Ben Horowitz

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The rise of the human-centric CEO

Published May 5, 2020

Romeen Sheth
Contributor

Romeen Sheth is president of Metasys, a workforce-management firm based in Atlanta.

Steve Schlafman
Contributor

Steve Schlafman is founder, coach and angel investor at High Output, a boutique leadership-development company based in NYC.

Peacetime CEO/Wartime CEO by Ben Horowitz is one of the most commonly cited management think pieces of the last decade.

And for good reason; Horowitz surfaced a fundamental distinction in operating philosophy that is necessary for companies to survive, reinvent and ultimately win when macroeconomic environments shift. The framework is especially useful given how counterintuitive the advice is — behaviors of a peacetime CEO and wartime CEO are often on diametrically opposite sides of the spectrum; it is rare to find a CEO who can successfully emulate both personas.

While in concept it is easy to understand these principles, as with most things in life, nothing can replace the visceral comprehension that comes via learned experience. We are at the onset of enduring the most challenging startup environment of (at least) the last 15 years. COVID-19 is an indiscriminate event that is systematically wiping out businesses, whether “atoms” or “bits.”

For most startup operators, this is the first taste of true systematic adversity. The undercurrents of frothy valuations, the social milieu of early-stage investing and stores of excess capital are coming to a grinding halt as the bull market of the last 12 years is dramatically disrupted. We have an entire generation of founders/CEOs who may conceptually understand the peacetime CEO/wartime CEO ethos, but now, they’re going to actually live it. At the same time as every other founder/CEO. Brutal.

Since the onset of COVID-19, we have spoken to more than 100 founders and CEOs. Naturally, we are hearing frequent allusions to peacetime CEO/wartime CEO as a framework to help navigate the landscape. We’ve even used it over the last few months. While we believe it is a helpful framework, it is also incomplete. Further, we believe its application can lead to deeply problematic outcomes.

At a micro level, the misplaced application of peacetime CEO/wartime CEO can fundamentally change a company for the worse. A wartime CEO, as Horowitz notes, is “completely intolerant, rarely speaks in a normal tone, sometimes uses profanity purposefully, heightens contradictions, and neither indulges consensus building nor tolerates disagreements.” In the strictest application, we are seeing this align with a common false trope that has plagued the tech industry: “To change the world like Steve Jobs, I need to emulate all aspects of Steve Jobs’ personality.” A classic logical fallacy many founders/CEOs have learned the hard way — if you emulate all aspects of Steve Jobs’ personality, it doesn’t mean you will change the world like he did.

Each company is driven by its own unique culture and values — in a crisis situation, while it is important to be adept and agile, it’s equally, if not more important, to triple down on the strongest elements of your culture established pre-crisis. Many of the strongest founders/CEOs we have had the pleasure of coaching and investing in are uniquely world-class in their patience and tolerance, their ability to make the abnormal normal and their commitment to inspire with clarity. It is the adherence to these principles that will help carry their companies through this time.

At a macro level, peacetime CEO/wartime CEO conjures outdated themes that are at best inaccurate, and at worst, counterproductive. War implies “destruction, ruthlessness, blood, death;” there is an innate sense of machismo and bravado in this language reinforcing a homogeneous tech community. This type of vernacular and attitude increases barriers to a more inclusive community excluding women and underrepresented minority participation.

Now is the time for us to propagate community, resourcefulness and generosity.

One of the most common takeaways we have heard in reference to the framework is, “now is the time when real founders are made.” If Rent the Runway, ClassPass, Away, the Wing and the countless other women-led/minority-led startups that have been adversely affected by COVID-19 are not able to bounce back, we highly doubt it is because “they weren’t able to cut it as real founders,” a ridiculous assertion to make under any circumstance.

The peacetime CEO/wartime CEO framework is clearly valuable — it forces us to dissect the behavioral shifts necessary to survive in a crisis. That being said, it needs to evolve. Being firm, decisive and staring down an existential crisis is not mutually exclusive with applying empathy, gratitude and generosity. You can be an intense, laser-focused and paranoid CEO without losing yourself or fundamentally changing the culture of your company.

We know dozens of leaders who are leading their companies through these challenging times without leaving a wake of carnage or damage to the foundation they have spent years building. They are leading with their heart and values and will be remembered for how they carried themselves, treated their employees and guided the company through the crisis. COVID-19 presents us with a unique opportunity as an industry. Now is the right time to retire the false dilemma of peacetime CEO or wartime CEO and empower the rise of the human-centric CEO:

The human-centric CEO considers and balances the needs of her organization, employees, customers and other stakeholders in good and bad times;
The human-centric CEO recognizes she cannot change the macro environment or competition so she focuses her effort and energy on what she and the team can control and manage;
The human-centric CEO internalizes his mission, vision and values in the face of difficult challenges and critical strategic decisions;
The human-centric CEO views and manages her company as a complex and dynamic human system with nuanced inputs and interdependencies;
The human-centric CEO believes employees are the single most important stakeholder — that is reflected in how the organization hires, coaches, trains, incentivizes and retains;
The human-centric CEO orients around decisive and bold decisions that impact employees rather than a series of micro maneuvers that damage culture and trust;
The human-centric CEO creates shared meaning and purpose by reiterating the mission and vision over and over and over again;
The human-centric CEO fosters an organization that values and cultivates psychological safety;
The human-centric CEO develops self-awareness and inner resilience to weather the emotional ups and downs of company building;
The human-centric CEO invests the time and energy to go deeper with her employees at strategic junctures and times of crisis;
The human-centric CEO distills and simplifies issues, strategies and tactics to help employees reduce noise and increase focus;
The human-centric CEO communicates frequently and articulates expectations with humility and confidence to avoid uncertainty, prevent anxiety and achieve alignment;
The human-centric CEO recognizes he has a range of communication mediums at his disposal and selects the most appropriate one based on the magnitude of the situation;
The human-centric CEO believes in the power of company rituals such as one-on-ones, exec team meetings, all-hands, stand-ups, retrospectives and off-sites;
The human-centric CEO expresses empathy, appreciation and gratitude for the work performed by existing, outgoing and former employees;
The human-centric CEO listens intensely and empathetically with her full self — ears, eyes and intuition;
The human-centric CEO takes out time for self-care because she understands she cannot serve others and be highly effective unless she is mentally and physically healthy.

There’s no way to mince words. COVID-19 is having a devastating impact on the startup community. The inevitable is unfortunately occurring every day — many startups will never come back from this. As eternal optimists, however, we see opportunity in this crisis for the broader industry: the rise of the human-centric CEO. Now is the time for us to propagate community, resourcefulness and generosity. It’s the time to be ever thoughtful about employees, colleagues, stakeholders and fellow founder/CEOs in need. Individual startups may not survive this crisis, but it is our hope that an everlasting mentality does.

By no means is this list exhaustive, but it captures the behaviors and attributes from the top leaders we are working with. We believe CEOs should strive to become human-centric. Not only because it’s the right thing to do, but also because we believe it will lead to healthier organizations and better results over time.

Pandemic reset leads investors to focus on resilience, adaptability

Published April 23, 2020

Mahendra Ramsinghani
Contributor

Mahendra Ramsinghani founded Secure Octane Investments, which includes Demisto, CyberGRX and 16 other infrastructure and cybersecurity companies. Mahendra authored “The Business of Venture Capital” and “Startup Boards.”

Ben Horowitz will explain how to create and sustain culture at TC Early Stage SF

Published January 7, 2020

The hardest challenges to tackle are usually the most nebulous. Culture, for example, is hard to define, implement, cultivate and evolve… How do you structure culture within a business or organization? Are there steps to follow? Is there a manual?

Interestingly enough, there is. “What You Do Is Who You Are” is the latest book from legendary investor, entrepreneur and founding partner at Andreessen Horowitz, Ben Horowitz. We are absolutely thrilled to announce that he’ll be joining us on April 28th at our brand new TC Early Stage event in San Francisco to discuss his new book and the lessons within it.

From the sleeve:

To Horowitz, culture is how a company makes decisions, and he explains how to make your culture purposeful by examining four intriguing models of leadership and culture-building well outside the usual business case studies: Haiti’s Toussaint Louverture, who was the leader of the only successful slave revolt in history; the Samurai, who ruled Japan for seven hundred years and shaped modern Japanese culture; Genghis Khan, who built the world’s largest empire; and Shaka Senghor, an American ex-con who created the most formidable prison gang in the yard and ultimately transformed prison culture.

Horowitz also authored The New York Times Bestseller “The Hard Thing About Hard Things,” which is one of the past decade’s most practical guides to entrepreneurialism and the challenges that come with it. The 2014 book speaks to founders in a way that business schools can’t, offering empathy and solutions to real-world, human problems that founders face.

And let’s not forget the wealth of wisdom and experience that comes with helming Andreessen Horowitz since its inception in 2009. The firm has more than $10 billion under management, with portfolio companies that include Box, Facebook, Lyft, Slack, GitHub, Instagram and Skype. And those are just the exits.

Horowitz himself sits on the boards of 14 portfolio companies, including Okta, Lyft, Foursquare, Genius, Medium and Databricks.

Suffice it to say, there is plenty to learn from Horowitz at TC Early Stage come April 28 in San Francisco.

TC Early Stage is meant to give founders a place to learn directly from the experts who have come before. All day long, seasoned VCs and operators will be holding breakout sessions where they identify the biggest challenges in their fields, and tangible, actionable insights on how to take on those challenges. These experts will cover a wide range of core startup disciplines, including but not limited to growth, legal, product management, tech stack, recruiting, design and company culture.

Horowitz joins Cyan Banister (How to get your first yes), Asher Abramson (How to create great growth assets for paid channels), Lior Zorea (What VCs want in a term sheet and how you can get what you want), and Dalton Caldwell (How to get into Y Combinator). We’ll be announcing many, many more speakers over the coming weeks, totaling more than 50 breakouts for the entire day.

Here’s the fine print. Each of the breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis. Buy your ticket today and you can sign up for the breakouts we are announcing today. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)

TC Early Stage SF 2020 goes down on April 28. You can pick up your ticket and start registering for breakout sessions right now.

Interested in sponsoring TC Early Stage SF? Contact us here and we’ll send you more information.

Anyscale, from the creators of the Ray distributed computing project, launches with $20.6M led by a16z

Published December 17, 2019

Open source has become a critical building block of modern software, and today a new startup is coming out of stealth to capitalise on one of the newer frontiers in open source: using it to build and manage distributed application environments, an approach being used increasingly to handle large computing projects, such as those involving artificial intelligence or scientific or other complex calculations.

Anyscale, a startup founded by the same team that built the Project Ray open-source distributed programming framework out of UC Berkeley — Robert Nishihara, Philipp Moritz and Ion Stoica, and Berkeley professor Michael I. Jordan — has raised $20.6 million in a Series A round of funding led by Andreessen Horowitz, with participation also from NEA, Intel Capital, Ant Financial, Amplify Partners, 11.2 Capital and The House Fund.

The company plans to use the money to build out its first commercial products — details of which are still being kept under wraps but will more generally include the ability to easily scale out a computing project from one laptop to a cluster of machines; and a group of libraries and applications to manage projects. These are expected to launch next year.

“Right now we are focused on making Ray a standard for building applications,” said Stoica in an interview. “The company will build tools and a runtime platform for Ray. So, if you want to run a Ray application securely and with high performance then you will use our product.”

The funding is partly strategic: Intel is one of the big companies that has been using Ray for its own computing projects, alongside Amazon, Microsoft and Ant Financial.

“Intel IT has been leveraging Ray to scale Python workloads with minimal code modifications,” said Moty Fania, principal engineer and chief technology officer for Intel IT’s Enterprise and Platform Group, in a statement. “With the implementation into Intel’s manufacturing and testing processes, we have found that Ray helps increase the speed and scale of our hyperparameter selection techniques and auto modeling processes used for creating personalized chip tests. For us, this has resulted in reduced costs, additional capacity and improved quality.”

With an impressive user list like this for the free-to-use Ray, you might ask yourself, what is the purpose of Anyscale? As Stoica and Nishihara explained, the idea will be to create simpler and easier ways to implement Ray, to make it usable whether you’re one of the Amazons of the world, or a more modest, and possibly less tech-centric operation.

“We see that this will be valuable mostly for companies who do not have engineering experts,” Stoica said.

The problem that Anyscale is solving is a central one to the future of large-scale, involved computing projects: there are an increasing array of problems that are being tackled with computing solutions, but as the complexity of the work involved increases, there is a limit to how much work a single machine (even a big one) can handle. (Indeed, Anyscale cites IDC figures estimating that the amount of data created and copied annually will reach 175 zettabytes by 2025.)

While one day there may be quantum-computing machines that can run efficiently and at scale to address these kinds of tasks, today this isn’t a realistic option, and so distributed computing has emerged as a solution.

Ray was devised as a standard to use to implement distributed computing environments, but on its own it’s too technical for the uninitiated to use.

“Imagine you’re a biologist,” added Nishihara. “You can write a simple program and run it at a large scale, but to do that successfully you need not only to be a biology expert but a computing expert. That’s just way too high a barrier.”

The people behind Anyscale (and Ray) have a long and very credible list of other work behind them that speaks to the opportunities that are being spotted here. Stoica, for example, was also the co-founder of Databricks, Conviva and one of the original developers of Apache Spark.

“I worked on Databricks with Ion and that’s how it started,” Andreessen Horowitz co-founder Ben Horowitz said in an interview. He added that the firm has been a regular investor into projects coming out of UC Berkeley. Ray, and more specifically Anyscale, is notable for its relevance to today’s computing needs.

“With Ray it was a very attractive project because of the open-source metrics but also because of the issue it addresses,” he said.

“We’ve been grappling with Moore’s Law being over, but more interestingly, it’s inadequate for things like artificial intelligence applications,” where increasing computing power is needed that outstrips what any single machine can do. “You have to be able to deal with distributed computing, but the problem for everyone but Google is that distributed computing is hard, so we have been looking for a solution.”

Brad Feld: what founders need to know about recent changes in VC deal terms

Published October 11, 2019

Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch’s Connie Loizos hopped on the line with prominent investor, entrepreneur, thought leader, and Techstars co-founder Brad Feld to chat about the latest edition of his book “Venture Deals,” his advice to founders and investors, and his take on hot-button issues of the day.

In their conversation, Brad and Connie discuss the need to know information when it comes to preparing for, structuring and executing venture deals, and how that information has changed over the past several decades. Feld walks through the major topics that have been added in the latest edition of the book, such as how to handle venture debt, along with tactical attributes that aren’t currently in the book, such as secondary market trading.

Brad also shares his take on the most effective fundraising tactics for founders, and which common pieces of advice might be overblown.

Brad Feld: “I think the approach to the amount of money that you’re raising is both nuanced and evolves based on what financing round you’re at. So if you’re in an early round, some of the characteristics are different than if you’re in a later round. But I think the general truism… that I like to use when people say, ‘Well, how much money should I raise?’

I start with two variables and you the entrepreneur get to define those two variables. The two variables are: the amount of money you raise and what getting to the next level means. The amount of money you should raise is the amount of money that you need to get your business to the next level. There are lots of different ways to define what next level is and by forcing yourself internally to define next level and then define what you need in terms of capital to get to that next level… when you’re raising that first round of financing or even the second or third round of financing, it helps you size rationally what you need versus reactively to whatever the market characteristics are.

I actually encourage entrepreneurs to raise the least amount of money they need to get to the next level, or at least that’s the number that they go out to market with. Not a range, not a big number because you’re trying to drive some kind of valuation characteristic off a big number, but the amount of money that you actually think you need to get to the next level. Then if you can be oversubscribed, that’s an awesome situation.”

Feld and Connie dive deeper into current issues in the startup and venture landscape, including Brad’s take on the impact of the SoftBank Vision Fund, what went down internally and externally at both WeWork and Uber, as well as how boards, executives and founders can manage cult of personality and static company cultures.

For access to the full transcription and the call audio — and for the opportunity to participate in future conference calls — become a member of Extra Crunch. Learn more and try it for free.

Connie Loizos: I think the last time I saw you in person was out here in San Francisco at an event I was hosting and that was maybe two years ago?

Brad Feld: Yup, that’s right. That was at the Autodesk Lab if I remember correctly.

Loizos: Yes. It’s good to hear your voice, and thank you for joining us on this call. We have a lot of readers who are big fans of yours that are on the line and are eager to learn about your book “Venture Deals” and your broader thoughts about the current state of the market. That said — and I know you only have so much time — let’s dive first into the book. So Wiley, your publisher has just put out the fourth edition of this book “Venture Deals,” and it’s really easy to appreciate why. I was looking through it and it’s so incredibly instructive how venture deals come together and possible pitfalls to avoid. And given there are always new entrepreneurs emerging, it continues to be highly relevant.

How do you go about updating a book like this, given that some things change and some things stay the same?

Ben Horowitz backs rapper Ryan Leslie’s SMS commerce startup Superphone

Published March 7, 2016

Ryan Leslie gave every fan his phone number. It’s (646) 887-6978. But instead of a million unwanted phone calls, it’s making him money and giving him deeper intelligence about his listeners than anyone in the music business.
That’s why A16z’s Ben Horowitz, Betaworks, and more investors just put a $1.5 million seed round into Leslie’s startup Disruptive Multimedia. Read More