Tag: ben horowitz

• What you do is who you are

  I very much enjoyed Ben Horowitz’s last book called, The Hard Thing About Hard Things. In fact, five years later, I still find myself going back to it in my mind, particularly the bits about high quality decision making.

  So I am looking forward to his latest book about how to create and sustain the kind of business culture that you want. It’s called, What You Do Is Who You Are, and that should give you a sense of where this is going.

  Here’s an excerpt from Ben:

  Because your culture is how your company makes decisions when you’re not there. It’s the set of assumptions your employees use to resolve the problems they face every day.

  It’s how they behave when no one is looking. If you don’t methodically set your culture, then two-thirds of it will end up being accidental and the rest will be a mistake.

  Your culture is who you are. Who you are is not the values you list on the wall. It’s not what you say at an all-hands. It’s not your marketing campaign. It’s not even what you believe.

  It’s what you do. What you do is who you are. My new book aims to help you do the things you need to do so you can be who you want to be.

  If you’d like to pre-order a copy, you can do that here. 100% of the proceeds will go to anti-recidivism and to Haiti.

  2019.10.11

• Any decision over no decision

  The Hard Thing About Hard Things is a book that I read a number of years ago (Amazon just told me that I purchased it on March 12, 2014), but that I frequently come back to in my mind. 

  One of my favorite themes in the book can be summed up with this quote: “Often any decision, even the wrong decision, is better than no decision.”

  Decisions can be scary. What if I make the wrong decision and things go horribly wrong? Then things are on me.

  In some organizations, indecision may feel like the safest decision. Let’s do one more study just to make sure that we’ve got this right. 

  But in a startup (which is what Ben Horowitz’s book is about) and in organizations that would actually like to grow, innovate, and accomplish things, indecision can mean death. Without decisions, organizations lock up.

  None of this is to say that bad decisions are okay. Executives must make high quality decisions as fast as possible, and as a rule of thumb you probably want to make more good decisions than bad decisions. 

  But speed, momentum, and organizational clarity also matter a great deal. 

  One of the reasons why I mentally come back to this book is because oftentimes I find that things can get hung up on relatively inconsequential decisions. So I like to remind myself that go is better than stop.

  As Ben points out in his book: “The only mistake you cannot make is running out of cash.” And time has a funny way of burning through cash.

  2018.09.16

• I can’t spend unrealized gains

  

  Earlier this week the Wall Street Journal published an article claiming that the celebrated venture capital firm Andreessen Horowitz was lagging behind its elite peers in terms of returns.

  The firm then responded with a well-written blog post explaining why this accusation is off the mark. Their response was simply that you can’t measure returns on “unrealized gains.” Until there is a liquidity event – that is, the company gets sold or goes public – it’s just paper returns. And what matters is cash. 

  As the post clearly states: “I can’t spend unrealized gains.”

  But beyond just a rebuttal, the blog post is a great primer on how the venture capital industry works. We talk a lot about the tech space on this blog, so I thought some of you might find it interesting. 

  One of the reasons I like to follow the VC space is that there are many similarities to real estate development. Not only in the way that the funds are structured, but also in the way that the gestation periods are incredibly long.

  The post talks about this as a “J curve.” In the early years of a fund, the returns are negative. Money is going out the door to invest in immature and risky startups. And it’s not until the harvesting period (7+ years later) that the realized gains start getting paid out to investors (LPs).

  It’s also interesting to note that the exit timing for companies – at least according to Andreessen Horowitz – seems to be increasing (10+ years). This is yet another similarity to real estate development where it seems to be getting harder and harder to build and deliver new supply.

  2016.09.04

• Will real estate developers open up, too?

  A few months ago I read a book by venture capitalist Ben Horowitz called “The Hard Thing About Hard Things.“ It was a great read and I recommend it to anyone who currently or plans to one day manage and lead people. But on a side to that, one of the things I found really interesting is the shift he talks about in the venture capitalist business.

  Over the span of a decade, venture capitalists went from being ivory tower professionals to incredibly open and transparent. And they did that primarily through blogging. Just yesterday, I saw somebody tweet out that the key to becoming a venture capitalist in 1994 was to get an MBA. Today, it’s to start a blog.

  The reason I find that interesting is because I predict that the same transformation is going to happen in the real estate development business. Today, most developers are pretty opaque. The people and personalities behind the projects are still generally concealed (save for a few developers) and my sense is that there’s still very much a fear of exposing and sharing too much.

  But the lesson to be learned from the VC business is that blogs have become one of, if not their most important customer acquisition tool. I read somewhere that entrepreneurs—which are the customers of VCs—are most heavily influenced by blogs over any other medium. That is how they decide who they will allow to invest in their business.

  Which is why I think it’s only a matter of time before the same sort of dynamic plays out in the real estate business. In fact, one of the most common questions I get from readers of ATC is about the reputation of developers and builders. Customers—before they decide who they will allow to build their future home—not surprisingly want to know something about the developer.

  So if you’re a developer looking to sell more homes or lease more space,   I suggest giving blogging a try. It’s hard work, but I think you’ll be surprised at how effective a tool it can be.

  2014.06.05

• The hard thing about urban debt

  I’m in the midst of reading Ben Horowitz’s new book called “The Hard Thing About Hard Things.” You may have noticed all of the random quotes I’m posting over on my tumblog. It’s good stuff.

  At one point, he talks about two types of metaphorical debt: technical debt and management debt. Technical debt is when you write shitty (computer) code that addresses the short-term, but eventually needs to be rewritten in the future. Similarly, management debt is when you make bad and short-term management decisions that don’t serve you well in the longer term. In both cases, the debt compounds and, when you eventually pay for it, it’s got a lot of interest on it.

  This got me thinking: Is there an equivalent for cities? Is there such a thing as urban debt? I figured there must be since we’re an impatient society obsessed with instant gratification.

  I then remembered a great quote that I saw either on Twitter or Tumblr that I think can be credited to Lewis Mumford:

  Adding highway lanes to deal with traffic congestion is like loosening your belt to cure obesity.

  Neither solution is sustainable and eventually you’re going to have to pay the consequences. In the case of cities, I think the answer is transit.

  And transit (disinvestment) is actually a really good example of what might be considered urban debt, because it requires long term planning—something that often conflicts with our political system. Politicians want quick wins.

  But I think it’s important to keep in mind that when we fail to make the hard decisions today, they only become more costly to deal with tomorrow. Quick wins might make for good politics, but they often don’t make for great city building. 

  2014.03.18

• Poke the box, dammit

  Last night before bed I decided to buy a book on my Kindle (iPad app) that I’ve been meaning to read for awhile. It’s called Poke the Box and it’s by Seth Godin. It’s a short read and it’s meant to be that way. You could easily read it in one sitting.

  The book is about taking initiative. Taking action. And drawing your own map. It’s about not being scared of failure and realizing that failures are how you learn. It’s about poking the box, which is a computer programming reference. Programmers learn by poking the box (computer) and seeing what works and what doesn’t work.

  As I read through the book I’m reminded of something that venture capitalist Ben Horowitz wrote a few months ago on his blog:

  “Every employee in a company depends on the CEO to make fast, high quality decisions. Often any decision, even the wrong decision, is better than no decision.”

  Both Godin and Horowitz are, in a way, talking about the same thing: You have to keep moving. Make decisions. Start stuff. And stop worrying so much about being wrong, because it’s virtually impossible to know how things will eventually play out in the future.

  A perfect example of this is Starbucks.

  The first Starbucks in Seattle didn’t sell brewed coffee. It sold beans. And had it continued along this path, it certainly wouldn’t have become the brand that it is today. In fact, it may have failed completely. It wasn’t until Howard Schultz saw what they had started and combined it with what he had learned in Italy, that the Starbucks experience of today was born.

  The important thing is that somebody (Jerry Baldwin, Zev Siegl and Gordon Bowker) took the initiative to start and build a Starbucks. It didn’t matter that they got the recipe wrong, they poked the box and it ultimately lead to something magical.

  The same reluctance to poke the box can also be found in city building.

  Here in Toronto we spend a significant amount of time debating and vacillating around transit decisions (as well as many other things). Should we build LRT? Or should we build subway? What should we replace the Scarborough Rapid Transit line with?

  But we’ve fallen into analysis paralysis.

  The original Transit City Plan was announced on March 16th, 2007. It’s now 2014. And transit still sucks. Imagine if we started and finished, say, 2 kilometers of rapid transit each and every year. Forget worrying if it’s LRT, subway or a horse drawn space ship. We just kept moving.

  Something tells me that we’d be better off, even if we did make a few mistakes along the way.

  2014.01.23

• Innovating amongst the haters

  Whether you’re developing a building, planning transit, starting a company or just trying to do something different, there will always be haters. But pessimists don’t change the world—optimists do.

  I came across a great post last night by venture capitalist Ben Horowitz. It’s called, “Can-Do vs. Can’t Do Culture.” And I think you’d be well served to keep a copy of it on file and read it before every single meeting where you’ll be asked to provide input on something new.

  He’s specifically talking about a growing and discouraging trend of naysaying in the tech community, but the lessons apply more broadly to innovation as a whole.

  I love these lines:

  “The trouble with innovation is that truly innovative ideas often look like bad ideas at the time. That’s why they are innovative — until now, nobody ever figured out that they were good ideas.”

  “From a psychological standpoint, in order to achieve a great breakthrough, you must be able to suspend disbelief indefinitely. The technology startup world is where brilliant people come to imagine the impossible.”

  But the best part of Horowitz’s post is an excerpt from an internal Western Union report (then the largest telegraph provider in the US) recommending that the company not purchase Alexander Graham Bell’s invention (the telephone) and patents for $100,000.

  The Telephone purports to transmit the speaking voice over telegraph wires. We found that the voice is very weak and indistinct, and grows even weaker when long wires are used between the transmitter and receiver. Technically, we do not see that this device will be ever capable of sending recognizable speech over a distance of several miles.

  Messer Hubbard and Bell want to install one of their “telephone devices” in every city. The idea is idiotic on the face of it. Furthermore, why would any person want to use this ungainly and impractical device when he can send a messenger to the telegraph office and have a clear written message sent to any large city in the United States?

  The electricians of our company have developed all the significant improvements in the telegraph art to date, and we see no reason why a group of outsiders, with extravagant and impractical ideas, should be entertained, when they have not the slightest idea of the true problems involved. Mr. G.G. Hubbard’s fanciful predictions, while they sound rosy, are based on wild-eyed imagination and lack of understanding of the technical and economic facts of the situation, and a posture of ignoring the obvious limitations of his device, which is hardly more than a toy …

  In view of these facts, we feel that Mr. G.G. Hubbard’s request for $100,000 of the sale of this patent is utterly unreasonable, since this device is inherently of no use to us. We do not recommend its purchase.

  It’s a classic example of The Innovator’s Dilemma (a book written by management guru and HBS professor Clayton Christensen). Many firms see their businesses disrupted because they blindly stick to the innovation that made them successful in the first place—ignoring what’s coming up on the horizon.

  In the case of Western Union, they could not imagine “telephone devices” in every city. The idea was pure lunacy to them. Of course to us today, they look like myopic fools. We now not only have telephone devices in every city, but a full fledged computer in every pocket. Imagine that.

  Which is why I think it’s important to remember that the way to drive the world forward is—to use Horowitz’s terminology—through hope and curiosity. Suspend disbelief. Think big. Dare to be crazy. Because you’re only crazy until you’re proven to be a genius.

  2014.01.02
• Every employee in a company depends on the CEO to make fast, high quality decisions. Often any decision, even the wrong decision, is better than no decision. These decisions are pulse of the organization. Sharing command almost guarantees that the CEO position will perform poorly in this dimension.

  Ben Horowitz

  2013.08.08