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Ben Horowitz

My Personal Journey

Christmas Book Recommendation: From the Holy Mountain

Asked for a recommendation for bizjournals.com holiday book guide I sent in:

“From the Holy Mountain: A Journey Among the Christians of the Middle East” by William Dalrymple

Recommended by: Penny Herscher, president and chief executive of FirstRain.

Why it’s a must-read:“William
Dalrymple’s evocative descriptions of his journey give a profound
context for the rapid changes happening in the Middle East today. This
area was the cradle and center of Orthodox Christianity for the last
1,700 years, and it changed little for most of that time until the
dramatic political shifts of the last few decades. The growing
intolerance between religions in the region is destroying Christian
communities that have lasted more than a thousand years. This book,
combined with the recent news coming out of Syria, deeply changed my
thinking about the cultural loss and tragedy occurring in the Levant
today.”

Glad to see some of my other favorite books like The Hard Thing About Hard Things by Ben Horowitz, and Stiletto Network by my friend Pam Ryckman are also on the list!

Leadership

Why being “too aggressive” is a compliment for a leader

Much is being written right now about high performing men and women are described differently in reviews. Kimberly Weisul in Inc calls it an “insane double standard”, and who wrote up the original survey in Fortune points out the old truth professional women know:

Jane – who is a strong female – gets the feedback to be less aggressive whereas Joe – who is a strong male – gets the feedback to be more patient.

In Kieran’s survey a full 71% of women had negative feedback in their critical reviews, vs 2% of men. Why am I not surprised?

I’ve always been characterized as “too aggressive” and “too ambitious” in my reviews. From day one, until the day I became a CEO. Then the very same characteristics were praised – you are aggressive – that’s great!

When I wanted to recruit a world class board member to my board and identified Larry Sonsini (who I did not know) my board said “you’re being too aggressive, you’ll never recruit him” – and then I did. When the IPO market shut down after the dot.com bust and I needed to get my company public many people said “it can’t be done, you should just sell the company” – but I took it public in a very successful IPO in 2001 (with the help of Frank Quattrone and his CSFB banking team – Frank is very, very aggressive). When the financial market cratered in 2008/9 and we decided to pivot FirstRain to the enterprise it took every ounce of aggression and assertiveness to do it – and we did – with the result that FirstRain has significantly higher quality personal business analytics than anyone else because we cut our teeth on hedge fund managers.

For young women wanting to get ahead – especially if they want to be a GM or run their own company one day – I say be aggressive. Be a rebel. Stand up and be noticed – don’t conform. As Cindy Gallop (an original rebel) says you can’t change the world if you are worried about what other people think all the time.

And if you are a rebel, embrace it. There’s an interesting section in Ben Horowitz’ fantastic book The Hard Thing About Hard Things where he talks about When Smart People are Bad Employees. One such type is the Heratic – and two of the three examples he gives are indeed bad for your company. But one, the Rebel, may change the world for as he says “She is fundamentally a rebel. She will not be happy unless she is rebelling; this can be a deep personality trait. Sometimes these people actually make better CEOs than employee.”

I recognized myself when I read that. I am sure I was tough to manage. I am sure I got heaps of critical feedback because I was aggressive, and ambitious, and challenged the status quo every day. But it is those same characteristics that make me a leader and a (reasonably competent) CEO. 

I did have to learn how to be kind with my strong personality though. Early on I was not always aware of the affect I had on other people. But once I figured that out then I let my aggressive personality blossom, and took care of the people who were following me.

So when someone tells you you are too aggressive and you need to tone it down smile and say “thank you” and keep going.

Equality

The dark side of Silicon Valley

Silicon Valley is on a roll right now. The relatively low levels of capital needed to start a software company has meant that start up incubators and small software companies wanting to be the “next big thing” are popping up all over. Bars are crowded, San Francisco is hip and traffic is worse than L.A. All signs of a booming economy and tech infrastructure that has spawned new wealth-generators like Facebook, Zynga, Instagram and now Yammer.

And yet, this is just the face we like to present to the world. Underneath, as in any competitive society, there is a dark side.

Depression:

Ben Horowitz captured the psychological pain of the struggle of being a company founder and leader in his blog post The Struggle last week. He captures perfectly the isolation, the pain, the cold sweat of building a company which, in 99.99% of cases, does not goes smoothly. Being on the emotional roller coaster of building a new company can lead to depression. It can be hard to setp up every day and face your demons and the risk of failure while all around you seem to be succeeding (because no one talks about the failures). We saw this tragically recently in the case of the suicide of Diaspora founder Ilya Zhitomirskiy.

I try to remember that it’s “not checkers; this is mutherfuckin’ chess” (to quote Ben) and manage my stress with swimming. But even for me, who’s lived the entrepreneur’s life for 15 years, there are days…

Discrimination:

It’s illegal to discriminate on age – employees over 40 are a protected class. But the new generation of companies doesn’t seem to know or care. The median age of Google is 31, the median age of Facebook is 26. They are hiring a generation of new employees who know Java but not C++, who can sell ads over the phone, and who cost a great deal less than experienced employees. Contrast that with computer and communications companies like HP and JDSU who need experienced hardware engineers and have median ages of 44 and 47. At FirstRain, we need both experienced and less-experienced employees to build our solution so we have a healthy mix, but even so I am the oldest employee. Yikes.

It’s illegal to discriminate on race too – and yet, as Vivek Wadhwa discovered when he reported the dearth of black and latino employees in Silicon Valley, it’s a contentious issue and he found himself being dismissed by Techcrunch’s Michael Arrington for highlighting the issue. As Vivek says “an elite group of power brokers, exemplified by Arrington, is totally ignorant of the hurdles faced by minority groups”. But like the shortage of women, this issue starts in middle school and perpetuates into college with the shortage of graduating engineers. We are so short of good engineers in the Valley now that I don’t see race or gender discrimination at the engineer level — I see a dire shortage of qualified candidates.

Feeding the cash monster:

Companies take cash. They consume cash. Salaries, rent, insurance, computers, bandwidth, data center fees… it’s never ending. And once you raise money you are a slave to the cash monster because you have investors who want growth. They want success. And that takes more cash. I watch some of the new young companies raise (too much?) cash, and then spend it on flash offices and parties (see below) and fear for them. Do they know what a down round feels like?

In the social media world, like the dot.com era, the focus is on users and eyeballs, not on profitability, which will work for the very few who ramp fast, get bought and exit. But it takes cash to do that. Consider Yammer which raised $140M to build a Facebook-like service for the enterprise and has purchased by Microsoft for $1.2B. But that’s the exception. Most new companies cannot get access to that level of capital and they underestimate the cost of user-acquisition. Unless you are in the in-crowd with a runaway success you’ll be feeding the cash monster with VC rounds and sleepless nights until you get profitable.

Excess:

But on the flip side of the cash monster… The dot.com boom brought with it a period of excess that hyped, and ultimately hurt the Valley. Companies celebrated raising money and launching products with wild parties – never mind that they had no idea how to make money. Then for a while the Valley sobered up. Companies got back to work, profitability became fashionable, companies talked about helping non-profits and excess was considered bad taste. Especially as the great recession hit and companies worked hard to preserve their cash.

But now, even though the rest of the world is still struggling, the Euro-zone is in crisis and 8.1% of the US workforce is without work, the excess is back in Silicon Valley. Once again companies are celebrating launches, and recruiting and, as Business Insider reports, there sure are a lot of parties going on.  Are we tone deaf to what’s happening to the rest of the world? Is this, again, the result of too much money flowing in?

As Rob Cox wrote in Newsweek, in his analysis of Silicon Valley’s undeserved moral exceptionalism – we are not as altruistic as we’d like the world to believe. He makes the case that “though Silicon Valley’s newest billionaires may anoint themselves the
saints of American capitalism, they’re beginning to resemble something
else entirely: robber barons.”
  For example, the flagrant disregard for privacy prevalent in the new, free apps is stunning. When I gave my TEDx talk at Gunn High School a few weeks ago I surprised many of the students as I explained how they are now the product – their every move and action is being recorded and sold in a way most of them simply do not understand.

But, in the end, these facets of Silicon Valley are capitalism at work. A lot of people work very hard, a few get very rich. Many make healthy salaries working on fun products and in exciting companies. Most will not get rich, but most will have a fun experience. But as the leaders in Silicon Valley, we need to pay attention to the dark side and not perpetuate it. We need to be aware of the stress the long hours and intense deadlines can create. We need to be circumspect about our good fortune. We need to hire the best and the brightest, no matter their age, gender or race.

And on the good days, like today, bring in ice cream for everyone!

Leadership

Ben Horowitz: CEO psychology – or Don’t Quit!

Terrific article in TechCrunch this week by Ben Horowitz – What’s the Most Difficult CEO Skill? Managing your own psychology.

Managing inside my own head is by far the most difficult thing I do as a CEO and I appreciate Ben being so out and candid about what’s going on inside. As he says “Over the years, I’ve spoken to hundreds of CEOs all with the same experience. Nonetheless, 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 covers classical psychoses like “If I am doing a good job why do I feel so bad?”, and the cliche (and truism) “It’s a Lonely Job” – especially when you are facing a crisis like the worst recession since the great depression and you have to make the decision to cut staff which impacts the livelihoods of the very people you are working so hard for and care about.

The piece of advice I liked that was new to me – is Focus on the road not the wall. It it so easy to stare at all the things that can kill your company – and at any moment in time, even great times, any number of things can wipe out a small company. It is this single difference that makes being a CxO in a large company feel so emotionally different than being a CEO of a small company and I have done both. Large companies have mass and momentum – you have time to recover from mistakes most of the time. (Note for Cadence Design Systems (CDNS) which crashed and fired it’s entire executive team on one day – it’s coming back because of the resiliency of the installed base and the R&D leadership team’s commitment to great products.)

The aspect Ben writes about that I have had in my head many times in the last 15 years which I can testify never goes away is A Final Word of Advice – Don’t Punk Out and Don’t Quit As CEO, there will be many times when you feel like quitting. I’ll add though that the most effective management tool I have found for this personal challenge is to get in the pool and pound the laps until my head is clear – which can be anywhere between 1 and 2 miles before I am calm.


If you have an ambition to be CEO one day read the article very carefully several times.