Posts from Ben Horowitz

I’m out here slingin bringin the drama,
tryin to come up in the game
and add a couple of dollar signs to my name
– Memphis Bleek Coming Of Age by Jay-Z

I'm not going all Ben Horowitz on you. But imitation is the finest form of flattery and I do like how Ben rolls on his blog and in the venture capital business.

I'd like to talk this morning about how hard it is the come up in the venture capital game. I work with a bunch of VCs who are in their early 30s and have less than five years in the business. They work hard, put in ridiculous hours, are on top of all the latest trends, companies, technologies, etc. They meet with tons of companies every week, work hard for their portfolio companies, and are on planes flying around to the important confereneces and demo days. I can assure you they are working harder than I am.

But when it comes to winning deals, they have a distinct disadvantage. They can be working on a deal for a year or more, and then when the entrepreneur decides to raise funds, a more experienced VC such as myself can swoop in, spend a week or two building a relationship with an entrepreneur, and take the deal away from them. I've seen it happen. I've done it myself.

They make rookie mistakes. They let a reporter hang out with them for a week thinking they can trust them. They talk when they should be listening. They overpay for deals thinking that will win the deal for them. They use their phones in board meetings. They fight with entrepreneurs over meaningless things.

When I see these things I cringe. Because I've been there and done that. I spent the first ten years (maybe 15) of my time in the venture business as a young VC trying to make it in the game and not really knowing how. I've made all of these rookie mistakes and more. I feel for them, I often mentor them, and I really enjoy working with young VCs.

When a young person asked me about getting in the venture capital business, I advise them not to. I think VC is an experienced person's game. Startups are not so much. Startups are a great place to be in your 20s and 30s. VC is a great place to be in your 40s and 50s.

I look at Ben and his partner Marc and think "they did it right." They got into the venture capital business when they had all the experience one could ever want working with startups. They don't lose deals to more experienced VCs. They win deals over more experienced VCs.

But of course many young VCs made the decision to get in the game at an early age and are committed to making it work. They are going to have to take their lumps. Make the mistakes. Learn from them. Continue to work harder for less results to show for it. And lose deals they should win.

One of the things I did not do very well that many of these young VCs are doing much better is building relationships with more experienced VCs. As I said, I work with a bunch of them. Teaming up with a more experienced VC can help you win a deal, you can learn from them in the board room, and you can ask them for advice when you screw up.

Going back to where we started this post to end it, I like how Jay-Z and Memphis Bleek partner up in Coming Of Age. That's the way to do it.

[JZ] Hahahh I like your style
[MB] Nah, I like YO’ style
[JZ] Let’s drive around awhile

Every once in a while I come across a blog post that so totally nails something and I am reminded why professionals blogging about their craft is such an important development in the world of media. Yesterday Ben Horowitz posted about the psychology of being CEO. He starts with this observation:

very few people talk about it, and I have never read anything on the topic. It’s like the fight club of management: The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown

Ben goes on to observe that:

building a multi-faceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard. If CEOs were graded on a curve, the mean on the test would be 22 out of a 100. This kind of mean can be psychologically challenging for a straight A student. It is particularly challenging, because nobody tells you that the mean is 22

I have never been a CEO. I don't think I would be a very good CEO. I have observed hundreds of CEOs from up close in my career from a perspective that is fairly unique and revealing. I have great empathy for the people who find themselves in this job. It is hard, lonely, and as Ben points out – it can really mess with the mind.

Ben goes on to identify a number of tools he used to help him manage the psychological challenges of the job.

If you are a CEO, work closely with CEOs, are married or in a serious relationship with a CEO, sit on Boards where a CEO is accountable to you, or if you want to be a CEO, the post is a must read.

I'd like to thank Ben for writing it and breaking "the first rule of CEO psychological meltdown."

Ben Horowitz and I debated Fat Vs Lean on stage at TechCrunch Disrupt yesterday morning. At the end, Erick Schonfeld asked for a show of hands and there was overwhelming support for my argument in favor of lean.

But to be honest, I had the easy task. Arguing for lean startups in front of a web crowd is like arguing for smaller government in front of a bunch of republicans. Not much argument there.

I think Ben did a great job making the contrarian argument in front of a dubious crowd. And he got in the best one liner for sure when he accused my math heavy argument of taking “all the joy out of being an entrepreneur.”

I know the Kid likes to see blog beefs, but there really isn’t one between me and Ben. He’s such a smart person and very easy to get along with. No wonder he was a great CEO before becoming a VC. I am sure he’ll be a great one.

So, all that said, here is the debate.

One of the best things to happen to startup land this spring is the arrival of Ben Horowitz as a serious blogger. Like his partner Marc Andreessen, Ben has a ton of great experiences to share and he is doing just that right now.

I particularly like his post on evaluating whether an executive "will scale." Ben writes:

evaluating people against the future needs of the company based on a theoretical view of how they will perform is counter-productive

I see this all the time in VC and startup land. An entrepreneur will come into our office and we will be discussing him or her after they leave. Someone will ask "will they scale into a big company CEO?" The answer as Ben points out so well is "who knows?"

Ben also points out that managing a lot of people well is a learned skill:

Managing at scale is a learned skill rather than a natural ability. Nobody comes out of the womb knowing how to manage a thousand people. Everybody learns at some point.

This is why I am a huge fan of getting mentors on the board and CEO coaches into the picture. Good VCs will try to help an entrepreneur "scale" but there is always going to be a tension between the investor and the entrepreneur and it is a good idea to get some other people involved if the entrepreneur wants to "scale" into a leader of hundreds or thousands.

The next time I hear someone says "that person won't scale" I am going to send them to read Ben's post.