A Conversation With Ben Horowitz, Author of "What You Do Is Who You Are"

everyone thanks for joining us i'm here with ben horowitz co-founder and general partner of andreessen horowitz for that founder and CEO of ops where somebody who doesn't need much of an introduction but he's also a two-time best-selling author the most recent book is what you do is who you are how to create your business culture we're gonna spend a couple of minutes talking with Ben about this book in about company culture so Ben I know you've talked about this before but I think for the viewers a good question up front is why write this book in particular what is it about company culture organization culture that interests you that made you want to write this book in the first place yeah well it was the thing that I struggled with most when I was CEO when I became CEO the first time I I asked all the kind of veteran CEOs what should I focus on to be a great CEO you know which I do and they pretty consistently said Ben pay attention to the culture em I was great how do I do that and you know that's kind of where the advice stopped and you know most of the things written on it have been relatively trivial you know based on one organizational behavior yeah kind of experiment or something like that and so but when you look at it it turns out to be a really important thing so if you go well how does your company behave you know particularly how does it behave when you're not looking today show up to meeting on times if somebody calls them do they return the call if it's a person who's a lower rank than them that they return it do they return that day do they return it the next day do they return it the next week all these things if they do a deal is it for the price or for the partnership what are they optimizing and so all those things which are not in your goals and objectives they're not in your mission statement they're not in your okrs they're how you behave on a daily basis how people experience your company what you're like to do business with what you're like to work at all that stuff is your culture but the amount of attention it's pay to and the management literature is like close to zero or close to zero usefully so I thought it was an important thing to try and get out well how do you move that how do you shape it how do you change it because you can't just do the simple thing you can't say oh well we'll put in your performance review did you follow the cultural values well you don't know if they receive that phone call so you definitely don't know if they returned it so that's not going to be the thing that drives the culture what's going to drive the culture or all these little behaviors all these little cues that people take about this is what I have to do to succeed in this company you make the point that I think a lot of people would confuse a company's values with their culture and you're saying that culture is different than values how so yes and I go to the bushido which is the way of the warrior kind of the code of the samurai and what the samurai said was a culture is not a set of beliefs it's a set of actions it was just hence the name of the book what you do is who you are it's not what you tweet it's not what you believe it's not the values on the wall it's what you do that's who you are and that's why we don't call them values or they didn't call them values they call them virtues because it's only a thing if you manifest it if you believe it it doesn't it's nothing if you put on the wall it's nothing if you actually do it and everybody does it and you have cultural cohesion tenets of virtue make sense I'm gonna come back to the sheet or later I think it's been said that you know in tech startups the startups in general first-time founders focus on product second times second time founders focus on distribution sales and marketing as a when you were CEO and you're okay I have to focus on both sure sure but where the focus ends up being if you're new to it how many times you have to be a founder before you realize that culture is that important did you take the advice of the CEOs that you talked to you as seriously as you probably should or did it take a while to learn that lesson well I think you know it always seems important but then what do you do about it right so look and nobody has a perfect culture everybody's got violations there's nobody he's got a hundred percent you know adherence to the culture but what do you do when it's off or how do you design it or what's important in the culture or how many things can you of all that I didn't know any of that and you know that's really what the book is about and what I try and explain is okay when you're off culture how do you move it to a better place yeah and it's gonna happen it's gonna it happens you know it's amazing even the companies with the very best cultures drift often but the really great leaders can help move it back to the place where it should be so when that's Lisa my next question and looking for examples of people who did that one of my favorite parts of aspects of the book and how you create it is you looked you found examples that were way outside of traditional tech or leadership examples you know that you mentioned the Bushido code Genghis Khan Shaka Senghor I just have to ask how on earth did you find all these examples well it's funny you know I've been a student of leadership and culture for many years and I you know end up reading a lot of things on it you know everything from you know the art of war.the the huhgak re they you know I've read a lot about the Haitian Revolution and so forth just you know various leaders in history and and I always found that you know those those four to be the ones that kind of taught me the most and it's you know there's things that you can figure out on your own if you're CEO and like okay that worked or this worked or I behaved this way and moves things that way but I wanted to look to the people who did things where I would never have thought of those things and they were super effective for them so that's kind of where they came from they just happened to be that people most influenced me and they are you know it's funny I get asked that a lot it's in a way a weird set of examples in you know in my mind it's an obvious and an examples interesting when you're being a student of leadership is that mostly to be a better leader yourself and officer at Andrews Horwitz or for you to evaluate leaders as an investor or both monsters Penda you know it's something that I've been interested in you know culture culture is very powerful thing but very few people understand how it works or you know why it's so powerful it turns out to be a much stronger force than a lot of the things that people end up focusing on either in a they are in society and so explaining and understanding how that worked has always just been a deep interest of mine and you know it's funny when I met Shaka you know he was nineteen years in prison you know seven years in solitary confinement and all that kind of thing and let a prison gang and so forth and most people read his book and it was a story you know for them of redemption how this guy who went to prison for murder came out and you know became a best-selling author and you know kind of an activist for anti recidivism and so forth but you know for me it was a story of leadership and somebody who really understood culture and how to develop it control it change it and and so forth yeah he's my favorite part of the book it's probably the most striking example of a culture and that you wouldn't know much about that and unless you were in prison sure sure I love the story about you met him as well your wife inviting him to dinner I had some a specific question about Shaka you already talked about why he's a good example you could add more to that but he the use of Diagnostics that he talks about you know one gang does something to one of your members how you respond to that really is a diagnostic for them to figure out yeah understanding culture truly understanding is difficult how much of a role to do Diagnostics playing that in your mind well you know there's always I think it's very important because there's always you know what is on the surface and then what's underneath in the actual kind of motivation and I think that you know when you look at you know that shock a story where basically he says okay Ben imagine somebody in a rival gang steals one of your members toothbrush you know what do you do how do you react to that and if you take it on the surface it's like okay maybe they're interested in dental hygiene and great you know let them brush their teeth I don't care about a toothbrush but of course that was a diagnostic to say okay we can I robbed you can I murder you can I do something much more severe and so how you react is gonna you know the one thing it does is that well you have to do something to protect your group but on the other hand if you're if you have to partial response then you've set a very kind of violent tone of violent culture for yourself and I think that you know that kind of idea happens in business a lot where somebody I'll do something and this is you know one of the most important things about managing the culture is somebody I'll do something and if you're looking at it through an individual lens and you say okay yeah that person he kind of took some credit for her work you know but like it wasn't that clear and he's really good and does good work himself so you know maybe I ought to let that go because if I confront them on it like maybe I'll quit and go to Facebook or whatever and then I'll lose a really good employee but if you look at that same incident through a cultural lens you know that's a little bit of a test for everybody to say oh you can just take credit for somebody's work and get yourself a promotion or a pat on the back or this or that and so everybody's going to go play that game if you let that go so you know part of being good at managing culture is being able to recognize what it is and so that's you know a lot of what shocked I ended up doing in prison which is you know it's leadership compared to leadership not prison compared to business and but a lot of what he did is easier to see it's easier to see in somebody else's culture how the mechanics work than in your own where you think of it as just so that's how we do things around here yeah so in looking at those things Diagnostics there are small things and there are big things I think one of the examples is you had in the book was a head of marketing at one of your companies was great at storytelling which is helpful in marketing but also it turns out he was lying so that's obviously a big one different kind of storytelling the one you just mentioned you're maybe taking somebody's for somebody's work is not as big of one how do you how you decide or how do you think about looking at major examples of culture with the major actions that everyone's going to pay attention to versus the small ones which may have outsized impact well look I mean I think that a lot of it comes back to okay who you are so on the one hand like so if you look at well whose Amazon Amazon want to be like they came out wanting to be we're gonna be the low price leader if you you never gonna have to comparison shop cuz always gonna be cheapest at Amazon so part of the culture necessarily was record waste money and they did all kinds of things to set that and so if you see somebody wasting money at Amazon that's a big deal Apple doesn't have that culture doesn't have that product positioning they're building the premium product they're building the most beautifully designed product and so look they spend a lot of money and if you waste money at Apple well you know that's probably not as big a cultural violation because it's not fundamental to the what they want to be in the strategy of the business so you you really have to start with okay who are we who do we want to be and then that there's something that takes you off of that even if it's little it's important you know here one of the things we want to be we want to be very respectful and empathetic to the entrepreneurial journey so here in a normal place if you're late for a meeting it's probably not that big a deal here if you're a late it's a very bad problem if it's with an entrepreneur because we do not want to be under any circumstance as disrespectful in that regard because that's off culture for us not for everybody and you have actually even created what you I think in the book you would call a shocking rule to demonstrate that if you're late for a meeting here with an entrepreneur you have to pay with the $10 you know it's funny because it's a little bit broad from Tom Coughlin who used to coach the New York Giants and he he had the saying if you're on time you're late he was fine you for being on time I hear that doesn't quite work as you know it's it's a pretty neat idea for a football team my knees make a little adjustment to make it work in venture capital and I think if I remember correctly book it was a thousand dollar fine if you were related yeah and people were furious they complain to New York Times so forth but it ended up setting the culture that want them to Super Bowls yeah let's come back to the Bushido the samurai code of the warrior one of the things that I thought was noteworthy and how you described it was just its longevity you know hundreds and hundreds of years what do you you know maybe talk a little bit about the the Bushido code for for the viewers but maybe talk also about why you think it would so long there's a lot that you know went into it lasting you know for so many years you know part of it was you know the fact that the code itself sat above the hierarchy so you had you know the samurai and you had lords and you had you know all these kinds of things but the code was above like when he came to the behavior of the samurai the code was above everything and because the code outlasts any person you know CEO goes maybe the culture change is on got captured by a Napoleon that changed the culture of Haiti but you know the samurai the code was always above everything and then that code was super meticulously constructed you know so it wasn't just the you know the elaboration of all the points it was how it was balanced so for example they were an honor culture but you know many many had were honor cultures but the reason for this is you know similar to in Jacques situation if you're threatening the center there's no uniform police or anything it's just you you're the samurai so if somebody insults you that could be a diagnostic that they're going to stab you in the head or cut your head off or whatever so insults were not tolerated in honor culture it got to the point where there was famous Serra summary story where a flea jumped on the back of a samurai and another guy said hey there's a flea on your back and the samurai cut his head off you say well that's really harsh and he said you know why'd you cut his head off you know he just there was a flea nerve accident I'm not an animal on that place and he just took it as an insult and so you can't just have that you know people cutting people's heads off or such you know small slights so they had another part of the culture this is super elaborate around politeness and politeness was really the best way to show love and appreciation for somebody else by you following strictly the rules of politeness be it how you bow or how you do serve tea or any kind of thing a very very intricate they train the kids on it I mean even now if you go to Japan like it's amazing how much more polite everybody is it just and how much more respected you feel so it really does work but then they had to you know design it so that that didn't go too far so they had this part of the politeness code which is without veracity politeness as an empty gesture so you it not only did you have to show respect you have to mean it and so that you know those kinds of elements really made it last a long time they all said great stories and um other elements to it but it's you know a very very well designed code alight like a lot of people disagree with some of the virtues that they had I don't think we should live in an honor culture today in that same way but that wasn't the point of the book the point of the book was what works in getting to cultural cohesion they had the system what was comprised of eight virtues as I correct interest I think what a core 14 core version I think one of the things that you believe 14 depending on what one of the things I thought you made really clear in the book are the examples of you have eight or fourteen virtues that make conflict with each other one of the ways that they helped resolve those conflicts is be very specific with examples of what you should do now some of those virtues are offsetting as you version so that kind of leads into my next question about cult cultures that go awry you know one of the cultures that you talked about in the book where they had a lot of different values whether they lived up to them or whether they were just words was separate from the fact that it seemed like one value was above all else competitiveness a company that valued competitiveness over anything would do anything that it took to win and so I wonder you talk about you know how do companies who have multiple different values that may compete with each other how do you make sure that one doesn't accidentally override the others yeah I think that you know the big in the place where Ober went astray and they think the mistake that's most often made on this is basically the ethical line so we need to make that wide wide evaluate ethics why I need to make the corner you know we need to win this deal we need to beat this competitor we need to hire this candidate we need to like there's some business imperative that's driving you you know something in your mission and your goals in your in your ethos that will if not if you don't make very explicit what the ethics are then you're gonna cross that line yeah and that's kind of what happened in uber where you know yet they were so good at being competitive that you know where that line was got very fuzzy and maybe and I had quite a few violations that's probably the the great counter example to this which I use in the book was to santa overture the leader of the Haitian Revolution and he did you know maybe the most important thing he did the most important rule he put in place in winning the only successful slave revolt in human history was this idea that his slave army went pillage and you go well okay they don't pillage that doesn't seem like that big a deal well this is a war over sugar and you have all the European superpowers the Spanish the British the French fighting for control of this sugar they're all basically paying their mercenary military forces through pillaging and The Perks the spoils of war so to speak but to Sam you know and gain this tremendous advantage by being very very explicit about not pillaging he outlawed pillaging and he said look we're fighting for liberty they're fighting for sugar we're fighting for liberty you can't achieve Liberty by taking people's Liberty so we're not going to do it and the stories of the time but we are just incredible where you see the reports of the Spanish army moving in you know setting the plantations on fire killing all the animals stealing all the stuff and then this slave army moves through they're half naked they're starving and they take they literally touch nothing and go right through and it was through that that that culture of Liberty that they actually gained the support these these you know African slaves of the white Europeans on the colony where they supported to science forces over the European armies which you know quite remarkable but it was the thing that really created cohesion around the loyalty of the army which was amazing the discipline of the army all came out of this idea that we're fighting for a higher purpose and so yes winning the war is important just like being competitive is important for a business but not as important as what we're fighting for and that you know that that ends up being a really I think important cultural lesson yeah I think you make the point in that regard that the why when you're talking about ethics is important that sounds like Toussaint did a great job in explaining the why we're fighting for freedom not trying to win the war trying to win our freedom exactly an octave one of our core values is integrity when we talk about it you know you don't talk about why do you have any value called integrity for obvious reasons I mean you would argue with that right but we say you know what we're trying to do is a decades-long vision our customers need to trust us for what we do for them and integrity is an integral part of that that's the why behind that one yeah well you know and there's a great story of that which is and the samurai has a great saying on ethics which is in ordinary times you can't even tell but when something happens all is revealed and that actually happened that octave there was a deal so look it makes sense for you know integrity honesty can you trust octa is a big element of what the business is about because hey if we've got all your credentials that's a heck of a problem if you can't trust us if we slip in any way against that promise of protecting your credentials and so early very early on the business when the business was not going as well as it is today and we were trying we were running up against the B round of fundraising which was the first round yeah you know after we invested and like the company was missing their quarters and so forth and really needed to make the quarter and there was a deal I think it was with Sony and the sales representative had promised a feature not that we were never planning on building but we weren't planning on building that fast and we had to decide okay we're gonna take that deal make the quarter and tell them when the feature was really coming or we were we gonna tell them and it ended up being really important to the way everybody behaved for the rest of the time at octa what Todd did was he said look we're gonna go ahead and miss the quarter and you know thankfully we were able to raise money from Khosla Ventures but it was right up against it because he said that now if you kind of fast-forward through it Octus history one thing that has distinguished the company is you know it's unbelievable lack of down time I think we went over four years without ever going down not even for maintenance I think the you know never you know never had any kind of serious breach whereas the competitor the start-up competitor I won't name them had a giant breach which kind of ended our competition with them but all of that kind of originated with this basic belief that if we couldn't be trusted we shouldn't even be in the game and that was more important than making a quarter and more important than competing and more important than raising the round was number one is we have to be trustworthy yeah you know to add to that story it wasn't just a deal that would have made the quarter for us it would have been the biggest deal in the company's history and talk about you know culture is what you do and everybody knows that right like because it was a big deal that's the other thing right everybody was paying attention what is Todd gonna do and so that's why it became extra important not as part of our lawyer we talked about that example all the time when in new hire orientation we talk about our culture values that story comes up all the time so yeah as we get close to wrapping up here I want to talk about something we mentioned before what you saw and you know the the value of making shocking rules and you know you talked a little bit about it how often can you use that you know you know the example that a 16 Z is shocking rules if enough partner's late to a founder they have to pay money and everybody knows that that's part of your guys's story but how often can you use that or how how how many seconds yeah like I think that won their hearts of design so you shouldn't underestimate that so you can just like pick an idea of something you want in the culture and then try and figure out a shot well like they it's not always that easy yeah and sometimes they bite you back I mean Facebook had a great one move fast and break things which you know people criticize it now but nobody was saying that when they ran past myspace when myspace had an invincible network effect in monopoly position you know Facebook out featured them probably ten to one that was move fast and break things it was one of the things that gave people permission to go fast and you know and not worry about the consequences because they had to kind of overtake myspace I was what they were trying to do now later on it didn't suit their needs and they had to change it but that just I think it's indicative of you know it's complex to write these kind rules and then it's even more complicated to write one that is going to endure for for a very long period of time so yeah I think typically organizations might have one or two things that's shocking you know Amazon had a couple one of the things they had was early on when you went to work there your desk was actually a door gonna held up by two by force so it's like yeah we're not spending any money that's like the and that's pretty shocking to go into work and see that you know one thing that they do that's also shocking I think if you weren't ready for it is you know there's no PowerPoint in meetings you've got to write this memo and so forth so that and it's just one of those things that goes like why are we doing it that way and then when you understand why then you learn what the culture is about and so you know I think you want to kind of focus that on you know that that particular technique you're probably not going to have more than a couple yeah but but it's powerful when you when you have the Netflix example of Reed Hastings keeps switching from DVDs to streaming and kicked all the the DVD execs out of the staff meeting even though they were 1% of the revenue that was you know and he really just need to needed to reset the culture around what that company was going to be yeah and it's very hard thing to do because if all your revenue is coming from here in the future it's the businesses on the other side you can't just tell people both streaming is important you got a show you mentioned with the Bushido code one of the reasons it was so long last thing is that it was above everything else it was more important than any one person do you think can you think of any companies where they have created a culture that has outlasted not just the founders maybe but the executives I mean so the one that really did four years in Silicon Valley was HP with the HP way now they lost it eventually but for for many years they're really meticulous with that and whatever and how it worked and the org structure supported it and and so forth and it was an amazing you know it had a tremendously long lasting impact on Silicon Valley until would be the other one where but they kind of passed it from Bob Noyce to Andy Grove and you know later Craig Barrett and you know it's probably you know faded from it what it once was but you know there are companies that do a good job I think that the only way it works in a company is if the CEO that follows the original CEO is as bought into those cultural ideas and you know that's why they do tend to change as opposed to having a code now HP had a very strong code and you know they drilled that code as did Intel and so is that an argument for companies who are successful how great cultures to promote successors from inside I think that generally tends to work better as a practice I think you know there's been a lot in the literature about that that you know I think boards tend to not want to do it because they want to you know go for a big name or this and then the other but I think that the history of it is that really successful successors do you come from the inside now there's a problem with that that's different which I wrote a piece called once and twos many years ago where oftentimes the person who is the number two in the company isn't the right person to take over and run the company yeah remember that piece well I want to come back to a question that I asked at the beginning but from a different angle why you wrote this book I I think it's really admirable and what you're doing with the proceeds from the book so wonder if you talked about that yeah so all the proceeds go to a combination of anti-recidivism and basically you know donating money to Haiti and rebuilding it and for different reasons so what I was very appreciative to both Jacques and gore and to Toussaint L'Ouverture for you know providing the core inspiration for the book and so it's just kind of a way of giving back to to their causes but you know particularly with anti-recidivism you know we've gotten to a culture in our country where we have kind of come to broadly feel it's ok to throw people away and what I mean by that and this isn't just people who go to prison but you know somebody says something on Twitter ten years ago and they can never be forgiven or somebody does something in their life 30 years ago and they can never be forgiven and there's you know whatever we're gonna keep doing documentaries on it and we're gonna ban them from talk on the Academy Awards or whatever and I think that like redemption ends up being a very important part of a culture because you know if you judge everybody by the worst thing that they ever did in their life you just lose a tremendous amount of capability and our prison system is you know one of the worst cases of that where somebody might do something when they're 17 years old because they were following their idiot friend and they land in prison and then that's it you know for them in our society and so I you know I think getting past that is really really important and a lot of the work that's being done by organizations like the anti-recidivism coalition and cut 50 or helping with that a lot so that's that's the reason behind the I love it well I don't know if you know this but I've been at octa for a long time now and the reason I found about an ox's from your writing you wrote a blog post announcing your very first investment I read your blog post I was reading all of your stuff and got introduced talked in that way so coming full circle you know I really loved reading the book a line that stuck with me if I could if I remember it correctly is this book helps you do the things you need to do so you can be who you want to be and I certainly made an impact on me so I want to say thanks write in the book and thanks for taking the time with us here okay thank you thank you for building an awesome company yeah thanks thank you you

Channel: Okta

Views: 5,601

Rating: 4.8736844 out of 5

Keywords: Oktane, Okta, Virtual conference, Remote Event, Identity Management, Zero Trust Security, Cloud Identity, Cybersecurity, Digital Security, Leadership + Industry, Oktane20 Live

Id: 8sABFA-zeM4

Length: 33min 6sec (1986 seconds)

Published: Mon Apr 06 2020