WEBVTT - Ben Horowitz Discusses Culture and Success 0:00:02.279 --> 0:00:06.840 This is Masters in Business with Barry Ridholtz on Boomberg Radio. 0:00:07.160 --> 0:00:10.280 This week on the podcast, I have an extra special guest. 0:00:10.360 --> 0:00:13.240 What can I say about Ben Horowitz. He is the 0:00:13.440 --> 0:00:17.960 co founder at Andrews and Harrowitz, a twelve billion dollar 0:00:18.480 --> 0:00:22.320 famed vc uh in Silicon Valley. I kind of get 0:00:22.320 --> 0:00:28.000 the sense that Ben is the inside process guy who 0:00:28.040 --> 0:00:32.560 looks at the world of venture investing and technology as 0:00:32.600 --> 0:00:36.440 a series of engineering problems to be solved. His partner, 0:00:36.479 --> 0:00:41.400 Mark and Reason, also a programmer slash engineer. UM. I 0:00:41.440 --> 0:00:44.080 get the sense looks at the world slightly different and 0:00:44.560 --> 0:00:47.600 the two of them have really put together a unique 0:00:47.600 --> 0:00:52.200 firm in Silicon Valley that has been wildly successful. If 0:00:52.240 --> 0:00:59.440 you are at all interested in technology startups, venture investing, management, culture, 0:01:00.400 --> 0:01:03.120 or hip hop, you're going to find this conversation to 0:01:03.200 --> 0:01:07.600 be absolutely intriguing. So, with no further ado, my conversation 0:01:07.920 --> 0:01:13.959 with Andresen Harowitz is Ben Harrowitz. This is Masters in 0:01:14.080 --> 0:01:18.920 Business with Barry Ridholts on Bloomberg Radio. My special yest 0:01:18.959 --> 0:01:22.200 this week is Ben Harrowitz. He is the co founder 0:01:22.240 --> 0:01:27.040 and general named partner at Andres and Horowitz, a highly 0:01:27.120 --> 0:01:31.039 regarded venture capital farm located right on Sandhill Road in 0:01:31.120 --> 0:01:34.880 Silicon Valley. He earned his MS degree in computer science 0:01:34.920 --> 0:01:37.080 from u c l A, following a b a in 0:01:37.080 --> 0:01:40.080 the same space from Colombia. He is the author of 0:01:40.120 --> 0:01:44.240 several books, including The Hard Thing About Hard Things and 0:01:44.360 --> 0:01:47.720 his most recent book, What You Do Is Who You Are. 0:01:48.040 --> 0:01:51.680 Ben Harrowitz, Welcome to Bloomberg. Thank you, Barry. So you 0:01:51.720 --> 0:01:56.680 began your career at the legendary Silicon Graphics in what 0:01:56.800 --> 0:02:00.320 was the technology scene like way back then? It was 0:02:00.440 --> 0:02:03.800 very different, um in that it was just there was 0:02:03.840 --> 0:02:07.120 just technology people in it. So it's really broadened since 0:02:07.160 --> 0:02:09.720 then an amazing way. And the reason was, you know, 0:02:09.760 --> 0:02:14.520 we were selling technology two technology people. It was all 0:02:14.560 --> 0:02:18.960 B two B. There wasn't really consumer businesses in the space. 0:02:19.040 --> 0:02:23.360 And then Silicon Graphics was kind of the Google of 0:02:23.360 --> 0:02:25.920 its stay and that it was where all the best 0:02:25.960 --> 0:02:28.680 engineers went. Um, you know, it kind of had all 0:02:28.720 --> 0:02:33.079 the panash Uh. We had done the kind of animation 0:02:33.200 --> 0:02:35.880 for the Terminator movie, which was like a big deal 0:02:35.919 --> 0:02:38.000 and that kind of thing. So it was it was 0:02:38.919 --> 0:02:41.640 super exciting time and just amazing. You know when I 0:02:41.720 --> 0:02:45.200 got there, how smart everybody was, um, which you know 0:02:45.280 --> 0:02:47.720 in life. You just never get put in a situation 0:02:47.800 --> 0:02:50.720 unless you're in a company like that. Quite quite interesting. 0:02:50.960 --> 0:02:54.880 How did you move from Silicon Graphics to um loud Cloud? 0:02:54.960 --> 0:02:58.040 How did that come about? Yeah? Well so the big 0:02:58.120 --> 0:03:01.040 kind of step in between it was be called Netscape 0:03:01.360 --> 0:03:07.079 UM which I joined. And what was your role in them? Yeah, 0:03:07.080 --> 0:03:10.000 so I started as a product manager UM on the 0:03:10.080 --> 0:03:12.520 kind of server product line, which ended up being very 0:03:12.520 --> 0:03:14.920 important because you know, Microsoft kind of took the money 0:03:14.919 --> 0:03:18.120 out of the browser product line, which was our first one. Uh. 0:03:18.160 --> 0:03:20.160 And although that, although it didn't work out all that 0:03:20.200 --> 0:03:23.200 well for them, eventually led to the anti trust suit 0:03:23.520 --> 0:03:27.720 which they lost. I yeah, no, it definitely we definitely 0:03:27.800 --> 0:03:30.920 put the hurt on them, but they kind of forced 0:03:31.000 --> 0:03:34.480 us to sell the company. So, uh, you know, it 0:03:34.520 --> 0:03:36.240 was an interesting one where I think they won the 0:03:36.280 --> 0:03:39.280 battle and we won the war. Also, we broke the 0:03:39.280 --> 0:03:42.600 Windows monopoly, which was you know, the win thirty two 0:03:42.600 --> 0:03:45.080 A p I was the kind of key lynchpin of it. 0:03:45.640 --> 0:03:48.400 And because of Netscape, people stopped writing to that and 0:03:48.520 --> 0:03:51.240 that kind of enabled the kind of way for everything 0:03:51.280 --> 0:03:55.120 else that's happened since. So from Netscape, you your partner 0:03:55.160 --> 0:03:59.440 Mark Andreeson famously created um the first browser. I think 0:03:59.440 --> 0:04:03.160 he was still in college years old. Yep, then came 0:04:03.200 --> 0:04:07.120 out and launched uh Netscape, which very quickly when public, 0:04:07.240 --> 0:04:10.440 really kicked off the whole dot com fifteen months old. 0:04:10.480 --> 0:04:14.560 When I want public, who U was Netscape? That's unbelievable. Yeah, 0:04:14.800 --> 0:04:19.640 that fifteen months we we even today as crazy as 0:04:19.680 --> 0:04:22.200 things have been, although the argument is it's everything has 0:04:22.240 --> 0:04:25.040 gone much further in the opposite direction. Let me bring 0:04:25.040 --> 0:04:29.120 this back to you. Um So from Netscape going public, 0:04:29.680 --> 0:04:33.880 how did you roll into loud cloud with Andresen Yeah 0:04:33.920 --> 0:04:37.480 so Netscape point uh public. But then eventually, you know, 0:04:37.520 --> 0:04:40.520 it was a very rough, kind of a legendary battle 0:04:40.520 --> 0:04:43.640 with Microsoft, and we saw the company to a o 0:04:43.760 --> 0:04:51.080 L one point six billion something like that. Not well Netscape, 0:04:51.120 --> 0:04:53.880 this is a Netscape slee So Netscape sold at the 0:04:53.960 --> 0:04:56.760 time it was four point two billion, but at the 0:04:56.800 --> 0:04:59.720 point the deal clused was ten billion dollars. Really that's 0:04:59.720 --> 0:05:03.520 a in transaction. Yeah, amazing trans mid nineties for sure. 0:05:04.000 --> 0:05:06.200 Oh yeah, yeah, yeah it was it. Look, it was 0:05:06.240 --> 0:05:08.240 a great outcome for a company. I was four years old. 0:05:08.240 --> 0:05:11.480 I mean, you can't you can't be mad at it. Um, 0:05:11.520 --> 0:05:14.560 but at a O l uh we were. I was 0:05:14.600 --> 0:05:16.520 in charge of kind of a well e commerce. And 0:05:16.560 --> 0:05:19.360 the interesting thing at a L L e commerce was, 0:05:20.000 --> 0:05:22.479 you know, it was a way like you come, you 0:05:22.600 --> 0:05:25.080 pay a well ten million dollars and they put you 0:05:25.120 --> 0:05:27.560 in the a well mall. That's kind of how the 0:05:27.600 --> 0:05:32.000 internet worked in those days. And yeah, the walled garden. 0:05:32.240 --> 0:05:35.200 And once you were in the mall, the problem was 0:05:35.480 --> 0:05:38.800 that your site would just basically collapse because a well 0:05:38.880 --> 0:05:41.920 had so much traffic it would basically turn it on 0:05:41.960 --> 0:05:43.760 you and you would just not even be able to 0:05:43.760 --> 0:05:47.200 handle fire. Absolutely, Oh my god. Yeah, and so that 0:05:47.240 --> 0:05:50.640 gave us the idea to create what was, you know, 0:05:50.720 --> 0:05:54.239 kind of the original or at least the original named 0:05:54.320 --> 0:05:57.880 so cloud computing company, loud Cloud. The idea is that 0:05:57.960 --> 0:06:01.360 this is scalable dynamically on a fly. If a ton 0:06:01.400 --> 0:06:07.039 of traffic comes in and you don't just crash, you 0:06:07.080 --> 0:06:11.200 get to take full advantage of that traffic. And so, 0:06:11.200 --> 0:06:12.840 so let me back up a little bit when I'm 0:06:12.880 --> 0:06:18.400 really curious about you start at Netscape as a middle manager, 0:06:18.440 --> 0:06:20.839 how do you rise through the ranks and how do 0:06:20.920 --> 0:06:25.200 you eventually become tight within reason? Yeah, well, I think 0:06:25.200 --> 0:06:28.600 there were two things UM and they were they were separate. 0:06:28.640 --> 0:06:32.760 So the relationship with between Mark and myself was due 0:06:32.800 --> 0:06:36.920 to kind of there's a phenomenon in companies where if 0:06:36.920 --> 0:06:41.880 you think about UM product strategy and the ability for 0:06:41.920 --> 0:06:46.000 any individual to create a new proper like to create 0:06:46.040 --> 0:06:48.920 a new product that works like that lands in the 0:06:48.960 --> 0:06:51.840 market is a very kind of rare skill. It's kind 0:06:51.839 --> 0:06:53.560 of rare skill you have in a company, and even 0:06:53.560 --> 0:06:57.200 in a really big company, they're only like five or 0:06:57.240 --> 0:06:59.120 six people who can do that, who can create a 0:06:59.120 --> 0:07:01.800 new product and get a market. And he I and 0:07:01.839 --> 0:07:04.920 I were like whatever, two of the six at the company, 0:07:05.000 --> 0:07:08.000 and so we became friends, uh over that, and then 0:07:08.000 --> 0:07:11.360 I think the rise through the ranks was more. Look, 0:07:11.400 --> 0:07:16.080 almost nobody in Silicon Valley actually cares about or puts 0:07:16.200 --> 0:07:20.880 effort into like management and developing people. And so I 0:07:20.960 --> 0:07:23.040 kind of realized that early and I thought, well, you know, 0:07:23.080 --> 0:07:25.160 I ought to do that UM and then that will 0:07:25.240 --> 0:07:28.920 distinguish man. I think that's kind of what led me 0:07:29.040 --> 0:07:32.760 to being a senior exact and then a CEO. That 0:07:32.840 --> 0:07:37.480 was a conscious decision, Hey, we're ignoring our staffing, we're 0:07:37.480 --> 0:07:40.200 ignoring the people who work for us, and if I 0:07:40.280 --> 0:07:43.880 find a way how to work with these people, manage them, 0:07:43.920 --> 0:07:48.080 motivate them, etcetera. That's a positive career move. I mean, 0:07:48.160 --> 0:07:51.800 was it that calculated, Well, um, you know, I don't 0:07:51.800 --> 0:07:53.720 know if it was that calculated, but that's kind of 0:07:53.720 --> 0:07:57.280 how it unfolded in that. Uh. Look, you get rewarded 0:07:57.560 --> 0:08:00.680 in a tech company for kind of having the best 0:08:00.760 --> 0:08:03.560 ideas and kind of knowing the technology and the products 0:08:03.560 --> 0:08:06.120 and the market the best like that. That that always 0:08:06.920 --> 0:08:10.440 gets you points and people usually don't even notice how 0:08:10.480 --> 0:08:13.680 well you're kind of running your team. Um, at least 0:08:13.720 --> 0:08:17.320 in the short term. Over time it becomes obvious and 0:08:17.560 --> 0:08:19.640 uh so that was a big deal. I think that's 0:08:20.320 --> 0:08:23.800 that was a big deal for me anyway, quite quite interesting. 0:08:24.280 --> 0:08:29.960 So you go from Netscape to loud Cloud. Eventually loud 0:08:30.040 --> 0:08:33.439 Cloud becomes OPS where it gets sold to HP for 0:08:33.600 --> 0:08:37.080 one point six billion dollars. Uh and you stick around 0:08:37.200 --> 0:08:39.120 HP for a couple of years. What was that like 0:08:40.120 --> 0:08:43.560 one year? Yeah, like I learned a lot um. You know, 0:08:43.720 --> 0:08:47.400 HP at that time was I would say, kind of past. 0:08:47.440 --> 0:08:49.760 It's heyday for sure, and you know it had gone 0:08:49.840 --> 0:08:55.000 through you know, uh, bunch of c e O s 0:08:55.040 --> 0:08:59.200 in succession um, which is never generally good. As you know, 0:08:59.240 --> 0:09:03.400 the culture kind gets twisted around and so forth. Uh. 0:09:03.440 --> 0:09:08.200 And I think that the thing that I learned was, um, 0:09:08.240 --> 0:09:12.520 you know, a company's culture kind of goes bad when 0:09:12.559 --> 0:09:15.280 nobody feels like it's their company, when they all feel 0:09:15.320 --> 0:09:17.200 like they worked there. And I think we had gotten 0:09:17.200 --> 0:09:19.520 to that point with HP where nobody felt like, okay, 0:09:19.640 --> 0:09:21.640 HPS my company. It was like I was meaning no 0:09:21.760 --> 0:09:26.319 equity participation. They don't feel like it's not a financial incentive, 0:09:26.360 --> 0:09:31.080 it's a it's more of a spiritual ownership like this 0:09:31.160 --> 0:09:33.800 is I'm proud of my company and where I work 0:09:33.840 --> 0:09:37.800 and so forth, and uh, you know, I'm gonna make 0:09:37.840 --> 0:09:40.040 sure that I represented the best way and the work 0:09:40.080 --> 0:09:42.480 that we do is high quality and all that kind 0:09:42.480 --> 0:09:45.679 of thing. Um, they had lost that. And you know, 0:09:45.720 --> 0:09:48.000 I've never seen a company that had lost it entirely. 0:09:48.120 --> 0:09:50.240 They had it and then lost it. Oh yeah, I mean, 0:09:50.280 --> 0:09:54.000 of course you knew work in Silicon Valley that they 0:09:54.040 --> 0:09:58.240 had it better than anybody. You know. The HP way, Um, 0:09:58.520 --> 0:10:01.840 you know, Dave Dave Packard was just a legend as 0:10:01.880 --> 0:10:05.240 a CEO and a manager, and um, you know, and 0:10:05.280 --> 0:10:06.719 that was kind of they built a lot of the 0:10:06.760 --> 0:10:09.000 culture of the whole all of Silicon Valley. But by 0:10:09.040 --> 0:10:11.120 the time I had gotten there, you know, in the acquisition, 0:10:11.960 --> 0:10:14.280 uh you know, and there there's this kind of thing 0:10:14.600 --> 0:10:17.920 which maybe you have seen it. People either get rewarded 0:10:17.920 --> 0:10:20.600 at work for caring or for not caring, a meaning 0:10:20.640 --> 0:10:23.520 that like, how do you get rewarded for not caring? Well, 0:10:23.600 --> 0:10:28.240 let's say that the company can't make a decision for 0:10:28.280 --> 0:10:31.040 whatever reason, it's to bureaucratic. So you work your butt off, 0:10:31.640 --> 0:10:34.480 you figure something out, you have a new idea, a 0:10:34.559 --> 0:10:36.800 new project or whatever. You try and bring it forth 0:10:36.800 --> 0:10:38.960 and get a decision on it, and like it goes 0:10:39.000 --> 0:10:43.439 nowhere because nobody can decide. Then you're punished for caring 0:10:43.480 --> 0:10:45.679 because you spend all that time and you get just 0:10:45.840 --> 0:10:49.120 nothing but frustration. Meanwhile, the guy who was playing video 0:10:49.160 --> 0:10:51.960 games at his desk, Like, that guy gets rewarded because 0:10:52.000 --> 0:10:53.560 he did nothing and he's probably going to get the 0:10:53.600 --> 0:10:57.640 same pay increases, no negative consequences for not caring versus 0:10:57.760 --> 0:11:01.040 actual time waste and energy way for caring and trying 0:11:01.040 --> 0:11:05.000 to do. Let's talk a little bit about the early 0:11:05.160 --> 0:11:09.679 days in terms of raising money and deploying it. What 0:11:09.760 --> 0:11:14.240 was that like when you guys were first launching A 0:11:14.440 --> 0:11:20.240 sixteen z as as it's known amongst a small group. Well, 0:11:19.960 --> 0:11:22.960 it was interesting because we had it had that quality. 0:11:23.000 --> 0:11:25.199 There's a quality that you always want and I understand 0:11:25.240 --> 0:11:27.120 it's better as a venture capitalists and I did as 0:11:27.160 --> 0:11:30.959 an entrepreneur, but you always really want it when you're 0:11:30.960 --> 0:11:33.800 starting something new, which is you want people to say 0:11:34.160 --> 0:11:36.960 you're crazy. That's the dumbest thing that I've ever heard, 0:11:37.000 --> 0:11:40.319 because if you don't hear that, then you don't actually 0:11:40.320 --> 0:11:43.040 have a breakthrough because if it's obvious to people, then 0:11:43.240 --> 0:11:47.280 like it's not it's not that great idea. Um. And 0:11:47.320 --> 0:11:49.920 so we got that big time, which was awesome. So 0:11:49.960 --> 0:11:52.880 you know, we went and we when you were when 0:11:52.880 --> 0:11:55.880 you were launching and greesent Harlot's oh yeah, Now was 0:11:55.920 --> 0:11:57.600 that a function of we were right in the middle 0:11:57.600 --> 0:12:01.319 of a meltdown or just enrule, who needs another venture 0:12:01.360 --> 0:12:05.000 capital farm? Well it was those two things. So it 0:12:05.120 --> 0:12:07.960 was you know, two thousand and nine was the worst 0:12:08.000 --> 0:12:10.440 time I think in the last thirty years to raise 0:12:10.520 --> 0:12:13.960 a new venture capital fund. Only only two new ones 0:12:14.000 --> 0:12:16.120 were raised us in coastal ventures, and of course of 0:12:16.120 --> 0:12:20.840 the coast is a super legend and venture capital business. UM, 0:12:20.960 --> 0:12:23.240 so like, yeah, it was a super bad time to raise. 0:12:24.360 --> 0:12:28.760 Nobody needed another yet another venture capital firm. And then 0:12:28.920 --> 0:12:32.120 our idea behind it, which was we were going to 0:12:32.360 --> 0:12:37.400 use um Michael Ovit's as CIA as the blueprint for 0:12:37.520 --> 0:12:41.040 the firm. Everybody thought was the dumbest thing that they'd 0:12:41.040 --> 0:12:43.120 ever heard in their lives. I mean it was just like, 0:12:43.360 --> 0:12:45.800 what are you talking about? Like this is nothing like Hollywood. 0:12:45.840 --> 0:12:48.120 You can't do that, you guys, are you know that 0:12:48.160 --> 0:12:50.720 will never work? Like it's been tried a thousand times, 0:12:50.720 --> 0:12:53.760 you know, like everything, like it's so dumb, nobody would 0:12:53.760 --> 0:12:55.960 ever try it to Like it's dumb and it's been 0:12:56.000 --> 0:12:59.120 tried already and didn't work. Like explain the CIA blueprint 0:12:59.200 --> 0:13:01.680 what you were doing in how different that was from 0:13:01.920 --> 0:13:07.199 typical vcs. Yeah. So basically if you looked at um, 0:13:07.240 --> 0:13:12.120 the talent agency business before CIA, when Michael started in 0:13:12.200 --> 0:13:16.560 seventy five, I think, um, it was kind of you know, 0:13:16.640 --> 0:13:18.960 you had you looked at any firm, you had agents, 0:13:19.120 --> 0:13:21.520 and then you had kind of people in the mail 0:13:21.600 --> 0:13:23.400 room because there was no emails, so you have to 0:13:23.440 --> 0:13:26.160 deliver the mail. You remember this Barry it's an old 0:13:26.240 --> 0:13:29.480 kind of school thing. Are you saying, I'm old? Well, 0:13:29.679 --> 0:13:32.199 you know, you're you're you're kind of at least close 0:13:32.240 --> 0:13:35.360 to me, okay, um, And then you have I think 0:13:35.400 --> 0:13:38.000 I actually have a few years on you. Yeah, okay, good, 0:13:38.600 --> 0:13:43.960 fifty eight you're fifty four some okay exactly so um. 0:13:44.000 --> 0:13:48.040 But anyway, so then you had secretaries and like that 0:13:48.160 --> 0:13:52.200 was the firm. And in the economics where you get 0:13:52.200 --> 0:13:55.200 ten percent of whatever an actress made or you know, 0:13:55.240 --> 0:13:57.800 an actor or that kind of thing. Um, And so 0:13:58.000 --> 0:14:02.480 as an agent, the firm would generate tempers and override there. 0:14:02.600 --> 0:14:05.160 Some would go to pay for the secretaries in the 0:14:05.160 --> 0:14:07.040 mail room guys, and then the rest would go to 0:14:07.080 --> 0:14:09.640 the agents. And you know, that's kind of how they rolled. 0:14:10.120 --> 0:14:12.559 And so kind of as a result of that, every 0:14:12.800 --> 0:14:16.319 agent kind of was a little bit you know, playing 0:14:16.360 --> 0:14:21.000 for himself and that newk. Yeah, what you kill, your 0:14:21.040 --> 0:14:23.160 network is your network, you know, the guys you know, 0:14:23.840 --> 0:14:26.120 and so you know, and that's how it worked. And 0:14:26.120 --> 0:14:28.520 then when you were if you were like a great 0:14:28.560 --> 0:14:31.840 actor and you were choosing a talent agency, you'd always 0:14:31.880 --> 0:14:34.960 go with the one that had the other big time actors, right, 0:14:35.000 --> 0:14:37.360 like it's just an obvious thing. And so the rich 0:14:37.400 --> 0:14:40.360 got richer, and the kind of same firms had been 0:14:40.400 --> 0:14:44.280 the top for for you know, decades. Uh So, then 0:14:44.320 --> 0:14:47.400 Michael comes along and he flips the model and he 0:14:47.440 --> 0:14:52.760 goes so he and his kind of founding partners deferred 0:14:52.880 --> 0:14:56.360 all their commissions for the first several years and built 0:14:56.440 --> 0:14:59.800 what he called the franchise, which was the professional I 0:15:00.240 --> 0:15:06.800 network for talent agency business. And that basically manifest itself 0:15:06.960 --> 0:15:10.760 in the uh the pitch meeting where they would pitch 0:15:11.040 --> 0:15:14.000 the talent. So the way it worked at William Morris 0:15:14.080 --> 0:15:16.720 was you'd go in, you meet with your agent. They'd say, oh, yeah, 0:15:16.760 --> 0:15:20.280 I know the president like Warrener Brothers Pictures, and I'll 0:15:20.320 --> 0:15:22.240 get you into that and the da da da, and 0:15:22.240 --> 0:15:24.680 that was that was kind of the pitch. You go 0:15:24.800 --> 0:15:27.480 into C A A. They had thirty people sitting around 0:15:27.480 --> 0:15:30.680 the table. The first person would say, I managed book publishing. 0:15:30.720 --> 0:15:32.960 Here are the relationships we have with all the publishers. 0:15:32.960 --> 0:15:35.200 Here are the new books coming out where I think 0:15:35.440 --> 0:15:38.080 that you would fit as we turned them into screenplays. 0:15:38.080 --> 0:15:41.120 And the next person would say, I'm in charge of music, 0:15:41.360 --> 0:15:43.520 and here's how we can cross promote you there, and 0:15:43.560 --> 0:15:45.880 then next person say, I'm in charge of international. Here 0:15:45.960 --> 0:15:48.800 the Japanese television commercials we can slide you into. So 0:15:48.840 --> 0:15:52.800 it was just an overwhelmingly powerful network. And if you 0:15:52.880 --> 0:15:55.440 fast forward, you know, fifteen years later, of course, Michael 0:15:55.440 --> 0:15:58.120 became the most powerful man in Hollywood and they owned 0:15:58.200 --> 0:16:01.520 you know whatever, ninety percent of all the top actress, 0:16:01.360 --> 0:16:05.240 a screenwriters, everything, and they transformed the industry and now 0:16:05.240 --> 0:16:10.560 everybody runs like CIA today. But oh yeah, absolutely, um 0:16:10.640 --> 0:16:13.200 so we thought, wow, venture capital looks just like this, 0:16:13.480 --> 0:16:15.160 Like this is exactly how it works. You got a 0:16:15.160 --> 0:16:17.400 bunch of like partners and they are like jack of 0:16:17.440 --> 0:16:19.840 all trades. They do beat and they help you with recruiting, 0:16:19.840 --> 0:16:21.560 and they do this and that, and they don't do 0:16:21.560 --> 0:16:23.240 any of them well. And we knew that because, like, 0:16:23.360 --> 0:16:27.280 you know, we'd experienced it, and so we said, oh, 0:16:27.320 --> 0:16:29.560 we're going to do the CIA model here, and everybody said, 0:16:29.720 --> 0:16:32.240 you guys are stupid. So that's when we knew it 0:16:32.280 --> 0:16:35.600 would work. So so the transition from being both a 0:16:36.040 --> 0:16:39.000 entrepreneur and somebody who was on the receiving end of 0:16:39.080 --> 0:16:42.520 venture capital that sounds like it very much colored the 0:16:42.520 --> 0:16:45.920 way you wanted the firm to run. Yeah, no, absolutely. 0:16:46.000 --> 0:16:50.240 So the other, uh kind of big idea that we 0:16:50.360 --> 0:16:55.400 had was venture capital was kind of oriented around you 0:16:55.520 --> 0:16:58.120 had this inventor and you would give them money and 0:16:58.120 --> 0:17:00.920 then when the company, if the invention worked and people 0:17:00.960 --> 0:17:03.800 liked it, then you would bring in a professional CEO 0:17:03.920 --> 0:17:08.480 to build the company. That was the general motion, um, 0:17:08.560 --> 0:17:11.440 and that we had a couple of observations on that one. 0:17:11.840 --> 0:17:14.520 If you looked at the history of technology companies, the 0:17:14.560 --> 0:17:18.600 greatest technology companies were generally run by their inventor founder 0:17:18.640 --> 0:17:21.080 for a very long time, from you know, Thomas Watson 0:17:21.080 --> 0:17:24.520 and IBM, Dave Packard and Bill Hewlett at Heulett Packard, 0:17:24.560 --> 0:17:27.520 Bill Gates, um, you know, and then later on Mark 0:17:27.600 --> 0:17:30.760 Zuckerberg and all these kinds of things. And so we thought, 0:17:30.760 --> 0:17:34.639 you know, that's interesting, um. And then as we looked 0:17:34.640 --> 0:17:37.680 at our own experience, you know, being kind of inventor 0:17:38.280 --> 0:17:41.800 and you know, in my my case CEO, Like, we 0:17:41.960 --> 0:17:47.560 knew that professional CEOs could not be taught to innovate, 0:17:47.760 --> 0:17:50.480 So like you could teach an innovator to be a CEO, 0:17:50.640 --> 0:17:53.880 but not necessarily a CEO to be an innovator. And 0:17:53.920 --> 0:17:55.640 so we thought, wow, what if there was a venture 0:17:55.680 --> 0:18:01.800 capital firm that actually helped a found or become a CEO. 0:18:01.920 --> 0:18:04.120 And we thought it was two parts of the CIA 0:18:04.359 --> 0:18:07.760 power network, which gave you a network like a professional 0:18:07.800 --> 0:18:11.399 CEOs network, and then like the know how, like what 0:18:11.560 --> 0:18:13.400 is that job? How do you do it? Help them 0:18:13.440 --> 0:18:16.119 get scaled up? And so that was kind of the 0:18:16.160 --> 0:18:19.720 idea from from the launch. The idea wasn't let's find 0:18:19.840 --> 0:18:23.200 entrepreneurs with great ideas and eventually will find the way 0:18:23.240 --> 0:18:25.720 to turn them into a company. You were looking to 0:18:25.880 --> 0:18:31.320 create a method to take entrepreneurs with good ideas and 0:18:31.400 --> 0:18:35.000 turn them into good CEOs of good companies exactly from 0:18:35.119 --> 0:18:37.879 day one, from day one, and and the rest of 0:18:37.920 --> 0:18:41.320 Silicon Valley did not embrace that. No, you know, like 0:18:41.359 --> 0:18:44.840 because they you know, they had been old school and 0:18:44.880 --> 0:18:47.760 they and look in their defense, it used to be 0:18:48.040 --> 0:18:51.800 way harder to get ready to be a CEO because 0:18:51.840 --> 0:18:54.560 if you think about like Tandem Computers, Um, since you're 0:18:54.600 --> 0:18:57.920 fifty eight, you remember Tandem. Uh. In order to get 0:18:58.040 --> 0:19:01.159 Tandem to market, you had to build manufacturing, you had 0:19:01.200 --> 0:19:05.399 to build comprehensive customer support and professional services, and a 0:19:05.440 --> 0:19:08.840 direct sales channel. To get Twitter to market, you needed 0:19:09.000 --> 0:19:12.159 like three guys with laptops and aws and like you 0:19:12.200 --> 0:19:15.639 were gone and very different today, Yeah, very very different. 0:19:15.680 --> 0:19:17.879 Plus you know they used to go public a lot quicker. 0:19:19.040 --> 0:19:22.800 There was um relevant to to that concept about three 0:19:22.800 --> 0:19:26.040 guys in a laptop in And I apologize if I'm 0:19:26.080 --> 0:19:29.040 confusing books because both of your books kind of all 0:19:29.280 --> 0:19:32.480 are jumbled in my head. Um, I learned the most 0:19:32.520 --> 0:19:35.959 important rule of raising money privately. Look for a market 0:19:36.040 --> 0:19:39.880 of one. Only need one investor to say yes. It's 0:19:39.960 --> 0:19:42.879 best to ignore the other thirty who say no. That 0:19:43.000 --> 0:19:46.520 sounds like that comes from real experience. Sadly, yes, yeah, no, 0:19:46.640 --> 0:19:49.160 so that that that's the hard thing about hard things, right, 0:19:49.920 --> 0:19:52.359 But yeah, no, that's right. You only need I mean, 0:19:52.400 --> 0:19:54.320 that's the beauty of raising money. You just need to 0:19:54.359 --> 0:20:00.439 convince one. And I think entrepreneurs get discourage sometime, you know, 0:20:00.480 --> 0:20:04.560 particularly if they have a particularly novel or breakthrough idea 0:20:04.680 --> 0:20:08.440 that's difficult to understand because you know, if it if 0:20:08.440 --> 0:20:11.679 people can't pattern match it, then you know it's it 0:20:11.760 --> 0:20:13.720 is difficult to raise money, but you just need one 0:20:14.600 --> 0:20:19.159 that's interesting. And since we're recording this right after the 0:20:19.200 --> 0:20:23.520 relaunch of Silicon Valley, the show HBO show your firm 0:20:23.640 --> 0:20:26.840 was a consultant to the first season at least of 0:20:28.000 --> 0:20:31.240 right your partner Mark. UM. I think a lot of 0:20:31.320 --> 0:20:35.640 the rest of America looks at Silicon Valley and they 0:20:35.720 --> 0:20:38.600 only know it through shows like that. What do you 0:20:38.640 --> 0:20:42.080 think the biggest misconceptions the rest of the country has 0:20:42.119 --> 0:20:45.960 about Silicon Valley? Um? Or is the show just dead on? 0:20:46.160 --> 0:20:49.399 Even the stereotypes and the exaggerations are all based on 0:20:49.480 --> 0:20:51.600 people we know. I felt you don't like all shows. 0:20:51.640 --> 0:20:54.479 It's a very kind of cartoonist version of of how 0:20:54.520 --> 0:20:57.760 it actually goes. I think the biggest misconceptions are one 0:20:57.800 --> 0:21:01.800 like it's crush singly hard to build a company. I mean, 0:21:01.840 --> 0:21:07.840 it is like emotionally and kind of rushes. That's a 0:21:07.920 --> 0:21:10.680 great phrase. Oh yeah, I mean I think Sean Parker 0:21:10.760 --> 0:21:12.919 said it's like, you know, eating glass. It's just like 0:21:13.000 --> 0:21:16.119 and that's what it feels like at times, um, Because 0:21:16.440 --> 0:21:21.080 like you go out, you tell that you have this idea, 0:21:21.160 --> 0:21:25.000 you're so excited about it. You raise money like from 0:21:25.040 --> 0:21:27.240 like you know you generally you start with like your 0:21:27.280 --> 0:21:30.040 best friends or like your parents are like that kind 0:21:30.080 --> 0:21:33.960 of thing, or like somebody anybody you know with money. Um, 0:21:34.040 --> 0:21:36.560 and then you know, you hire the best people you 0:21:36.600 --> 0:21:38.679 can find, you know, and and then you spend all 0:21:38.720 --> 0:21:40.560 your time on it. So really the only people you 0:21:40.640 --> 0:21:42.200 end up knowing in your life for the people who 0:21:42.200 --> 0:21:45.119 work for you, people who gave you money, because like 0:21:45.160 --> 0:21:47.040 all your times on the company and then starts going 0:21:47.040 --> 0:21:49.520 wrong and you go, okay, like, well what happens if 0:21:49.520 --> 0:21:52.640 this fails? And it's like, well, my like that's like 0:21:52.840 --> 0:21:55.040 not only do I let down everybody that I care about, 0:21:56.119 --> 0:21:59.040 but like that's my whole life, Like it's just gonna 0:21:59.280 --> 0:22:03.840 fail with me. Um. So that kind of pressure is 0:22:04.400 --> 0:22:07.359 not like something that you experience. And I'm sure you 0:22:07.400 --> 0:22:10.480 know if you're a soldier or whatever, you feel you 0:22:10.840 --> 0:22:13.800 have even worse pressure. But like it's a very extreme pressure. 0:22:14.320 --> 0:22:19.000 And and then you're always hiding it as CEO because 0:22:19.040 --> 0:22:21.080 you never want anybody on the outside to know there's 0:22:21.119 --> 0:22:24.080 something wrong with your company. And so that you know 0:22:24.119 --> 0:22:26.440 that part of it is is really really difficult. In 0:22:26.480 --> 0:22:30.679 the hours are just crazy hard, um and you know, 0:22:30.720 --> 0:22:33.240 like and then you know things don't work, they go wrong, 0:22:33.960 --> 0:22:36.400 You're running out of money, like customers don't like the product, 0:22:36.640 --> 0:22:39.440 like things blow up, people scream at you. It's it's 0:22:39.520 --> 0:22:42.520