VC Blogs You Should Follow (and Why): Ben Horowitz

This week we highlight Ben Horowitz’s blog, aptly titled ben’s blog, which TrueBridge follows to gain insight from Ben’s legendary track record of growing companies, as well as his more recent success as a venture capitalist. Ben’s extensive experience as an operator includes running several product divisions at Netscape, managing AOL’s e-commerce Platform division, and, finally, his co-founding of Opsware in 1999 (which we wrote about in a previous post). Over his eight years as CEO, Ben led Opsware on a monumental growth trajectory that culminated in its 2007 acquisition by Hewlett Packard for $1.6 billion. After the acquisition, Ben spent a short period of time as a vice president at HP before leaving in 2009 to join long-time friend and colleague, Marc Andreessen, to found Andreessen Horowitz. Despite the firm’s young age, Andreessen Horowitz has already found success with marquee companies that have experienced significant liquidity events, including Skype (acquired by Microsoft for $8.5 billion), Instagram (acquired by Facebook for $1 billion at acquisition), Facebook (FB), and Groupon (GRPN).

Through his blog, Ben connects with entrepreneurs by addressing some of the tough issues growing businesses face today and offering his thoughts on best practices drawn from his decades of experience. Owing to an affinity for rap music, Ben cleverly incorporates relevant rap lyrics to preface and explain important business concepts or lessons, many of which are focused on the softer skills that are required to be an effective manager. His posts also address pitfalls into which growing businesses can fall. While his tone is not confrontational in nature, Ben frequently highlights important issues that encourage the reader to reflect upon management techniques within his or her organization.

For example, in “Lies that Losers Tell,” Ben addresses the fact that people aren’t always willing to accept the writing on the wall when things are going poorly. As problems begin to surface, “the truth often becomes the first casualty.” Ben warns that it is human nature to blindly accept positive news, and suggests one should find a way to justify and downplay the impact of negative news:

“If a CEO hears that engagement for her application increased an incremental 25% beyond the normal growth rate one month, she will be off to the races hiring more engineers to keep up with the impending tidal wave of demand. On the other hand, if engagement decreases 25%, she will be equally intense and urgent in explaining it away: ‘The site was slow that month, there were 4 holidays, we made a UI change that caused all the problems. For gosh sakes, let’s not panic!’

“Both leading indicators may have been wrong, or both may have been right, but our hypothetical CEO—like almost every other CEO—only took action on the positive indicator and only looked for alternative explanations on the negative leading indicator.”

This issue does not solely reside in the C-level suite, and Ben notes that this can be a pervasive issue affecting the entire company. He suggests a critical eye is required when lackluster results are easily explained:

“So if you read this and it all sounds too familiar and you find yourself wondering why your honest employees are lying to you, the answer is they are not. They are lying to themselves.

“And if you believe them, you are lying to yourself.”

Along the lines of facing reality, in “Lead Bullets” Ben describes learning that there are no quick fixes for start-ups coming up against the competition. While he was working at Netscape, Microsoft released a web server that was just as robust as Netscape’s, but significantly faster.  Ben’s immediate reaction was to work with his colleague, Mike Homer, to conjure solutions that could obfuscate the direct competition. In so doing, he was failing to address the key issue of the product’s speed compared to that of Microsoft’s. His counterpart, Bill Turpin, told Ben, “Those silver bullets that you and Mike are looking for are fine and good, but our web server is five times slower. There is no silver bullet that’s going to fix that. No, we are going to have to use a lot of lead bullets.” Ben writes on that, “As a result of Bill’s words, we focused our engineering team on fixing the performance issues while working the other things in the background. We eventually beat Microsoft’s performance and grew the server line to become a $400 million business and we would never have done it without those lead bullets.” Ben further describes in his post how this life lesson shaped his vision when it comes to facing competition or trying to avoid it:

“There may be nothing scarier in business than facing an existential threat. So scary that many in the organization will do anything to avoid it. They will look for any alternative, any way out, any excuse not to live or die in a single battle.… There comes a time in every company’s life where it must fight for its life. If you find yourself running when you should be fighting, you need to ask yourself: ‘If our company isn’t good enough to win, then do we need to exist at all?’”

These few examples are reflective of the type of thought-provoking and practical topics Ben touches on in his writing. He is willing to offer advice on situations that are uncomfortable for entrepreneurs (see his post on “Demoting a Loyal Friend”), and he doesn’t hold back any punches. Ben’s insights and ability to insert personal anecdotes from his career bring ben’s blog to life, and make it both accessible and relevant for anyone with managerial responsibilities or an interest in learning more about leadership and best practices within an organization.

Previously in our series on venture capitalist blogs to follow, we discussed Fred Wilson’s A VC: musings of a VC in NYC and Bill Gurley’s Above the Crowd. Stay tuned for our next post on another great venture capitalist blog.