One on One with A and Z #1 | a16z Live with Marc Andreessen and Ben Horowitz

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Key Takeaways

  • In The Hard Thing About Hard Things, Ben Horowitz criticizes the popular idea saying “Don’t bring up a problem without also proposing a solution”
    • In most cases, you want employees to report what’s wrong with your company, even if they are not able to come up with a solution
    • The first step to solve a problem is to know that you have one
  • It’s better to have people report many small, solvable issues than to suddenly find out a huge issue that kept growing while you were unaware of it
  • “Make something people want” Paul Graham
    • If you do, every investor will pay attention
    • Starting a company has never been easier and cheaper than it is today
      • You only need a laptop
  • Decentralization may unleash the power of Permissionless innovation
  • “If you want a team that can do more than what you can do, you have to be able to recognize things that you can’t do” Ben Horowitz

Key Books Mentioned

Intro

  • Marc Andreessen (@pmarca) and Ben Horowitz (@bhorowitz) are the co-founders and general partners at the venture capital firm, Andreessen Horowitz
  • In this chat, part of their new Clubhouse show, Marc Andreessen and Ben Horowitz talk about tech trends, remote work, company-building, and more

Wartime and Peacetime CEOs

  • In 2011 Ben wrote an article outlining the differences between wartime and peacetime CEOs
    • Wartime CEOs are more dictatorial and micro-managing, not afraid to let people go
      • In Wartime you can’t afford to have anything go wrong, that’s why micro-managing becomes important
      • Steve Jobs’ is a good example of a Wartime CEO
    • Peacetime CEOs empower their employees and look at the big picture
  • Generally, leaders who are good in peacetime don’t do well in wartime and vice-versa
  • Depending on the situation a company finds itself in, it might need a different type of CEO
  • Similar patterns exist in politics as well
    • Churchill was great during wartime but quickly left his position once the war ended

Remote vs In-Person Founding Teams

  • It is still early to evaluate if remote startup teams can be as productive/successful as in-person ones
  • Charismatic leaders used to be more powerful than introverted ones in office environments
    • Now that advantage is waning
    • Many introverted people have been enjoying and improving their performance since switching to remote work
  • Teams that perform best remotely are those that keep communication high
    • Using different tools to ensure information flows through the company
  • Marc is surprised at how well companies have adjusted to the new situation
    • Once COVID is over and things re-adjust, companies might work even more effectively
      • Integrating benefits of both in-person and remote working
  • Ben thinks that working in an office is still much better than working remotely
    • Particularly because of access to information
      • The information you get before and after a meeting is usually more valuable than the information you get in the meeting

It’s Ok to Bring Up a Problem Even Without the Solution

  • In The Hard Thing About Hard Things, Ben criticizes the popular idea saying “Don’t bring up a problem without also proposing a solution”
    • In most cases, you want employees to report what’s wrong with your company, even if they are not able to come up with a solution
      • Perhaps the problem is too complex or outside of the domain of expertise of the person who found it
    • The first step to solve a problem is to know that you have one
  • It is good to have employees think about solutions, but even more important is to ensure they bring up problems they find
    • People are often afraid to tell the CEO bad news
  • The solution is to normalize in the culture to have people report problems
    • Ben used to not allow people in meetings unless they told him something wrong with the company
      • If they don’t know anything wrong, they are probably not doing their job well enough
  • It’s better to have people report many small, solvable issues than to suddenly find out a huge issue that kept growing while you were unaware of it
  • As a leader, working remotely you are not going to bump into people
    • You have to reach out individually to keep the communication going and ensure that they report issues they encounter

Difficulties Founders Face and The Value in Failed Companies

  • In addition to being really stressful, starting a company can feel very isolating
    • Talking about problems with employees might be inappropriate
    • People outside of the company won’t fully understand
    • Other CEOs will never tell you how messed up their companies are
  • Ben wrote The Hard Thing About Hard Things partly to address some of these problems
  • Often, even despite great ideas and execution startups just fail to take off because times are not ripe
    • In the early 90s, there were companies pioneering handheld computer-like devices but they all failed
    • A failed company is not an indication of a bad CEO
  • Many companies tend to prefer hiring from large, successful companies like Google
    • They have great hiring and personal development processes
    • If someone was hired by them, he/she must be valuable
  • You may get more value from people who struggled a lot, even in companies that eventually failed
    • Google employees will have never have experienced that struggle
      • They may be less fit for a fast-paced early startup environment
    • This principle does not hold for any failed startups
    • But for startups that raised lots of funding, had a strong founding team, etc…

Making it Into Silicon Valley as an Un-Networked Founder

  • “Make something people want” Paul Graham
    • If you do, every investor will pay attention
  • Starting a company has never been easier and cheaper than it is today
    • You only need a laptop
  • If you’re talented and you make a great product, you’ll eventually get access to the network
    • The VC network is not closed like that of Hollywood
      • Investors talk often introduce each other to new people or startups
      • Most people in Silicon Valley are outsiders
  • You have to be persistent in your networking efforts
    • A great book on this is Never Eat Alone by Keith Ferrazzi
      • Instead of being the person trying to get in the network, be the one helping everyone else to get into networks
      • Eventually, you’ll build a huge network
      • You don’t need to wait until you are successful to do this
  • Another possibility is to go work for a tech giant that’s still growing
    • These companies are hiring all over the world
    • Over time, you’ll naturally build a network

Trends in Blockchain and Decentralization

  • Innovation in any area comes in different waves
    • We first saw Bitcoin starting to hold value
    • Then ICOs, DeFi, NFTs (non-fungible tokens)
  • Blockchain is already past the “Netscape Moment” but not yet past the “iPhone moment”
    • A lot of developers are putting their energy into building on the blockchain
    • Bitcoin is worth $700B
    • But many people are still not familiar with or interested in crypto or blockchain
  • Now there’s a lot of energy into building a decentralized social network
    • We are not there yet
  • Decentralization may unleash the power of Permissionless innovation
    • The web was built on Permissionless innovation
      • You don’t have to ask anyone permission to create something new
    • Centralized entities like the App Store have taken reduced that possibility
      • They control what apps can and cannot be created and take a cut of the revenues of those that make it through
      • In addition to censoring things, they might prevent new things from being created

Problems Startups Should Work On

  • Decentralizing many of our public institutions
    • Governments tend to be slow and susceptible to corruption
    • We can now use technology to self-organize locally and become more effective
      • Currently, we need government permission to make any change in our communities
      • Tech can help us become a more “permissionless society”
    • It is not about getting rid of governments but getting more power into people’s hands
  • There are still many industries that make a huge part of the economy where startups can add value
    • Healthcare is one-sixth of the American Economy
    • Education, Government, and Housing are other examples where tech is not yet strongly present
      • These sectors tend to be more complex, but also bigger than the typical tech sectors
    • Transportation is an example where tech has been making a lot of progress lately (Tesla, Uber, Lyft)

Additional Notes

  • “If you want a team that can do more than what you can do, you have to be able to recognize things that you can’t do” Ben Horowitz
    • Most people can’t do this naturally
      • They still hire employees with similar qualities to theirs
    • They have to put in the effort and practice
A16z Podcast : , ,
Notes By Giorgio Parlato

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