I think really good companies, the 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 you're running away from the truth to preserve feelings, that's a very dangerous thing in a tech company. And the kind of corollary to that is it's really important that bad news travels fast. If something's wrong, as CEO, you need to find out about it, and so you need that bluntness.
Hey everybody, today's guest is Ben Horowitz of A16Z fame. There are a few reasons why it's fun to have him on. First, I wanted to get the behind-the-scenes look on why Andreessen 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 some CEOs that went down in dust. Like, what do they have in common? What are the great ones? What do they do? What are they like? What are the patterns there? And the same with the ones who 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 version of 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 you my summary.
You probably don't remember when we first met.
Yeah, remind me.
Can I tell you about it? 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 Dharmesh. And we walked in the room. We had a nice welcome because there was 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."
But we sat down and JD sat here, and I sat here, and Dharmesh sat here. I remember it like it was yesterday. We started with intros. JD barely got a sentence out of his mouth before you were like, "Wait, you're the COO? Tell me about your background." You spent like 15 minutes on JD, and then went to me and spent like 15 minutes on me like, "You're such a knucklehead. Why did you hire a COO?" And then Dharmesh. 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 valuable—you put a ginormous chip on JD Sherman's shoulder.
Oh, good.
And it was incredibly beneficial. How do you feel about CEOs and COOs these days? Same thing, or have you changed your mind?
Well, no. I think that generally when a company is small, flatter is better. In the early 2000s, it was a very popular construct and it was kind of "Mr. Outside, Mr. Inside," that kind of thing. If you're really scaling and you're not wrestling with product-market fit, it can work for a time on a product cycle, but when you hit the end of the product cycle, so much about 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 it depends on the definition of COO. If COO is really just a big title for the sales guy, that's fine. 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.
You've invested in tons of CEOs at this point, coached tons. What are you looking for? What's like a major green flag or red flag? How has it changed over time? What's your filter on a 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 Ghodsi and Elon Musk, they're all extremely different types of people. So, you try not to get into anything about the look and feel or sound, or like are they very extroverted or are they very introverted—none of that I think matters. There's a few things in common. One is anybody great really thinks for themselves. 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, do they have truly original thinking on things? And then from a leadership standpoint, I really like the Colin Powell definition, which is: leadership is the ability to get people to follow you, if only out of curiosity. So I think, "Well, would I want to work for this person? 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 kind of a momentum thing. If you can't hire the very top talent, then you're very unlikely to be a great company. It's kind of: how good is your talent density?
We just had our Sequoia offsite and I got into—not an argument, but a discussion—with Shaun Maguire, 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 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, and then we hired crap tons of people from Northeastern, 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 chess champions, but as it moves up the stack, Salesforce and ServiceNow kind of look like us. Do you have a take on my disagreement with Shaun?
Well, I think it depends a little on the era and the market. So if you look at HubSpot, it was a marketing/sales idea as much as it was a 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. 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 that angle of it. How smart is Elon? Extremely smart. Was he a Math Olympiad? Probably not. But just raw horsepower is pretty important. Larry Page is probably one of the smartest people in the world. That ends up mattering if you're going to build something Google-sized. It's very hard to imagine that without somebody like Larry Page who could even think of something that big.
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 Ghodsi at Databricks. He's a PhD in computer science. He's extremely smart, so he kind of meets the Shaun Maguire test, but he's exceptionally good—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 absolutely paranoid. The only person I've ever known as paranoid as Ali—I guess Elon is this level of paranoid—but Andy Grove was this level of paranoid.
He wrote a book about it.
Yeah, exactly. I think some of that comes from him being a refugee. He grew up in Iran and then when the Ayatollah came in, he had to flee to Sweden. Hopefully that's correcting now finally after all these years. But having everything taken away from him really informed his psychology in a way that's very beneficial for a founder.
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?
I think the universal one starts with "confidence," 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—how to run a company? No idea. And so you start 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. If you've not been in a position like that, which almost no founder has, it can be highly psychologically challenging. You see people react to it in two very dangerous ways.
One is they overly defer. "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 they're not really making the decision themselves. They're kind of doing a poll. But nobody other than the CEO has the context to make that decision. Nobody 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."
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 52/48 on it—but I'm afraid of making mistakes, so I'm going to not decide." And the other kind of hesitation is avoiding it. "I see 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?" 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 lack of confidence, that hesitation.
When I talk to CEOs, I'm like, "Look, if you were 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 ball carrier 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. That's what's going to get you replaced.
It resonates with me. At HubSpot, we had all kinds of debt—culture debt, product debt. We had "decision debt" at times, I would call it.
Decision debt is the worst debt, by the way, because it paralyzes a company.
I had it. I fell in your trap. And the way it kind of worked was I would see the company slowing down, just a lot of debate and a lot of stuff on my desk. And then once every four or five months, I'd be like, "I need to make some freaking decisions." And then once I made some decisions, everything just started moving and flowing. So I felt that very much.
What other mistakes have they made? Talk about team building. You've hired a lot of VPs of Sales. People screw up their VP of Sales hires all the time.
More than anything else.
More than anything else. So kind of more generically, hiring executives.
Yeah. It's also something you don't know how to do, right? A lot of times you don't even know what the job is. What is a CFO? What's a control structure? What are these "systems" they speak of? People go in to hire them with that level of knowledge and think they can smell it out from talking to a person. It's a little like trying to hire a Japanese interpreter and you don't know Japanese. They're all going to sound pretty good, and it's going to be very hard for you to distinguish.
Preparation is very important. Have you spoken to enough CEOs? Have you asked them, "What's the difference between a good CFO and a great CFO? How would you hire this person? What would you ask them? What would you want to see?" 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 feel for what the challenges are in your company. You don't want a generic CFO; you want one for *your* business.
Then when you get into sales—the problem that we have all the time is we have engineers running the company and they're hiring a head of sales. You could not be culturally more different than an engineer and a head of sales. The main thing is right down to how they talk to you. If you ask an engineer a question, 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 salesperson, your first thought isn't "what's the answer," it's "why are you asking me that question?" Because that's a clue.
If you ask an engineer, "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 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.
I like this, by the way. I hadn't thought of it this way.
Yeah. But the guys who are good at the job get rejected because you don't like them. And then the people who are terrible at it, those are the ones that end up getting hired. Mark Cranny used to say these CEOs just want to take a guy who failed the engineering test, put a clean shirt on him, and make him the head of sales. And there's a real truth to that. It's funny, I had this conversation with Sujay when he was at Dropbox. He goes, "How do I deal with the fact that our engineers are upset that we're going to pay the sales guys commissions?"
Guaranteed they're going to be upset.
Yeah. And I said, "Well, it's very 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 shut the up." He said, "Oh, okay. I never thought of it that way." I was like, "Look, do you have engineers that on the weekend might write some software for fun, as a hobby?" And he 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." That is not a fun job. There has to be—it's a prize fight. There is no fight without a prize. The whole cultural difference between what founders are and what salespeople are is so vast that somebody's got to have a conversation with them about what you're really looking for. Because otherwise you're just going to get somebody who's not good at sales.
Okay, I'm the engineer, I'm CEO of your brand new company. I'm likely to screw the hire up. What's your advice to me?
It's funny—one of the companies that both Sequoia and we were invested in is a company called Okta, which ended up doing very well. Pat Grady and I were on the board. The very first big mistake that Todd almost made was hiring the head of sales. There were two candidates: one whose name I forget, and the other was Adam Messinger, who was a PTC guy. We knew everything about Adam because he had worked for Cranny, he had worked for McMahon. I called them all and they were like, "This is the guy." And then this other guy, I got front-door references on him and they came out okay—not great, but Todd wanted to hire this other guy. The reason he wanted to hire him was he was much more enthusiastic about Okta, whereas Adam was like, "Well, I don't know about this company. Let me talk to some of your customers," and so forth.
And so the conversation I had with Todd was: "Todd, you don't want the sales guy all enthusiastic. You want them to be qualifying *you*." Because when you're selling, good sales guys don't just answer the damn questions being asked. They qualify the customer. Do you really have 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've got guys who owe me favors more than they owe Adam favors telling me he's great. And this other guy—all the guys who owe him favors and don't owe me anything say he's a B. So do not screw this up." I'll never forget it. I don't talk to founders like this anymore because I'm more mature, but 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 happen is this is the end of your company. Like, this is it. So you've got to be 100% confident, because I'm telling you, you're wrong, and I have more experience at this than you." So I really put pressure on him. He hired Adam, and it ended up really making the company. So it worked out.
But that's how important it is. I think if we had hired the other guy, Okta would have gone bankrupt.
I have a couple of questions on that. It sounds like the takeaway, if I'm that engineer who's CEO and getting some traction and hiring a head of sales, is: one, blind references really matter; and two, get a sales leader who brings a following.
By the way, that's the whole thing. 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, and the other. Okay, can I call them and find out if they're coming?" Because any great sales leader has a big set of followers, and anyone who's not great has nobody. Sales guys are savvy about the leader. I've never met even a mediocre salesperson who doesn't know who a good leader is.
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 the sales leaders that are filling Silicon Valley? I can't figure that out. And two, what do you think it was about the "PTC Mafia" that worked so well? For listeners, PTC was—and still is—a great company, but in the '90s it ripped and was the fastest-growing company in the world for a while. We sold CAD/CAM and 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 were a number of things about PTC, but one of the underrated things was that the product wasn't that great. Particularly the Windchill stuff—the hoop didn't work.
Yeah, anyone can sell a great product!
Exactly. You like to hire a sales guy that had a hard sell. You don't like to hire somebody who was like, "Yeah, he crushed his numbers," but anyone could have sold that. Like hiring somebody selling Google AdWords—what is that job? "How much do you want? Okay." You're not going to build the discipline that way.
But if you see someone from Databricks, for example, and they were a VP there, and you're looking for a CRO in your new company—I'm not saying that's easy to sell, but they have a brand and a lot of mojo. Is that someone you're looking for in an early-stage startup, or no?
Well, I can't comment on Databricks specifically because they're... but the analogy? It's like the early days of Oracle. Those guys were different than an Oracle salesperson today. As it gets more established, it's harder to tell because you can survive on the brand. But I will say this: if you have a product that's complicated to sell, that's when you get to the PTC level. The thing about PTC that was so amazing—other than the culture and the attitude, which was unique and probably illegal today—is the discipline.
The discipline really came down to being systematic. You're going into an account, there are competitors, and how systematic are you about laying the traps for those competitors? 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. For PTC, it was a very complicated process. Getting assurances that they're all lined up requires so much courage, effort, and competitiveness that it translates 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 just calling in and showing up as the salesperson from "Blah Blah" and away you go. Right now, I think with OpenAI and Anthropic and so forth, it's like that. Everybody wants to buy AI; they're already predisposed. That's very different than "Who the hell are you? Oh, we're PTC. I've never heard of PTC. Okay, now I'm in the door—why should I buy this? I can't get it to work." "Well, let me walk you through how it's going to work." That's invaluable.
Ryan Ghodsi, who's the original head of sales at Databricks—we got him, and I had never even heard of the company he was at, which was a public company. Imagine that: a tech sales guy and I had never heard of his company. The company was literally selling FTP.
Okay.
But secure FTP.
Okay.
Think about how good at selling you have to be to make your number as a public company selling that! And so this guy obviously had the discipline forced upon him and he was extremely smart. That combination? I'll take that all day.
So you'd rather have someone from a successful company, but one where the playbook was harder to write and the product was harder to build. That's another big one: can you run a playbook? Are you somebody who joined VMware when it was on fire and got a big position, but you just 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 out the competition, how to train the salesforce, how to discipline them? That's a much harder find.
My takeaways were... I was the first BDR and spent 10 years there. In a lot of ways, it was contrarian to the way people thought about selling. We sold an application one way, and then we moved into the platform business, which totally changed the way we sold. We were very disciplined on both sides and very process-oriented; we managed the process tightly. We were very tight on the profile of a sales rep.
The profile, by the way—when I interview sales guys, I always ask them, "What's the profile of your rep?" It's amazing to me that guys who are very senior in very big jobs sometimes have very loose profiles, whereas the ones who really have to compete, it's extremely tight. What they're looking for is so specific and often surprising.
Sticking on sales for a second: one of the things we got right—and we got a lot wrong at HubSpot—was the process to interview a rep. We found that reps who were good learners did well inside of HubSpot. We liked people on their second sales job, not their fifth or their first. So they had done something. If they had gone to a half-decent school—not Harvard, not MIT, but a state school—had a B average, and were a competitive athlete, if they could fog a mirror and they did those things, we didn't overthink it. They came in for a half-hour interview, and the half-hour was: "Ben, welcome. I'm going to give you a scenario. I'll be the customer and you sell me HubSpot." I'd give them 12 minutes to sell me, literally watching the clock. Then I'd 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." If the person internalized that feedback and sold it better the second time, 99% of the time we hired them.
Oh, that's interesting. I thought that scaled really well. How good are they at listening? This is the other mistake people make: they look for somebody who's good at talking. You really want somebody who's good at listening. It's a subtle but important difference.
Yes. 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?
Oh, sure.
The background was that you had a big product launch coming up, you were excited about it, and you had a press story coming in a couple of weeks. Mark Andreessen front-ran it, and you sent him an email saying, "I guess we're not going to wait until the 5th to launch the product, yeah, Ben?" And the response from Mark Andreessen was: "Apparently, you don't understand how serious the situation is. We're getting killed, killed, killed out 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 whole company, and it's the server management's fault." And then I love the ending: "Next time, do the interview yourself. F--- off, Mark."
Yeah, yeah.
Are we out of the "f--- off" era? These are the kinds of emails we used to get at PTC. Are we too soft now?
Elon's not soft. I think there's some of that. I don't think it's quite at the PTC level. In Mark 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 Cranny's response was, "Well, first of all, you better knock me out." And then McMahon says, "But what would you do?" He says, "Is this a question? Are you testing my intelligence or my courage?"
My first interview, I walked in with my suit on and Harrison, the original head of sales, said, "I wouldn't wear that suit to a fight."
I think really good companies, the very best companies tend to have founders and CEOs who ask pretty aggressive questions. Zuckerberg, Larry Page—those guys are pretty blunt. I think that's important because one of the most critical things in a company culturally is that you give direct feedback and you can have it out. Mark was wrong on that feedback to me—I was right—but it's important that he'd be able to say that, and it's important that I'd be able to stand up to it. Otherwise, the truth doesn't come out. If you're running away from the truth to preserve feelings, that's a very dangerous thing in a tech company. The corollary to that is that it's really important that bad news travels fast. If something's wrong, as CEO, you need to find out about it, and so you need that bluntness.
Andy Grove used to call it "constructive confrontation." One of my favorite Andy Grove anecdotes: somebody was late to a meeting when Intel was a monster and Andy was God. They come in late, and he just looks at them and says, "All I have in this life is time, and you're wasting it." That's like the meanest thing you could ever say to somebody! But particularly as a company grows, you need to reset the culture. If it's starting to fray at the edges, you can't just let that go. By saying that, he might crush that person's feelings, but everybody's telling that story to the point where *I* heard it, and I didn't even work for Intel! That's a culture setter: "We're not late to meetings here." Not every company has that culture, but if you have it, you need to maintain it.
Speaking of that, I coach all these CEOs, and one thing I've noticed is Paul Graham wrote that "Founder Mode" memo. It strikes me as relatively standard operating procedure now.
Well, yes, although there's a part that's wrong to it, or a little misleading. I think it came originally from Brian Chesky. There's a part that's very right about it, which is what happened to Brian: he hired extremely senior people and then he overtly deferred. That created all kinds of politics and weird stuff. After COVID, he took the company back by going into "Founder Mode" and was much more dictatorial. I think that part is all correct.
The danger with the idea is people are taking it to the point where they're saying, "Well, I don't want to hire any senior people." It's like, okay, so you're going to compete with a worldwide sales organization and you're going to try and grow a VP from scratch to do that? Let me tell you all the things that person doesn't know that they're going to have to learn on your nickel that you could just buy today. How do you split territories? How do you open up international? There's just years of experience and relationships required to do that. If you're in Founder Mode and you're so afraid to do that? No, you need to be able to hire that person too, but you need to be able to *manage* them. That's very different than "avoid, avoid." I think people have taken what Paul wrote and thought, "Oh no, no experienced people, screw that." Particularly if you're an enterprise company, that definitely doesn't work.
Outside knowledge is just valuable. You have to learn enough about that job that you feel confident managing that person and telling *them* what to do, not having them tell *you* what to do. That's when you lose the company.
One of my favorite CEOs is Jensen Huang, and he's got a unique 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 is none of them really do that. They haven't followed his playbook. I kind of scratch my head. People also haven't followed Elon's playbook. No one uses "The Algorithm" outside of Elon's companies. I don't get it. Do you notice the same thing?
Most of the companies you recruit out of don't run like that, so they don't think of it that way. To run it like Jensen does... by the way, that's a little closer to how I run Andreessen Horowitz. But what founders are lacking is the level of confidence you have to have to do that. If you're reporting to me, you've got to be CEO-caliber, because I'm not developing you. I highly believe that CEOs can't really develop executives; they either can do it or they can't. You have to have enough knowledge to understand what's going on and be able to evaluate how the company is going at that level.
Elon is the most competent and has the most confidence of anyone, and Jensen is at that caliber. I think a lot of people need to develop that as they go. When I observe Zuckerberg, he didn't have that the whole way. Over time he's gotten more like that, but he deferred half the company to Sheryl for a while until he could build his confidence. I think that's a little more the normal path. It's hard to go from zero to Jensen.
Jensen's been doing it for 30-plus years. I suspect four years in, he wasn't quite at this level.
And Elon, of course, got fired early. There is a learning curve to the job, even for the best.
What can CEOs learn from Zuckerberg? You work with him pretty closely.
Zuck is very good at operating from first-principles thinking, not being overly influenced by anyone else's ideas or just the way things are. They were also amazingly disciplined at looking at things through a data lens: "What does the data say?" That's how they were able to grow so fast and overcome the competition. He stays extremely curious, which all great CEOs are. I think people underestimate him, Elon, and Jensen by saying, "Oh, those guys are nerds." Their people skills are astoundingly good.
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 felt like it was going on inside his head. If you look at the M&A deals he's done, he's a really outstanding psychologist. I think he always had some of that. His mom is in that profession and she's very smart about it. I think it was always in there, but he needed the confidence to get it out. He started that company when he was like a little kid!
You wrote a whole book about culture. What are people getting wrong?
I think people don't know what it is. Founders especially don't know, which is why I wrote the book. Although it's funny—the people who really liked that book were like Ted Sarandos. I realized after I wrote it that you really don't have the cultural issue until you get big. At the startup phase, you may be sowing the seeds of your own problems, but there are no cultural issues in the beginning because the thing is small. You're managing the culture by hand unconsciously.
The big thing people think of culture is "values." They think it's like, "We have a culture of integrity," or whatever. Everyone's got the same ones—they're just platitudes. The actual thing is *behaviors*. You want to think about what behaviors put you in a place where you're the kind of company you want to be. In venture capital, everybody says, "We really love entrepreneurs." But then you hear entrepreneurs talk about VCs and they say, "These guys are arrogant, they talk down to me." Well, if you want to be *this*, why are you *that*? It gets down to the behaviors. Are you on time for a pitch meeting? Are you on your phone during a meeting? Do you get back to the entrepreneur if you're not going to invest? These behaviors end up setting the culture. It doesn't have anything to do with what you said; it has to do with what you *do*. That's why I called the book *What You Do Is Who You Are*.
It takes a lot of thought to say, "Okay, if I want to be this, how must I behave to get there?" You can say, "Treat the company's money like it's your own," but what does that mean? Where are you staying? How are you traveling? If you want that, it has to be systematic.
One cultural "gotcha" I see a lot is the brilliant "100x engineer" in the company that's a jerk.
Venture capital is more like that than engineering organizations! But on an engineering team, you have to have parameters. If being a jerk means that in the code review I don't say anything and then in the middle of the night I rewrite your code, that's going to be tricky as you grow. If being a jerk means I expect a super high standard, that's another thing. You want to define what it is that we're *not* going to do here. Engineers are amazing at following rules, so if you make the parameters clear, it works.
It's a venture capital problem too—you get a lot of smart, spiky personalities. Mark and I talk about this sometimes: was Steve Jobs mean to people because that just goes with being brilliant, or because he could get away with it because he was brilliant?
Where do you come out? I've had the same debate.
I think it's more the latter—he could get away with it. He didn't *have* to do that, but he could, and it's his company. The problem with founders modeling themselves after Jobs or Elon is that if you're not Jobs or Elon, maybe you can't get away with that. Maybe people just walk out the door.
One of the things I've outlawed at the firm is: you can't make yourself look smart by making somebody else look dumb. That doesn't count here. If you get on Twitter and say, "Oh, that business sells dollars for 85 cents, haha, I'm so smart"—you're fired. I'm not dealing with that at all. We love that you're smart, but you don't have to get there through that method. Once people know that, they're fine. But it would be hard to say just "don't be a jerk," because sometimes extremely smart people aren't going to suffer through a dumbass conversation. You can't say, "You have to suffer through every dumb conversation," because that's not going to work.
So it's not "zero tolerance" to being spiky?
No, I think the "No Asshole Rule" is never going to work. What is it that you don't want them to do? What's over the line? Very spiky people can live in that kind of context.
When I was CEO of HubSpot, I didn't know what I was doing a lot of the time. When you were CEO, you felt the same way. What percentage of the time do you feel like you really don't know what you're doing, versus having a handle on it? Founders pretend they know what they're doing.
Everybody pretends, and that's part of the challenge. I had to grow up very fast—we went public when we were 18 months old. That'll grow you up in a hurry. I didn't really feel like I knew what I was doing there probably until four years into it, when I rebuilt the sales force and brought in Cranny and all that. Maybe three and a half, four years into it. And I was never as confident at it as I am now. It's different for different people, but you need enough reps at it. The more confident you are in your judgment, the faster the decisions you can make, the less you care about what people think, and the less you care about making a mistake. That's why Jensen is so magical—he sits in the room, talks to everybody, and knows exactly what he wants. Same with Elon. I guarantee you neither of them started that way; you build into it.
I see silly things on Twitter where people say venture capital is easier than entrepreneurship, or vice versa.
Venture capital is way easier. That's not even close! Who the f--- would think venture capital is harder than entrepreneurship?
A lot of people! In venture capital, there's a lot more luck involved. If you join Andreessen Horowitz or Sequoia today, you have an amazing platform, and you may do three deals and one turns into a trillion-dollar company. There's a fair amount of luck around that.
I think entrepreneurship has some luck, but a lot of *bad* luck! In entrepreneurship, you have one shot—you have to make it work. And then you really pay for your mistakes much more directly. The clock is ticking in a way it isn't in venture. There are no "quarters" in venture capital, so it's just an easier kind of business. I'm saying that as someone who succeeded in it; I suppose if you failed in it, it might have looked harder in a different way. But the pressure level and the stress level are not close. If a small venture capital firm fails, it's never a lot of people. You can get a tech company up to thousands of people and then have to lay them all off. That is brutal. And the people you're raising money for have a much tighter eye on you because you might have only one funding source, whereas in venture capital you generally have many funders.
I appreciate you coming on the pod.
Yeah, it was fun. Thank you very much.
I think all the CEOs who watch are going to really like it. Thank you.
All right. Good, good, good.
Okay, I hope you liked that episode with Ben. I really liked it and learned a lot. Something I thought about while he was talking is that one of my "bugs" as CEO of HubSpot was that I'm pretty conflict-averse. I think a lot of CEOs are, particularly first-time founder CEOs. Andreessen Horowitz and Sequoia back a lot of first-time CEOs who haven't really managed before, and it's just uncomfortable. Confrontation is uncomfortable unless you grew up with it. Ben's got a good term that I'm going to borrow: "constructive confrontation." I like that. You need to have a constructive level of confrontation with most people inside of your organization.
Kind of related to that, Ben talks about "decision debt." We had this at HubSpot. You have a VP of sales, you need to fire them, but you kick the can down the road hoping they nail the next quarter. Your pricing model isn't really working or scaling, but you kick the can down the road a couple of quarters to fix it. There's all kinds of stuff kicking around your head like that, and I think it's a lack of confidence. I wanted to be a popular CEO—I think that was another bug of mine related to that conflict-averse thing.
All of this also rhymes with hiring and "Founder Mode." When you're a first-time founder CEO and you're hiring a "been-there-done-that" person who is more senior than you, you're a little nervous about truly managing them and you end up deferring to them, and that's where the problems start. I think this idea of constructive confrontation is really productive. If you're a little risk-averse or 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 is that being a CEO is pretty uncomfortable, particularly for hypergrowth companies today. Everything's breaking, everything's changing. It's just fine if 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, and I didn't think I knew what he was doing when he was running 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 @behag on X. See you over there.