Ben Horowitz's 5 Lessons for Founders and CEOs

Takeaways from a recent talk given by a16z cofounder Ben Horowitz at a gathering of speedrun founders

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In a recent talk delivered before an audience of a16z speedrun founders from the class of SR005, a16z cofounder Ben Horowitz warned there are no easy shortcuts to understanding the task that awaits them as they lead their companies.

“Nobody’s gonna train you to be a CEO,” Horowitz said. “There are no five steps for being a CEO.” Instead, the problems founders are set to encounter are overwhelmingly likely to be situation-specific. So founders and new CEOs often need people they can trust and discuss their problems with, preferably experienced operators who “know what they’re talking about,” in Ben’s words.

With that caveat in mind, Horowitz offered the founders some of his hardest-won lessons. Below are five that stood out.

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1) Do the thing you can do, even when all the options look bad

When Ben took his company Loudcloud public in 2001, he saw it as the least bad choice out of many very bad options. The move was, he remembers, “clearly a bad idea.” But the only other option, after having spoken with “literally every investor in the private markets, was bankruptcy.”

Horowitz says that at moments like these, he often sees founders and CEOs hesitating to make a hard choice. They know they need to do the hard thing: to fire that underperforming sales lead, or re-architect the product. Faced with a seemingly impossible decision, they make the mistake of biding for time, which only compounds the pain they’re facing.

In Loudcloud’s case, Horowitz says, bankruptcy “was obviously a worse choice than going public.” So he made the painful decision, and took Loudcloud to the public markets. Horowitz says if he’d thought about “all the things that were gonna happen to me when I went public—and they all did happen to me, by the way—I would’ve just shot myself in the head.”

But hesitating would have been even worse. Ultimately, Horowitz was able to hold the company together and sold it to HP for $1.65 billion in cash in 2007, a journey he’s written about in detail in his bestselling book The Hard Thing About Hard Things.

When it’s all on the line, decisiveness is key to survival. As a founder or CEO, your job is to act under uncertainty.

“I always come back to: ‘what can I do? And I better do that right now.’ And that’s a lot how you work your way through those very bad [choices].”

“The worst thing you can do is think about ‘what are all the implications of it?’ That doesn’t matter. Is that the best choice I have? If that’s it, I’m doing it… You’re not a great entrepreneur unless you feel like you don’t have a choice but to build a company. Because otherwise you’re gonna quit.”

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2) Choose investors who help you build momentum and confidence as a CEO

Andrew Chen asked Ben: For founders seeking investors particularly at the earliest stages, how do you evaluate who the best partner might be?

Ben said to focus on two questions: Can the investor help create momentum (e.g. through support with hiring, follow-on, and customers)? And can they raise your confidence and capability as a CEO so you’re more able to make timely, high-quality decisions despite uncertainty?

“The thing you don’t have,” Horowitz said to the audience of speedrun founders, “is you don’t know how to do that CEO job. No founders we work with who haven’t already been CEOs of giant companies know how to do that. And it turns out to be a really complicated skillset.”

Ben gave examples like selecting talent for jobs you’ve never done (“I had never been a CFO, I didn’t know what the hell that was”), or building a control structure, or talking to Wall Street. This uncertainty slows down decision-making and causes founders to hesitate. “When I watch founders who fail at doing [the CEO job], it always comes down to a crisis in confidence,” Horowitz says. “You know you don’t know what you’re doing. You know it’s hurting the company. But yet you still have to make a decision.”

So it’s critical to work with investors who can help you get to a higher confidence level to make decisions more quickly. For this reason, Horowitz says, he favors investors who have been CEOs. “Try to mostly get investors that have done something.”

Otherwise, you might end up with a team of investors who give you trite and nearly useless advice:

“One of my favorite pieces of advice I got… and I got it like 27 times: They’d say, ‘look, here’s the key: Hire A players.’ And I was like, okay... yeah, my plan was to hire a bunch of f***ing morons, but now I’m gonna hire A players.”

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3) Focus on strengths more than weaknesses

Using the original iPhone as a reference point, Horowitz argues that when it comes to evaluating technologies, or products, or even talent in individuals, you should focus more on strengths over weaknesses.

“If you look at the 2007 reviews of the iPhone, they’re saying it’s a bad phone,” Horowitz says, “It’s a way worse computer than a normal computer. The keyboard is much worse than a Blackberry’s.”

But focusing on the iPhone’s weaknesses missed its strengths, including the possibilities unlocked by the device’s camera and the ability to have a GPS in your pocket. Breakthroughs like these are what allowed for entire new companies like Uber to be built. “It just has to be unbelievable at something,” Horowitz says. “It doesn’t have to be better than the last thing at everything.”

The same logic applies to how founders should think about their own capabilities. When speaking about how a16z evaluates founders, Horowitz drew an analogy to how he thinks about new technologies like LLMs:

“I always say it’s like we’re not looking for lack of weakness. There’s something wrong with every entrepreneur, including all you—including me… but that’s not the question. The question is, are they world class at a thing? Are they the best in the world at something? Do they have a secret that nobody else has? Do they have something really special? What’s the magnitude of the strength? And I think the future is a lot like that. How strong is the strength? How different is this technology? We now have a computer that you can talk to in English. That’s kind of important. That’s a hell of a thing.”

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4) You have to be much better than the competition, but winning comes with its own advantages

One of the first challenges founders face is acquiring early customers. Here Ben warns against taking a cavalier attitude toward competitors who are already in the market.

“You don’t take out a competitor with an equally good product or a slightly better product,” he says. “It’s gotta be a 10 times better product. And then of course with AI, if you take the market you get more data about your particular kind of user.”

On this last point, Ben highlights a unique opportunity in the age of AI. By building something that’s good enough to attract an initial batch of users, you’re then in a position to learn about them—and train new models—to serve that particular audience even better than before. Learn from every interaction, ship improvements, and hold the account. That’s the secret to defensibility.

“If you’re talking to super high-end programmers all day about how to design their program, that’s a lot of information into your system and into your model that nobody else has. And so that becomes part of your differentiation. And then possession is nine tenths of the law when competing on software.”

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5) Always believe in yourself

Asked if he had any final words of wisdom for the founders in the audience, Ben had this to say:

“I’ll just say this: Congratulations on betting on yourself, because that’s what this is all about. Your job is to make your bet pay off. You believed in yourself enough to do it. There are gonna be many times when you question that bet and you question that belief, but that gets you nothing. Don’t worry about it. You’ve just gotta do your thing and keep going.”

“Focus on what you can do and don’t worry about the doubts. The doubts are gonna be there. And the worst doubts aren’t the ones people put on you. It’s the ones that you put on yourself. Every entrepreneur has them. I spent a lot of time with Mark Zuckerberg when he was like 22 years old and he had tremendous doubt about whether he was gonna make it. Everybody has that. It’s not about what you feel. It’s about what you do. So just focus on what you can do. You’re gonna feel scared. If your guts aren’t boiling, you’re not even trying at this thing.”

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