disappointed than when the company
outperformed, because they trusted Michelle when she said
that things were not worse than they appeared and bought
on the dips.
Once she came on board, Michelle rapidly reviewed all
of our practices and processes to make sure we were both
compliant and competitive. One area where she thought we
were less than competitive was our stock option granting
48 Some More Things

process. She reported that her previous company’s practice

of setting the stock option price at the low during the month
it was granted yielded a far more favorable result for
employees than ours. She also said that since it had been
designed by the company’s outside legal counsel and
approved by their auditors, it was fully compliant with the
law.
It all sounded great: better incentives for employees at no
additional cost or risk. However, aaer nearly four years of
disastrous surprises, nothing made me more nervous than
things that sounded great. On top of that, changes related to
accounting law always worried me.
They worried me, because every incentive that we put in
place as a company was designed to encourage people to
achieve their goals. All these incentives had the caveat that
the goals must be achieved while obeying the law. Now that
may sound simple, but in virtually every meeting every day
people discuss their goals and how they will achieve them.
They almost never discuss accounting law. In a sales forecast
meeting, you will oaen hear, “What can we do to get this
closed by the end of the quarter?” You never hear, “Will the
way we made the commitment comply with Statement of
Position-97-2 (the critical soaware accounting rule)?”
Beyond that, U.S. accounting law is extremely diZcult
to understand and oaen seems illogical and random. For
example, the law in question with respect to stock options,
FAS 123, is Xlled with paragraphs such as this:
“This Statement does not specify the measurement date
for share-based payment transactions with non-employees
for which the measure of the cost of goods acquired or
services received is based on the fair value of the equity
instruments issued. EITF Issue No. 96-18, “Accounting for
Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or in Conjunction with Selling,
Goods or Services”, establishes criteria for determining the
 Why I Did Not Go To Jail 49

measurement date for equity instruments issued in share-

based payment transactions with non-employees.”
And that is the clear part.
To guard against employees purposely or accidentally
breaking the law in pursuit of their goals, I took two broad
measures. First, when we started the company, Marc and I
agreed that the company’s General Counsel would always
report directly to me. This is diWerent than in many
technology companies where the General Counsel reports
to the Chief Financial OZcer. That way, there would be no
way for another executive to subvert the law in pursuit of
the number. Secondly, I would regularly give a speech to the
Xnance employees that went like this:
“In this business, we may run into trouble. We may miss
a quarter. We may even go bankrupt, but we will not go to
jail. So if somebody asks you to do something that you think
might put you in jail, call me.”
With that as a backdrop, I told Michelle that a better stock
granting process sounded great, but I needed Jordan
Breslow, my General Counsel, to review it before making a
decision. Jordan lived in my hometown of Berkeley and he
certainly belonged there. With hippie sensibilities, Jordan
was nearly allergic to corporate politics, showmanship, or
any behavior that covered the truth. As a result, I knew that
what he said was 100% what he believed and had nothing
to do with anything else. I could trust it. Michelle was
surprised, as her previous company had run this practice for
years with full approval from PricewaterhouseCoopers, its
accounting Xrm. I said: “That’s all Xne and good, but I still
need Jordan to review it Xrst.”
Jordan came back with an answer that I did not expect:
“Ben, I’ve gone over the law six times and there’s no way that
this practice is strictly within the bounds of the law. I’m not
sure how PwC justiXed it, but I recommend against it.” I told
Michelle that we were not going to implement the policy
and that was that.
50 Some More Things

Well, that was that for a while. Then, almost two years
later, the SEC announced that it was investigating Michelle’s
previous company for stock option accounting
irregularities. This started a massive investigation of all
Silicon Valley companies and their stock option accounting
practices. All told, more than 200 companies were found
guilty of some sort of irregularity.
In November of 2005, Michelle’s previous employer
announced that it was removing most of its management
team in an admission of wrongdoing. The SEC issued
Michelle a Wells notice, a letter stating that it planned to
recommend enforcement action against her personally. It
was not an indictment, but it was a formal investigation,
and it would be very distracting. I had to ask her to step
down. In some ways the choice was obvious—we could not
put the entire company at risk for one person. Still, Xring
somebody who had done nothing wrong at Opsware was
tough. Nonetheless, Michelle graciously resigned as she did
not want to bring negative attention to the company.
In the days that followed, I carefully positioned the
change to both protect the company and not put Michelle in
a bad light. I told our employees that there was a diWerence
between accounting fraud and accounting mistakes and I
believed that Michelle made mistakes at her previous
company, but did not commit fraud. I explained to our
investors who loved Michelle that I also thought very highly
of her, but I had no choice. The company came Xrst.
Michelle ultimately served 3½ months in jail for her part
in the other company’s stock option practice—the same
practice that we nearly implemented at Opsware. Since we
had the same head of Xnance, we almost certainly would
have been investigated. I obviously don’t know what
happened at the other company, but I do know that
Michelle had no intention of breaking any laws and no idea
that she’d broken any laws. The whole thing was a case of the
old saying: “When the paddy wagon pulls up to the house of
 Why I Did Not Go To Jail 51

ill repute, it doesn’t matter what you are doing. Everybody

goes to jail.” Once the SEC decided that most technology
company stock option procedures were not as desired, the
jail sentences were handed out arbitrarily.
In retrospect, the only thing that kept me out of jail was
some good luck and an outstanding General Counsel, and
the right organizational design.
[12]

Shareholders' Best Interests

To me it’s kinda funny, the attitude showing a n***a driving

But don’t know where the fuck he’s going, just rolling
—Easy E, “Straight Outta Compton”

Recently, major shareholders and board members of the

legendary, but now troubled, retail chain JCPenney have
been Xghting over the best direction of the company. 18%
shareholder and hedge fund manager Bill Ackman proposes
removing current CEO Mike Ullman and opening a search
for a new CEO. Meanwhile, Starbuck’s founder Howard
Schultz counters that suggesting such a thing is despicable,
especially when the company’s current position is Ackman’s
fault. Meanwhile, the spat climaxed with Ackman resigning
from the JCPenney’s board of directors on August 12th and
subsequently divesting his holdings.
While observing this, a friend of mine asked me a
question: “Aren’t they both highly motivated to do what’s
in the best interests of shareholders? Why are they pulling
the company in diWerent directions?” What an excellent
question.
Despite appearing to have totally aligned interests, these
two can’t seem to agree on anything. Beyond that, they
have almost no regard for each other’s opinions. How can
that be? Is one of them an idiot? Is Howard Schultz soa?
 Shareholders' Best Interests 53

Is Bill Ackman despicable? Certainly, both have been quite

successful in their careers. Why the sharp disagreement
about the future of the franchise?
There are at least two major reasons why these two do
not agree. The Xrst is time horizon. If your objective is
to restore JCPenney to its former glory, then your time
horizon is “as long as it takes”, and you stand to lose nothing
if you are wrong. Conversely, you might come up with an
entirely diWerent strategy if your objective is to get the stock
price up long enough to get your money out. It is oaen
the case that conYicting time horizons among shareholders
lead to sharp disagreements about the right leadership for
a company. One might assume that Howard Schultz, as an
entrepreneur and former CEO with no Xnancial stake in
the company, has a longer time horizon than Ackman who
has a huge stake in a good short-to-medium term outcome.
As a result, Schultz may be more focused on making hard
decisions in the short-term, even if those decisions cause
a temporary decrease in the stock price. Ackman, on the
other hand, will have to answer to his own shareholders if
he takes such a short-term hit, so he has a real incentive
to employ a strategy that yields a monotonically increasing
stock price.
The second reason is that almost nobody knows what’s in
the shareholder’s best interests when it comes to corporate
strategy. SpeciXcally, the right answer for JCPenney isn’t
actually clear to anybody. When a company goes into a
spiral, better execution on the current path will not work.
Therefore, a new path must be chosen. Choosing a new path
for any company is extremely diZcult. Choosing one for
a business as old and large as JCPenney is rocket science.
When Apple was winding down the drain in the late 1990s,
nobody other than Steve Jobs thought that further vertically
integrating the product line was the right strategy. Every
publication, analyst and reporter considered it self-evident
that Apple needed to become more horizontal to compete
54 Some More Things

with “PC economics”. It turned out that the right answer

wasn’t obvious. It was so complicated that only the founder
of the company and perhaps the greatest CEO of our time
came up with it. Certainly no board member or shareholder
had the answer.
Similarly, when I was CEO, I radically changed the
direction of my publicly held company in 2002. Nearly
all of my shareholders promptly gave me a vote of “no
conXdence” and sent Opsware’s stock plummeting from $2/
share to $0.035/share. By 2007, I sold the company to
Hewlett-Packard for $14.25/share. It seems that all of my
shareholders voted with their wallets and against their own
best interests.
It’s not clear that it’s possible for any outside board
member or shareholder to have enough knowledge to pick
a company’s new direction accurately. I was working 16
hours/day on the problem and I barely knew enough to
make that decision. As a result, the best that outside parties
can do is vote for or against the CEO. Clearly that’s not
easy when you don’t know where the company should be
headed.
[13]

Can Do vs. Can't Do Cultures

God body and mind, food for the soul

When you feeding on hate, you empty, my ni*&$a, it shows
— Rick Ross, “Hold On”
The reasonable man adapts himself to the world; the
unreasonable one persists in trying to adapt the world to
himself. Therefore, all progress depends on the unreasonable
man.
— George Bernard Shaw

Lately, it’s become in vogue to write articles, comments

and tweets about everything that’s wrong with young
technology companies. Hardly a day goes by where I don’t
Xnd something in my Twitter feed crowing about how a
startup that’s hit a bump in the road is “fu&%@d” or what an
as*h%le a successful founder is or what an utterly idiotic idea
somebody’s company is. It seems like there is a movement
to replace today’s startup culture of hope and curiosity with
one of smug superiority.
Why does this matter? Why should we care that the tone
is tilting in the wrong direction? Why is it more important
to Xnd out what’s right about somebody’s company than
what’s wrong?
The word technology means “a better way of doing
things.” This is easy to say, but extremely diZcult to do.
56 Some More Things

Making a better way of storing information, a better

currency, or a better way of making friends means
improving on thousands of years of human experience and
is therefore extraordinarily diZcult. At some level, it would
seem logically impossible that anybody could ever improve
anything. I mean if nobody from bible days until 2014 has
thought of it, what makes you think you are so smart? From
a psychological standpoint, in order to achieve a great
breakthrough, you must be able to suspend disbelief
indeXnitely. The technology startup world is where brilliant
people come to imagine the impossible.
As a Venture Capitalist, people oaen ask me why big
companies have trouble innovating while small companies
seem to be able to do it so easily. My answer is generally
unexpected. Big companies have plenty of great ideas, but
they do not innovate because they need a whole hierarchy
of people to agree that a new idea is good in order to pursue
it. If one smart person Xgures out something wrong with
an idea–oaen to show oW or to consolidate power—that’s
usually enough to kill it. This leads to a Can’t Do Culture.
The trouble with innovation is that truly innovative ideas
oaen look like bad ideas at the time. That’s why they are
innovative – until now, nobody ever Xgured out that they
were good ideas. Creative big companies like Amazon and
Google tend to be run by their innovators. Larry Page will
unilaterally fund a good idea that looks like a bad idea and
dismiss the reasons why it can’t be done. In this way, he
creates a Can Do Culture.
Some people would like to turn the technology startup
world into one great big company with a degenerative Can’t
Do Culture. This post attempts to answer that challenge and
reverse that tragic trend.
Dismissive rhetoric with respect to technology is hardly
new. Sometimes the criticism is valid in that the company
or invention does not work, but even then it oaen misses
 Can Do vs. Can't Do Cultures 57

the larger point. Here are two historical examples to help

illustrate:

The Computer

In 1837, Charles Babbage set out to build something he

called The Analytical Engine the world’s Xrst general-
purpose computer that could be described in modern times
as Turing-complete. In other words, given enough resources
the machine that Babbage was building could compute
anything that the most powerful computer in the world
today can compute. The computation might be slower and
the computer might take up more space (OK, amazingly
slow and incredibly huge), but his design matched today’s
computational power. Babbage did not succeed in building
a working version as it was an amazingly ambitious task to
build a computer in 1837 made out of wood and powered
by steam. Ultimately, in 1842 English mathematician and
astronomer George Biddel Airy advised the British
Treasury that the Analytical Engine was “useless” and that
Babbage’s project should be abandoned. The Government
axed the project shortly aaer. It took the world until 1941 to
catch up with Babbage’s original idea aaer it was killed by
skeptics and forgotten by all.
171 years later, it’s easy to see that his vision was true and
computers would not be useless. The most important thing
about Babbage’s life was not that his timing was oW by 100
years, but that he had a great vision and the determination
to pursue it. He remains a wonderful inspiration to many of
us to this day. Meanwhile, George Biddel Airy seems more
like a short-sighted crank.

The Telephone

Alexander Graham Bell, inventor of the telephone, oWered

to sell his invention and patents to Western Union, the
58 Some More Things

leading telegraph provider, for $100,000. Western Union

refused based on a report from their internal committee.
Here are some of the excerpts of that report:
“The Telephone purports to transmit the speaking voice
over telegraph wires. We found that the voice is very weak
and indistinct, and grows even weaker when long wires are
used between the transmitter and receiver. Technically, we
do not see that this device will be ever capable of sending
recognizable speech over a distance of several miles.
“Messer Hubbard and Bell want to install one of their
“telephone devices” in every city. The idea is idiotic on the
face of it. Furthermore, why would any person want to use
this ungainly and impractical device when he can send a
messenger to the telegraph oZce and have a clear written
message sent to any large city in the United States?
“The electricians of our company have developed all the
signiXcant improvements in the telegraph art to date, and
we see no reason why a group of outsiders, with extravagant
and impractical ideas, should be entertained, when they
have not the slightest idea of the true problems involved.
Mr. G.G. Hubbard’s fanciful predictions, while they sound
rosy, are based on wild-eyed imagination and lack of
understanding of the technical and economic facts of the
situation, and a posture of ignoring the obvious limitations
of his device, which is hardly more than a toy… .
“In view of these facts, we feel that Mr. G.G. Hubbard’s
request for $100,000 of the sale of this patent is utterly
unreasonable, since this device is inherently of no use to us.
We do not recommend its purchase.”

The Internet

Today most of us accept that the Internet is important, but

this is a recent phenomenon. As late as 1995, Astronomer
CliWord Stoll wrote the article entitled Why the Web Won’t
 Can Do vs. Can't Do Cultures 59

Be Nirvana in Newsweek, which includes this unfortunate

analysis:
Then there’s cyberbusiness. We’re promised instant
catalog shopping—just point and click for great deals. We’ll
order airline tickets over the network, make restaurant
reservations and negotiate sales contracts. Stores will
become obselete. So how come my local mall does more
business in an aaernoon than the entire Internet handles
in a month? Even if there were a trustworthy way to send
money over the Internet—which there isn’t—the network
is missing a most essential ingredient of capitalism:
salespeople.
What mistake did all these very smart men make in
common? They focused on what the technology could not
do at the time rather than what it could do and might be
able to do in the future. This is the most common mistake
that naysayers make.
Who does the Can’t Do Culture hurt the most? Ironically,
it hurts the haters. The people who focus on what’s wrong
with an idea or a company will be the ones too fearful to
try something that other people Xnd stupid. They will be
too jealous to learn from the great innovators. They will be
too pig headed to discover the brilliant young engineer who
changes the world before she does. They will be too cynical
to inspire anybody to do anything great. They will be the
ones who history ridicules.
Don’t hate, create.
[PART II]

Bonus Tracks (older posts

not in The Hard Thing
About Hard Things)
[14]

No Credit for Predicting Rain

Smack slap smack slap smack slap smack

Just to make it worse and hurt your pride I’ll run it back
Smack slap smack slap smack slap smack
—LL Cool J, “How I’m Comin'”

Recently, I was reminded of one of the more annoying

things that happens to the CEO when things go horribly
wrong in your business. Aaer a terrible event such as a
lay oW or a whiWed quarter or getting stomped by the
competition in a critical deal, you run the scenarios of doom
through your mind thousands of times. You retrace every
terrible small decision that you made along the way. Aaer
doing so thousands of times, you sometimes Xnd a diZcult,
low-probability way to get the company out of the mess.
At that point, it’s sort of like walking into the OK Corral
with only one bullet in your gun—you know that you have
to hit the target with that one bullet. So you summon all
your energy to rally your troops and intensely focus them
on that one achievable goal. You draw on every ounce of
positivity in your soul to get the team behind the plan. Once
you’ve Xnally generated enough momentum to create some
hope that you might survive, the annoying thing happens.
In a critical meeting with many of your best and most
important employees, an inYuential person (perhaps an
64 Some More Things

executive or a board member) raises his hand, proceeds to

recount all of the company’s past mistakes and predicts that
the company will fail. He doesn’t say anything new or
anything interesting; he just recounts all of the company’s
extremely well known problems. Gee, thanks.
To those predictors of doom, I relay what an old friend
once passed on to me. At a certain point in the process, no
credit will be given for predicting rain. The only credit will
be for helping to build an ark.

July 20, 2010

[15]

Second Startup Syndrome

When your ups lia you down

your placebo is too weak
you’re in the syndrome
—Parliament, “Placebo Syndrome”

Oaen when super successful entrepreneurs found their

second company, they suWer from a dangerous condition.
In fact, the more successful the original startup, the more
likely it is that the entrepreneur develops an acute case
of Second Startup Syndrome.
Second Startup Syndrome occurs when an entrepreneur
wants to pick up in her second startup right where her
Xrst startup lea oW. In the beginning, the focus of a startup
must be on building a great product and Xnding product
market Xt. During this period, there is no glamour and very
little breadth—the company must be narrow. Serial
entrepreneurs who suWer from Second Startup
Syndrome want to skip through the narrow early steps and
move quickly to more exciting topics such as long-term
strategy, sales and marketing, company positioning,
company culture, and more. Unfortunately, when you build
a house, it’s usually a very bad idea to start with the roof.
Some telling symptoms of Second Startup Syndrome:
66 Some More Things

• The company assumes that the Xrst product will succeed

and spends more time Xguring out business models and
monetization strategies than developing the core product
idea.

• The company becomes obsessed with the things that

went wrong in their last company and focuses entirely on
how to rid the new company of these mistakes. If the
previous company was successful, the entrepreneurs
oaen ignore what went right and focus on what went
wrong.

• The company glosses over important details assuming

that what worked the Xrst time will automagically work
the second time.

Perhaps the greatest sign of Second Startup Syndrome is a lack

of anxiety. Building a new technology company is really,
really hard. In order to do it successfully, you have to sweat
the details, worry about all the things that might go wrong,
and suWer more than a few sleepless nights (either from
working through the night or just worrying through the
night). All of those things that you go through—a boiling
stomach, lack of sleep, waves of paranoia, and vivid visions
of your own demise—turn out to be good things.

June 14, 2010

[16]

Is Now the Time to Hire MBAs?

First they hate you, then they love you, then they hate you
again
What the f*ck do it take for a gangsta to win?
—The Game, “Don’t Need Your Love”

Conventional wisdom among smart technology

entrepreneurs says not to hire people with Masters in
Business Administration (MBAs) into startups. Aaron Patzer,
founder of Mint, expressed the sentiment well when he
said: “When valuing a startup, add $500k for every engineer, and
subtract $250k for every MBA.” My friend Peter Thiel once
warned a young entrepreneur: “Never ever hire an MBA;
they will ruin your company.” I chimed in myself with this
Quora answer [“Does getting an MBA make someone a
better entrepreneur?”]. At Andreessen Horowitz, we believe
that once everyone thinks that something is true, that might
be a good time to do the opposite. So, with everyone
convinced that MBAs are useless, I wonder: Is now the time
to hire MBAs?
When considering this question, the Xrst thing to
understand is that MBAs have not always been the scourge
of startup society. When I began my career in the late 80s
and early 90s, MBAs ran most of the best new technology
companies. Scott McNealy and Ed McCracken, Stanford
68 Some More Things

MBAs, ran the two best new computer companies, Sun and
Silicon Graphics, respectively. John Morgridge, Stanford
MBA, ran Cisco, the best new networking company. Bill
Campbell, Columbia MBA, ran a hot new consumer
soaware company, Intuit, and Dave DuZeld, Cornell MBA,
ran the premier new enterprise soaware company,
PeopleSoa.
So, what happened? How did startup world grow to loathe
MBAs?
It turns out that the success of the MBAs from the late 80s
and early 90s created an insatiable demand from startup
companies and their backers to hire MBAs from top schools.
With only a small number of top schools, the newly minted
MBAs became the belles of the of the startup ball. Every
Stanford and Harvard MBA received multiple oWers from
top startups and, not surprisingly, many MBAs developed a
strong sense of entitlement and overconXdence.
They began to stroll into startups with insane lists of
demands. They wanted loay titles, they wanted to manage
hundreds of people even though they had no management
experience, and they wanted salaries that matched people
with 10 years more experience. And the MBAs got what they
wanted, which ironically precipitated the MBA’s long and
painful fall from the penthouse to the outhouse.
It turns out, as I pointed out in my Quora post, you can’t
learn management exclusively from a class or a book. It
takes real world practice. Many of the MBAs who got the
big management positions turned out to be some of the
worst managers that Silicon Valley has ever seen. While
understandable given their total lack of experience, the
people assigned to work for them did not understand.
When these employees asked themselves how such
incompetent imbeciles could acquire such important jobs,
all evidence pointed back to an all too familiar culprit: The
miserable, sorry, weak manager that you suWer under got
his position not by merit, but by MBA.
 Is Now the Time to Hire MBAs? 69

To make matters worse, the entitlement bug spread

through the MBA community like a social game with full
access to the Facebook feed controls. It got so bad that at
one point an MBA employee of mine asked for a promotion
because most of his classmates at Stanford had been
promoted and he felt lea out. Had I been a more
experienced CEO, I would have Xred him on the spot. Being
young and naïve, I simply replied: “I’m sorry. You must have
me confused with somebody who gives a crap.” In any case,
the episode did not make me want to hire more MBAs.
Perhaps worst of all, many MBAs carried intense ambition
for themselves, but no strong bond to the company’s
mission. While everyone else in the company was “ride or
die,” these MBAs could be seen carefully plotting their next
career move. When you’re working 16 hours/day with a
team of dedicated people driven towards achieving a nearly
impossible goal, this does not sit well.
Finally, the MBA schools of the late 90s and early 2000s
did a relatively poor job of preparing people for startups.
MBAs learned how to analyze existing markets, but knew
nothing about creating new markets. In general, the MBA
education was geared towards attaining positions in large,
established companies rather than new entrepreneurial
ventures.
At this point, it’s probably not diZcult to understand why
MBAs carry little credibility in startup world. So why am I
even asking the question? I think we have thrown the babies
out with the bathwater. More speciXcally, we’ve thrown the
outstanding talent out with the bad behavior of an old,
irrelevant sub group. Broad categorizations usually tend to
be a bad idea when it comes to people and in this case,
the trends that led to the negative characterization have
reversed. In my observation, there are four key reasons to
consider hiring today’s MBAs.

1. The world largely beat the arrogance, overconAdence and

70 Some More Things

sense of entitlement out of the current crop of MBAs. Most

now exhibit a level of humility and willingness to learn
that was unheard of 10 years ago.
2. The course material has become much more relevant.
Innovative instructors like Tom Eisenmann and Alison
Wagonfeld at Harvard explore the challenges of scaling
new companies. Mark Leslie and Andy RachleW at
Stanford teach key lessons in building enterprise sales
channels. Bob Sutton and Huggy Rao at Stanford teach
novel approaches to incentives. Today’s MBAs bring
some interesting knowledge and relevant skills to the
table. This is in stark contrast to the old curriculum,
which focused on big company problems.
3. The kids are still smart. Even in the late 90s and early
2000s, you had to be extremely smart and ambitious to
get into the Stanford or Harvard MBA programs. That’s
still true today.
4. A di@erent perspective can be helpful. Engineers run most
technology startups and that’s great. But it is important
to recognize that engineers tend to look at the world
from the product out. Having a few people in the
company who see the world from the market in can be
enlightening.

In the public equities market, everyone knows to buy low

and sell high. However, the momentum of the day usually
overwhelms that obvious strategy. In practice, public
market investors pile into stocks as they become overvalued
and abandon high quality companies at the Xrst sign of
trouble. Similarly, when it comes to hiring MBAs,
technology companies have historically bought high and
sold low. The current price is low.

May 18, 2012

[17]

On Micromanagement

This was a guest post on the original pmar pmarcaca blog [ebook and
links to ar
archi
chives
ves to that available her
heree], responding to Mar arcc’s views
on hiring
hiring,, managing
managing,, pr promo
omoting
ting,, and Aring executi
executives.
ves. Mar arcc
italicized the parts belo
below
w wher
wheree Ben “reall
eallyy tears into me, for your
added humor value
value””.

While I enjoyed Marc’s post on hiring and Xring

executives, I think that he unfairly dissed
micromanagement.
Here’s why.
Everyone knows that the hyper-controlling manager with
the severe personality disorder who micromanages every
crummy decision is no fun to work for. However, it is wrong
to condemn the practice of micromanagement on that
basis.
SpeciXcally, there are times and situations where
micromanaging executives is not just ok, but also the right
thing to do. Andy Grove has an excellent explanation of
this in his classic book High Output Management, where he
describes a concept called “Task Relevant Maturity”. Andy
explains that employees who are immature in a given task
require detailed training and instruction. They need to be
micromanaged. On the other hand, if an employee is
72 Some More Things

relatively mature in a task, then it is counterproductive and

annoying to manage the details of their work.
This is also true when managing executives. Marc might
think that he hires an executive because she has the
experience and know-how to comprehensively do her job,
so any detailed instruction would be unwise and
unwarranted. Marc would be wrong about that. It turns out
that even — and maybe especially — executives are also
immature in certain tasks.
It is almost always the case that a new executive will be
immature in their understanding of your market, your
technology, and your company — its personnel, processes,
and culture. Will the new head of engineering at Ning walk
in the door with Marc’s understanding of the development
process or the technology base? Would it be better for this
new head of engineering to make guesses and use her own
best — not so good– judgment, or for Marc to review the
Xrst say 20 decisions until the new exec is fully up to speed?
In reality — as opposed to Marc’s warped view of reality —
it will be extremely helpful for Marc [if he were actually
the CEO, which he is not] to meet with the new head of
engineering daily when she comes on board and review
all of her thinking and decisions. This level of
micromanagement will accelerate her training and improve
her long-term eWectiveness. It will make her seem smarter
to the rest of the organization which will build credibility
and conXdence while she comes up to speed.
Micromanaging new executives is generally a good idea
for a limited period of time.
However, that is not the only time that it makes sense to
micromanage executives. It turns out that just about every
executive in the world has a few things that are seriously
wrong with them. They have areas where they are truly
deXcient in judgment or skill set. That’s just life. Almost
nobody is brilliant at everything. When hiring and when
&ring executives, you must therefore focus on strength
 On Micromanagement 73

rather than lack of weakness. Everybody has severe

weaknesses even if you can’t see them yet. When managing,
it’s oaen useful to micromanage and to provide remedial
training around these weaknesses. Doing so may make the
diWerence between an executive succeeding or failing.
For example, you might have a brilliant engineering
executive who generates excellent team loyalty, has terriXc
product judgment and makes the trains run on time. This
same executive may be very poor at relating to the other
functions in the company. She may generate far more than
her share of cross-functional conYicts, cut herself oW from
critical information, and signiXcantly impede your ability to
sell and market eWectively.
Your alternatives are:
(a) Macro-manage and give her an annual or quarterly
objective to Xx it, or…
(b) Intensively micromanage her interactions until she
learns the fundamental interpersonal skills required to be
an eWective executive.
I am arguing that doing (a) will likely result in weak
performance. The reason is that she very likely has no idea
how to be eWective with her peers. If somebody is an
executive, it’s very likely that somewhere along the line
somebody gave her feedback — perhaps abstractly — about
all of her weaknesses. Yet the weakness remains. As a result,
executives generally require more hands-on management
than lower level employees to improve weak areas.
So, micromanagement is like Xne wine. A little at the right
times will really enhance things; too much all the time and
you’ll end up in rehab.

September 19, 2007

[PART III]

Tributes
[18]

Andy

New intr
introduction
oduction to “H
“High
igh Output Management
anagement”” [see also this
video tribute to A
And
ndyy Gr
Groove, 1936-201
1936-20166)]

At sixteen, son was watching him, mesmerized

Respect, not jocking him, was so amazing, besides
He came on the stage with lasers in his eyes
Walk with me now
— Nas, “U.B.R. (Unauthorized Biography of Rakim)”

I Xrst read High Output Management in 1995. In those days,

there were no blogs or TED Talks teaching us about
entrepreneurship. In fact, there was almost nothing of use
written for people like me who aspired to build and run a
company.
Against this backdrop, High Output Management had an
almost legendary status. All the best managers knew about
it. The top venture capitalists gave copies of it to their
entrepreneurs, and aspiring leaders in Silicon Valley
devoured its contents. It amazed all of us that the CEO of
Intel had taken the time to teach us the essential skill of
entrepreneurship: how to manage.
This was no small thing because Intel was known as the
best company in the technology industry. It had pulled oW
78 Some More Things

the greatest transformation in the history of the business:

moving from the memory business to microprocessors
more than a decade aaer its founding. Beyond that, Intel ran
with legendary precision, which gave it the ability to make
multibillion-dollar investments with high conXdence. If you
wanted to hire a great operational manager, then Intel was
the place to go — but good luck getting one to leave the
best-managed company in Silicon Valley.
Andy himself was a legendary Xgure. He had grown up
Jewish in Hungary during a time when the country was
occupied by the Nazis and, later, by the Soviet Communists.
Arriving in New York, he spoke no English and had almost
no money. He enrolled himself at the City College of New
York, overcame his language deXciency, and went on to get
a PhD from UC Berkeley. This nonnative English speaker
would then write an important textbook on semiconductors
in English while working at Fairchild Semiconductor. As a
result, he was considered a scientiXc pioneer even before
helping to launch Intel in 1968, building it into the seminal
technology company of the era. Later, in 1997, Time
magazine would recognize his nearly impossible
accomplishments and name him Man of the Year.
This is in part what made High Output Management so
extraordinary. Andy Grove, who built himself from nothing
to run Intel, stopped what he was doing to teach us his
magic. And not through some ghostwriter either — Andy
wrote this book himself. What an incredible gia.
When I Xnally got my hands on the book, the paperback
cover took me aback. The 1995 version featured a picture
of Andy Grove standing next to the Intel sign. Unlike every
other CEO photo that I had ever seen, Andy was not wearing
a designer suit. He did not have perfectly combed hair, and
he did not strike an arms-folded power pose. No, Andy
Grove was dressed for work right down to his key card
hanging from his belt. I did a double take. “Was that a key
 Andy 79

card? He didn’t remove his key card for the book’s cover
photo?”
In retrospect, the cover was perfect. As you will see when
you read this book, Andy Grove was all substance. He did
not have time for pretty photo shoots or self-promotion.
He wrote the book for us, but if we had to be sold on it by
how he looked in the photo, then that would be our loss.
The time that he did not spend styling fancy photos, he put
into writing the book. He did not just give us the lessons; he
articulated them in a way that connected both logically and
emotionally. We would come to understand him and feel
what he meant in our core.
I immediately got a jolt of this style with the title of the
very Xrst chapter: “The Basics of Production: Delivering
a Breakfast (or a College Graduate, or a Compiler, or a
Convicted Criminal…).” Okay, I am interested. What does
making a soa-boiled egg have to do with how many prisons
we build? It turns out quite a bit. High Output Management
opens by teaching us the importance of proper system
design even when we are dealing with a system of human
beings — especially when we are dealing with a system of
human beings.
Andy then shows us how you can use these same
principles to understand how society should operate. It
doesn’t accomplish anything to declare that we need more
kids going to college than to jail and demand that we build
more schools than jails. In fact, it’s counterproductive.
Identifying complex system problems is one thing. Solving
them is something else entirely, and Andy lays out the tools
to do just that.
Over the years, I have come to consider High Output
Management a true masterpiece, and there are at least three
core aspects to its genius. First, in as little as one sentence,
it lucidly explains concepts that require entire books from
lesser writers. Second, it consistently uncovers brand-new
management ideas or Xnds new insights in old standards.
80 Some More Things

Finally, while most management books attempt to teach

basic competency, High Output Management teaches the
reader how to be great.
Andy introduces management with this classic equation:

A manager’s output = the output of his organization + the

output of the neighboring organizations under his inYuence.

On the surface it may seem simple, but he clariXes the

essential diWerence between a manager and an individual
contributor. A manager’s skills and knowledge are only
valuable if she uses them to get more leverage from her
people. So, Ms. Manager, you know more about our
product’s viral loop than anyone in the company? That’s
worth exactly nothing unless you can eWectively transfer
that knowledge to the rest of the organization. That’s what
being a manager is about. It’s not about how smart you are
or how well you know your business; it’s about how that
translates to the team’s performance and output.
As a means to obtain this leverage, a manager must
understand, as Andy writes: “When a person is not doing his
job, there can only be two reasons for it. The person either
can’t do it or won’t do it; he is either not capable or not
motivated.” This insight enables a manager to dramatically
focus her eWorts. All you can do to improve the output of an
employee is motivate and train. There is nothing else.
As he describes the planning process, Andy sums up his
essential point with this eloquent nugget of wisdom: “I have
seen far too many people who upon recognizing today’s
gap try very hard to determine what decision has to be
made to close it. But today’s gap represents a failure of
planning sometime in the past.” Hopefully, the value of this
short insight is not lost on the young reader. If you only
understand one thing about building products, you must
understand that energy put in early in the process pays oW
 Andy 81

tenfold and energy put in at the end of the program pays oW

negative tenfold.
The book has an entire section dedicated to an oaen
neglected, but critically important management tool:
meetings. Andy makes us see this oldest of business
principles in a new light. He teaches meetings from Xrst
principles, beginning with how to conduct a one-on-one. It
seems incredible that the CEO of Intel would take the time
to explain how to have a one-on-one.
Why is he doing this? It turns out that the one-on-one is
not only a fundamental element in the manager/employee
relationship, but perhaps the best source for organizational
knowledge that a manager can get. In my experience,
managers who don’t have one-on-ones understand very
little about what’s happening in their organizations.
It is by understanding the simple things that Andy goes
deep. For example, when people visit today’s technology
companies they oaen remark about how casual the
environments are, but with very little explanation about
why they are that way. In fact, many CEOs do not
understand why as they simply follow the trend, but Andy
explains it perfectly:

A journalist puzzled by our management style once asked me,

“Mr. Grove, isn’t your company’s emphasis on visible signs
of egalitarianism such as informal dress, partitions instead of
oZces…just so much aWectation?” My answer was that this is
not aWectation, but a matter of survival. In our business we
have to mix knowledge-power people with position-power
people daily, and together they make decisions that could
aWect us for years to come.

In this fashion, the book quickly gets to the heart of

complex issues. It raises and deals with the stickiest
management issues. Andy asks the question of whether you
should be friends with the people you manage:
82 Some More Things

Everyone must decide for himself what is professional and

appropriate here. A test might be to imagine yourself
delivering a tough performance review to your friend. Do you
cringe at the thought? If so, don’t make friends at work. If your
stomach remains unaWected, you are likely to be someone
whose personal relationships will strengthen work
relationships.

By breaking down the process, he makes hard things

manageable.
Ultimately, the power of High Output Management is that it
creates experts rather than merely competent managers.
A great example of this is the section on task-relevant
maturity. This part of the book became very personal for
me as it taught me how to formulate the most useful
management question that I use in interviews: “Is it better to
be a hands-on or hands-o@ manager?”
It seems like a simple enough question, but it sorts out
the 95 percent of managers who never think deeply about
their craa from the 5 percent who do. The answer, as Andy
explains, is that it depends. SpeciXcally, it depends on the
employee. If the employee is immature in the task, then
hands-on training is essential. If the employee is more
mature, then a delegate approach is warranted. Andy
presents a great example of this: “The subordinate did poor
work. My associate’s reaction: ‘He has to make his own
mistakes. That’s how he learns!’ The problem with this is
that the subordinate’s tuition is paid by his customers. And
that is absolutely wrong.”
Perhaps the chapter that best reYects Andy Grove is the
last, “Why Training Is the Boss’s Job.” Oaen, people who
manage in the so-called knowledge economy believe their
employees are so smart that they need no training at all.
Andy brilliantly corrects this notion by explaining why as
customers we are Yabbergasted when we encounter
employees who are insuZciently trained at relatively simple
 Andy 83

tasks such as taking restaurant reservations. He then

challenges us to imagine how furious customers of complex
jobs will be if an employee isn’t properly trained. Finally, he
reiterates his thesis that there are only two ways in which
a manager can impact an employee’s output: motivation
and training. If you are not training, then you are basically
neglecting half the job.
Throughout the chapter, the reader feels Andy’s intense
passion toward training and teaching, because in the end —
more than anything else — he is a teacher…in the very best
sense of the word.
Many years aaer reading High Output Management, I met
Andy for the Xrst time. Upon seeing him, I was so excited
that I immediately blurted out how much I loved the book.
In classic Andy Grove style, he shot back: “Why?” I did not
expect that. I thought that he would say, “Thank you” or
“I appreciate that,” but not “Why?” But that was Andy. He
was always teaching and always expecting more from every
student.
Caught completely oW guard, I scrambled for the reason
and came across a good one: “Every other management
book that I’ve read explains the trivial, but yours gets to the
real issues.” Upon hearing that, the master teacher soaened
and replied with a priceless story:

It’s funny that you say that about management books. I

recently ran out of space on my bookshelf at home, so I was
faced with a choice. I either had to throw away some books or
buy a bigger house. Well, that was an easy decision, but which
books to throw out? Then I thought, the management books!
But I had a problem. Nearly every management book that I’d
received was sent to me by the author and was autographed
with a kind inscription. I felt badly about throwing away all
those nice notes. So, I went through each book and tore out
the inscription page then threw away the book. So now I have
84 Some More Things

a large stack of pages of nice notes to me and plenty of space

for good books.

I have never met anyone other than Andy Grove who would
have a story like that. He uniquely balances the highest
standards for clear thinking and performance with an
undying belief in the underlying person. Who else would
require so high a bar for writing that you had to be good
enough to Xt on his one bookshelf and still be so touched
by the fact that you wanted him to read your work that he
would save the page that you inscribed?
Later, in 2001, I met with Andy again and I asked him
about a recent run of CEOs missing their numbers despite
having told investors that their businesses were strong. The
bubble had burst for the Xrst wave of Internet companies
nearly a year prior, so it surprised me that so many many
of them had not seen this coming. Andy replied with an
answer that I did not expect: “CEOs always act on leading
indicators of good news, but only act on lagging indicators
of bad news.”
“Why?” I asked him. He answered in the style resonant of
his entire book: “In order to build anything great, you have
to be an optimist, because by deXnition you are trying to
do something that most people would consider impossible.
Optimists most certainly do not listen to leading indicators
of bad news.”
But this insight won’t be in any book. When I suggested
he write something on the topic, his response was: “Why
would I do that? It would be a waste of time to write about
how to not follow human nature. It would be like trying
to stop the Peter Principle*. CEOs must be optimists and
all in all that’s a good thing.” This is classic Andy Grove.
He is amazingly perceptive and can see every Yaw in every
person, yet despite that he believes in human potential
more than anyone. Maybe that’s why he has spent so much
time teaching us to be better.
 Andy 85

It has been an honor for me to learn from Andy Grove

through the years and I am excited for everyone who is new
to High Output Management to join me in this experience. I
know that you will enjoy this marvelous book written by the
best teacher that I have ever known.

–Ben Horowitz, 2015

* The Peter Principle is a concept in management theory
in which the selection of a candidate for a position is based
on the candidate’s performance in their current role, rather
than on abilities related to the intended role. Thus,
“managers rise to the level of their incompetence.”

Foreword copyright © 2015 by Ben Horowitz. Reprinted by

permission of Vintage Books, an imprint of the Knopf Doubleday
Publishing Group, a division of Penguin Random House, LLC. All
rights reserved.
[19]

Bill

Originall
Originallyy appear
appeared
ed on M
Medium
edium April 18, 201
20166

Winter, spring, summer or fall

All you’ve got to do is call
And I’ll be there, ye, ye, ye
You’ve got a friend
— James Taylor

Last night my friend Bill Campbell passed away. He meant

everything to me and I am having trouble even beginning
to say something.
Today people will recount his many massive
accomplishments as well as his unparalleled inYuence on
the development of the greatest leaders in the technology
industry such as JeW Bezos, Larry Page, and Steve Jobs. They
will speak about the unlimited energy he applied in helping
others —from the poor kids in hometown of Homestead,
Pennsylvania to the students at Columbia University. And
all of it will be so well deserved. But I don’t feel like talking
about any of that.
SelXshly, all I can think about is how much he helped me
and what a true friend I had in Bill. Whenever I struggled
with life, Bill was the person that I called. I didn’t call him,
 Bill 87

because he would have the answer to some impossible

question. I called him, because he would understand what
I was feeling 100%. He would understand me. I have never
known anyone else who could do that like Bill. Be the
person who would understand me all the time. I must have
called him a 100 diWerent times, because I knew he would
feel what I was feeling.
One time when I was running Loudcloud, we needed to
either raise money or go bankrupt. The private capital
markets had completely shut down and the only way out
was to go public. Unfortunately, we did not have a board
of directors that met the requirements of being a public
company and it was diZcult to recruit anyone to the board
at that time due to our dire circumstances. I certainly
couldn’t recruit anybody that I knew, respected, and trusted.
The last thing that I need was a board member that I’d just
met. I had already ruled Bill out, because he had told me
when we Xrst started working together that he wasn’t going
to go on any boards. I knew that he meant it, because he
didn’t even go on Google’s board. Board work was just not
something that he wanted to do at that point in his life.
Nonetheless, I knew that he would understand the situation
and I needed someone to understand. So, I explained
everything to Bill about the situation that we were in and
how I was feeling about it. He said: “I don’t go on any boards,
but I can hear that you need me. I’ll go on your board.” And
he did and we wouldn’t have made it as a company without
him.

Bill and Me
88 Some More Things

Another time, my oldest child Jules concluded he was

transgender and was going to change his gender by taking
testosterone and having surgery. It’s impossible to fully
describe how one feels as a parent in a situation like that,
but mostly all I felt was worry—worry that he wouldn’t be
accepted, worry that his health would fail, worry that the
surgery would not go well, worry that he would be killed by
some intolerant group. I was so Xlled with worry that I could
barely function. When I told people about it, they would
have various reactions, but the one thing that was clear was
that nobody really understood the depth of the issues or the
worry that I had. So, I decided to tell Bill. When I told him,
I could see the tears well up in his eyes and he said: “that’s
going to be really hard.” Then he immediately wanted to see
Jules. And Bill made sure that he embraced Jules and let him
know that he was not alone and would always have a friend
in Bill. Bill understood.

Jules and Bill Campbell

The worst thing about today is that I can’t call Bill. I miss
him so much.
[20]

Where Do Leaders Come From?

For
orewor
eword
d to “T
“The
he IInternet
nternet IIss M
Myy R
Religion
eligion”” by J
Jim
im Gilliam

When I read the Xrst draa of The Internet Is My Religion,

the new book by NationBuilder founder and CEO Jim
Gilliam, I was blown away by its honesty and what it
revealed. I had known Jim for quite some time—but I did
not really know him. The book ( July 22) tells Jim’s story
through his eyes, beginning with his upbringing as a
Christian Fundamentalist. It takes us through his harrowing
battle with cancer and the comprehensive collapse of his
belief system. Jim shares the most intimate moments of
his personal struggle, which lead to his emergence as an
important leader of a new movement.
Through this journey, we learn new secrets about
ourselves. For me, I found the answer to an old and
important question: Are great leaders born or made?
Because I invest in and advise CEOs, it’s a question which I
care deeply about. Do great leaders come out of the womb
with the charisma, grit, and courage to move men and
women to do great things? Or are they forged from intense
experience and great training? There are many seemingly
“natural” leaders, but almost none of those would say that
90 Some More Things

they were born that way. But if leaders are made, then why
is true leadership nearly impossible to teach?
I never really became comfortable with my answer to this
question until I fully understood Jim’s story. I Xrst met Jim
when he came to pitch my venture capital Xrm, Andreessen
Horowitz, to invest in his company. NationBuilder, Jim
explained, sold soaware meant to help leaders
communicate with and organize their followers. It was a
breakthrough concept, made possible by a series of
technological breakthroughs including the Internet and
social networking.
Essentially the soaware helps a leader build a database
of his or her followers, then grow and encourage that base
through a variety of techniques. It connects with all of the
modern social networks as well as email to enable the leader
to communicate with his or her followers where they are.
It then provides tools for building sub-leaders, incentivizing
followers and generally helping a leader accomplish his or
her goals.
As interesting as NationBuilder was, it still had what we
aWectionately refer to in technology as “a bootstrapping
problem.” Bootstrapping, a term derived from a 19th
century phrase, refers to starting a self-sustaining process.
For example, how do you start a computer before loading
the operating system into memory? You need a process
before the process. Leadership soaware was great, but
where would the leaders come from?
To understand the solution to NationBuilder’s
bootstrapping problem, I Xrst had to understand Jim.
Exceptionally tall, impossibly thin and white as ghost, Jim
does not look like a storybook leader. His shy personality
and awkward manner reinforce this perception. On top of
that, Jim has not worked for great leaders in his career and
lacks formal management training.
But Jim is a real leader. He has a clear, compelling vision.
He inspires people to greatness. He leads with a focus so
 Where Do Leaders Come From? 91

intense that if you get in his way, he’ll burn a hole in you
with his eyes. He has accomplished amazing things in life,
from turning obscure documentary Xlms into blockbusters
to rallying a community that he created to help get a new
pair of lungs aaer chemotherapy burned out his original
pair. Now, with no background and no connections, he has
built this very promising new company—one, I should note,
in which my Xrm invests and on whose board of directors I
sit.
If Jim the leader was neither born nor made, where did
this come from? How did this gangly, awkward man learn to
lead? What was the source?
Aaer reading The Internet Is My Religion, I learned the
answer this question and to my larger question as well.
Leaders are neither born nor made; they are found. This
book is about Jim’s journey to Xnd his inner leader. It’s
a journey that all leaders must go through, but one that
almost nobody ever talks about. It’s about learning to think
for yourself and sharing what you know in the best and
most impactful way possible. I hope that as you read this
book, you will Xnd your inner leader and lead the world to
great things.

July 17, 2015

[PART IV]

Back Pages
[21]

Don't Follow Your Passion

Transcrip
anscriptt of commencement speech delideliver
vered
ed at Columbia
Uni
niversity
versity to the Fu School of Engineering and Applied Science
class o
off 2015

So Xrst of all, thank you, Class of 2015, for inviting me to

speak. It’s such a great honor and when I got the invitation
I started thinking back to when I was in Columbia and I
remember getting to Columbia and I was immediately
stressed out, because I realized that I now had to Xgure out,
at some point, what I was going to do with my life. That was
super scary. Some of you might be going through that now
a little bit, (but not to bring that up or anything.)
I remember when I got the Xrst clue of what I might
do, I was taking a class over in the Mudd Building, which
somebody was telling me today is a great building if you like
prisons and Catholic school. I was in this class and they were
talking about this guy, Alan Turing and they were talking
about how he had proven that if you built a machine, that he
called a Turing Machine, it was theoretically impossible to
build a machine that was computationally more powerful.
It just melted my mind when I heard it, because I couldn’t
even imagine what he was talking about, because it was 1984
96 Some More Things

and you have to remember 1984 computers weren’t even

really a thing.
So the idea of a machine that could do anything was just
so farfetched, because all of our machines were just special-
purpose machines, like for doing math. Your parents will
remember it’s called a calculator. And then we had one
machine for word processing called a typewriter and we
even had one for video called a television set. And so the
idea of, okay, now you’re gonna have the machine that can
do absolutely anything and this guy had Xgured that out 40
years previously — I didn’t even know it was possible. I had
no idea, it was like this secret to the universe in which they
were saying, “Oh, here, there is a machine that’s limitless
and you can do anything on it.” And I was just thought: “No
way.” Translate, español, no way Jose. For the parents, that’s
a Kanye West reference.
That point in my life was like, for those of you who are
Phineas and Ferb fans, it was like that time when Phineas
goes, “I know what I’m gonna do today. ” I’m gonna major
in computer science. And so I ran over to (Carmen) and I
was just so excited to tell my friends. I was, like, man, they’re
gonna be just like so Xred up for me, I Xgured it out. I’m
not gonna be stressed anymore: “Guys, I’m gonna major
in computer science.” And one of my friends said, “Wow,
that’s the stupidest thing I’ve ever heard.” And said: “Why?”
He said, “Look, you’re at Columbia University. That’s like
a trade. You could learn that at DeVry. They’ll teach you
how to build computers, Xx them, program them. Here you
should major in something real.” And I was just thinking
to myself: “I’m talking about a limitless machine. You’re
talking about a washing machine.” I was completely
frustrated, I couldn’t really explain to him why, but it was
at that point, at my height of frustration that I learned the
most valuable lesson that I learned at Columbia, which is:
Don’t listen to your friends. Think for yourself.
Thinking for yourself sounds both simple and trivial, but
 Don't Follow Your Passion 97

in reality it’s extremely diZcult and it’s profound and here

is why. As human beings, we want to be liked. It’s
anthropological. If people didn’t like you in caveman days,
they would just eat you. So you really have a natural built in
instinct to want to be liked and the easiest way to be liked is
to tell people what they want to hear.
And you know what everybody wants to hear? What they
already believe to be true. And so the last thing they want to
hear is an original idea that contradicts their belief system.
So it’s very hard to even bring that kind of stuW up. But
those are the things; those are the only things — things that
YOU believe, that everybody around you doesn’t believe —
that when you’re right that create real value in the world.
Everything else people already know. There is no value
created. It’s just business as usual. So it’s so important to
think for yourself.
I see this in my business every day. My business is that
I fund people who have companies. Some of you probably
have company ideas and you might come to me and say,
“I’ve got an idea.” The biggest thing that I’ll look for when
you come to with an idea is, have you thought for yourself?
Is it something that you know that nobody else knows? Or is
it something that everybody knows?
Let me give you an example. Let’s say you come to me
and say, “Hey, I’ve got an idea to make batteries and cell
phones last longer.” I would react, “Well, that’s a pretty good
idea, but I’m not gonna fund it, because everybody thinks
that’s a good idea.” And because everybody think that’s a
good idea, companies like Google and Apple and Samsung
with tons of resources will just build that. So it’s not really a
new value creation for a new person.
Contrast that with an idea that came to me about Xve years
ago. A young man by the name of Brian Chesky came up
to me and had this idea that he was going to have an air
mattress in his apartment that he rented to people. It would
be an air bed and breakfast and I immediately thought:
98 Some More Things

wow, that’s a horrible, horrible idea. Who would want to

rent an air mattress out to somebody’s apartment like
probably a serial killer?
But Brian had a secret and his secret: and that was he had
run the experiment. He had actually tried his idea and a
whole lot of people wanted to rent that air mattress and they
weren’t serial killers. Beyond that, he went and he studied
the history of hotel chains and he found out hotel chains
were a relatively new concept. That before hotel chains,
people stayed at inns and bed and breakfasts. And that the
problem with inns and bed and breakfast were, they were
like a box of chocolates. You had no idea what you were
going to get — one day you might have something good
and the other day you might have marzipan cherry or some
weird stuW.
So, he though, with the internet, we can make every one
of those little chocolates in the box transparent and you
can know what you’re getting. And then you’d get all the
greatness of the bed and breakfast and all the goodness of
the hotel chain all in one. And he had Xgured out that secret
and it was an interesting secret, because it wasn’t something
everybody knew. Or it was something that probably
everybody in the world knew at one point, but they had all
forgotten. Everybody had forgot why we had hotels. And
today? I think they rent more nights every night in New
York than Hilton Hotel. Just Xve years ago and it was all
based on him believing something that nobody else
believed.
So in that spirit, what I’d like to give is a few
unconventional graduation thoughts and I’m titling them,
“Do Not Follow Your Passion and the World is Not Going to
Hell in a Handbasket and the Class of 2015 is Not Required
to Save it.” I told you it wasn’t going to be conventional.
Don’t follow your passion.
Now, you’re probably thinking, “That’s a really dumb
idea.” Because if you poll 1,000 people who are successful
 Don't Follow Your Passion 99

they’ll all say that they love what they do. And so the broad
conclusion of the world is that if you do what you love,
then you’ll be successful. But we’re engineers and we know
that that might be true. But it also might be the case that if
you’re successful, you love what you do. You just love being
successful and everybody loves you. It’s awesome.
So which one is it?
Well, I think to Xgure it out, you have to go back in time.
You have to back oW when you were successful to right now
when you’re graduating as the Class of 2015. And the Xrst
tricky thing about passions are they’re hard to prioritize.
Which passion is it? Are you more passionate about math
or engineering? Are you more passionate about history or
literature? Are you more passionate about video games or
K-pop? These are tough decisions. How do you even know?
On the other hand, what are you good at? Are you better at
math or writing? That’s a much easier thing to Xgure out.
The second thing that’s tricky if you’re going forward in
time with this follow your passion idea is that what you’re
passionate about at 21 is not necessarily what you’re gonna
be passionate about at 40. Now, this is true for boyfriends as
well as career choices.
The third issue with following your passion is you’re not
necessarily good at your passion. Has anybody ever watched
American Idol? You know what I’m talking about. Just
because you love singing doesn’t mean you should be a
professional singer.
Finally and most importantly, following your passion is
a very “me”-centered view of the world. When you go
through life, what you’ll Xnd is what you take out of the
world over time — be it money, cars, stuW, accolades — is
much less important than what you’ve put into the world.
So my recommendation would be follow your contribution.
Find the thing that you’re great at, put that into the world,
contribute to others, help the world be better and that is the
thing to follow.
100 Some More Things

Now, speaking of the world, this is generally the point

in a graduation speech where I should say, “The Class of
2015 faces unprecedented challenges. There is ISIS. There
is global warming. It sucks.” Don’t get me started on
congressional gridlock. And I think all those are true, but
what’s remarkable from a historical standpoint about this
time in the world, to me, are not the unprecedented
challenges; it’s the unprecedented opportunities.
Let me talk quickly about the state of the world.
The number of people living in extreme poverty today
is the lowest in the history of the world and one-Xah of
what it was in 1900. Child labor is in steep decline and fell
one-third between 2000 and 2012. Compared to the late
19th Century, the number of hours that one has to work
has fallen roughly in half. The percent of income spent
on food has fallen in half since 1960. Life expectancy has
increased six years between 1990 and 2012. Child mortality
has fallen in half since 1990. People are getting taller, which
is a measure of nutrition. People have grown more in the
last 100 years than in the previous 2,000. Speaking of ISIS,
worldwide battleXeld deaths are down twentyfold since the
40s. The homicide rate in the U.S. is down half since the late
70s, violent crime is one-third of what it was in 1976. The
global supply of nuclear weapons is down nearly Xvefold
since 1990 and in 2014 was the Xrst year in 40 that carbon
emissions were Yat.
So it’s not that bad.
But the biggest opportunity is one that we’ve only begun
to measure and to explain this, I’d like to go back to when
your parents and I were in college, because when we were
in college, and they may have told you this, and it may
have scared you, we didn’t have the internet. There was no
internet. And so if we had an idea Brian Chesky had an idea,
and we wanted to Xnd out about it, we couldn’t Google it.
But we did have a search engine. It was a diWerent kind
of technology. It was called a library and it kind of sucked.
 Don't Follow Your Passion 101

There is actually an old search engine behind me; I’m

looking at it there. But it kind of sucked because, one, you
couldn’t access it from your dorm room, because it wasn’t
even in cyberspace. It was in, well, actual space. And you
had to walk over there and then, and you had to bring your
credentials or they wouldn’t even let you in. There was no
logged out user experience.
And it was based on this really weird tech that was
invented a long time ago called the Dewey Decimal System.
And this tech was so old, Dewey was named aaer the guy
Dewey who invented it. But to make it seem high tech, they
said it’s a decimal system: “This is so high tech, we’re using
numbers, dude.” And not just integers, the decimal system!
The user interface to it was so bad, it was called a card
catalog, they had to train you to use it. You couldn’t just
go in and use it. You needed hours and hours of classroom
training.
The net result of this was that looking stuW up was very
discouraging, because you couldn’t look it up in
milliseconds, it took hours, and that’s if you were a
Columbia student, right? Even if you had a good library like
Butler, it would take you hours to look things up, so it was
very discouraging.
Maybe if Brian Chesky was born then he would just have
said, “Forget this, I’m going to Taco Bell. I’m not Xguring
out where hotels came from.” But think about it, that’s for a
Columbia student. Even worse for like a student who didn’t
go to Columbia and didn’t have access to as good a library
and, you might not even have that book in the library.
Or even more so, imagine if you grew up in Bangladesh
or Sudan and you had all kinds of great ideas, you had no
access, no search engine at all, no way to contribute your
original ideas to the world.
But then we fast forward to where we are now and
everybody who has a smart phone, which is pretty soon
going to be everybody in the world has the Library of
102 Some More Things

Congress in their pocket. That means a girl growing up

in Bangladesh now has a better library than a student at
Columbia or Harvard had 20 years ago.
What might her idea be? What might she contribute?
Well, I think that’s going be a lot up to you, because the
world still isn’t Yat. There are issues. There are issues with
power and issues with water and issues with food and issues
with equal rights. But if you contribute, if you put your
contribution into the world, if you think for yourself, then
I believe that you will be the greatest generation. Because
when we look back 50 years from now, 100 years from
now, 500 years from now, you will be the generation that
unlocked human potential.
So congratulations Columbia Class of 2015 and thank you
for inviting me.
[22]

The Legend of the Blind MC

You can see the belo

beloww post — with original links and anno
annotations
tations
po
power
wered
ed by Genius — her
heree

People say I’m crippled, but that’s a lie

they’re just mad ‘cause I’m so Yy
being handicapped is a state of mind
I’m not disabled I’m just blind
—The Blind MC

People oaen ask me why I feature Hip Hop so much in my

blog posts. In the past, I have given short and incomplete
answers, but here is the full story. It probably belongs in The
Hard Thing About Hard Things, but I did not know how to
tell it without Rap Genius.
In 1986, I was 20 years old and attending Columbia
University in the City of New York. I received a phone call
from my mother on the shared dorm room phone:
Elissa Horowitz: “Ben, I don’t know how to tell you this, so
I am just going to say it. Seth has been shot.”
Me: “What? How? Is he alive? How could that happen?”
Elissa: “He’s been shot in the face. He’s alive, but the
doctors say he will never see again.”
I dropped the phone. Seth Clark and his family—Joel,
104 Some More Things

Adam, Dana, Joel, and Penny—were my family too. We lived

two houses away from each other. We ate dinner with each
other almost every night. We saw each other every day. I
went on their family vacations. He was my brother and he
was 13 and he was blind for life.
I tried to imagine what he was feeling and I couldn’t. Seth
was smart and athletic. He stood over 6 feet tall at 13 and
every high school football coach in the area wanted him on
their team, but there would be no football. The more that I
thought about it, it seemed like there would be no anything.
What could a blind person do? Who would his friends be?
Where would all his dreams go?
When I would call home, things sounded worse and
worse. “He has pellets from the shotgun blast in his brain.
He is having seizures. He is totally depressed. He hasn’t
spoken a word to anyone in 3 months.” I felt completely
helpless. We were losing Seth. I felt like a part of me was
slowly dying.
Meanwhile, I was in New York City in 1986 and there
was an explosion of a new kind of music called Hip Hop.
It was unlike any other kind of music because the rappers
were celebrating having nothing while aspiring to have
everything. The songs were about growing up in the
housing projects, surviving in the streets, and how great it
was and how great they would become. At the time, Rock
n’ Roll was about rejecting the world, but Hip Hop was
about embracing it with all of its Yaws. In an era of super
groups and over production, rap groupsdidn’t even need
instruments. It was mind blowing and I was captivated.
For people in New York, the music came primarily from
two radio stations: WBLS and 98.7 KISS. The important
DJs were Cool DJ Red Alert and Chuck Chillout who not
only played the songs, but also signiXcantly enhanced them
through amazing scratching and sampling. As I listened to
Red Alert one evening, I thought, “This is so inspiring that
nobody could listen and be depressed.” I immediately
 The Legend of the Blind MC 105

grabbed a cassette tape and inserted it into my boom box.

I recorded that show and every Red Alert show from that
point forward. I would then mail the cassette tapes to Seth
every week.

Aaer a few months of mailing the tapes, I called home

and got a diWerent response. “All Seth wants to do is listen
to Cool DJ Red Alert. Can you send more tapes?” Then the
next call: “Ben, Seth isn’t talking, but he wants to talk to you
about Chuck Chillout and how he remixed something from
this guy LL Cool J called, ‘Rock the Bells’.” Seth was coming
back. Hip Hop was bringing him back.

Don’t need no help dictionary or thesaurus

my dog Dino, he’s a brontosaurus
—The Blind MC

As summer approached, I became overwhelmed with the

thought that I had to continue what I started. There would
be no summer internships with computer companies or
summer classes. This would be the summer of Hip Hop and
Seth. Maybe we could do more than listen to the music.
106 Some More Things

Maybe we could get into the game. As soon as I returned

home, I started writing rhymes.
The Xrst song that I wrote was based on an obsession
with the Flintstones and was naturally called “Bedrock”. I
showed it to my friend David Stern who said that his friend
Keith McArthur was a musician and could help put some
beats together. I then called Seth and told him that we were
forming a rap group and needed him. He was excited.

The Blind Def Crew you know we’re Yy

3 of us, but we got 4 eyes
—The Blind Def Crew

Keith was amazing and Xgured out how to make my rhymes

into songs. We all came up with proper rap names. Seth was
The Blind MC, I was Tic Toc and Keith was The Phantom.
Heavily inYuenced by Russell Simmons’ Def Jam records,
we decided to call the group Blind and Def.

We were hanging out, listening to Red Alert and writing

songs. It was heaven. One thing that I noticed at the time
 The Legend of the Blind MC 107

was that everyone other than Keith and me were extremely

sensitive about the shooting and the resulting blindness. It
was almost as though they were tiptoeing around Seth as so
not to oWend him. Meanwhile, Keith and I were relentlessly
cracking jokes about how he couldn’t see and how funny
that was. Within the context of the blindness, it was like
there were two possible views of life: Either life was horrible
and tragic or life was extremely brutal, but you had to
embrace it—you had to be in the game. We chose the Hip
Hop way; we chose the latter.

Perhaps because of that, we thought a great way to open

the mixtape was with an amazingly racist sample from the
Disney movie, Dumbo, from the black crows scene followed
by The Phantom and me screaming at The Blind MC:
“That’s the wrong record blind man, can’t you hear?”
Eventually, we recorded 4 songs on Keith’s 4-track
recorder and were extremely pleased with the result. We
were so excited that we decided to take a road trip to LA to
try to record on my brother Jonathan’s 8-track recorder for
108 Some More Things

higher quality and maybe get signed to a big time record

contract.

The road trip didn’t go quite as planned, including the

car overheating on the Grapevine and us getting stranded
on the side of the highway, but we did record on 8 tracks.
More importantly, through Hip Hop, Seth found his new
self. Today he is a PhD student of history at UC Davis and
has a beautiful family with his wife Chris.
 The Legend of the Blind MC 109

I have posted the original mixtape to Rap Genius and

annotated it here. It’s not a lost classic and it probably makes
sense that we didn’t get signed, but if you listen close
enough, you can hear the resurrection of The Blind MC.
That’s why I love hip-hop. So when people complain
about the rap lyrics in my blog being hokey or gimmicky, I
just defer to Nas:

This our thing, you know what I’m saying

This came from the gut, from the blood
From the soul, right here, man
This is our thing, man
You know? So I say what I say
110 Some More Things

THE MIXTAPE

• Bedrock
• Blind and Def
• The Phantom
• The Legend of MC H20

March 2, 2014
[23]

Why I Will Give 100% of My Book

Earnings to Women in the
Struggle

There is a woman in Somalia

Scraping for pearls on the roadside
There’s a force stronger than nature
Keeps her will alive
This is how she’s dying
She’s dying to survive
Don’t know what she’s made of
I would like to be that brave.
—Sade, “Pearls”

Never believe that a few caring people can’t change the

world. For, indeed, that’s all who ever have.
—Margaret Mead

I will donate all of my proceeds from The Hard Thing About

Hard Things to American Jewish World Service to support
their eWorts to help women Xght for their basic rights
throughout the world. Since there are many important
causes, I thought that it would be worth explaining why I am
supporting this one.
112 Some More Things

When I was 11 years old, I was exposed to chronic cruelty

on a global scale. I watched the miniseries “Roots” based on
Alex Haley’s bestselling novel about slavery in the United
States. I was riveted and horriXed. It was my Xrst real
introduction to slavery and I could not believe what I was
seeing. I saw families broken apart as they were sold to
diWerent owners. I saw slaves pleading for their lives only
to be brutalized and killed. How could anybody be so cruel?
How could everybody sit by and watch it happen? How was
this even possible? I could not have been more shocked.
I was deeply disturbed by the whole experience and
sought to Xnd out how it happened. I studied humankind’s
long history with slavery. I learned that in the 1600s, 75%
of the world’s population was enslaved. I learned that the
Caribbean form of the African slave trade was far more
brutal than the U.S. version. I studied the complex
economics of slavery and why it was diZcult to unwind
once started. I began to wonder how slavery ever ended.
Then I began to study the abolitionists. Men like former
slave ship captain John Newton who later wrote the song
“Amazing Grace”. People like the great Thomas Clarkson
who at times seemed to be alone in taking on the world.
I learned how a few unimaginably brave people took on
the entire globe and its brutal institution. They did not care
about the twisted history or corrupt cultures that created
slavery. They just wanted it stopped. Clarkson took great
personal risk in traveling by boat back and forth across
the Atlantic to record and tell the story of slavery for no
reason other than he wanted it ended. He dedicated his
life to stopping the cruelty. His story is among the most
inspirational in human history.
It had to be, because the most incredible thing about
slavery was how it ended. An institution that was embedded
into human culture, endorsed by the Bible, promoted by the
Qur’an, pervasive in society, and embedded in the global
economy was taken on and defeated by a movement started
 Why I Will Give 100% of My Book Earnings to Women in the Struggle 113

by a tiny number of people. These brave souls had no

Twitter or Facebook. They had no Internet or telephones
or automobiles, but they organized people across the world
and largely stopped slavery globally.
Aaer understanding how slavery ended, I promised
myself that if something like that ever happened in my
time, I would be part of the group who tried to stop it.
Sadly, something like slavery is happening in my time. It’s
not happening in the United States, but it is happening and
the victims are women. In many parts of the world, women
are literally owned by men. Women do not enjoy basic
rights, are denied access to education, can be arbitrarily
raped, robbed, and killed, and live in fear with no chance for
self-determination. A few revealing statistics:
Every year 10 million girls under the age 18 enter into early and
forced marriages
2 million girls a year undergo genital cutting
Two-thirds of the world’s illiterate adults are women
Women constitute about 70% of the world’s absolute poor
(i.e., those living on less than a dollar a day)
Meanwhile, the rhetoric deployed in resistance to
women’s rights is eerily reminiscent of resistance to freeing
slaves. Consider this statement from the Muslim
Brotherhood in resistance to a U.N. declaration calling for
an end to violence against women:
This declaration, if ratiXed, would lead to complete
disintegration of society, and would certainly be the Xnal
step in the intellectual and cultural invasion of Muslim
countries, eliminating the moral speciXcity that helps
preserve cohesion of Islamic societies.[1]
And compare it to this poem written in defense of slavery
in England in 1789:
If our slave trade had gone, there’s an end to our lives
Beggars all we must be, our children and wives
No ships from our ports, their proud sails e’er would spread,
114 Some More Things

And our streets grown with grass where the cows might be
fed.[2]
Like Thomas Clarkson and the abolitionists, Ruth
Messinger and AJWS are starting at the grass roots level, but
are already making great progress.
Consider Rehana Adib. At age 12, she was raped by a
group of older relatives. She bravely told her father, but
he responded by arranging for her to marry a middle-aged
man—a match designed to protect her security and
reputation. Like many other girls her age, she was forced
to drop out of school and was expected to be a subservient
wife and mother. She was not free to make choices about
her daily life and her own future.
But Rehana refused to be silent. She found a women’s
organization in her neighborhood and began to learn about
her rights. She took workshops in leadership and activism
and gained the courage to speak out about her experiences.
By the time Rehana was 18, she was an active member of
the local women’s movement and was already helping other
girls overcome the challenges they faced. Although her
family and community criticized her work at Xrst, she
slowly gained their respect and is now looked to as a leader
in her community.
In 2005, Rehana founded her own organization, Astitva,
in Muzzafarnagar—a rural area in Uttar Pradesh, India.
With AJWS’s support, Astitva works today to stop both
sexual violence and child marriage, helping give girls a
chance at a brighter future.
The systematic cultural abuse of women worldwide must
end. Let’s end it.

• [1] http://www.theguardian.com/world/2013/mar/15/
muslim-brotherhood-backlash-un-womens-rights
• [2] Bury the Chains, page 185
 Why I Will Give 100% of My Book Earnings to Women in the Struggle 115

February 25, 2014

Where to Buy Ben's Book

The Hard Thing About Hard Things is available here:

https://www.harpercollins.com/books/9780062273208