The worst thing that you do as a leader is you hesitate on the next decision. The thing that causes you to hesitate is both decisions are horrible. Probably one of my bigger ones on that was we went public with $2 million in trailing 12 months revenue at 18 months old. That's obviously a bad idea. But the truth of it was the alternative was going bankrupt. And that's a worse idea.

It's very difficult and painful to be a CEO, to be a founder. In spite of that, so many people want to start companies.

The psychological muscle you have to build to be a great leader is to be able to look in the abyss and go, "Okay, that way is slightly better. We're going to go that way." If everybody agrees with the decision, then you didn't add any value cuz they would have done that without you. So, the only value you ever add is when you make a decision that most people don't like.

You are famous for writing one of the most popular pieces of literature for product managers.

What I was trying to get out in "Good Product Manager, Bad Product Manager" was the job is fundamentally a leadership job and it's a tricky leadership job because nobody is actually reporting to you.

There's always this kind of sense that the PM is not the mini CEO. How dare you call yourself that? I actually think that's exactly what the PM is.

It doesn't matter if you write a good spec or you have a good interview or you do this or do that. What matters is that the product wins.

Today my guest is Ben Horowitz. Ben is the Z in a16z, the world's largest venture capital firm with over $46 billion in committed capital. They're investors in OpenAI, Cursor, Anduril, Databricks, Figma, basically every generational tech company. He's also the author of two New York Times bestselling books, The Hard Thing About Hard Things and What You Do Is Who You Are.

Ben is endlessly fascinating. He started a rap group when he was younger. He started his career as a product manager and wrote the now famous "Good Product Manager, Bad Product Manager" piece. In our wide-ranging conversation, we cover a ton of ground and Ben shares stories and insights that he's never shared anywhere else. A huge thank you to Shaka Senghor, Ali Ghodsi, and Adam Neumann for suggesting topics for this conversation.

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Ben, thank you so much for being here and welcome to the podcast.

All right. Thank you, Lenny. Excited to be here.

I'm even more excited to have you here. I want to start with a question that a close friend of yours suggested I ask you, Shaka Senghor. So Shaka, he's like, "We could do an hour just on how interesting this guy is and the things he's done."

Three hours on Joe Rogan.

So we're not gonna do that just to give a glimpse. He was in prison for 19 years. He was in solitary for seven years. He led a huge prison gang. You wrote about him in your book as a great exemplar of great culture in the prison gang that he ran. So interesting. But something that he learned from you that he told me I need to ask you about is about success and how to be successful and how it's not what people think. And he said that you learned this lesson from a pilot. What is that story? What is that lesson?

Well, it's kind of... I mean I would say it's a long life lesson, but the pilot story is... I actually ask people silly questions sometimes when I meet them. And so I met this gentleman who was a pilot and it was right around the time JFK Jr. crashed his airplane and ultimately died. And I asked him, I was like, "You know, like what happened?" Because there's always the story in the press—and I know this from them writing about me or anything—it's always what's the best narrative, not what's true. So you can never actually find out what happened, you just find like the best story version of what happened.

And the story in the press was all about, "Oh, he wasn't trained on instruments, instrumentation was flying that night." And I wanted to know, was that right? And the pilot said, "Well, really it's like all plane crashes are a series of bad decisions. And none of the decisions by themselves is that bad, but when you add them up, it's bad." So the first decision was he needed to get wherever he was going and that was the priority. And in flying, that can't ever be the priority because there are conditions, there are things that happen.

And then the second one was, well, his timing of when the sun would go down was wrong. So he thought he'd be flying in sunlight and he wasn't. And then, once he got up there, when the plane was going down, kind of making it go up was a bad decision because he was upside down. So then I can't remember all the things, but this guy had like 17 steps, 17 bad decisions in a row.

And the big thing for me that I felt was really true is, you know, one decision leads to another. And so if you can break... if psychologically you can take the sunk cost, then that gets you out of a lot of bad paths. And then a little good decision may be difficult but you have to believe it's going to lead to the next one. And a lot of success is about that. You know, it's a small thing, a small thing that's hard to do that doesn't seem to have a high impact. But it leads to the next small hard-to-do thing and then eventually you get an outcome. So that was kind of the concept.

So the lesson there is just success is just a bunch of little things. It's not this like, "Well I got here and a big thing."

If somebody were to write a story about me, they would be like, "Then Ben did this really smart thing and blah blah blah." You know, happy ending. But it really wasn't like that. I don't think it's like that for you or anybody. And you know, I spent a lot of time with Shaka on how... because it's always your own psychology that gets you.

And one of the most insightful things he said to me is... most people who are in solitary for seven years, that's it. You're insane, you're never coming back from that. It's just an impossible thing. But if you study his story, he actually kind of really was massively self-improved coming out of solitary. And he wouldn't recommend that for anybody, just to be clear, but what it was is he changed. In solitary, he was able to change a big set of beliefs that he had about himself that kind of got him out of that.

And the thing that his conclusion from it, which I thought was really interesting, he's like, "Look, I was in prison for 19 years. I was in solitary for seven. I come out. I can't rent an apartment. I can't vote. I can't get a gun. I can't do... like no rights. None of that was anything compared to what I did to myself."

And I think that's very true for CEOs in general and people in general. Is that all the things that you perceive that are happening to you that are bad—be it the system's against you or somebody undercut you or racism or sexism or this or that—is very small compared to... like it means a lot if you believe it. If you believe what people say about you, if you believe what they did to you, then that destroys you. But if you go like, "That's not me," you can overcome almost anything. And he's got a new book out on that anyway that I think is very good because I say more than anything that's the key to success.

Something you... it's like if you look at all the writing you've done, it's essentially about the struggle and pain and suffering of being a CEO. You know, your first book, The Hard Thing About Hard Things. There's a lot of talk these days about just how important struggle is and how valuable it is to go through struggle. Jensen's big on this, you know, he talks a lot about just you have to go through pain and suffering to be a great leader.

Yeah. You don't really have a choice, you know. That's true.

There's something that I saw you share that I love, which is running towards fear versus running away from fear. Something that you tell all your leaders to work on. Easy to hear, hard to do. We don't like doing things that are scary. Running towards things that are scary. Why is this so important? Why is this something people need to learn to do?

Well, so the biggest mistake that you made there... the worst thing that you do as a leader—there's things in your control and there's things out of your control—and hesitation is generally the most destructive. And I can go through all the ways that it's destructive but it's extremely bad. And the thing that causes you to hesitate is both decisions are horrible. Right? Like there is... it's not business school where you're going through a case study and "if you had done that then the company would have gone this way but if you had done that it's a great success." That's not actually what happens to you as CEO.

What happens to you as CEO, it's like, "Okay, if we re-architect... you know this product, the architecture is not actually going to get us to where we need to go. I kind of know that. But if we re-architect it, like we're gonna probably miss all the features, miss the quarter, have trouble raising money, you know, etc., etc. So like that's really bad. And then not re-architecting is really bad. And so I'm just going to try and avoid this subject because I don't even want to deal with either of those." And that's the worst thing.

Because if action is the better choice, then that's good. And then if you don't make an explicit decision, then the whole company's going to get nervous because they know that the architecture is whack and you got to fix it. And you know, like probably one of my bigger ones on that was we went public with $2 million in trailing 12 months revenue at 18 months old. Right? That's obviously a bad idea. I mean, like there's no question that was a bad idea. But the truth of it was the alternative—because of where the private markets were—was going bankrupt and that's a worse idea. And if you look at that time, March of 2001 when we went public, you just look at the number of CEOs that hesitated on that and didn't do it and went bankrupt. It's a lot.

And so that... getting good at making a decision that everybody's going to go, "Wow, that was insane. Ben, like you went..." Like the Wall Street Journal wrote a whole long story about how stupid I was. And then Business Week wrote a story called "The IPO from Hell." That was the name of our idea, "The IPO from Hell," which was accurate in a sense. But so like that's really bad, but it wasn't as bad. And this is why it's so scary to make that decision because you know that's going to happen. I knew those stories would get written. Like there was no question.

And yeah, and that's the kind of muscle. So if you think about like the psychological muscle you have to build to be a great leader is to be able to like look in the abyss and go, "Okay, that way is slightly better. We're going to go that way." It's very hard to do. I would say it's a thing people struggle with. And it can be something like, "Should I fire the head of sales? I don't want to have that conversation. And then I'll have to replace him. And then like there's going to be a bad PR story and and and..." And you can quickly calculate all the bad stuff that's going to happen if you do it. But if you don't do it, that's probably going to be much worse. And you know, kind of that's why you have to run towards the pain and darkness.

What is the advice you share with founders? Because as you said, it's very hard to do this. Just like what helps them actually get better at this? Is it just Ben being by their side telling them this is how it is? Is there anything else you could...?

No, no, no. Like I would say this is one where... you know I can't really coach you to be good at this. I can point it out and so that you recognize that you were slow or whatever. But it's kind of like football. You know, you have a really fast great athlete, but if they don't trust their eyes, if they don't run to the ball when they see it, if they think, "Oh, maybe that was a fake," then they're that step slower and then they'll never be as good. And CEOs are like that. If you don't trust what you see and you don't run at it, then like you're just not going to be good.

And it's hard to get CEOs not to hesitate. But look, one thing that does help is they look at it and I look at it and I kind of confirm, "No, that that is as it appears." And sometimes they're afraid of the conversation. So that one I can help with. So a CEO might be afraid, like they want to do something but they don't know how to say it. They don't know how to have the conversation with the employee. So I can walk them through that.

I had an instance where the CEO said, "Hey, you know, Ben, I need your help. My CTO, he's an asshole." And I was like, "Okay, great. But you're not going to fire him because I know he's a good CTO. Or are you asking me should you fire him?" He said, "No, no, I don't want to fire him." And I was like, "So you're asking me what to do because you don't know how to have that conversation with him about being an asshole without him quitting? Like, that's what you're saying." And he goes, "Yeah, that's the problem."

And so I go, "Well, like why is he an asshole?" And he says, "Well, he's an asshole because the other day he made like a very junior young woman in our finance organization cry." And I was like, "Oh, that's kind of... Yeah, I got you." I said, "Look, this is what I would say to him. I'd sit him down and I would say: Look, you're a really good Director of Engineering because you do a great job of managing the team, get the products out, all that. But like you're not really a CTO. Because to be a CTO, you have to be effective with other parts of the organization. You can't just be effective only with engineering. And making somebody cry... she's never going to do anything you want. You lost all effectiveness with all of finance by doing that."

"And so if you want to get good at that, I'll help you. I'll work with you on it. But if you don't, I'm going to have to hire a CTO at some point because like obviously I need that." And then he's like, "Oh, okay. I can have that conversation." You know, I can't have the conversation that "Hey, you're an asshole" because I don't want them to quit. But I can have the conversation that's more specific. And a lot of getting people not to hesitate is just getting them over that. And I would say early in a CEO's career, a lot of it is just not knowing how to have the conversation.

There's also I imagine an element of "I just want to be liked. I don't want people to hate me." You have this great line that you want to be liked and respected in the long run, not the short run.

Yeah. Yeah. That's tricky because... so by the way, I have to deal with this in the firm too. You know, people want to be entrepreneur friendly. I'm like, "No, it's not friendly. Be respectful, but you got to be able to tell them the truth in a way that you probably don't tell most of your friends the truth." Because your friend, you know... look, anthropologically we want people to like us. Like it's just so that, you know, they don't throw us to the lion or whatever. So you say tell people what they want to hear. But in dealing in a company level and in a context of you're on the board of somebody's company, you got to be able to tell them what they don't want to hear. That's the most important thing you're going to say. And yes, they're not going to like it when you say it. There's no question. But over time, like it could save the company.

And all the most important things I said are things that I've said to CEOs that they did not want to hear. And look, that's what leadership is about. It's making... If everybody agrees with the decision then you didn't add any value because they would have done that without you. So the only value you ever add is when you make a decision that most people don't like. And that's where leadership comes in because that's where it's got to get to.

And you know that's a thing that takes practice. I think when Jensen talks about like you got to get to near death to get yourself to do that, that's true. You know it's hard to build that if everything's going great. And I would say like the CEOs who kind of had an easy run of it for their... like let's say they just launch a product that's an instant hit. It's very hard for them to develop that muscle compared to the ones that built a company like Jensen where he like gutted it out for multiple decades before they had big success.

Clearly it's very difficult and painful to be a CEO, to be a founder. In spite of that so many people want to start companies, so many people dream of having their own company. Who is not right to start a company? Like what advice do you share with folks that are thinking about starting a company that may not understand just what they're about to get into?

Yeah. So, it's funny. So, there's a couple things. You know, John Reed, who was the CEO of Citigroup when I started as CEO, said to me something I never forget. He said, "Ben, the only reason to start a company is because you have an irrational desire to do so, because it's not worth the money." And you know, I was like, "Wow, he didn't even quantify how much money." And this guy's running Citi, so he's a very numbers banking guy. And he didn't quantify it. And I remember when we sold Loudcloud for $1.6 billion, I remember thinking, "Wow, that wasn't worth the money."

So I think if you're doing it for the money, that's a very bad reason and it'll be extremely difficult to get to an outcome. You really have to have an irrational desire to do something larger than yourself to kind of improve the world in some way. That somehow that is your purpose. And if you don't feel that, then you'll never get through it. It just is too many bad things happen along the way.

So then how do you think of founders that are kind of looking around for ideas that kind of brainstorm, that look for, you know, market opportunities versus come from "I have this mission I got to do this thing in the world"?

If you have a... you know, my business partner Marc always talks about that. So like if you have a product that forces you to build a company, that is a great case of it. Right? Like okay you build something and the world wants it and you need a company to deliver it. That's going to... you already have the right product and so that's very helpful.

I think there are cases of people... I think Hewlett-Packard was kind of built that way, that they're like, "Okay, like we got to build technology." You know, was that abstract? "We got to build some technology for the world." And then they started with, "Well, like what do you need?" They called it the "next bench" thing. What does the engineer sitting next to me need? The next engineer on the bench. That was kind of how they define the first set of problems. So it can work the other way.

But like I think the thing that is in common is it's just a very abstract idea that like you have to build something that's going to be important, that is going to... you know, people are going to like working there, people are going to benefit from the products. Like you have to have some like weird concept other than "Oh, this is going to be successful and I'm going to make a lot of money." I think that's... I think you're way better off taking Zuck's offer at Meta and just doing that. Like that's a way better deal.

Along these lines, something else Shaka suggested to ask you about. Apparently, there's a story where the CEO of Databricks asked you for $200,000 in the early days and you said no. And it's not because you didn't want to invest, it was more about helping him think bigger. What happened there?

Uh, so there were six of them. There were six PhD students and Ion Stoica who is their professor. And Ion is a super genius. But you know when I met with them, they were like, "You know, we need to raise $200,000." And I knew at the time that what they had was this thing called Spark. And they had the competitor was something called Hadoop. And Hadoop had very well-funded companies already running towards it. And Spark was open source, so like the clock was ticking.

And you know, and I think they didn't quite know what they had. But I... and then there's also a thing always—although I wouldn't say Ion has this mentality—but professors in general, like it's a pretty big win if you start a company and you make $50 million. Like you're a hero on campus. Like that's a pretty cool thing to have done. And so I'm always a little nervous about kind of a company that comes out of academia thinking too small anyway.

And so I said, "Look, I'm not going to write you a check for $200,000. I'll write you a check for $10 million. Because like this company, you need to build a company. You need to really go for it if you're going to do this. Otherwise, like you guys should stay in school." And they were all graduating right then. So that was kind of that.

And Ali... Ali actually was VP of Engineering at the time. And it was a while, you know, before I made him CEO. And that was very good luck on my part because I had no idea that they had a guy that good inside the company who could become CEO when I invested. Like that was just God smiled on me and gave me that one.

Um, so speaking of Ali, I actually asked him what to ask you about. And he immediately shared this story. I don't know if you remember this, in your first one-on-one with him after you made him a CEO. He was struggling with a bunch of low performers because he was coming in to lead the company. And he was trying to turn things around, trying to coach them, trying to level them up. And your advice to him was, quote, "You don't make people great. You find people that make you great, that make the company great, that you learn from, not the other way around." And there's something that he called managerial leverage. What is that all about? What's the lesson there?

Oh yeah. Yeah. So like understand he had just become CEO. So I was teaching him... he had been VP of Engineering and CEO is different. And I'll get into why and what I mean by leverage. So, I actually wrote a post about this with a Lil Wayne quote where I think the quote was, "The truth is hard to swallow and hard to say too, but I graduated from that. Now I hate school." And that was always my feeling about this particular idea.

Look, if you're VP of Engineering, you can develop people. You can teach them to be better engineers. You can teach them to be better engineering managers. Like that's very workable. But if you're a CEO, like what do you know about being CFO? Like what do you know about being VP of HR? What do you know about any of these jobs? You know, except maybe VP of Engineering, right? And so the idea that you're going to take somebody who doesn't... who isn't world class at marketing and make them world class, and you don't know anything about marketing, is a dumb idea. It just doesn't work.

Um, and then the company can't afford for you to be spending time on that because they need you to make very high quality, fast decisions. They need you to set the direction for the company and they need you to have a world-class team. And so like that... and it's a very hard lesson if you've been VP of Engineering because if you're a good VP of Engineering, you do develop your people. But as a CEO, like it's not like you don't do any of it, but it is very very small compared to...

So I like to make things just very stark so you get what I'm saying, I don't like to hedge it. And then managerial leverage means this. It's very simple. It's: Okay, if I have the ideas about what your department should do next, if I am kind of pushing you to kind of move your organization forward, then that's no leverage. What's leverage is if you're telling me what you should do and how you can push the company forward. That's leverage. Then I'm getting kind of more than I'd have if you weren't there. Otherwise, I could just manage the team. And that's the point when you feel like you're not getting leverage, when you got to go say, "Hey, why aren't we doing this? Why aren't we doing that?" That's when you got to make the change. And by the way, he's unbelievable at that. As good as anybody I've seen as a guy who's not callous as a CEO. He really cares about the people who work for him. He really wants them to have great careers and all that, but he does not hesitate like if he's losing leverage, he'll make a move.

Kind of going back to the origin story of a16z, something you guys were really big on was helping founders stay CEOs, become great CEOs, not replace them with professional CEOs. I want to flip this question on you. When does it actually make sense to replace a CEO? When are people not going to make great CEOs?

Really... there's a very consistent thing that happens when somebody doesn't make it. And it kind of starts with confidence, is the way I would put it. So when you invent a product, you kind of recruit a team, so forth, all of a sudden you're CEO, but you got to run a big organization. You don't know how to do that. Like most founders are like that. And so if you don't know what you're doing, you're going to make mistakes. And they all make a lot of mistakes. And then when you make those mistakes, they're very expensive. You know, like they could cost you to do a down round or they could cost you to lose the company or they could cost you a customer or you screw up a product. Like they're very high impact and not just on you but everybody who you talked into joining you.

And so that kind of motion can really cause you to lose confidence. And then if you lose confidence, what happens is you hesitate on the next decision. And you know, as we talked about, hesitation is very dangerous because one, it locks up the company, but even worse, what happens is if you have senior people working for you, they get very nervous and they feel like they need to jump into that void and make the decision for you. And that's when it gets political, like very political, because people are like vying for power inside your little, you know, screwed up company. And so now you've got a political, dysfunctional organization.

And that... you know, like that's generally where like, "Okay, the founder probably can't run this thing anymore." That's how it happens. So most of what we do as a firm is to try to help people with that confidence problem. And there's like a whole series of ideas that we have around that. But that's... you know, you kind of have to somehow climb the confidence and the competency curve together. It's very hard to do. And particularly like if you're an engineer and you're used to getting things right, or if you've been a straight A student or something like that, it's very disconcerting. It is better to have like CEOs who are like C-minus students, you know.

Why is that?

A little facetious... like well, like it's just good to be used to failing. So I think I wrote this, but like the median on the CEO kind of test is like 18. It's not like 90. And so you got to be comfortable getting a lot of D-minuses because the D-minus is fine, you know, as long as you don't get the F. As long as you don't run out of cash, as long as you don't lose the whole thing, you know, okay, like you got through it. Keep going. And that's a lot of the thing that we try to do as CEOs.

Yeah. It comes back to the core, I don't know, message through your first book is just how much you will fail and how much you will struggle and how much pain you'll go through as CEO.

Yeah. Yeah. And you know, like I mean, a lot of why I wrote that book was just to normalize that. I think what happens is... and I think it's come back and been true now... is like the way the narrative gets written on all these successes is like, "Oh, they came up with a genius idea and then they built this company and they hired all these smart people and it was all great." But like that's not at all how it happens. Um, and you know, I've spent enough time with like everybody from Mark Zuckerberg to Sam Altman and so forth that like they all go through that same thing that you who has, you know, your struggling company go through. Like you screw a lot of things up and they have massive consequences. But you have to kind of maintain your confidence.

Actually, I was at a storytelling event last night and I was chatting with someone that I ran into there and told her I was chatting with you today and she said how meaningful your first book was to her as a founder. Exactly as you said, normalizing that it's very hard and painful and this is just the way it is.

Yeah. And the feeling... look, I mean you know like if you think about organizational design or you know goals and objectives or OKRs or whatever management technique, like you need like a basic eighth grade education to like do any of that stuff. It's not that complicated. The difficult part is the feeling that you have when you have to do it. Like the hard thing about a reorg is you're redistributing power. So you're going to have people really freaking mad at you because somebody's losing power if you do it correctly. And that person may be like a really good employee. Dealing with that is the hard thing. Like knowing how the organization should work to make communication better, it's not that complex.

Yeah. I think about I was at Airbnb for a long time and just thinking of Brian, who I don't know even know if he had a job before Airbnb.

Oh yeah. I don't know. I spent a lot of time with Brian and he... after COVID it all kind of clicked for him. And then he did that good talk on Founder Mode and so forth. But the reason that was so articulate is because he had screwed every one of those things up. You know, he hired LT and all this stuff and you know these are very senior people and he didn't... he wanted to defer to them but you can't defer as a CEO you know because you know what Airbnb should be doing. He may know what finance should do but you know what Airbnb should do. And then it gets really wild when you like you can't defer decisions as a CEO. You got to like understand what people are saying and go, "Now we're going to do this."

And this again comes back to the point of you have to go through the struggle and pain and failure to learn those lessons.

Yeah. No, like I mean it's... they're really hard to learn without kind of doing and without often like without paying the consequence. And you know, like even I make mistakes. I was having conversation with Ali the other day and he's like, "How's it going Ben?" And I was like, "Well, you know, like I'm finally dealing with something that I had put off for, you know, a very long time." And he said, "Why'd you put it off?" I said, "Cuz things were going too good. I didn't have to deal with it." And he was like, "Yeah." He said, "I know that." Like and I say Ali is, you know, one of the if not the kind of best private company CEO out there. And he's making a mistake and I'm making a mistake. So like it's just tough.

You said that one of the maybe the main reason founders fail as CEOs is they lose confidence and you had some ideas that you guys have to help founders work through that. Are there a couple you can share how you help?

Yeah. Yeah. So we do a lot of things on that. So the kind of design of the firm is about confidence. So the first thing is: well what would give you confidence? Well like if you can get stuff done. So what if I could give you a network that's as good as Bob Iger's network day one, like the day you step into the job. And so you know we have 600 people at the firm. And why is that? Well most of them are building that network for you. So you can call any CEO or anybody in Washington or, you know, kind of any executive or that kind of thing and get them on the phone and they'll talk to you and you can kind of deal with that thing.

And then that just makes you feel like a CEO. And then you know we have a lot of people in the firm like myself who you can talk to on like a CEO-to-CEO basis as opposed to an investor-to-CEO and just kind of feel that. Early in the firm's days we used to do this thing—I think I'm going to bring back in some form—this thing called the CEO Barbecue. And it was like you know a lot of people have these events where like they bring in speakers and this and that and the other. And I always felt like those were... one, they were too many days, and then sometimes you know what they said wasn't really applicable and that kind of thing.

And so what I said is, "Well why don't we just have a barbecue?" And like I would barbecue, we get everybody in my backyard. It was 500 people at the peak which is why the kind of stuff... because I couldn't cook that much food after that. And then you know we'd have Larry Page and Mark Zuckerberg in Pa West. And so you're a CEO in there with Cor. You're like, "Wow, like I must be important. I'm here with all these guys and we're just hanging out having a drink, eating barbecue." And so then when I go back to my company, like I feel like I am somebody. And like, okay, I might not be like perfect at all this, but I am really a CEO. I was at the CEO barbecues for crying out loud and that kind of thing.

And so yeah that that's... but it's all the whole idea was always like okay, do you feel like you can do it? Because that's about it. And look, having been in... every CEO has been in a position where they feel like, "Well maybe I shouldn't be the one running this thing. Maybe it's just too big for me." And that's a bad... you don't want to go there. Because as we've said, founders can get to the next product and that's something that almost no professional CEO is able to do. Like there have been rare cases but very rare.

So clearly you've worked with a lot of companies, a lot of founders. Let me kind of zoom out a little bit and ask you this question: What's the most counterintuitive lesson you've learned about building companies that goes against common startup wisdom?

Well, you know the common startup wisdom keeps changing. You know, like one of the early ones that was wrong... and kind of Brian articulated it and then now I think a little bit of what people have gone to is also wrong. So the first idea that was wrong was like, "Okay, build a team of like senior executives as soon as you get product-market fit as fast as possible and they can scale the thing."

And I think that you got to build that team slowly and deliberately kind of paced to your ability to manage, integrate, and then manage them. Because if you bring in a bunch of senior people and you don't know really how they map to your company or how that function works or so forth, then you're going to start deferring. And once you start deferring, it's going to get out of control very fast because they're going to build empires, they're going to get political, they're going to do all that kind of thing. So that was bad advice. You kind of have to do it in a measured way.

I think that Founder Mode... I think a lot of people have taken to "never hire anybody with experience" and that's also bad advice. In that look, somebody who knows how to do something can really accelerate your thing. So very early on, one of the founders, great founder, Arsalan at Databricks was running sales. And I'm like, "Ali like you're going to have to hire like somebody who knows sales." Because Arsalan's PhD in computer science, like I like that, but that's probably not where you're going to have to start if you're going to catch these guys before they take Spark and like use it against you.

And you know, and I sat down with Arsalan and I explained why. I said look, "You know a lot of what sales... there's a lot of knowledge in how to build a worldwide sales representation. You need knowledge of customers, territories, territory splitting, rep profiles. Like there's just like a litany of stuff that you really can only learn by doing trial and error. And you don't know any."

"So like you're phenomenal. Like let's get you... (and he's still he's a very senior executive in the company now), but we need somebody who knows that." And the idea that there are companies that go, "Okay, we're just not going to hire that because we're in Founder Mode." That's also a mistake. So then there's a lot of... it's more subtle than you think. And it's more complex than you think. And so you kind of have to get all the way to the truth. And these little snippets of advice that VCs give because they watch some podcast are all stupid. Like it's just... there's a lot of depth to these things. You have to know the answer to the next question, the next question, and the next question.

And it does drive me crazy. Like one of the funnier things that happened along these lines, just to show you how little you know as an investor about what it means to be CEO... One of the CEOs says to me, he goes, "Hey, you know Ben, like that thing you told me a while ago about 'don't be CEO at home'." He said, "Like I was doing that and I stopped and it really helped me." And then the other kind of VC said, "Yeah, you know, you got to unplug sometime."

And I said, I was like, "What the fuck are you talking about? He's CEO. He's not unplugging. Like, he's getting fucked all the time. Like, he's got to deal with that." Like, that was not what I meant. I was like, "You can't go home and boss your family around." That's what I meant, you know? Like, so it's... you hear something from like somebody who... But if you haven't done it, you don't even know what that means. And so then you kind of then trying to transfer the advice to the next guy. That's not going to work. So anyway, but he was very innocent. I just don't want to kind of speak bad of him, but like that's how it sounds, right? But that's not what it is.

That's an amazing story. So the advice partly here is just don't believe everything you see on Twitter and little sound bites of advice.

Yeah. Yeah, I mean like I think actual CEOs know it and that's kind of how like people in my profession kind of get a bad rep because like giving advice that's not something that you know but something that you heard is very dangerous I think.

So speaking of advice that you've shared that might be out of date now, you are famous for writing one of the most popular pieces of literature for product managers. There's a lot of PMs that listen to this podcast called "Good Product Manager, Bad Product Manager". And if you actually go to that post today at the top you say: "This document was written 15 years ago and it's probably not relevant today for PMs. I present this merely as an example of a useful training document." Still people link to it. I actually just link to it as an "as is" just like this is something every PM needs to read. What is it that you think people should maybe not take away from it and what do you think people still should take away from that piece?

Yeah. So the reason I wrote it when I wrote it was that I had a lot of product managers. And one thing about product management is it's a job that's completely different at every company. Like and there is no training for it. So like everybody kind of figures it out as they go. And depending on like what's being emphasized, like they'll get wrapped around the axle on, you know, like if it's enterprise company, "Okay, well like you know pitching to customers" or "Like I need to be like really good with the press" or "I need to be really good at writing the product requirements document" or that kind of thing. And none of the... those are all like these tasks. But none of those were the job.

And what I was trying to get out in "Good Product Manager, Bad Product Manager" was the job is fundamentally a leadership job. And it's a tricky leadership job because nobody is actually reporting to you. So it's like this influence. How do I get people to do what I want even though I'm not paying them, I can't fire them, I can't promote them, and so forth? Which is kind of the essence of like real leadership, because if you start to rely on promotion and firing and so forth for authority, then you're never going to be good at being CEO or anything.

So I wanted them to get into the mindset of: okay, your actual job is to get a product into market that customers love that's better than anything that anybody else in the world puts in market. Like that's your job. And so to accomplish that job you need engineering to understand you with clarity. You need to understand engineering with clarity. You need to have a really good view of the market and the competitors and the technology and so forth. And you need to kind of put that all together and deliver the thing.

And all the other things are tasks that you may or may not need to do. I don't know if you need to do them, but like the thing is, you have to be the leader. You've got to get the thing done. And so what I think it's still good on is that like the mindset: you know, be the leader. I think the details of it, um, of any kind of thing that was kind of task specific was like really for my group at Netscape in like 1996 whenever the hell I wrote it. So it's a kind of document I read out of frustration. But I am glad that people still like it. And I think leadership in general is undervalued, underestimated. It's the most powerful thing. And most of the great companies—Jensen is a great example—like what a phenomenal leader he is not just of Nvidia but of the whole industry. And he doesn't have authority over the industry but like he drives it forward. And that's... and that's why the "Good Product Manager, Bad Product Manager" is so important because that thing... if you learn how to do it, that's the thing.

I didn't realize you wrote that initially as just an internal document and then you made it public.

It was kind of before blogging took off. So it's just an internal thing. And I published it later. It was... I was just getting so mad, you know. And by the way, my product management team at the time was like very good, very talented people. They just didn't... they just were not getting that concept. So you know, like David Weiden at Khosla Ventures, Raghu Raghuram who went on to be CEO of VMware. I mean, like the team was like that team. But they were driving me crazy. And so I just was like, "I can't yell at people anymore. I have to like explain to myself." It's a good thing if you find yourself yelling at people like you probably haven't explained what you want was the other big takeaway from that.

Do you ever think that piece would be so long lasting and so I don't know...?

No, I didn't even know... like I thought it was kind of like aggressive when I wrote it. Like you could tell I was mad because I called it "Good Product Manager, Bad Product Manager." It's like bad dog, you know, bad pride... bad product manager. That was kind of the emotion I had. So, you know, it's kind of shocking some of the things that you write. I would say that that's, you know, and kind of creative... and you probably know this, like the ideas that you have, the things that you write in five minutes end up being much better than things you write in five weeks, you know. And I find in talking to you know musicians or writers or anybody, everybody has that same experience. Like the thing that you've already synthesized so much that you just have to write it out is... that's the best stuff.

There's something that you mentioned there in your answer about the PM being the leader. There's always this kind of sense that the PM is not the mini CEO. How dare you call yourself that? I actually think that's exactly what the PM is. They're basically the closest to the CEO. Their kind of job is to think like the CEO within the team.

Yeah. People get mad, you know, like because everybody... you know, like this is the whole challenge of management in general, like people get jealous over stewardship. But look, from the perspective of the PM, like it doesn't matter if you write a good spec or you have a good interview or you do this or do that. Like what matters is that the product wins. And you have to get all the way to there and kind of work backwards from that. And you can't do that without leadership because it is about "Okay, we want to build that."

And you're not necessarily the person who comes up with every idea or this or that or you're just the keeper of the vision, you know. And that's true for CEOs too. Like you don't want every idea in a company coming from the CEO. Like that's... I think it's misunderstanding what a CEO is is why people don't like that. They don't know what a CEO is. But a CEO isn't the one who has every idea, gives every order, does every... That's not the way it works. The way it works is there's somebody who's got to consolidate, get all the good ideas, prioritize them, decide which good ideas we're going to do, and then get everybody on the same page so that they have very high fidelity understanding of what that is. And if you... you know, so that is a CEO kind of function. Now it doesn't mean like I'm better than you. It just means that like that's what I'm doing.

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Let's talk about AI. I'm very proud of us. It's been almost an hour. We haven't even mentioned AI. I think that's a record.

Uh, okay.

So, I asked Adam Neumann, WeWork founder, now Flow founder, someone you work closely with now, what to ask you about, and he said he has some really interesting insights about how AI is impacting hiring.

You know, Adam is probably the single most controversial investment that we ever made. Like we got called everything from stupid to sexist to racist to this and that for like literally just funding that. Um and I think it's going to end up being one of the best investments we ever made. He's doing a phenomenal job there.

But there's an important principle in that which kind of we do as a firm which I think is not widely done but I would love it if people copied it. Which is—and something I learned somewhat from Shaka—which is you don't judge a person by the worst thing that ever happened to them. Like we've all had bad things happen to us. We've all made bad decisions. Most of them they don't make a miniseries about, right? And so like to judge them on that... you want to judge people on what they do well, not what they screwed up. And you know, because that's where you see the talent.

If you look at what Adam did well, it's truly spectacular. You know, like WeWork, everybody knows WeWork. It's like the... name a more important commercial real estate brand than WeWork, like you can't. And so like what an accomplishment. And then you know and there were so many things that went into that and so many things he did right. And then if you kind of look at really unravel the things that went wrong, most of it was like a combination of inexperience and nobody around him that would tell him the truth. And so like that... and you know, maybe he wasn't good at listening to the truth either at the time.

But to throw away a guy on that—which is, by the way, the world was so mad at us for not throwing him away, for believing in him—um, is just a... it's a big mistake. And you know, I credit Marc because Marc is the one who called him up originally and just said, "Hey, Adam, what are you doing?" Because like you know we watched what you did at WeWork and we thought it was pretty impressive. And so I think that that's probably the biggest secret there. It's not really about AI, but I think that um look... looking... you know you judge... Al Davis once said you know coach players on what they can do. And I think that's very true. You know judge people on what they can do. Coach people on what they can do. Like help them take their strengths and use them as opposed to overfocus on their weaknesses and just, you know, hand-wring about the one thing they don't know how to do. Because look, everybody's uneven.

What it's like what you're describing essentially this is the job of an investor is to find an underappreciated asset and invest before... something people don't see.

Yeah. And I mean I think that it's you know like venture capital is really about investing in people, right? Like you know that you have ideas as an investor but like what you really are ultimately betting on is the entrepreneur and the entrepreneur's idea because the initial idea isn't where they end up usually. It changes a lot with everybody we invest in. So you know you kind of have to make the judgment on the person. And you know how you do that is really really important.

One of the things we emphasize inside the firm is look, like we're investing in strength, not lack of weakness. Like I want to know like how good... like are they world class? Do they have a world class strength and you know can that beat anybody? And look, everybody's flawed. And so like let's help them deal with the flaws and you know surround them with people who can handle that and put the right person on the board who can talk to him. I go to all Adam's board meetings. Even though Marc's on the board, I go to all his board meetings because I'm the one who's good at like killing a guy who's that confident. Um when he's like, "Okay, that's not your best idea." Like that's a good world for me. But that's how you deal with that. You don't, you know, throw them away and go, "Okay, like we don't want to be called names, so we're not going to invest in Adam Neumann after he built WeWork." That's crazy.

That's also why you guys invested in Cluey, I imagine. Similar.

Yeah. Yeah. Yeah. No, that's right. Like I mean like if you look at what those guys did, that was like some like high level marketing genius too. And you know that's really something. Plus the product is awesome.

I'm going to bring us back to AI. Something that a lot of people are talking about right now while we're recording this is this potential huge bubble we're in with AI. Sam Altman said we're in a big bubble which is you know that's saying a lot. I'm curious just how you think...

What is it saying? So you gotta like first of all I should qualify this by saying I'm an investor and Sam's a CEO. So CEOs have to have much more purpose when they talk. Investors just have to be entertained. Um, so you got to give Sam credit for like... what is it in his interest to say it? Well, like if it's a bubble, then the one thing you should invest in is him and not all these guys chasing after him. Um, so that I would say like that's very smart. And then the other thing that's smart about it is there's nothing that you can say to the press that will make them love you more than saying "all investors and like entrepreneurs chasing this are idiots." Like they love them because you know the press are generally haters. And so it's just like red meat for the haters which is also super clever. So I think whether even he believes that or not that was a super smart thing to say. So I'll just put it there.

Whereas what I'm going to say um won't be as smart, but it will... I don't really have an axe to grind here. I mean, I could have an axe to grind and say, "Okay, like let's get all the other investors out. I'll say it's a massive bubble."

But what I would say about that is... um so the first thing, the one thing about bubbles is anytime everybody thinks it's a bubble, it's not a bubble. Because in order for it to be a bubble, you need capitulation and that you need kind of everybody to believe it's not a bubble because then the prices really go out of control. But as long as there's people who think it's a bubble, then it's hard for that to happen.

And it's funny, I had this debate in the Economist I think with Steve Blank in like 2011 or 12 when everybody thought it was a tech bubble. If you can imagine that. Which it absolutely was not. But because there were like 1,400 articles saying that we were in a tech bubble... and yeah I mean you know where prices were then compared to where they are now. But I knew because everybody was saying it was a bubble... like I knew that the prices were higher, but the reason the prices were higher was we're getting to a global market.

AI prices are higher than prior prices, but if you look at the revenue growth and memories, we've not seen anything like it. The products work. ChatGPT, Sam's product, works so amazingly. We never seen that before. Like not even Google, not anybody. And so like that's real. And you know we have companies that you know went from 0 to 800 million in a year and that kind of thing. And so it's not a... I would say there's a basis for the prices going up first of all.

Now will the... I think the thing that's right about kind of what Sam is saying is the landscape is early. Really early. The technology is very immature as amazingly as it works. You know, there's a long way to go to improve it. So, it's very possible, you know, when you have that much technological change that the positions that these companies have achieved with their high revenue isn't sustainable and that, you know, there will be a competitive change that either kind of lowers prices or a new number one emerges or that kind of thing. And so that... yeah that's possible.

But I would characterize that as being like a financial bubble in that like... like if you go back to the great dot-com bubble that everybody's always waiting for it to happen again—which I was CEO during the thing—that happened there was very different. Which is, it was the internet and every smart investor knew that the internet was a big deal. Like how could you not know that the internet was... of course it's a big deal. But like if you go back to 1996 at Netscape, we had 90% browser share and we had 50 million users. So there were 55 million people on the internet in total and half of those were on dial-up. So and then to build a product like Evite, the greeting card company, had 300 engineers. That's how hard it was to build this stuff.

And so the math didn't work. And the math didn't work on any of those ideas. But the investors kept pouring money in. And then eventually, you know, everybody went bankrupt because there was no revenue coming in. And like when they figured that out, then nobody would invest in anything. And of course, then everybody realized, well, the internet was actually real. And Paul Krugman didn't know what he's talking about. And like it was going to be a big thing. And then Facebook and Google and all these things emerged.

But the thing that made it a bubble was like the unit economics didn't work, the businesses didn't work. Like these businesses are all working and they're being priced appropriately for how they're growing. So that's not in effect. So the thing that you could say is they're not going to keep growing like that or like and so forth. And I'm not sure about that. Like the products, like I said, are working so much better than any technology product that we've ever built has worked. Like it's just mind-blowing how good this stuff is. And so I don't know. If I had to bet, I would bet not a bubble. You know there... I think there will be some dislocation. I think companies that... I think always in venture capital if you've got like a run like this then the great company and the crap company both get funded. But you know that's just... that's just venture capital. Not a bubble.

For founders starting companies these days when you look into the future of the AI industry say in 5, 10 years, how do you think things will play out slash where do you think the biggest opportunities remain? Where are you guys looking to invest most?

In infrastructure. I think that like there is obviously like a real estate, power, cooling play. I think that's a little outside of you know kind of hardcore technology investing that we do. But there's another layer which is like who can run... you take a given open source model, who can run it the cheapest with the kind of lowest latency? And that's going to be extremely valuable like whoever has that. And you know Google has been historically very good at that and so forth. And I know Sam is really trying to build that now, Stargate. And so I think that's going to be a very important layer of value.

I think that you know on the foundation model side you have to be very selective as an investor. So in order to compete in foundation model world, our basic rule of thumb is you have to be able to you know without much product progress raise at least $2 billion. Because that's basically what it's going to cost you to train something that gets you competitive enough to make money. Um and there are just very few founders like that. Uh so Ilya [Sutskever] is one of those, Mira [Murati] is one of those, Fei-Fei [Li] is one of those. But like that's the kind of class of person you need and there's you know whatever... there's certainly less than 10 of those in the world. And so that that's kind of like an important area but a small area.

And then I think the application layer is going to be very very interesting. And I think that you know if you look that Sam like he's making most of his money off ChatGPT—almost all his money off ChatGPT now. And ChatGPT is like you know I... it looks like it's got a real—like it or not—it's got a real moat. It's very hard to knock it off its perch. There's a you know everybody's taking a shot at people with great distribution like Google and you know Elon and and Zuckerberg and everybody and like that thing just keeps going. Like it is.

So I think the applications are both more complex and uh kind of stickier than people thought they were originally. Like so the thing that people got very wrong is this whole "thin wrapper around GPT." Like that's really wrong. In fact, here's how wrong it is: back in the 80s there... that same phrase was used but it was "thin wrapper around an RDBMS," uh which...

Database.

Yeah. Yeah. Yeah. So it meant companies like Salesforce were basically just a thin wrapper. And I think that that's kind of the mistake people made. So like we're at this company Cursor and if you look under the covers in Cursor, they've built like 14 different models to really understand um how a developer works, like a high-end... like a real developer. And they have that... those models have tons and tons of interactions with how people talk to their friend Cursor about how they should design their programming so forth.

And that's like real. That's not just a thin layer on a foundation model. And I think there are many many applications like that. And so I think there's going to be a lot of opportunity at the application layer. There's going to be some opportunity at the foundation model. And of course you can invest in Sam, you can invest in Anthropic and so forth as well. Um but there will probably be like a very small number of companies at that set and then a almost unlimited number of companies at the application layer.

And then you know as the technology advances we'll of course see more things with embodied AI. I mean already, you know, autonomous cars are working like really well now after a long long long long time since like I think Sebastian won the uh the challenge in 2006 when he drove the self-driving car across the country. Um and here we are 20 years later and now they're deployed. So that was a long time. Robots I think is a harder problem than self-driving cars. So, we'll see how that goes. Um, but uh yeah, there's certainly a lot in that world as well.

Wow. Okay. There's a lot to this answer. Something that... exactly what I was looking for. The Cursor example. It's something that comes up a lot on this podcast in the application layer specifically, the thought that the way to win in this space and to build a moat is as you said build your own model slash have proprietary data that you build through people using your product. Thoughts on that?

Yeah, I mean I think that's ends up just being what's required. So it turns out that um the universe is long-tailed... is is as fat tailed and humans are very fat tailed in terms of human behavior, human conversation and so forth. So to get to the real meaning of it and to get to the kind of essence of the problem, you know, in any domain uh turns out to be I think more complex than we thought.

And so like like the early things and you know people were running around uh saying, "Okay, there's going to be one big brain to rule them all," and these kinds of things. That's kind of not played out yet. And and in fact like if you look underneath the covers you have LLMs which have generalized pretty you know like in fascinating ways but they've kind of also asymptoted in that um you know we have run out of data for the most part. And so if you look at the GPT-5 LLM compared to the GPT-4 one and how much more it costs to train and so forth, like it's you know... it's definitely not going linear anymore.

On the other hand, the reinforcement learning side has been linear, but it doesn't generalize. So, if you build a great uh programming model, it may be an idiot at math. And so that I think is just very different than what people would have said three years ago. And I think that's kind of, you know, that there's not something that's both scaling and generalizing yet. And you know, maybe we'll get there, but that certainly opens the door to something that's more user friendly, that's more effective in any number of domains than just the basic foundation model infrastructure.

Now, those models are incredibly important and they're... and I think OpenAI is probably 80% of the revenue in AI or something like that now. Like it's massive. So that foundation model is really really important. Um, and then like the the basic consumer app is really really important. Um, that just answers whatever the hell you want to know. Like those things are like very very real. But I do think you know particularly... and then if you get into like enterprise stuff and then it's no longer internet data, it's their data. That becomes very different.

Like Databricks is having a lot of success there because okay well once you're inside a company guess what? Like you care about access control. And that's hard with an AI world you know. It gets trained on some stuff, how does it know who has access to that information, who's present and so forth? Um you have semantic issues. So if you look at an enterprise, find 10 enterprises, they all have a different definition of what a customer means. Like you would think customer is a basic thing. Well, is it a department at AT&T? Is it AT&T? Is it like a person at AT&T? Is like what the hell is a customer? It turns out to be very very very meaningful. Uh particularly if you're trying to um figure out like important things like churn and this and that and the other. So like that kind of stuff matters. So so it... I would just say like the the problem space is a lot bigger than you can just attack with a basic foundation model um at you know currently. You know maybe that will change and like if that changes then certain prices will have in retrospect looked way inflated and others will look you know too low but you know that that is TBD.

So a big takeaway from this is that there's still tons of opportunity for founders to start companies building AI products.

I think so. I mean you can solve so many... everything that we couldn't solve with software we can solve now almost. So it's a really big world. And it's funny, you know, like because we're investors in Waymo and uh one of the things when you get into like what took so long to make Waymos this safe like they are now, it wasn't the things that everybody reported on the podcast. It wasn't sleet and, you know, heavy rain. And it was people. It was like the human who was driving 75 in the 25 zone was very hard for the AI to anticipate because it was rare but important. And the number of rare, important crazy shit that humans do is very high. Uh and I think that that goes for all of AI. Um so to make things work really well, you have to understand this this very kind of fat tail of human behavior.

Along this AI thread, something that is really important to you clearly, something you talk a lot about, is the US being successful in AI and leading the world in AI. Why is it so important? Why is something you spent a lot of time on?

It starts with uh I think my view of the US and its role in the world. So it's my personal view is like it's very very very important not for society to be completely fair because it's not going to be completely fair or completely equal because we've never had one that's been completely equal. But it's important that everybody have a chance um at life you know. And particularly uh you know kind of both culturally but also just like you can't advance the world if you know you can't tap into all of your resources. And so if you kind of take away motivation and these kinds of things, you get into trouble.

And if you look at the kind of every country today—and and this is by the way um so you want like the right amount of decentralized power. Um you know you don't want it to be completely concentrated. Concentrated power makes it very very difficult for everybody to have a chance. This is the big kind of lesson of communism over the last hundred years is it turned out right. And and you know we still have politicians selling it this way today. It's like, "Oh it's power to the people." No no no. It's power to you because you're removing all power from the private sector and installing it into the government and then you're putting yourself in charge of the government. And so I become extremely powerful.

And this is why it didn't matter if it was Mao or Pol Pot or Ceausescu or Stalin... everybody died because when you give anybody that much power, nobody has a chance. There's no incentive. Uh there's no carrot. There's only stick. And so use that stick. And that's just the nature. It's a systems problem. It's not a person problem. It's not Stalin was evil, Ceausescu is evil. It was like that system is evil. Uh and that's the same with fascism, right? Be it Hitler or Mussolini, it doesn't matter. Like that level of power is evil.

Um and the US does the best job systematically. It's the best system. It's got all kinds of issues. It's got problems. People always trying to defeat it. But you know one of the things that um you know if you look at kind of the Declaration of Independence or the Constitution like the language is very important. You know it's "we hold these truths to be self-evident." What does that mean? It means there... it's not my rule. It's not the president's rule. It's God's rule. And so those rules are above the president. And then you work in that context and that distributes power because you're under the law, not under the person.

And we see that you know now even with Europe where Europe is kind of the leaders are going "Well I have a rule it's you can't say certain things or I'll throw you in jail." And the kind of shield they hide behind is "Well like we have to keep the kids safe." But if you say something that I don't agree with and the kids hear it, they're not safe, right? Like so the kind of transitive property of like [censorship] is going to override.

And so it's really important that we have at least like one society and as flawed as we are, as flawed as the US is, it's still the best. And you can see it by the number of new company creations, the number of new ideas that come out of here and so forth. Um it's really really important that the US kind of stays important and powerful in the world. And we know from the last century, if you look at the last century, who were the countries that had economic power, military power, cultural power? They were the ones that industrialized.

Yeah. And the ones that industrialized first and best. And the ones that didn't became communists, right? Like you know Russia, China like they they were slow on industrialization and they fell into this very dangerous uh system. Looking forward that's going to happen again but it's going to be AI.

And so it is kind of fundamentally important not just to like America but to humanity that America succeed at that. You know, like we don't have to be the one winner or this or that, but we do have to be like in that tier. Uh, and you know, as I go around the world and travel, I can't tell you everybody... and everybody was getting by the way very very worried about us uh earlier. Um and they say, "Look, we need you to succeed. You know, don't destroy the dollar. Don't like fall behind AI. Don't overregulate it too early. Don't do do these things, please." Because we need you to win like because we're all like counting on that.

Uh and and I think it's um it's the most important work that we do. It's why we're so involved in policy and so forth. Um I think this is also, you know, very going to be very very true with crypto which ends up being an incredibly important networking technology that complements AI. Uh and uh and so that's... Yeah. And that you know that work is I would say beyond for the money. Like that's... although like we will end up making a lot of money with the right policies like so I don't want to like seem totally philanthropic on this but but it's more important than that. It's it's certainly more important than us succeeding or anything like that that the country succeed.

Speaking of philanthropic and other passions of yours, something that I don't think most people know about you and I think will give them another insight into how interesting you are: You uh run an organization called Paid in Full, which uh is incredibly cool. Talk about what that's about, why this is so important to you.

We kind of our our ethos as a firm is um kind of uh what I'd say is something from nothing. Um you know like that this is the greatness of entrepreneurship. You start with nothing and then you make something really important. And um you know that that kind of that that is also how hip-hop started where you had like a bunch of kids who didn't even have instruments um and they kind of created something out of nothing. And and the people in that world always talk about that.

And you know one of the really unfortunate things that happens is the people kind of who invent the art form—and certainly in the case of hip-hop—don't get anywhere near the kind of proportional benefit of their invention. And a lot of the guys uh you know people have forgotten about or you know are kind of struggling to make ends meet and so forth. So what we created was this thing called the Paid in Full Foundation named after uh the Rakim & Eric B song which I did call Rakim and ask him for permission to use the name. So already taken. And what we do is we give essentially pensions to the old rappers um that enable them to kind of continue their work.

Uh and then we have a big event. Go to paidinfullfoundation.org for tickets which is amazing. Um where they kind of get the award and uh you know and they're celebrated by all their peers and so forth and it's really phenomenal. But you know, so some of the awardees have been Rakim, Scarface from the Geto Boys, Roxanne Shante, Grandmaster Caz, Kool Moe Dee. This year we're honoring George Clinton for being sampled, Kool G Rap and Grand Puba and also uh Jalil from Whodini.

Um and it's just it's very I I can't even describe how high impact it is on these guys. I mean, I think Rakim was touring close to 200 nights a year and he got his award and came out with his first album in 15 years and is doing amazingly well and all of a sudden, you know, everybody's going, "Oh, yeah, that's the greatest rapper of all times." Like, they're finally going back and remembering all the things he did. Uh, Roxanne Shante, I mean, nobody had mentioned her in years and years and years. And I think six months after we gave her the award, the Grammys gave her a lifetime achievement award, which is amazing. So, it's a it's super high impact. It's a great thing. You know, as a hip-hop fan, I say dream come true.

What is what's the origin story of you and hip-hop? I imagine many people look at you and wouldn't imagine you... you these records behind you, Nas gifted you. You uh you're so deep into the community. Just how did this all begin?

Well, so there's I actually wrote a blog post on it called "The Legend of the Blind MC" uh which I think would be uh if you're really interested, it's worth reading, but it is kind of a story of me uh becoming a rapper and um and like how that occurred and how it went and so forth. But uh you know like I always say the very short story is you know I was in New York when it at the birth of hip-hop and at the birth when it really became big kind of 84 through 88. And yeah it's just the most exciting thing to see a new art form kind of pop out and the creativity and everything. You know once music kind of becomes mainstream I would say it gets very shaped by business and like in the early days there's no business. Yeah, everybody's just coming out with whatever idea they have and so forth. Then so there's the early days of rock and roll were like that, the early days of jazz were like that.

So I see now even more why you guys uh brought on Eric Tornberg uh beyond his many talents he's also really big into rap himself.

Yeah yeah. I need to that that's a good reminder I need to make sure he gets the Paid in Full...

Ben this was incredible. Is there anything else that you want to leave listeners with or share before we get to our very exciting quick lightning round?

Yeah, I mean I would just say um you know like if you're a CEO listening to this then know that like how you feel about yourself is going to end up meaning as much as anything. And so like take your time on that. Don't don't uh you know like self-evaluation is the one of my favorite quotes is um that one of my old managers told me as like there's no uh there no from this day on no credit will be given for predicting rain only credit for building an ark. And I think that's more true for CEOs than anybody. You know you have to build ark like it doesn't matter like if you predict you're going to fail you still failed it doesn't it gets you nothing. Um so what you have to do is figure your way out of it and spend all your time on that.

Well, with that, we've reached our very exciting lightning round. I've got five questions for you. Are you ready?

Yes, sir.

First question, what are two or three books that you find yourself recommending most to other people, not including your own books?

Yeah. So two that um I learned a lot from are one is The Weirdest People in the World uh which um it's a kind of big history book but through an anthropological kind of cultural lens and it's really fascinating explains an awful lot about like how society works and how little changes in the rules completely change the culture. Um, you know, one of the things that he he basically endeavors to explain, okay, why did the West get ahead of the rest of the world? Um, and it kind of comes down to like a weird anomaly with the Catholic Church where they've kind of enforced um monogamous marriage. And it turns out that the natural state of humans is polygamy. Um, but the problem with polygamy is there's no cooperation among men um which is a problem. Uh and as a result uh and then everything is secret. So there's no shared there's no sharing of knowledge because it's all kept in the family in what he calls kin-based culture. It leads to something called kin-based culture and like even recipes won't be shared if you're in a kin-based culture because it's a secret. Um so you can't build science, you can't build cities, you can't build big companies.

Um and you know so because the West kind of enforced broad monogamous marriage early it was able to kind of evolve into all these things. And he kind of shows why and how he does these psychological tests today with people from kind of monogamous culture kind of like Western culture and kin-based culture and the psychology is completely different. And he gives examples like um you know if a person murders another person is that still murder if that person who did the murder is your brother? And in Western society yeah that's a murder. In kin-based culture it's not a murder it's just not. And so like that's really different and so like morality is different like everything kind of comes off of that. So it's just a fascinating fascinating book. Uh so that's that's one.

Um I tell you know another book that I recommend a lot is Shaka's book uh his first book Writing My Wrongs. He has a new book that I think is better which is called How to Be Free. Uh so I'm going to start it's not quite out I or maybe it's releasing it's releasing like next month. So I recommend it. So what it does is it goes through like how did he work his way out of prison and solitary confinement to his current psychology and what are the techniques he used. And it's um they're very powerful very powerful ideas so I think that like you know CEOs always ask me like how do you deal with it like how do you deal with it you know they'll ask in like work life balance or like and it's like what are you talking about no work life balance for CEOs. Um but or particularly like entrepreneur CEOs like come on. But like what do you do? Do you meditate? Do you do this or that? But he kind of goes through the things that you really ought to do. So that that's what I would recommend if somebody's wondering like how do you deal with all this pressure.

I love this uh just the whole idea of Shaka being this uh help for CEOs someone that killed someone went to prison led a prison gang. I just love that how valuable.

Turn out to be really complicated things to manage enough. Sorry for getting into this, but the problem with running a prison gang is you're just dealing with people who all come from broken culture, right? Like so in any organization like the fundamental thing is trust. And so you're you you're bringing in a bunch of no-trust people. And so you can't... and like and it's kind of like a military organization. It's a gang. And if you think about a military operation, if you don't have trust, people don't trust the order, then you're completely dysfunctional. So, how do you build trust from zero is a very interesting problem. And he's a genius at that, by the way. Uh, and you know, I learned a lot uh from kind of talking to him about it. So like that from a management standpoint it's a I would just say it's an important kind of boundary case of how you build culture and uh so I he is very very smart at that. I mean you kind of have to like I said you have to look at people about you know their greatness not not the worst thing they ever did.

I I know this is the lightning round, but uh can you just share one example of something he did that was like wow that's a really good lesson someone trying to create a good culture that worked for him.

Yeah. So like one of the things that he did that that I thought was um really smart is well he did a couple things. One is just like a simple thing was he just made everybody eat lunch together in the gang just to kind of build rapport, relationship, trust. Like it's all one thing. We're all together on that. And I think you know like particularly in like remote world and so forth. People really underestimate how powerful like just that idea can be.

And then you know another thing he did is he he made kind of like morality. You know he he had kind of very specific things about you know if you you had to be good to your word internally and externally. Um, and so normally a gang you went like, you know, like I said, it's kind of a kin-based culture thing, but it made it much more powerful when he said, "Look, like you you can't do devious shit like outside the gang either." Um, and he had a bunch of examples of that that I went through in the book, but it's a very um like I said, because you're building it from zero, you really have to take a hard line on things that I think people in companies don't even take a hard line on. Like, you know, is it okay to lie internally? Probably not. Is it okay to lie to a customer? Well, in some organizations it is. Um, but like in Shaka's organization, like that's as big a cuty as lying internally and and and these things I think end up being really important.

We're going to link to this book. This is uh What You Do Is Who You Are. This is your second book that fewer people know about and this is one of the stories you tell and just what the lessons are.

It's kind of a more advanced book, you know, like I think people don't... you kind of have to survive to want to care about dealing with the cultural issues and the survival book has a bigger audience.

Amazing. Okay, we're going to keep going with Lightning Round. Is there a favorite recent movie or TV show you have really enjoyed?

Yeah. So, well on TV I really like Slow Horses, which is like uh the show about the MI6 kind of cast offs um guys. And then I you know I haven't seen a lot of movies lately but I watched Centers. I went to the uh theater Centers and it's I mean just the cinematography is unbelievable and the story is really original and the acting is incredible and the costumes are amazing. So it's it's just like a great kind of comprehensive piece of work. Like people have the craftsmanship on that thing is just a lot beyond what most people making movies are doing these days. So I I I really enjoyed that.

Mhm. Yeah, I hate scary movies, but I I watched it and loved it.

Yeah, it wasn't that scary.

It wasn't that scary, but still, you know, zombies popping out of corners.

Yeah, not not my jam usually.

Is there a product you recently discovered that you really love? It could be a gadget, could be clothes, could be something else.

I bought a coffee machine called the Technivorm Moccamaster, which is freaking incredible. In fact, uh, a friend of mine saw it. I was like, what is that? And I just bought it for him, too, because it's so awesome. Like, this thing makes coffee that it's just like perfect. Like, there's no bitterness. It's completely clean. It's amazing. Like, the only problem with it is I can't drink coffee that it doesn't make anymore.

I don't know if that's a good thing or a bad thing, but that might come out someday in the AI future. Uh, two more questions. One, do you have a is there a life motto that you often come back to find really useful in work or in life?

The thing that I would say has had the biggest effect on me is something my father said to me years ago um which is life isn't fair. And that that seems like really really simple, but I think that um the thing that defeats people more than any other thing that I've seen just in life is the expectation of some fairness. Uh you know, like it's just not fair. And there are like all kinds of stuff that are going to happen to you that you know and happen to everybody um that don't happen to other people that are completely unfair but it doesn't matter because that's the way it is. And as soon as you get that idea out of your mind um then you can just deal with it like "Oh yeah of course it's unfair but I'm going to... what should I do now?" Which is the real question not "How do I go back and get people to be fair?" because nobody's gonna be fair. It's not fair. It's the nature of it. If you think about it for more than five seconds, you'll realize that. And I think a lot of uh you know, and it's as an individual like if you want to make the world a better place, whatever. But for as an individual, do not expect anything to be fair. It'll only defeat.

Final question. This comes from Shaka actually. Uh he gave me so many great suggestions. I had to save this one for last. Okay. Okay. So, the question is, if you had to build a business curriculum from two hip-hop albums and one funk album, what would they be and why?

I think probably Follow the Leader um by Rakim. I thought that was so... and and and the reason is kind of uh what we had kind of gotten into earlier which is um leadership. So when he came out with that song, which was like, you know, maybe the greatest hip-hop song ever written, you know, he's telling people to like follow him. Um, you know, follow the leader. Uh, and just to have the idea that he was the leader of the entire art form, not just, you know, his band, it is an amazing idea. Um and and then the way he expressed it was incredible. And then he's got uh he's got other great concepts in there. Um that would give you like it's hard to listen to that record and have confidence.

I think from a like competitive, purely competitive standpoint, Stillmatic um from Nas. I mean that's one with "Ether". That's the one with uh "Got Ur Self A..." That's the one with you man. It's kind of like all of like the idea of competition is kind of encapsulated in that in that album. So that that would be the other one.

Uh and then funk... for One Nation Under a Groove for sure. One Nation Under a Groove because it's kind of like this is uh how do you initiate people into like a concept or an idea and and right how do you infuse them. Like One Nation Under a Groove is all about joining the nation um and like it's so musically interesting and and kind of getting people to be part of that that is probably... If you asked me tomorrow, I probably have three other ones.

Incredible. I'm going to go listen to these. Ben, final question. How can listeners be useful to you?

If you get something that makes you better, please take it. If you need kind of more advice on it, let me know. But, um, look, my job is to help everybody build something great. So, if you're if you're an entrepreneur, um, thank you for that.

Uh, also check out Paid in Full, paidinfullfoundation.org if you want to learn more about that nonprofit.

Yeah, definitely. We would love to have you.

Amazing, Ben. Thank you so much for being here.

All right. Awesome. Thank you, Lenny.

Bye, everyone.

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