Ben Horowitz: What You Do is Who You Are (Lessons in Management) – The Tim Ferriss Show

Check out The Tim Ferriss Show Episode Page & Show Notes

Key Takeaways 

  • “To be a good CEO, and to be liked in the long run, you must do things that upset people in the short run”Ben Horowitz
    • “If you make decisions that everybody likes all the time, then those are the decisions they would have made without you. You’re not actually adding any value.”
  • As an entrepreneur, avoid thinking in terms of probabilities
    • Instead, think in terms of: “How do I do this?”
    • You have to have the mindset: “Okay, I’ve got one bullet in the gun. I’ve got to hit the target. I’m going to do whatever I can to get as close as possible… If somehow we don’t make it, we don’t make it. But we’re going to die trying.”
  • Sharpen your contradictions
    • “In an organization, you’ll often see little disagreements between people, and a lot of your inclination is to smooth things over, but the right answer is to sharpen the contradictions” – Ben Horowitz
  • What you DO is who you are – not your values, not what you tweet, but what you DO
  • A company culture isn’t a shared set of beliefs, it’s a shared set of actions/behaviors

Books Mentioned

Intro

The Story of Andy Grove

  • Andy was one of the founders of Intel
    • “For my money, he was the best CEO we ever had out here” – Ben Horowitz 
  • Andy began his life as a refugee from Hungary during World War II, coming over on a boat to NYC
    • He worked his way up the ladder, teaching himself English, eventually becoming a physicist, and later founding Intel

High Output Management

  • Andy, mentioned above, is the author
  • “It’s my favorite management book by far. In fact, I think it’s the only management book I’ve ever read that I liked.” Ben Horowitz
  • “I know some incredible founders who have stacks of this book in their offices to give away” – Tim Ferriss
  • The book is highly regarded as it gets into the nitty-gritty of management and tells it like it is
  • A notable line from the book: After an employee showed up late to a meeting, Andy told him – “All I have in this world is time, and you’re wasting my time”
    • This counters most management books, which dictate that you should never embarrass an employee in a public setting

With an extensive computer science background, how does Ben think about management?

  • With engineering, you’re continually thinking about systems and system interaction. This translates to management:
    • For example – Say an employee comes to your office asking for a raise
      • You could certainly just give them one
      • But you should also think about:
        • How will this look to other employees? Is it fair?
        • Is that employee just getting a raise because they came into your office? Or do they really deserve it?
        • (In short – systems thinking allows you to examine the raise from the perspective of others)
  • Using the example of Andy calling out the employee (above):
    • In a sense, he was setting the culture – he was teaching everybody in the company a lesson (that it’s not okay to be late for a meeting)
      • He was sacrificing the individual (the employee) for the good of the whole (and this is necessary from time to time)

The Difference Between Management and Leadership

  • “Leadership is the art of getting people to follow you” Ben Horowitz
    • This involves:
      • Having a vision and being able to articulate it
      • Being inspiring
      • Creating a feeling among your followers that you care about their goals/objectives
  • Management is about operationalizing your vision/breaking it down into its steps
    • It involves getting people to do what you know
  • Leadership is more on the creative side, while management requires more discipline and systematization

Good Product Manager/Bad Product Manager

  • This is a piece Ben wrote in 1995
    • “It was a piece I wrote out of pure frustration” – Ben Horowitz
  • In Silicon Valley, being a product manager means something completely different from company to company
    • “And many companies have bad product management functions” – Ben Horowitz 
      • So, Ben put this piece together to set the record straight
  • “Everybody, no matter how smart they are, whether they went to Stanford, Harvard, or wherever, can always use training in the job you want them to do”Ben Horowitz
    • “If you’re a manager that doesn’t train your people, I can’t imagine you’re good at your job. There’s no way your employees can read your mind on everything.”

Bill Campbell = Oprah Winfrey

  • Who was Bill?
    • A legendary Silicon Valley business coach
    • For more on Bill, check out these Podcast Notes from Tim’s interview with Eric Schmidt
  • “He was of great help to me as a CEO… He was invaluable.” – Ben Horowitz
  • “The thing he did better than anybody that I’ve worked with is that he could really see the company through the eyes of every single employee. He knew how people would react to every single decision.”Ben Horowitz
    • “The only person I’ve ever met who could do the things Bill could do is Oprah Winfrey. Oprah can meet you, talk to you for 5 minutes, and know you as well as someone who’s known you for 5 years; Bill can do that too.” 
  • What enables someone to do the above?
    • They’re able to read every signal you’re sending – the tone of your voice, your facial expressions, the way you’re holding your hands, etc.
      • “They’re able to process way more information about a person, and do it faster. They have great retention on the thousands of people they’ve met before who might match to that.” – Ben Horowitz
    • They also know the exact questions to ask to get to the deeper level of what’s going on

How does Ben advise young CEOs or managers in training? 

  • Mark Zuckerberg has said of Ben: “He’s the management guru to all of the young entrepreneurs in Silicon Valley”
  • “One thing they all struggle with is how to build their management team” Ben Horowitz
    • AKA executive hiring (i.e., hiring a CFO)
      • Young CEOs have no idea how to distinguish a good CFO from a bad one
        • “How are they going to interview a CFO? It’s like interviewing a Japanese interpreter if they don’t know Japanese.”
    • “None of them are good at it. We’ve never had a first-time CEO who was good at this. I know I wasn’t good at this when I started.”

What books would Ben give to a first-time founder?

Unpopular Short-term, Popular Long-term

  • Check out this blog post form Ben – Making Yourself a CEO
    • A quote from the piece: “To be a good CEO, and to be liked in the long run, you must do things that upset people in the short run”Ben Horowitz
  • How has Ben helped others cultivate the ability to be unpopular in the short run?
    • He’ll tell them:
      • “If you make decisions that everybody likes all the time, then those are the decisions they would have made without you. You’re not actually adding any value.” Ben Horowitz
      • “A lot of the most important decisions end up being ones that people don’t agree with, don’t like, are difficult, and cause people not to like you, at least for a while.”Ben Horowitz
    • CEOs are emotionally pushed to make the easy (people-pleasing) decisions
      • You have to train yourself to push past this, and do what you know, deep down, is right

Managing Your Own Psychology | What has Ben found helpful?

  • “It’s the hardest part of the job, and you don’t think about this when starting a company. I always talk to entrepreneurs about this. If you knew what was involved when you started, you never would have started.” – Ben Horowitz
  • As an entrepreneur, avoid thinking in terms of probabilities
    • Instead, think in terms of: “How do I do this?”
    • You have to have the mindset: “Okay, I’ve got one bullet in the gun. I’ve got to hit the target. I’m going to do whatever I can to get as close as possible… If somehow we don’t make it, we don’t make it. But we’re going to die trying.”
      • Ben adds – “Getting to that mentality is key to being an effective entrepreneur”
  • But, this isn’t to say Ben’s an expert:
    • “I was frequently up at 2 AM in a cold sweat with my guts boiling” – Ben Horowitz
  • “The thing that helped me was always focusing on what I could do. There’s always so much out of your control.” – Ben Horowitz
  • Tim adds, about Ben – “It strikes me that one of your superpowers may be running towards the scary things and not away from the scary things, which might result in a lot of acute, short-term duress, but ultimately result in less, long-term duress”

Sharpen Your Contradictions

  • Ben uses this as a cue for CEOs:
    • “In an organization, you’ll often see little disagreements between people, and a lot of your inclination is to smooth things over, but the right answer is to sharpen the contradictions” – Ben Horowitz
      • Why? – There’s information in the contradictions:
        • How you’re not communicating
        • How the objectives aren’t aligned
        • How the strategy may be wrong
      • “You’ve got to get that information. That’s where the truth is. When you smooth that over, when you don’t bring it to a head and resolve it, you miss an opportunity.”

Ben’s New Book – What You Do is Who You Are

  • Why write the book?
    • Over the past few years, Ben became obsessed with the idea of company culture (and culture in the broader sense)
  • Ben pondered the question: What makes a company who they are?
    • Do employees show up on time for meetings?
    • Do employees go home at 5 PM or 8 PM?
    • Do employees stay at the Four Seasons or the Red Roof Inn when traveling for business?
    • What’s a standard timeline for getting back to someone’s email – a few hours or a few days?
    • One the above: “All of those behaviors are your culture. They’re how people are behaving when you’re not looking… This ultimately speaks to the quality of your company, but also to what impression it makes on the world.”Ben Horowitz
  • What you DO is who you are – not your values, not what you tweet, but what you DO

What exactly is a company culture?

  • A culture isn’t a set of beliefs, it’s a set of actions
    • It’s more a shared set of behaviors, rather than a shared set of beliefs
  • It relates to the question: “What are the behaviors that show we as a company are doing what we believe?”
    • “Every VC firm says they have great respect for entrepreneurs. Very few treat entrepreneurs with any kind of respect at all.” – Ben Horowitz
      • This disconnect exists because they haven’t defined the actions that translate into their beliefs being a part of the culture
      • One way Ben & Andreessen Horowitz enact this: they fine employees $10 for every minute they’re late to a meeting with an entrepreneur 

Can you change your company culture? Or is it set from the get-go?

  • You can definitely change it

More on Ben’s New Book

  • “Anybody who cares about their imprint on the word, this is the book for that” – Ben Horowitz
  • When you’re retired, you won’t remember specific parts of your job, but you will remember:
    • What it felt like to work at the companies you did
    • What it felt like to interact with your colleagues
    • Whether or not you were proud of your work
  • “That’s what culture’s about: Who are you? What do you do? What does it mean to know you?”Ben Horowitz

What would Ben put on a billboard?

  • A quote from Nas – “I know you think I’m rich because of my diamond piece, but I’ve been rich since I started finding peace”

Wrapping Up

  • “The book’s aim is to enable you to do what you need to do as a leader, and as an organization to be what you want to be. As a leader, I think that’s the most important thing.” Ben Horowitz

Additional Notes

  • The name “a16z” comes from the fact that there are 16 letters between ‘A’ and ‘Z’ in “Andreessen Horowitz.”
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