Culture and Revolution from Andreessen Horowitz

all right how's everybody doing so I'm going to talk about culture and revolution today and let's start with culture so culture is one of those things where when I was a an entrepreneur I was then I first started out I asked everybody smart I knew had run a company or was a venture capitalist or somebody you know like what did I need to focus on from like a company building management perspective and like I like got a wide variety of answers and a lot of BC's with those you know higher ed players and that kind of thing it was always great advice because I was going to hire a bunch of idiots and it cleared it right up for me but the advice that I got from the guys who really knew how to build companies was like culture is really important they were also culture you got to focus on the culture bin and I'd be okay do you have anything beyond the platitude or is like not just it like culture like could you explain to me what do you mean by culture even and it was always very difficult for them to do that and then as I became a venture capitalist and I work with companies and work with CEOs this is the main thing that people don't even know where to begin they get very confused on and even for larger really successful companies who can get a get away from you you know and so I thought this would be a really good thing to talk about it turns out that the best way to understand culture is through significant revolution okay so first of all what is culture this is not culture so dogs at work yoga organic food that's not culture perks difference between culture and parks this is not about perks this isn't culture either corporate above and beyond dependent integrity these are could be aspects of culture but like you create corporate values and you put them on a wall like that's not going to get you a culture and this is not a talk about corporate values and revolution that's about culture so what is culture this is a picture of me in the middle you might recognize me on the left to me is Admiral John Richardson a friend of mine who runs the Navy and when I say he runs a navy this isn't the Secretary of the Navy the appointee this is a CNO the guy who spent 10 years under water running nuclear subs the guy who really runs the Navy the guy who came up that way and then the guy on my right is my friend Shaka st. goar who spent 19 years in prison and while in prison ran one of the largest I'll call it prison their organizations and we got together I thought I'd get them together to talk about culture because they were two of the best guys I knew with insights about running organizations and if you think that was just my crazy idea you can see the Admirals holding Jacques book so like they had a lot in common we talked about culture and the reason I wanted to talk to them and say both have organizations where culture really matters because if somebody comes into the Navy and they don't become part of the culture and they don't do things in the way you need to do them in the Navy they die and that's the same thing in prison you come into prison you don't do things the right way you die and it's not that funny if you're in prison but anyway and so in talking to them and Admiral Richardson went through look you know it starts with who comes into the organization and he pointed out like we have an advantage because we're a volunteer service we're a volunteer Navy and it turns out that nearly half of our people actually come from people who were also in the Navy or in somewhere in the Armed Forces and so they're already into the culture as soon as we get them and he said I'll take it even further it's like in the Navy SEALs program anybody can try out and go through the training and there's a very high failure rate and I know who's going to fail with 95% accuracy just based on a psychological exam that we give them going in it's not a physical thing it's a physical test but it's your psychology that determines it are you ready for that culture on the other side talking to shock cause shock and says you know one thing that really shaped the culture is the decisions that you make said well give me example that he said well look if a guy comes in and steals one of my guys toothpaste what I do there that decision is going to matter a lot and I'm like well if he feels the toothpaste he's just very concerned with dental hygiene like aren't you going to let him go on that like he wants clean teeth with it you know come on man he's like no no he's like you don't steal two-faced in prison because you care about your teeth that's a diagnostic that's to determine if I can rape you if I can kill you if I can hurt you or anybody associated with you that's a diagnostic so how I react that determines the safety of all my guys so the easy thing to do is kill the guy not easy but like that's the easy decision right like you kill them you protect your crew but I make that decision to be that violent my culture is that violent everybody making their own decision is just that violent so this is how culture grows and something when we talk about culture these are the things we're talking about we're talking about important decisions we're talking about how you recruit how you run the organization decisions you make and in a company it ends up manifesting itself in a lot of different ways but what it really comes down to is it is the collective behavior of your organization this is who you are you know it's funny to Rica CEOs it go well stuff not us it's like well that's how you act it's what you do it's not us it is you it's a it's your collective behavior it's your culture that creates that environment and it's what you do it's what your people do when you're not giving them a direction which is guess what anybody's run anything 99% of the time you're not telling people what to do they're doing it on their own they're making their own decisions what do they do when you're not looking well you do what your way of doing things is and if you don't make that explicit it will just create itself it'll just grow that way it'll just do those things people want to harass each other they'll harass each other you know people want to lie to customers they'll lie to customers unless you said it it'll just be what it is so some examples of how this shows up in a company because your company get back to people when they come or do they just like drop them on the floor because like we're great like we all need to call you back are you open to new ideas is data more important or is intuition more important does the job title impact is right and wrong do you show up on time or there's people have our for your meetings this is all your culture do you use your own products describe them and should matter it's okay to take risk it's watching what you spend important one empty box do you even tell the truth because you're the CEO your goal you one thing and I'll tell you something else you think that doesn't run downhill you don't think that that doesn't matter and like everybody from your HR person to your managers feel totally comfortable just making stuff up well they will if that's the culture you set so I know if you were like me and you're an entrepreneur you're going ok great this is great then you're telling us all about culture and how important it is but guess what like I already missed the TAFTA stuff I've made a lot of decisions I even know that what I was getting into so like is it possible to change and the good news as it is and I'm going to take you through it a historical example and this brings me to Tucson and the entire history of humanity there's been exactly one successful slave revolution one now think about that flavors been around long time basically all of written history it's endorsed by the Bible and the Koran if you don't believe me you don't know your Bible because it's not only endorsed they have like special rules about it in 1600 I think nearly half the world's population was enslaved and yet there's never been a successful revolution or there's only been one so why plenty of motivation like why didn't the slaves of the Han Dynasty rise up and win why don't the Gauls rise up and defeat the Romans when the Christians rise up and take down the Ottoman Empire why didn't that Turner like fail so fast like what is it that stops all stop every revolution but one from winning culture turns out slave culture is absolutely detrimental to winning a revolution what is it about slave culture well one when you're a slave your life isn't worth much the only thing you at your relationships are nothing your family can be taken away from you at any point you can't invest in your future and then you're not even generally allowed to like learn to read or anything so what does that mean well you have then a culture that's got real challenges you've got low trust you've got no long-term planning the population is generally ignorant and superstitious and there's very low loyalty and none of this none of this is conducive to winning a war so how did an ex-slave the person is a flake most of his life like well it is middle-aged reprogram his culture reprogram himself reprogram an entire slave culture and lead the only successful slave revolution ever like how did that happen and a lot of you guys are probably engineers and you're going well like maybe the circumstances of that slavery weren't as bad as the slavery we've read about so I thought I would read you a little bit about the slavery that you thought came up in whipping was interrupted in order to pass a piece of hot wood on the buttocks of the victim salt pepper citron cinders aloes and hot ashes were poured on bleeding wounds mutilations were common limbs ears and sometimes private parts to deprive them of the pleasures which they could indulge in without expense their masters poured burning wax on their arms hands and shoulders emptied boiling cane sugar over their heads brendham alive roasted them on slow fires fill them with gunpowder and blew them up with a match nothing to go on anymore it's hard to read this is the worst slavery this is some of the worst slave conditions in the history of humankind so bad I'll quantify it u.s. slavery is known as a pretty brutal form of slavery during the slave trade a million slaves were brought to the u.s. at the end of slavery there were 4 million slaves people had babies the population grew in the Caribbean 2 million slaves were brought during the course of slavery at the end of slavery in the Caribbean seven hundred thousand slaves were left that's how many people got killed that's how bad it was that's how brutal it was this was the environment in which he changed the culture but it went beyond that the advantages of being white were so obvious that race prejudiced against Negroes permeated the minds of the mulattos who so bitterly represented the same thing from the whites black slaves and mulattos hated each other the man of color who was nearly white despised the man of color who is only half white who in turn despised a man of color was only a quarter white and so on through the shades this is the environment we're talking about it was not an easy environment to change the culture beyond that in the region there were many previous attempts I'll talk quickly about two of them the first was led by gentleman by name by Francois McIndoe 1758 now Mackin Dahl was a super charismatic guy tall much taller than Tucson very good-looking great warrior but not at all focused on culture so not focused on culture and he would do the whole thing they would win they rape they pillage and then if somebody did something wrong to him he would poison him like some one of his own guys he would poison his own guys if stated something he didn't like now think about how deceptive is that is like not confront him not deal with him poison them some people no corporate cultures like that now the way this ended for him was his own people turn him over to slave masters who bring him alive and so he was actually defeated by the culture he set the second example guy by the name of Vincent oj he tried to run the revolution to finesse it so he said look we're going to have a revolution to get equal rights for free black people but we're not going to end slavery and that way maybe I can get enough white people supporting me that I can you know kind of split the baby I don't have to take an ethical stand enough to take a moral stand I'll just kind of try and walk down the middle and it turned out white people didn't really vibe with that so that didn't work I'm about to get into how he actually did it but I want to set the tone because I think this is really important so if you go to 1797 at this point Toussaint has already basically running Haiti and this guy vincent de leblanc leblanc was lobbying the French government and because he's running two thoughts running Haiti but still a French colony and he's already free displays and this guy's like look I need to lobby the government because we can't let black people run this colony like that's crazy and he writes basically the most racist attack you could ever imagine and he's like these guys are ignorant and brutish Negros they're savages you can have savages running Island they're going to destroy the economy like it's going to be the end like we're going to lose a colony what are you doing guys and sutala spots was key because it's indicative of all the things that he did he said look black and out lazy and ignorant savages slavery makes him so he he separated the color from the culture the culture was driving the behavior and then he goes on to show the Haitian Revolution has been less brutal and less savaged when the French Revolution was the economy is actually booming he proved that it was a culture so how did he change the culture there four keys to how he changed or four keys that I'm going to highlight there were probably a lot more keys in that so the first is he kept what worked we'll get into that a second he created very shocking roles that caused people to change their behavior the third was he incorporated people from other cultures and adopted their way of doing things and then finally his decisions demonstrated his priorities so first keeping what works so when they started the revolution she saw what everybody wanted to join he's a very charismatic guy very well-connected guy he knew everybody they all knew he was super smart and so everybody wanted to join in said look I'm willing to take a small group at first because the tactics that I'm going to use we can win with just a small group of people because we're going to introduce a communication technology that the opposition doesn't have and that technology came from one of the strengths of slave culture which is music and so what to Todd did was he set up particularly the women on the outside and had them sing certain songs that all his guys knew with encoded with the exact maneuvers and attacks that he wanted them to do so by doing that he had long-range communication he was fighting the British in the Spanish early on and they were like passing messages walking stuff around lining up so they had to be all together in the middle as a picture depicts because they didn't have any way of communicating with each other otherwise whereas Assad could he had more advanced technology based out of slave culture second thing he did is he created shocking rules and shocking rules like particularly when you get into a company end up being the important thing because people have to question they have to ask themselves why does this rule even exist in order to change their behavior and so the really crazy shocking rule that he created was officers cannot cheat on their wives and remember like everybody is raping and pillaging in these days like you win you get to rape and pillage so how do you go from that to like I'm not even allowed to cheat on my wife and the reason he did that is because remember one of the big problems of slavery is there's no loyalty because you're in an environment where tomorrow didn't matter and so how do you build loyalty well you say look you gave your word when you got married if you're not keeping that word how can we trust you to keep any word you can't be part of this if you can't keep your word and he famously said I'd rather relinquish my command than break my word and so by saying look officers cannot be officers if they cheat on their wives he made it clear to everybody in his organization that keeping your word that was one of our corporate values that was part of our culture you couldn't play in this culture without doing that next thing he did was incorporate other cultures and this was very unusual because you have to remember he's running a slave army you know he's been oppressed they you know horrible oppression by the white people on the island and he decides and although he was a slave she's not knew how to read and not only didn't know how to read but he had read the complete works of Julius Caesar and one of the things he got from Caesar was that when Caesar built the Roman Empire he won't kill the people he conquered so would he go in the conquering area he believed them in place and the reason he loved them in places they were going to be part of the Empire and he needed somebody who knew that culture running that region so he did not what we did when we went into Iraq and kind of cut the top off of the country and then it went crazy and chaos he knew but it was funny Julius Caesar knew that we had no to do that but he knew not to do that he knew to leave those guys in place so that they could succeed and go on to saw also wanted to do something culturally but he didn't want to preserve the culture he wanted to change his culture and so when he defeated the Spanish or just defeated the British what he did was he incorporated them and made those guys officers in his army in that moved the culture much much faster than otherwise would have moved because they had much more advanced cultures they came from cultures who had a lot of the elements that he needed to build a winning army and then finally make decisions to demonstrate priorities so big decision he had well he abolished his slavery he kind of defeats his enemies what are you going to do with the slave masters that's a big thing right like when what would your instinct be kill those guys right but what he did was he said look we need them for the economy because they're the ones who know how to run these plantations so we're not only not going to kill them we're going to say you can't have slaves but you have to pay your labor but we'll lower your taxes to make that possible so he completely changed he just removed the past and said we're going forward together this is going to be one country so what were the results of this first result something called the teutonic clause so in 1799 just to demonstrate how powerful this in 1799 the French and us were in something that was known as the quasi war they didn't called the war said be fake news the quasi war they're just shooting each other over stupid stuff and as part of that the u.s. put an embargo on all the French colonies including Haiti now Haiti was already kind of breaking from Frandsen Toussaint needed that trade in order to basically continue the prosperity of the island so he sends a white diplomat to the United States the white diplomat meets with John Adams president John Adams Timothy Pickering the secretary of state and basically convinces them to exempt only Haiti and they had to do it in the secret language because they didn't want France to get mad but it was so transparent that in the u.s. in the Congress and all the documentation they just call it the Toussaint Klaus and you have to understand he brokered this deal this is a black ex-slave cutting a deal with the United States who did outlaw slavery for another 65 years in 1799 and there's a footnote to that Timothy Pickering cents Tucson a note telling him this and signed it your obedient servant which is the way they signed a lot of stuff but imagine that the United States signing that to an ex-slave I'm your servant how about that that's a result of culture so gently successful slave revolt in human history creates a booming economy in a world-class culture under cute on Haiti had more expert income the United States so super successful as the country he ended up he defeated the Spanish the French and ultimately they defeated Napoleon actually after Toussaint captured and his successor abandoned the cultural thing once they defeated Napoleon he killed all the white people in Haiti and the economy fell apart and all those things that you would expect so culture really mattered ok great that was a lot how does it apply to me what about me man weather what is this so keep what works so some of you guys know Steve Jobs Steve Jobs came back to Apple when Steve Jobs came back to Apple they were about three weeks away from bankruptcy and the conventional wisdom crossed the board everybody said this every financial analyst every industry analyst the problem with Apple is they need to be more like Microsoft anybody Ellen offe would remember this you have to be more like mark except you've got a separate Mac OS off of the Mac and you've got to get clone makers to make you know it and you got to go into the operating system market because PC economics is wiped it out and like that's what you have to do and actually his predecessor Jobs predecessor Gil Amelio was doing just that jobs consent he so it's like what are you talking about that's not who we are let me tell you what we're good at we're good at building integrated stuff and so not only am I going to kill all the clone manufacturers but I'm going to make it more vertical I'm going to build more hardware I'm going to add a music player I'm going to build stores I'm going to go completely vertical because that's what we're good at design we're good at the end-to-end experience that's our culture so you have to keep what's work you want to change the culture but you got to keep what's good about your culture second example create shocking roles so Mark Zuckerberg is this great rule move fast and break things now he could have said we are innovative we've got a company value of innovation put that on the wall innovative they know what everybody would like that and go oh yeah we're innovative but you go move fast and break things you're like what plus break things you want me to break things how's an engineer I don't fix things or break things why you have that rule that's the key if you get your employees asking themselves why are we doing it this way then they're going to think about that answer when it comes and the answer is innovation is even more important than like breaking things getting into trouble quality at times even anybody who is a developer on Facebook knows this just kidding is it geez I love Facebook you guys some of you had some Facebook developers here but move fast and break things creates that shock value that actually makes them an innovative culture and if you look at them today like one of the things they do is they move fast like the innovation the new products coming out of Facebook is astounding because that was their culture incorporating outside leadership this is a funny one Google like had they built Google Apps like what like five years before Microsoft really got going with office 365 and Microsoft ran right by him right by him why because there was no enterprise culture in Google none none nobody did Steve Ballmer used to go to see like CIOs and he'd go are you going to buy from me or from Google well why don't you see if Larry Page will come visit you gets a Larry Page never visited any of those guys because that wasn't their culture their culture was an enterprise so they went out and got Diane Greene and Diane great one of the great enterprise people I work but this is like an impossible thing to do because she was on the board alphabet she still is on the board of alphabet how do you take a board member and like put him under sundar under Google under you know Larry and have her run this well have to be very convincing and you have to be committed to it and the final thing you have to make decisions to demonstrate priorities so this is Reed Hastings CEO of Netflix and this is without our tech summit and we're asking Reed mark my partner Marcus a securities like Reed like to start out in the DVD delivery businesslike and then you went to streaming like how did you make that transition how did you do it culturally how did that happen and Reed said you know it's interesting because we started out like you know the metaphor was like it was a network you know the DVD delivery thing is a network it was high bandwidth like we could deliver a lot of big payload but it was really high latency like three days so no networking gigs like not three milliseconds three days so that was the network he said and then we knew streaming was going to happen at some point we just didn't know when he said but we really wanted to be a first-class streaming company we could you that if we were totally focused on like DVD delivery logistics he said well how did you handle that and basically Reed said well it all happened one day and on that day and DVDs was a hundred percent of our revenue and we had a whole like giant team running that business and one day I said you guys aren't allowed to come to staff meeting anymore because it was a really hard day they were really sad can you imagine that like the team running all of your revenue is no longer allowed in the executive staff meeting where you're talking about the future and the strategy of the company that's an extreme decision why would you make that well if you're really going to be number one in streaming and you're going to beat all of the people every startup that's going into it you've got to make it really clear to the company that's the future we're not messing around here and he did just that so look I know that culture sounds abstract and I know it sounds hard but I'm telling you just like the old guys told me it's really important when you build a company there's almost nothing that's more important than culture and if this guy could overcome being a slave for 40 years and completely change a slave culture and defeat the French the British Emma Spanish and free displays of Haiti 65 years before they were freed the United States then you can change your company and make it great so thank you [Applause]

Channel: V Weng

Views: 1,174

Rating: 5 out of 5

Keywords: Andreessen Horowitz, a16z, Culture

Id: 8Ai5_9GeSgw

Length: 29min 13sec (1753 seconds)

Published: Sun Mar 19 2017