Ben Horowitz On What Makes a Great Founder

I think really good companies, the the very very vague, very very best companies tend to have founders and CEOs who ask pretty aggressive questions.

Zuckerberg, Larry Page, those guys who have kind of gotten all the way to the mountaintop. They're pretty blunt. If

mountaintop. They're pretty blunt. If

you're running away from the truth to preserve feelings, that's a very dangerous thing in a tech company. And

the kind of corlary to that is it's really important that like bad news travels fast. that you know if

travels fast. that you know if something's wrong that as CEO you find out about it and so you need that bluntness everybody today's guest is Ben Horowitz

of A16Z fame few reasons I fun to have him on. First, I wanted to get the

him on. First, I wanted to get the behindthescenes look on why Andre passed on HubSpot back in the day. And there's

a funny story behind that. He's seen so much. He's backed some amazing CEOs and

much. He's backed some amazing CEOs and some CEOs that went down in dust. Like,

what do they have in common? What are

the great ones? What do they do? What do

they like? What's what's the patterns there? And the same with the ones who

there? And the same with the ones who failed. I read his book like a hundred

failed. I read his book like a hundred years ago when I was running HubSpot. I

thought it was really good. I think he published it in 2014. I wanted the updated, you know, what's changed since he wrote The Hard Thing About Hard Things back in the day. The convo I think is really good. One of the things

I've always liked about Ben is he is completely unfiltered and gets after it.

I think there's a lot of nuggets in here. I'll come back at the end and give

here. I'll come back at the end and give you my summary. You probably don't remember when we first met. Can I Can I Yeah, remind me.

>> Can I tell you about it? It's It stuck in my mind. Kind of a long story.

HubSpot pitched you on the series D.

>> Okay, I remember that. Yeah.

>> Three of us came in for the pitch. Our

very newly hired COO JD Sherman, >> myself and my co-founder Dash.

>> And we walked in the room. We had a nice welcome because there's a guy that worked for you that was your sales guy named Mark Cranny that was a former colleague of mine.

>> And then we had just written a book called Inbound Marketing. And two of your marketers had the book. So we're

like, "This is a hometown. We got this."

>> Okay. But we sat down and JD sat here and I sat here and Dash sat here. I

remember it like it was yesterday and we started with intros. JD barely got a sentence out of his mouth like wait you're the COO tell me about your background. You spent

like 15 minutes on JD. You spent like 15 minutes on JD and then went to me and then about 15 minutes on me like you're such a knuckle. Why did you hire a COO and then Darm? Anyway, you guys passed

as did everyone. Two weeks later, I read your book >> and I saw in the book that you're not a fan of the idea of hiring a COO. So, I

guess my question, and by the way, I think chips on the shoulder are really valable. You put a chip, a ginormous

valable. You put a chip, a ginormous chip on JD Sherman's shoulder.

>> Oh, good.

>> And it was incredibly beneficial.

>> How do you feel about CEOs, COOs these days? You same same thing or change your

days? You same same thing or change your mind?

>> Well, no. I mean, I I think that generally when a company is small, flatter is better. in the early 2000s is a very popular construct and it was kind of Mr. outside, Mr. Inside, that kind of

thing. You know, if you're really

thing. You know, if you're really scaling um and you're not kind of wrestling with product market fit, like it can work for a time on a product

cycle, but when you hit the end of the product cycle, it's you know, so much about a company, a tech company is kind of the communication architecture and it

just makes that worse generally. It's a

little like two people in charge. Not to

say it can't work and you know it depends on the definition of COO and if COO is really just a big title for the sales guy like that's fine. You know COO in the sense that I'm running the

company and you're like Mr. Thoughtman outside I think that's not a great thing for a startup. Yeah.

>> You've invested in tons of CEOs at this point. Coach tons.

point. Coach tons.

>> What like what are you looking for?

What's like a major green flag red flag?

How's it changed over time? like what's

your filter >> on a CEO?

>> Founder CEO. So, you're looking at the company and the market, but the person, not the co-founder, the CEO.

>> The thing about founder CEOs is that there's definitely not what I would consider like a canonical one. So, if

you look at Mark Zuckerberg and Ali Goatsy and Elon Musk, they're all like extremely different types of people. So,

you know, you try not to get into like anything about the look and feel or sound or like, you know, are they very extroverted or are they very introverted or this kind of none of that I think

matters. There's a few things in common.

matters. There's a few things in common.

One is, you know, anybody great uh really thinks for themselves. So, they

don't feel like they're reading the room or influenced by what I'm going to say or anything like that.

>> And you could probably figure that out during the pitch, you think? Well, you

can figure out if they're not that during the pitch for sure. And then,

>> you know, do they have like truly original thinking on things? So, and

then, you know, from a leadership standpoint, I really like the Coen Pal definition, which is, you know, leadership is ability to get people to follow you, if only out of curiosity.

So, so I think, well, would I want to work for this person? Like, how

interesting are they? And if you don't have that right, you're not going to bring in the super high-end talent, which is, you know, it's kind of a a momentum thing. If you can't hire the

momentum thing. If you can't hire the very very top talent, then you're not very unlikely to be a great company.

It's kind of, you know, how good is your talent density and all that kind of thing. So,

thing. So, >> we just had our SEOA offsite and I got into not an argument, but discussion with Shawn Magcguire, one of our partners.

>> Yeah. He's very outspoken.

>> Very outspoken. and he got up and he said, "What we should be looking for are these founders that won the chess olympiad or the math olympiad in high school and surrounded by other of those

folks." And he was very articulate on

folks." And he was very articulate on it, made a good point. A lot of people shook their head and I thought about it and I was like, "Well, HubSpot's no Tesla, but it did pretty well."

>> And my co-founder and I, we're Sloan people, not you know, >> and then we hired crap tons of people from Nor Eastern and I was like, it worked out pretty well. And then I just think like early in the cycle maybe you

need those PhDs and those you know chess champions, match champions, but as it moves up the stack because Salesforce and Service Now kind of look like us. Do

you have a take on my disagreement with Sean?

>> Well, I think it depends a little on the era and the market. So if you look at HubSpot, right, like it was a marketing sales idea as much as it was a

technological idea. So you have to have

technological idea. So you have to have great people on that side who tend not to be math olympiads.

>> Yes.

>> And so for that company, I don't think that's right. For other companies,

that's right. For other companies, that's right. The other thing is, you

that's right. The other thing is, you know, Math Olympiad is very specific.

The very best companies are founded by exceptionally smart people. There's no

question about that. I agree with him on on that angle of it. You know, like how smart is Elon? Extremely [ __ ] smart.

Was he math Olympiad? Probably not. Like

I don't think so. But just like raw horsepower is pretty important. Like

Larry Pageige is probably, >> you know, one of the smartest people in the world. That ends up mattering if

the world. That ends up mattering if you're going to build something Google sized.

>> Um it's very hard to imagine that without somebody like Larry Page who could even think of something that big.

>> Yeah, you've worked with a lot of CEOs.

Who's the best?

>> Probably the best one that I personally work with right now is Ali Goatsy at Data Bricks. You know, he's a PhD in

Data Bricks. You know, he's a PhD in computer science. He's extremely smart.

computer science. He's extremely smart.

Um, so he kind of meets the Shawn Magcguire test, but he's like an exceptionally good, you know, for an enterprise software CEO, he's exceptionally good at go to market, able to compete with Snowflake, which was a

very, very good go-to market organization. And then he's just

organization. And then he's just absolutely paranoid. The the only person I ever

paranoid. The the only person I ever known as paranoid as Ali, I mean, I guess Elon is this level of paranoid, but Andy Grove was this level of paranoid.

>> He wrote a book about it.

>> Yeah. Yeah. Exactly. You know, I think some of that comes from him being, you know, he's a refugee. Uh he he grew up in Iran and then when the Ayatollani

came in, uh he had to flee to Sweden.

Hopefully that's uh correcting now finally after all these years. But you

know that having everything taken away from him, um really informed his psychology in a way that's I'd say very beneficial for a founder.

>> Okay. I work with a lot of founders.

their companies are growing fast and I'm kind of new to this. What's the pattern of mistakes these folks make on the way up? What are the common traps?

up? What are the common traps?

>> So look, I think the universal one is kind of starts with it's kind of confidence is a way kind of in a word, but it starts with the fact that nobody

knows what they're doing as you probably have experienced yourself. You have an idea, you invent something, you know how to run a company. No idea.

>> And so you start, you know, building the company and you make a lot of mistakes.

Those mistakes are extremely damaging.

You feel terrible about it because you hired all the people, you sold them on this great idea, then you make a mistake and everybody gets hurt. And if you've not kind of been in a position like that, which almost no founder has, it

can be like highly psychologically challenging. And you see people react to

challenging. And you see people react to it in two very dangerous ways. One is

they overly defer. So, okay, I hired a lot of smart people. I'm going to be very open to their input on all the decisions to the point where I'm not really making the decision myself. I'm

kind of doing a poll.

>> But nobody other than the CEO has the context to make that decision. Nobody

kind of sees the whole picture. And so

that can lead you into not only bad decisions but a very dangerous political environment where people go, "Oh, there's a vacuum here. I can step into it."

it." >> And then the second thing that you see often is just hesitation.

>> I don't know what the right answer is.

>> I have a suspicion. I'm like 5248 on it, but I'm afraid of making mistakes, so I'm I'm going to not decide. And then

the other kind of hesitation is, well, I'm going to avoid it. like I see something bad. I really need to fire the

something bad. I really need to fire the head of sales. What is the press going to say? What is my board going to say?

to say? What is my board going to say?

What is this going to be? D. And you're

thinking about everything that you should not be thinking about rather than can this person do the job. And those

things are really what cause founders to fail at the CEO job. That that lack of confidence, that hesitation. You know,

when I talk to CEOs, I'm like, look, if you were like a linebacker in the NFL and you were really fast, but you didn't trust your eyes, you would get cut >> because you wouldn't get to the no matter how fast you are, you're not

going to get to the ball carry in time.

And if you don't trust your eyes as CEO and go run at the problem and make the decision, you're going to fail. You're

going to like that's what's going to get you replaced.

>> It resonates with me. At HubSpot, we had um all kinds of debt, culture debt, product debt. We had decision debt at

product debt. We had decision debt at times I would call it.

>> Yeah. Yeah.

>> And when the company was >> decision debt is the worst debt by the way because it it paralyzes a company.

>> We had I had it. Uh so I fell in your trap. And the way it kind of worked was

trap. And the way it kind of worked was I would see the company slowing down >> and just like a lot of debate and a lot of just stuff on my desk. And then once

every like four, five, six months be like I need to make some faking decisions. And then once they made some

decisions. And then once they made some decisions, it just kind everything just started moving and flowing. So I felt that very much.

>> Yeah.

>> What other mistakes have they made? Talk

about the team building. Like you've

hired a lot of VP of sales. Like

>> people [ __ ] up their VP of sales hires all the time.

>> More than anything else. Yeah. More than

anything else. So kind of more generically, hiring executives.

>> Yeah.

>> Is also something you don't know how to do, right? Like it's

do, right? Like it's >> a lot of times you don't even know what the job is. Like what is a CFO? What's a

control structure? You know, what are these systems they speak of?

>> And yep, >> people go into hire them like with that level of knowledge and think they can like smell it out from talking to a person. And it's a little like trying to

person. And it's a little like trying to hire a Japanese interpreter and you don't know Japanese. Like they're

they're all going to sound pretty good.

>> Yeah.

>> And it's going to be very hard for you to distinguish. So preparation I would

to distinguish. So preparation I would say is very important in terms of okay have you spoken to enough CEOs have you asked them like what's the difference

between a good C CFO and a great CFO like you know how would you hire this person what would you ask them what would you want to see um you know these kinds of things and just understand the

job I always say if you have a chance just try to do the job yourself act in that role so that you can get a a feel for what the challenge allges in your company and it's also right like you

don't want a generic CFO you want one for your business then when you get into sales so the problem that that we have all the time is we have engineers

running the company and then they're hiring a head of sales you could not be culturally different between like an engineer and a head of sales the main

thing is like right down to how they talk to you so engineers if you ask them a 100% of them will try and think of what

is the correct answer to that question.

That's how they think about it. If

you're a saleserson, your first thought isn't what's the answer. It's why the [ __ ] are you asking me that question?

Right? Because that's a clue. And so,

you know, if you ask an engineer like, "Does your product have this feature?"

The answer is yes or no. If you ask a sales guy, it's like, okay, what competitor was in here that planted that trap for me? What's their weakness and how do I get to that? And so, if you

have an engineer talking to a head, a good sales guy, it's going to upset them >> because they're often not going to answer the question. They're going to try and figure out why they're being asked that question. And so then,

>> I like this, by the way. I hadn't

thought of it this way.

>> Yeah. But the the the guys who are good at the job get rejected. Yes. Because

you don't like them. And then the people who are terrible at it, those are the ones that that end up getting hard. Mike

Mark Cranny used to say, you know, these CEOs, they just want to take a guy who failed the engineering test, put a clean shirt on him, and like make him the head of sales. And and there's a real truth

of sales. And and there's a real truth to that. It's funny. I had this

to that. It's funny. I had this conversation with uh SUJ when he was at Dropbox. He goes, "How do I like deal

Dropbox. He goes, "How do I like deal with the fact that our engineers are upset that we're going to pay the sales guys commissions?" You know,

guys commissions?" You know, >> by the way, guarantee guaranteed they're gonna be upset.

>> Yeah. And I said, "Well, it's very simple. Tell them if they want to make

simple. Tell them if they want to make commission, then they can [ __ ] grab a bag and sell some [ __ ] software. And

if they don't hit their number, you're going to fire them. And if they want that job, they can get a commission, but otherwise, you know, shut the [ __ ] up."

You know, he said, "Oh, okay. I never

thought of it that way." I was like, "Look, the other question you can ask him is, do you have engineers that like on the weekend might write some software for fun, like as a as a hobby?" And he

goes, "Yeah." And I said, "I guarantee

goes, "Yeah." And I said, "I guarantee you don't have a single [ __ ] sales guy on the weekend who's selling software as a [ __ ] hobby." Like that that is not a fun job. There has to be it's a prize fight. There is no fight

without a prize. And I think that the whole mentality, the whole cultural difference between like what founders are and what salespeople are is so vast

that you know somebody's got to have a conversation with them about like, okay, what are you really looking for? Because

otherwise you're just going to get somebody who's not good at sales.

>> Okay, I'm the head of I'm the engineer.

I'm CEO of your brand new company.

>> I'm likely to screw the higher up.

What's your advice to me?

>> Yeah. Well, it's funny. So, one of the companies that both Sequoia and uh we were invested in is a company called Octa, which ended up doing uh very well.

It's actually Pat Grady. I was on the board with Pat Grady on that one.

>> Those guys.

>> Yeah. And you know, the very first like big mistake that Todd almost made was hiring the head of sales. There were two candidates. One I I forgot his name and

candidates. One I I forgot his name and the other was Adam Erenss um who was PTC guy. You know, we knew everything about

guy. You know, we knew everything about Adam because, you know, he had worked for Cranny. you know, he had worked for

for Cranny. you know, he had worked for McMahon. Like I I knew everybody in the

McMahon. Like I I knew everybody in the tree and I called them all and they were like, "This is a guy." And then this other guy, you know, I got front door references on him.

>> Yep.

>> And they came out okay. Like not great.

>> Yeah.

>> But Todd wanted to hire this other guy.

And the reason that he wanted to hire him was he was much more enthusiastic about Octa, whereas Adam was like, >> "Well, I don't know about this company.

Let me talk to some of your customers."

And so forth and that kind of thing.

Yeah.

>> And so, you know, the conversation I had with Todd was I was like, Todd, you don't want the sales guy all enthusi they you want them to be qualifying you.

Y >> because when you're selling, good sales guys don't just answer the damn questions are being asked. They

qualify the customer. Do you really have the money? Do you really have the need?

the money? Do you really have the need?

Do I really have a shot here or am I politically already boxed out? You need

that. And I said, "But beyond that, I got guys who owe me favors more than they owe Adam favors telling me he's great."

great." >> Yeah.

>> And this other guy who all the guys owe him favors and don't owe me anything say he's a B. And so do not [ __ ] this up. I never forget it. And I I don't

up. I never forget it. And I I don't talk to founders like this anymore because I'm more mature. But I said, "Todd, >> I'm still working on that." I said, "Todd, look, if this hire doesn't work,"

because we were in a lot of trouble at the time. You realize what's going to

the time. You realize what's going to happen is this is the end of your company. Like, this is it. So, you got

company. Like, this is it. So, you got to be 100% confident because I'm telling you, you're wrong. Um, and I have more experience at this than you and so forth. So, I really put pressure on him.

forth. So, I really put pressure on him.

And he hired Adam and you know, it ended up really making the company. So, worked

out. I have a bunch of questions.

>> But, that's how important is like I think if we had hired the other guy, Octa would have gone bankrupt.

I have a couple questions on that. It

sounds well just the takeaway if I'm that engineer who's CEO I'm getting some traction hiring the head of sales it's one blind references really matter and two get a

>> sales by the way it's the whole thing >> uh also who are you bringing with you >> that's what I always ask who are you bringing with you >> okay you're bringing this that the other okay can I call them

>> and find out if they're coming >> because >> any great sales leader has big set of followers >> and any one who's not great.

>> Nobody.

>> Nobody. Cuz the one thing sales guys are they're savvy about the leader.

>> Yes.

>> Like you've I've never met even a mediocre salesperson knows who's a good leader.

>> Okay. You brought up PTC. You've hired

people from PTC. I came from PTC. First

of all, who's the equivalent of PTC now building on the sales leaders that are filling Silicon Valley? I can't figure that out. And two, what do you think it

that out. And two, what do you think it was about the PTC mafia that worked so well? And by the way, for listeners, PTC

well? And by the way, for listeners, PTC was a great still a great company, but in the '9s it ripped and was fastest growing company in the world for a while. And we sold CAD CAM, we sold PLM

while. And we sold CAD CAM, we sold PLM software to manufacturers, hard sell, but we were very good at it. And the

diaspora of PTC sales execs throughout Silicon Valley was very interesting and compelling.

>> There was a number of things about PTC, but one of the underrated things was the product wasn't that great. Particularly

uh the windshields the hoop didn't work.

>> Yeah. Anybody can sell.

>> So you like when you you like to hire a sales guy that had a hard sale. You

don't like to hire somebody who was like yeah he crushed his numbers but anyone could have sold that.

>> Yeah. Like hire somebody selling Google Adwords. Like like you know what that

Adwords. Like like you know what that job is? How much do you want?

job is? How much do you want?

>> Okay. You're not going to build the >> Okay. You see someone from Data Bricks

>> Okay. You see someone from Data Bricks though and they were a VP of data bricks. You're looking for a CRO in your

bricks. You're looking for a CRO in your new company. I'm not saying that's easy

new company. I'm not saying that's easy to sell, but they have a brand. They

have like a lot of mojo. Is Is that someone you're looking for an early stage startup or No.

>> Well, you know, I can't comment on that because, you know, data bricks is >> Well, you know the analogy.

>> Yeah. It's like the early days of Oracle, those guys were different than an Oracle salesperson today, right? And

I think that like as it gets more established, it's harder to tell because >> you can survive on that. But I I I will say this. If you have a product that's

say this. If you have a product that's complicated to sell, then that's when you get to the PTC level. The thing

about PTC that was so amazing other than like the culture and the attitude. So there so there's a culture and the attitude and we talk about that which was unique and

probably illegal today. I would say almost certainly illegal today. But the

thing that uh I think is very replicable but only if you have a difficult product to sell is the discipline. And the

discipline really came down to okay you're going into an account.

You know there are competitors and how systematic are you about laying the traps for the competitors? you know,

making sure you make a comprehensive technical case, a comprehensive business case, making sure that you've charted everybody in that organization who's in that decision process. And it was a very

complicated decision process for PTC.

Getting asurances that they're all like lined up and that's so complicated and requires so much courage and effort and

competitiveness that that translates into anything. Whereas, look, if you're

into anything. Whereas, look, if you're walking into an account and they're already predisposed to buy, you can skip steps. You can get away with [ __ ] You

steps. You can get away with [ __ ] You know, you just have to call in, show up, hey, I'm the, you know, yep, >> salesperson from, you know, blah blah blah and, you know, away you go. You

know, like right now, I think with OpenAI and Anthropic and so forth, it's like that. It's like everybody wants to

like that. It's like everybody wants to buy AI. They're already predisposed to

buy AI. They're already predisposed to buy. Very, very different than who the

buy. Very, very different than who the hell are you? Oh, we're PT. I never

heard of PTC. Okay. Like now I'm in the door. Why should I buy this? I can't get

door. Why should I buy this? I can't get it to work. Well, like let me walk you through how it's gonna work. Like these

kinds of things. Yeah, that's invaluable if you have that actually. So the Ryan Gabrisco, who's kind of the original head of sales at Data Bricks, we got him. I had never heard like I had never

him. I had never heard like I had never heard of the company he was at, which was a public company. Imagine that. A

tech sales guy that I had never heard of his company. And the company

his company. And the company was literally selling FTP.

>> Okay.

>> But secure FTP.

>> Okay.

>> Like think about how good at selling you have to be to make your number as a public company selling that.

>> Yep.

>> And so this guy like obviously had the discipline forced upon him and he was extremely smart and that combination, you know, I'll take that all day. Yeah.

you know, if you've got that and so you'd rather have, you know, a successful company is fine, but some kind of playbook that was harder to write, some product that was harder to

build. And that's another big one is um

build. And that's another big one is um >> can you run a playbook? Are you somebody who like joined VMware when it was on fire and got a big position, but you ran

the playbook that was set up for you?

>> Or are you the person who wrote the playbook, who figured out how to sell this very complicated piece of software, who figured out how to lock lock out the competition to train the salesforce to discipline them to do all that kind of

thing. That's a much harder find. And

thing. That's a much harder find. And

you know depending on the complexity look if you've got an easy product then that that's one kind of thing. If you've

got a hard product that's another >> some of my takeaways were I was the first basically BDR >> and work and spent 10 years.

>> It was in a lot of ways contrarian to the way people thought about selling.

>> Um yeah >> we sold an application we sold it one way and then we moved into the platform business. Totally changed the way we

business. Totally changed the way we sold. very disciplined on both sides and

sold. very disciplined on both sides and very processoriented like really manage the process tightly.

>> Yeah.

>> So we're very good at that and just very tight on the profile of sales rep.

>> Yeah.

>> And that very very well.

>> The profile by the way that's when I interview sales guys I always ask them what's the profile of your rep?

>> Yes. And it's amazing to me that guys who are very senior in very big jobs have sometimes very loose profiles whereas the ones who really have to

compete it's extremely tight. What

they're looking for is so specific >> uh and you know often surprising.

>> One of the things we just sticking on sales for a sec. One of the things we got right got a lot wrong at HubSpot.

One of the things we got right was the process to interview a rep. And what we found out was reps who are good learners did well inside of HubSpot. And so we

got lots of resumes. We like people on their second sales job. Not their fifth, not their first or second. So they had done something.

>> And if they had gone to a half decent school, not Harvard, not MIAT, state school, >> state school, B average. Yeah.

Competitive athlete. if they could fog a mirror and they did those things. They

came in and we didn't overthink it.

>> We came in for a half hour and the half hour was Ben, welcome.

>> Yeah.

>> And I would give you a scenario >> and I would be the customer and I would say sell me HubSpot and I give you 12 minutes to sell me like literally watch 12. I say that's very good, Ben. Here's

12. I say that's very good, Ben. Here's

my feedback. 12 minutes of feedback. Why

don't you think about it and let's do it again. And if the person internalized

again. And if the person internalized that feedback >> and sold it better the second time, 99% of the time we hired them.

>> Oh, that's interesting.

>> Yeah. I thought that was And it scaled really well.

>> Yeah. Yeah. Yeah. Right. Can they How good at they are they at listening? This

is by the way, that's the other I think mistake people make. They look for somebody who's good at talking. You

really want somebody who's good at listening. Yeah.

listening. Yeah.

>> Um while important subtle difference.

>> Yes. Okay. While we're on this type of thing, you were the recipient of maybe my favorite email in the history of emails. May I read it to you?

emails. May I read it to you?

>> Oh, sure. Sure.

>> And the background of this was you had a big product launch coming. You were

excited about it and you had a press store coming up in a couple weeks and Mark Andre >> front ran it and you sent him an email.

I guess we're not going to wait until the 5th to launch a product. Yeah,

>> Ben. And the response to Ben Horowitz from Mark Andre. Apparently, you don't understand how serious the situation is.

We're getting killed, killed, killed out there. Our current product is radically

there. Our current product is radically worse than the competition. We had

nothing to say for months. As a result, we've lost over three billion in market cap. We're now in danger of losing the

cap. We're now in danger of losing the whole company. And it's the server

whole company. And it's the server management's fault. And then I love the

management's fault. And then I love the ending.

Next time, do the [ __ ] interview yourself. [ __ ] off, Mark.

yourself. [ __ ] off, Mark.

>> Yeah. Yeah. Yeah. Yeah.

>> Are we out of the [ __ ] off era?

>> Uh from Mark. everyone like this is emails that we get at PTC.

>> Oh yeah.

>> And are we too soft now?

>> You know, Elon's not soft.

>> Nope.

>> And I think there's some of that. Like I

don't think it's quite at PTC level. So

in Cranny's interview with McMahon, I think McMahon said to him, "What would you do if I hit you in the face right now?" And I think Cranny's response was,

now?" And I think Cranny's response was, "Well, first of all, you better knock me out." And and then McMahon says, "Well,

out." And and then McMahon says, "Well, like, but what would you do?" He says, "Is this a question? Are you testing my intelligence or my courage?" And yeah, and that kind of thing.

>> They said my first >> You went asked somebody that in an interview.

>> My first interview, I walked in with my suit on and and Harrison, who was the original head of sales, says, "I wouldn't wear that suit to a [ __ ] fight."

fight." I think really good companies, the the very very vague, very very best companies tend to have founders and CEOs

who ask pretty aggressive questions.

Zuckerberg, Larry Page, those guys are pretty who who have kind of gotten all the way to the mountaintop. they're

pretty blunt and and I think look I think that's important in that one of the most critical things in a company uh culturally is you know one you give

direct feedback and like you can have it out like you know like Mark was wrong on that feedback to me I was right but like it's important that he'd be able to say that and then it's important that I'd be

able to stand up to it otherwise the truth doesn't come out like you've got to like if you're running away from the truth to preserve feelings. That's a

very dangerous thing in a tech company.

And the kind of correlary to that is it's really important that like bad news travels fast. Yeah. That you know if

travels fast. Yeah. That you know if something's wrong that as CEO you find out about it and so you need that bluntness.

>> Uh Andy Grove used to call it constructive confrontation. M

constructive confrontation. M >> and he was, by the way, that's another one where uh one of my favorite Andy Grove anecdotes was um somebody was late

to a meeting, you know, and then this is when Intel was a monster and Andy was God and all that kind of thing and they come in late to the meeting and he he just looks at them and he goes, "All I

have in this life is time and you're [ __ ] wasting it." you know, which is like the meanest thing you could ever say to somebody, but particularly as a company grows, you need to reset the

culture. Like if it's starting to fray

culture. Like if it's starting to fray at the edges, you can't just let that go. And by him saying that, you know, it

go. And by him saying that, you know, it might crush that person's feelings, but everybody's telling that story to the point where I heard it, I didn't work for Intel, >> right? And that that's a culture setter.

>> right? And that that's a culture setter.

Like we're not [ __ ] late to meetings here. Like that's not what we do. And

here. Like that's not what we do. And

and that's look not every company has that culture but in if you have that culture you need to to maintain it.

>> Kind of speaking of that I coach all these CEOs. Well one thing I've noticed

these CEOs. Well one thing I've noticed is Paul Graham wrote that founder mode memo. It's it strikes me as relatively

memo. It's it strikes me as relatively standard operating procedure now. It's

really >> well yes although there's a part that's wrong to it. Okay. Or there's a part that I I would say is a little misleading to it you know and I think it came originally from Brian Jessie. Sure.

>> And so Brian like so there's part that's very right about it which is um what happened to Brian is he hired like extremely senior people.

>> Yeah.

>> Uh and then he did the thing that you know we talked earlier which he overtly deferred. Yeah.

deferred. Yeah.

>> And then that created thfts politics um all kinds of like weird stuff. And then

he kind of after co took the company back by going into quote founder mode and just was like I'm being much more dictatorial. And I think that that part

dictatorial. And I think that that part is all correct. I think the danger with the idea is people are taking it to the point where they're going, "Well, I don't want to hire any senior people."

>> Yeah, I see that.

>> It's like, well, okay, so you're going to go compete with and you need a worldwide sales organization and you're going to try and grow a [ __ ] from scratch to do that. Well, let me tell you all the things that that person

doesn't know that they're going to have to learn on your nickel that you could just buy today. What's your profile? How

do you split territories? Like how do you open up international? How do you like there's just like years and years of experience and relationships that are required to do that, right?

>> And so because you're in founder mode, you're so [ __ ] afraid to do that.

It's like, no, you need to be able to hire that person too when you need them, but you need to be able to manage them.

And that's very different than avoid avoid avoid. And I think people have

avoid avoid. And I think people have taken what Paul wrote and it's like oh no like no no no experienced people like screw that and so forth and I you know particularly you know if you're an enterprise company I think that

definitely doesn't work like even on a consumer company it's going to be shaky you know like positions like CFO and so forth like outside knowledge is just valuable you have to understand enough

about that you know in founder mode you've got to learn enough about that job that you feel confident managing that person and telling them what to do.

Uh, and not having them tell you what to do >> because that's that's when you lose the company. So,

company. So, >> I think it's good. It's a good It's like an overcorrection from from where things were.

>> I think you're by the way, I think spot on that. One of my favorite CEOs is

on that. One of my favorite CEOs is Jensen Hong and he's got a unique playbook. He's got 60 direct reports. He

playbook. He's got 60 direct reports. He

gives feedback in public and everybody knows the story.

>> The interesting thing about the CEOs I coach, none of them really do that. They

don't have 60 direct reports. They they

haven't followed his playbook. I kind of scratched my head. Uh why

>> people also haven't followed Elon's playbook. Right.

playbook. Right.

>> Exactly. No one uses the algorithm outside of Elon's companies. I don't get it. You notice the same thing.

it. You notice the same thing.

>> So most of the companies you recruit out of don't run like that. Um and so they don't think of it that way. And then

also I think that to run it like Jensen does. By the way, you know, that's a

does. By the way, you know, that's a little bit like I I would say closer to how I run Andre and Horowitz is more like how Jensen operates.

>> But you got to like the I think what founders are lacking is the level of confidence that you have to have to do that because you have to be able to say

if you're reporting to me, you got to be like basically CEO caliber. um because I'm not

CEO caliber. um because I'm not >> I'm not developing you. Um which is something that I highly believe in and CEOs can't really develop executives.

They either can do it or they can't.

>> I agree with you on that.

>> And then you have to have feel like you've got enough knowledge to just be able to like walk in and understand what's going on and so forth and and kind of be able to evaluate how the

company's going from, you know, at that level. you know, Elon is the most

level. you know, Elon is the most competent and has the most confidence of anyone and you know, Jensen is kind of at that caliber. I think that a lot of people, you know, need to develop that

as they go. I would say like when I observe Zuckerberg, he didn't have that the whole way. He's kind of over time getting more like that, but you know, look, he deferred like half

the company to Cheryl for a while until he could kind of build his confidence over there. And and I think that's a

over there. And and I think that's a little more the normal path. It's hard

to go from zero to Jensen.

>> Yeah.

>> You know, like and >> you know, it's interesting. Jensen's

been doing it now for >> 30 years.

>> Yeah. 30 plus years. So, you know, what was he like four years in? I suspect he wasn't quite at this level of master of the universe.

>> What can the the CEOs listening learn?

>> And Elon of course got fired early. like

you do like there is a learning curve to the job even for the best.

>> What can CEOs learn from Zuckerberg? You

work with him pretty closely here.

>> Well, I think Zuck, he's very very very good at operating from kind of first principles thinking, not being overly influenced by one anybody else's ideas

or just like the way things are. Um like

he he's very very good at just looking at it. And then also you know they were

at it. And then also you know they were amazingly disciplined at looking at things through a data lens like okay what does the data say and do that and

you know that's how they were able to uh grow it so fast overcome the competition and these kinds of things and he he definitely stays like extremely curious

uh which I think all the all the great CEOs are like very just interested in everything >> um all the time you know I think people underestimate him and Elon and Jensen and so forth on they're like Oh, those

guys are nerds.

Their people's skills are astoundingly good.

>> And do you think they always were?

Zuckerberg struck me as that not being the case early.

>> He was so introverted that you couldn't see it, but I I felt like it was going on inside his head. You know, if you look at like the M&A deals he's done, he's he's like a really outstanding

psychologist. And I I think that

psychologist. And I I think that >> he always had some of that in it. you

know, his mom's uh in that profession and she's she's very smart about it.

Karen, I think it was always in there.

Um it but he needed the confidence to get it out. I mean, he started that company when he was like a little kid.

>> Funny.

>> Yeah.

>> You wrote a whole book about culture.

What are people getting wrong?

>> I think people don't know what it is.

Like I mean that's the main thing. The

the main thing that particularly founders don't know which is why I wrote the book. Although it's funny, the

the book. Although it's funny, the people who really liked that book were like Ted Sarandos, you know, like and I realized after I wrote it, you really don't have the cultural issue

till you get big.

>> And so at the startup phase, you you you may be sewing the seeds of your own cultural like problems, but there are no cultural issues in the

beginning because the thing is small.

You're seeing it. you're kind of managing the culture by hand unconsciously.

>> So the the big thing that people people think of culture is values. Um they

think oh it's you know like we have a culture of integrity or we have a culture of you know whatever >> all the same everyone's got the same ones.

>> Yeah. We we have each other's backs or like whatever whatever it is. And those

things aren't really anything. They're

just platitudes. The actual thing is behaviors. And so when you think about

behaviors. And so when you think about your culture, you kind of want to think about like what are the behaviors that put you in a place where you're the kind of company that you want to be and give

you the advantage that you want to have.

Okay, we're in venture capital.

What does everybody in Well, we really love entrepreneurs. Like everybody in

love entrepreneurs. Like everybody in venture capital [ __ ] loves entrepreneurs. But then you get down to

entrepreneurs. But then you get down to the way entrepreneurs talk about a lot of VCs and they're like, "These guys are [ __ ] arrogant. They're [ __ ] They talk down to me this and that. Well,

like, well, if you want to be this, why are you that? And it gets down to the behaviors. Are you on time for a pitch

behaviors. Are you on time for a pitch me? Are you on your phone during pitch

me? Are you on your phone during pitch me? Do you get back to the entrepreneur

me? Do you get back to the entrepreneur if you're not going to invest in them?

Like these behaviors end up setting the culture whether you're like care about entrepreneurs, have respect for them, or you think you're above them. And it doesn't have anything to do

them. And it doesn't have anything to do with what you said. It has to do with what you do. uh which is why I call the book what you do is who you are but it's

that's the really the core thing um but it takes a lot of thought to say okay if I want to be this how must I behave to get there and you know you can say like

oh treat the company's money like it's your own okay great but what does that mean well where are you staying what hotel >> you know how are you traveling what's

your thing and like so if you want that Then that has to be systematic.

>> Let me ask you about >> now you may not want that. You know

>> there's one cultural gotcha that I see a lot where there's a brilliant brilliant 100x engineer in the company that's an [ __ ]

>> Yeah. Yeah. Yeah.

>> Yeah. Yeah. Yeah.

Not sometimes. By the way, venture capital is more like that >> than engineering organizations. There's

more of those.

>> Yes. Well, like I mean and and I think that on an engineering team you kind of have to have the parameters of okay like what does [ __ ] mean? If [ __ ] means that in the code review I don't say

anything and then I go in the middle of night and I rewrite your code that's going to be tricky as you grow like that that that's hard to manage. If [ __ ] is I expect like a super high standard

that's another thing. And so you kind of want to define like okay what is it that we're not going to do here? And the

thing about engineers is they're like amazing at following rules. So if you make clear like what the parameters are on it and I I find that in venture capital too like like we have that that

that's a venture capital problem if I ever heard one. It's you know you get a lot of very smart spiky personalities and you know Mark and I talk about this sometimes. It's like, well, was Steve

sometimes. It's like, well, was Steve Jobs so mean to people because that just goes with being so brilliant or because he could get away with it because he was so brilliant, right? Like

>> where do you come out?

>> Um, >> oh, I've had the same debate.

>> Yeah. So, I think it's a little bit more the latter. And so, I think that if

the latter. And so, I think that if you're running an organization >> Wait, which one was the latter? I

forgot.

>> Um, that that he could get away with it, right? Like he didn't have to do that.

right? Like he didn't have to do that.

like but he could do that and you know like it's his company he can do what he wants. I think that the the problem with

wants. I think that the the problem with founders modeling themselves after Jobs I mean you know to some extent after Elon is well if you're not Jobs or Elon maybe you can't get away with that and

like maybe people just walk out the damn door in a way that they went with those guys and it's very hard to have like the highest performing talent without like them coming with some of those

behaviors. uh you know and it doesn't

behaviors. uh you know and it doesn't matter like in engineering in BC and whatever and so you kind of have to be very specific about okay we're not going to have this but we'll have that you

know one of the things that I've outlawed at the firm which a lot of you know kind of people of this ilk would do is like look you can't make yourself look smart by making somebody else look

dumb like that doesn't that [ __ ] doesn't count here and if you do it by the way with an entrepreneur like if you get on Twitter and say oh that business sells dollars for 85 cents. Haha, I'm so

smart. [ __ ] you. You're fired. Like, I'm

smart. [ __ ] you. You're fired. Like, I'm

not dealing with that at all because that's just like not who we're going to be. We love that you're smart. You can

be. We love that you're smart. You can

be as smart as you want to be. Like,

that's fine. You don't have to get there through that method. And then once people know that, they're fine like not doing that. But I couldn't say I think

doing that. But I couldn't say I think it would be hard to say just don't be an [ __ ] >> because look sometimes you know the smartest like they're just like I'm not gonna suffer through this dumbass

conversation like you know people who are extremely smart are going to do that and it can't be like oh no you have to suffer through every dumb conversation like that's not going to work.

>> Okay but there's Ben Horus isn't like don't tolerate it zero tolerance to this thing. It's

thing. It's >> no I think the no [ __ ] role is never going to work. Yeah. Yeah.

>> So, what is it that you don't want him to do?

>> Yeah.

>> Like what's over the line and what's not over the line? And like I think even like very spiky people can live in that kind of context.

>> He's very spiky.

>> Yeah.

>> Yeah. What percentage I like you brought this up um in another pod that I wanted to follow up on. Like when I was co of HubSpot, I I didn't know what I was doing a lot of time. I was confused a

lot. And when you were CEO, you felt the

lot. And when you were CEO, you felt the same way. Like what percentage of the

same way. Like what percentage of the time do you feel like I really don't know what I'm doing versus I kind of got a handle on this thing and today running Andre and Horowitz are through your journey like I founders pretend like

they know what they're doing.

>> Yeah. Well, everybody pretends um and this is kind of part of that challenge.

So I think it takes a while. I mean like like I now like I had to grow up very fast. We went public when we were 18

fast. We went public when we were 18 months old, right? So

>> that'll grow you up in a hurry.

>> Yes. But I I didn't really feel like I knew what I was doing there probably till four years into it. Um, you know, when I rebuilt the sales force, I brought in

Cranny, all that kind of thing. Maybe

three and a half, four years into it.

>> And I was never as confident at that as I was as I am now. And it it's different for different

now. And it it's different for different people, but like it you need like enough reps at it to have like the more confident you are in your judgment, the faster the decisions you can make, the

less you care about what people think, the less you care about making a mistake. And those are all the things

mistake. And those are all the things that's why Jensen is so magical, right?

Like he sits in the room, he talks to everybody, he knows exactly what he wants. Same with Elon, right? Like he

wants. Same with Elon, right? Like he

can just sit there and go. I guarantee

you neither of them started that way.

>> Uh, >> yep.

>> You know, like you build it into that.

>> I see silly things on Twitter where people say venture capital is easier than entrepreneurship or entrepreneurship's easier than venture capital. People ask me that

capital. People ask me that >> venture capital's easier.

>> What are you talking about?

>> Way easier.

>> Yeah.

>> Uh, >> like that's not even close. Like who the [ __ ] would think venture capital is harder than >> entrepreneur? A lot of people. I think

>> entrepreneur? A lot of people. I think

the venture capital there's a lot more luck involved like if you join Andre and Horowitz today you have an amazing platform or Sequoia amazing platform and you may do three deals you know maybe

one turns into a trillion dollar company there's fair amount of luck around that >> yeah I I mean I think that >> entrepreneurship doesn't have a lot of luck it's some luck a lot of bad luck

>> you know entrepreneurship you have one shot you have to make it work y >> and then you really really pay for your mistakes much more directly and then the

clock is ticking in a way >> it's like y >> there are no quarters in venture capital so like venture capital is just kind of

like a an easier kind of business now look there's a lot of people I'm saying that as you know someone who succeeded in it I suppose if you failed in it it

might have looked harder in a in a different way but like I think the the pressure level and the stress level is not close because if you have a small

venture capital thing and it fails, it's never a lot of people. Like you you can get a tech company up to thousands of people and then have them lay them all the off.

>> Yes.

>> Like that is common.

>> Yeah.

>> And it's brutal. And then

the people that you're raising money for have a much tighter eye on you. Um

because it, you know, you could have one funding source whereas in venture capital, you always have, you know, many funders.

>> Mhm.

>> Very generally have many funders. Yeah.

>> I appreciate you coming on the pot.

>> Yeah. No, it was fun.

>> All right.

>> Yeah. Thank you very much. I think all the CEOs who watch are going to really like it. Thank you.

like it. Thank you.

>> All right. Good, good, good.

>> Okay. I hope you like that episode with Ben. I really liked it. learned a lot.

Ben. I really liked it. learned a lot.

Something I thought about while he was talking is one of my bugs as CEO of HubSpot was I'm pretty conflict averse.

I think a lot of CEOs are particularly firsttime founder CEOs. Andre Horowitz

and Sequoia back a lot of firsttime CEOs who haven't really managed before. And

it's just uncomfortable. Confrontation

is uncomfortable unless you kind of grew up with it. It's just not natural. Ben's

got a good term that I'm going to borrow. He calls it constructive

borrow. He calls it constructive confrontation.

I like that. You need to have a constructive level of confrontation with most people inside of your organization.

I think kind of related to that, Ben talks about decision debt. And we had this at HubSpot. You had a VP of sales.

You know, you need to fire them, but you kick the can down the road hoping they nail the next quarter. You know, your pricing model not really working and scaling, but you kick the can down the road a couple quarters to fix it.

There's all kinds of stuff kicking around your head like that. And

you know, I think it's a lack of confidence. I want to be a popular CEO.

confidence. I want to be a popular CEO.

I think that was another bug of mine kind of related with that conflict averse thing. All of this also rhymes, I

averse thing. All of this also rhymes, I think, with hiring. And there's a lot of talk around founder mode and, you know, people hiring and deferring to people and now they're micromanaging.

I think when you're a a first-time founder CEO and you're hiring a been there, done that person that's more senior than you, has done more stuff in their career, you're a little nervous

about truly managing them and you end up deferring to them and that's where the problems start. And so I think a lot of

problems start. And so I think a lot of this idea around constructive confrontation that Ben talked about is really productive. And if you're a

really productive. And if you're a little riskaverse like me, if you're a little you want to be popular like me, maybe you need to be a little bit more constructive in your confrontation. The

last thing I would say that he talked about and I agreed on is being a CEO is pretty uncomfortable, particularly from one of these hyperrowth CEO companies today. They're growing so fast,

today. They're growing so fast, everything's breaking, everything's changing. I think it's just fine if in

changing. I think it's just fine if in your head you think you don't know what you're doing because Ben didn't think he knew what he was doing when he was running LoudCloud. I didn't think I knew

running LoudCloud. I didn't think I knew what I was doing when I was running HubSpot. So, if you're feeling that as a

HubSpot. So, if you're feeling that as a CEO, I'm here for you. Hope you liked it. Let's keep the convo going. I'm

it. Let's keep the convo going. I'm

behag OnX. See you over there.