The Hard Thing About Hard Things, page 24
The first person we hired was Scott Kupor, who had been the director of finance from Opsware. Scott worked for me for nearly the entire eight years, and I’m not sure that he enjoyed any of it, but he performed phenomenally nonetheless. He ran customer support, planning, and technical field operations during those years, but none of the jobs were what he wanted to do. Scott loved three tasks: running things, strategy, and deals. If he could do those things, he’d almost never sleep. But at Opsware, he’d only gotten to do two of the three. Not getting to work on transactions was torture for Scott. He was like a caged animal. And I’d kept him in that cage for eight long years. So, when we designed the firm, the first thing that came to my mind was “I finally found the perfect job for Kupor.” Scott became the firm’s chief operating officer.
We then filled out the rest of the team. We hired Mark Cranney, head of sales at Opsware, to run the large-company network; Shannon Callahan, former head of recruiting and HR, to run the engineering network; Margit Wennmachers, the Sultan of Swat, to run the marketing network; Jeff Stump, the best executive recruiter we knew, to run the executive network; and Frank Chen, my former head of product management, to run a centralized research group.
Our theory about what a venture capital firm should offer turned out to resonate with the best entrepreneurs in the world. In four very short years, we have gone from nothing to being one of the most respected venture capital firms in the world.
FINAL LESSON
“I know you think my life is good cause my diamond piece
But my life been good since I started finding peace.”
—NAS, “LOCO-MOTIVE”
I often joke that I am considered to be a much better CEO now than I was when I was actually CEO. These days people sometimes refer to me as a management guru, but when I managed Opsware most people referred to me as, well, less than that. As Felicia is fond of saying, “They called you everything but a child of God.”
What happened? Did I change or did perception change?
There is no question that I learned a great deal over the years and I am pretty embarrassed about how I conducted myself in the early days, but by the end I became pretty good at running the company. There is plenty of evidence supporting this view. I completely changed our business midstream—even while it was a publicly traded company—and still managed to grow its value from $29 million to $1.65 billion in five years. A large percentage of the employees from Opsware either work for me at Andreessen Horowitz or in one of our portfolio companies, so they must have liked something about working together. The acquisition by HP was the largest outcome in the sector, so we won our market.
Still, during the years that I was good at running Opsware—from 2003 to 2007—you would be hard-pressed to find a single article or blog post or message board comment that said anything nice about me. During that time, the press declared the company dead and shareholders called for my resignation. No, I was not considered to be very good at all.
In retrospect, people’s perceptions changed because of the sale to HP and the things that I’ve since written. Once I stopped being CEO, I was granted a freedom that I did not have before. As a venture capitalist, I have had the freedom to say what I want and what I really think without worrying what everybody else thinks. As a CEO, there is no such luxury. As CEO, I had to worry about what everybody else thought. In particular, I could not show weakness in public. It would not have been fair to the employees, the executives, or the public company shareholders. Unrelenting confidence was necessary.
When we started Andreessen Horowitz, I could let all that go. Sure, we still have employees, but we do not have public shareholders who live and die on every piece of press. More important, at Andreessen Horowitz I am not really CEO. We invest in companies that have CEOs. The burden of unrelenting confidence lies with them. I can now share my weaknesses, my fears, and my shortcomings. I can say what I want without worrying about offending the wrong people in the power structure. And it’s those fears and controversial opinions that hold the clues to dealing with hard things. Hard things are hard because there are no easy answers or recipes. They are hard because your emotions are at odds with your logic. They are hard because you don’t know the answer and you cannot ask for help without showing weakness.
When I first became a CEO, I genuinely thought that I was the only one struggling. Whenever I spoke to other CEOs, they all seemed like they had everything under control. Their businesses were always going “fantastic” and their experience was inevitably “amazing.” I thought that maybe growing up in Berkeley with Communist grandparents might not have been the best background for running a company. But as I watched my peers’ fantastic, amazing businesses go bankrupt and sell for cheap, I realized that I was probably not the only one struggling.
As I got further into it, I realized that embracing the unusual parts of my background would be the key to making it through. It would be those things that would give me unique perspectives and approaches to the business. The things that I would bring to the table that nobody else had. It was my borrowing Chico Mendoza’s shocking yet poetic style to motivate and focus the team. It was my understanding of the people underneath the persona and skin color that enabled me to put Jason Rosenthal together with Anthony Wright to save the company. It was even my bringing in to the most capitalistic pursuit imaginable what Karl Marx got right. On my grandfather’s tombstone, you will find his favorite Marx quote: “Life is struggle.” I believe that within that quote lies the most important lesson in entrepreneurship: Embrace the struggle.
When I work with entrepreneurs today, this is the main thing that I try to convey. Embrace your weirdness, your background, your instinct. If the keys are not in there, they do not exist. I can relate to what they’re going through, but I cannot tell them what to do. I can only help them find it in themselves. And sometimes they can find peace where I could not.
Of course, even with all the advice and hindsight in the world, hard things will continue to be hard things. So, in closing, I just say peace to all those engaged in the struggle to fulfill their dreams.
APPENDIX
QUESTIONS FOR HEAD OF ENTERPRISE SALES FORCE
Is she smart enough?
Can she effectively pitch you on her current company?
How articulate is she on the company and market opportunity that you are presenting to her now?
Will she be able to contribute to the strategic direction of your company in a meaningful way?
Does she know how to hire salespeople?
What is her profile?
Ask her to describe a recent bad hire.
How does she find top talent?
What percentage of her time is spent recruiting?
How does she test for the characteristics she wants with her interview process?
How many of her current people want to sign up? Can you reference them and validate that?
Could you pass her sales interview test? Should you be able to pass?
Does she know how to hire sales managers?
Can she define the job?
Can she test for the skills?
Is she systematic and comprehensive on how she thinks about the sales process?
Does she understand the business and the technical sales processes?
Does she understand benchmarking, lockout documents, proof of concepts, demos?
Does she know how to train people to become competent in the process?
Can she enforce the process?
What is her expectation of her team’s use of the CRM tools?
Did she run the process at her last company or did she write the process?
There is a big difference between people who can write a game plan and people who can follow a game plan.
How good is her sales training program?
How much process training versus product training? Can she describe it in detail?
Does she have materials?
How effective is her sales rep evaluation model?
Can she get beyond basic performance?
Can she describe the difference between a transactional rep and an enterprise rep in a way that teaches you something?
Does she understand the ins and outs of setting up a comp plan?
Accelerators, spiffs, etc.
Does she know how to do big deals?
Has she made existing deals much larger? Will her people be able to describe that? Has she accelerated the close of a large deal?
Does she have customers who will reference this?
Does she understand marketing?
Can she articulate the differences between brand marketing, lead generation, and sales force enablement without prompting?
Does she understand channels?
Does she really understand channel conflict and incentives?
Is she intense enough?
Will the rep in Wisconsin wake up at 5 a.m. and hit the phones or will they wake up at noon and have lunch?
Can she run international?
Is she totally plugged into the industry?
How quickly can she diagnose?
Does she know your competition?
Does she know what deals you are in right now?
Has she mapped your organization?
OPERATIONAL EXCELLENCE QUESTIONS
Managing Direct Reports
What do you look for in the people working for you?
How do you figure that out in the interview process?
How do you train them for success?
What is your process for evaluating them?
Decision-Making
What methods do you use to get the information that you need in order to make decisions?
How do you make decisions (what is the process)?
How do you run your staff meeting? What is the agenda?
How do you manage actions and promises?
How do you systematically get your knowledge?
Of the organization
Of the customers
Of the market
Core management processes—please describe how you’ve designed these and why.
Interview
Performance management
Employee integration
Strategic planning
Metric Design
Describe the key leading and lagging indicators for your organization.
Are they appropriately paired? For example, do you value time, but not quality?
Are there potentially negative side effects?
What was the process that you used to design them?
Organizational Design
Describe your current organizational design.
What are the strengths and weaknesses?
Why?
Why did you opt for those strengths and weaknesses (why were the strengths more important)?
What are the conflicts? How do they get resolved?
Confrontation
If your best executive asks you for more territory, how do you handle it?
Describe your process for both promotion and firing.
How do you deal with chronic bad behavior from a top performer?
Less Tangible
Does she think systematically or one-off?
Would I want to work for her?
Is she totally honest or is she bullshitty?
Does she ask me spontaneous incisive questions or only pre-prepared ones?
Can she handle diverse communication styles?
Is she incredibly articulate?
Has she done her homework on the company?
ACKNOWLEDGMENTS
First and most important, I thank my beautiful wife of twenty-five years, Felicia Horowitz. It is a little odd thanking her, because she has been so central to the story that she is more properly the coauthor. She has been my number-one supporter and her belief in me and in this book has meant everything. There would be no book without her, and there is no me without her. She is my partner in life and the love of my life, and I owe her everything that I have and everything that I am. I do not have the words to express the magnitude of gratitude that I feel. Felicia, I love you and I thank you.
I am extremely grateful to the countless people who helped me through all the difficult times and to the people who helped me articulate what all that was like. I hope this book pays some of that forward.
Next my mother, Elissa Horowitz, who always encouraged me to pursue anything that I wanted to do—from playing football to writing this book. She believed in me when nobody else did and understood me like nobody else ever could. Thanks, Mom!
I also thank my father, David, who convinced me that writing this book was a good idea and then put in long hours helping me edit it.
None of this would have been possible without my longtime business partner Marc Andreessen seeing things in me that nobody else did. Beyond that, it’s been amazing to work with him for the past eighteen years. He’s been a great inspiration to me in everything that I do. He was the primary editor of the first dozen blog posts that I wrote and a very helpful editor of this book. It’s a great privilege for me to work with someone of his caliber every day.
I thank my friend Bill Campbell for teaching me so many things about how to survive the hard times. So few people went through what he went through and almost nobody is willing to talk about it. Bill, thank you for your honesty and courage.
Michael Ovitz helped me rewrite the ending of the book and make it ten times better. Before that, he did everything imaginable to support me in my impossible quest—up to and including buying Opsware stock when nobody else would. He is a true friend.
To every employee who ever worked at Loudcloud or Opsware, I thank you from the bottom of my heart. I still cannot believe that you believed in me as much as I believed in you. On that team, very special thanks to Jason Rosenthal, Mark Cranney, Sharmila Mulligan, Dave Conte, John O’Farrell, Jordan Breslow, Scott Kupor, Ted Crossman, and Anthony Wright for being part of this book. Hopefully, I didn’t get anything too wrong. Thank you, Eric Vishria, Eric Thomas, Ken Tinsley, and Peter Thorp, for helping me remember what happened. Thanks also to Ray Soursa, Phil Liu, and Paul Ingram for saving the company. Darwin forever! Thanks so much, Shannon Callahan. I still cannot believe that I laid you off. Thanks to Dave Jagoda for not letting me forget what matters.
I thank Tim Howes, my Loudcloud/Opsware cofounder and confidant. I do not know if we made all the right decisions, but I do know that our conversations kept me sane. Thank you for being there from start to finish.
Without Carlye Adler, my editor and coach, I am not sure that I would have even started this book, let alone finished it. Nobody was more jazzed when I wrote something good or sadder when I wrote something boring. Thank you, Carlye, for making this book so much better than it should have been.
Special thanks to Hollis Heimbouch for tracking me down on Facebook and getting me to write the book. I could not have asked for a better publisher. A thank-you to the entire team at HarperCollins.
Binky Urban is the top literary agent in the world, and I am so lucky to have had the chance to be her client. It is a great joy to work with the very best.
I thank my friends Nasir Jones and Kanye West for being so inspirational in their work and helping me articulate emotions that seemed impossible to express. I also appreciate them for letting this fan backstage.
Steve Stoute has been an outstanding friend throughout this process, helping me find my voice and letting me know that the work that I am doing is important.
Thanks to my oldest friend, Joel Clark Jr., for being a great friend for forty-three years and letting me tell the story of how we met.
Chris Schroeder helped me edit the book and maintained a crazy amount of enthusiasm while doing so. Chris blows me away with his interest in this work. Many times, he seems even more interested than I am.
Thank you, Herb Allen, for being a great friend and letting me write about you. I know that is not your favorite thing.
I thank all the partners and employees at Andreessen Horowitz who put up with my grouchiness and increased profanity as I wrote this. It would not have been possible without you. Thank you for making the dream of a firm for founding CEOs come true.
A special thank-you to Margit Wennmachers for believing that I had something to say and helping me find people who would hear it. I am so lucky to be working in the presence of such greatness.
Grace Ellis has been by my side throughout the process, handling every weird detail that one could imagine. During this time, I have yet to hear her complain about a single thing. Beyond that, she has given me great advice and been a great friend.
Thank you, Ken Coleman, for giving me my first job and being a fantastic mentor for nearly thirty years.
Thanks to my brother in-law, Cartheu Jordan Jr., for being an important character in this book and in my life. He is Branch Rickey to my Jackie Robinson.
Thank you, John and Loretta Wiley, for being so supportive of me in everything that I do.
Thanks to my brothers and sisters Jonathan Daniel, Anne Rishon, and Sarah Horowitz for shaping me. Love you always, Sarah.
I thank the late, great Mike Homer for his wisdom, help, and love. I thank Andy Rachleff for being a great gentleman and friend. Thank you, Sy Lorne, for keeping me out of trouble. Thank you, Mike Volpi, for being on the board of a very scary company.
Finally, thank you, Boochie, Red, and Boogie, for being the best children that I could imagine.
ABOUT THE AUTHOR
