“As a start-up CEO I slept like a baby. I woke up every 2 hours and cried.”
Ben Horowitz
Today, Ben Horowitz is the billionaire co-founder of a16z and one of the most important people in tech. But 20 years ago, he was the CEO of a penny stock startup called Opsware.
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By persevering through layoffs and withering criticism, Horowitz built his company into a colossus. In 2007, Opsware sold to HP for a cool $1.65 billion in cash.
Horowitz’s most important lesson: no matter what happens, don’t give up!
“Whenever I meet a successful CEO, I ask them how they did it. Mediocre CEOs point to their brilliant strategic moves or their intuitive business sense or a variety of other self-congratulatory explanations. The great CEOs tend to be remarkably consistent in their answers. They all say, “I didn’t quit.'”
How to Lead
Horowitz often had to bet the company’s future on a decision made with limited information. As a founder, that’s all you’re ever going to get.
He also didn’t shy away from getting involved in details. Companies tend to stand still unless someone forces them to move.
“…when you are a startup executive, nothing happens unless you make it happen.”
Above all, a leader has to put the company and his people first. If you take care of your customers and employees, success will follow.
Finding the Right People
Horowitz dedicates much of the book to how to find and train the right people.
Horowitz favors team-oriented hires. He looks for people who rarely say “I” or “me,” even when discussing their own accomplishments.
Once you have those great employees, Horowitz urges you to invest in them:
“Training is, quite simply, one of the highest-leverage activities a manager can perform.”
In fact, no one at Opsware could even start looking for an employee until they had a training plan ready for that person.
Layoffs
Many startups are facing layoffs today, as Opsware did.
Horowitz advises CEOs to first speak to the entire company, making clear that the company has failed. Then, managers must lay off their own people.
Be sure to treat the departing staff well: the rest of your employees will be watching closely.
Lessons for Investors
When he started a16z, Horowitz wanted to change one icky thing about venture capital: forcing founders to wait forever in the lobby.
Horowitz made a simple rule.
Anyone late to a meeting with a founder would be fined $10. A minute.
“We wanted the firm to respect the fact that in the bacon-and-egg breakfast of a startup, we were the chicken and the entrepreneur was the pig: We were involved, but she was committed.”
I’m instituting this rule in my own meetings with startups, with the fines going to charity.
Horowitz also provides some great guidance on finding promising founders.
He notes that successful CEO’s he’s met all have different styles. There’s no one type to look for.
But one thing all great leaders share is a desire to improve. So I’ll be asking “How could you improve as CEO?” a lot more frequently.
Horowitz’s memoir is a window into what life as an entrepreneur is really like — at turns, nerve-wracking and exhilarating. It makes great reading for founders and investors.
What do you think of Horowitz’s advice? Leave a comment and let me know!
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“PandoMonthly – June 2012 – Sarah Lacy interviews Ben Horowitz” by thekenyeung is licensed under CC BY-NC-ND 2.0.
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