Invest Like the Best with Patrick O'Shaughnessy
· Ben Horowitz
[00:00:00] S1: Let me give you a small but probably the most important insight, which is from Bushido, the Way of the Warrior from the Samurai. A culture is not a set of ideas. It's a set of actions. If you define your culture as a kind of set of ideas – integrity, do the right thing, we have each other's backs, or any corporate values – it's actually just a bunch of fucking platitudes. It doesn't mean anything. The culture has to be defined in terms of the exact behavior that you want that support that idea. What do you have to do to actually be that thing that you want it to be? It's the little things. How responsive are you to your colleagues? What's the SLA on returning a Slack message or an email? Do you show up to meetings on time? Not everybody has those ideas, but if you want that idea, you've got to manifest it through something else. We have an idea about, "You have to respect the entrepreneur." Well, what is that behavior? Well, like, one, you can't ever be fucking late to a meeting with an entrepreneur. I used to fine people $10 a minute in the beginning of the firm to reinforce it. And then you have to get back to an entrepreneur. If you say no, you have to say no. You have to explain why you're not investing. And we're going to survey that entrepreneur after you say no to make sure that you said no and that they had a good experience. That's a behavior. If you try to make yourself look good by making an entrepreneur look bad, you're fired. You get on X and say, "Oh, he's selling dollars for 85 cents." No, no, no. No, no, no, no. We're dream builders. We're not dream killers. Fuck that. If somebody wants to do something larger than themselves… build a company, make the world a better place, we're for that. We don't give a fuck what the idea is. Or if Sequoia funded them or whatever, we'd love that. That's who we are. And so the behavior is the culture, is the actual thing, and that gets you the idea, as opposed to the idea and then figure out how you're going to behave. That's probably the main thing on culture.
· Patrick O'Shaughnessy
[00:00:00] S0: Can you say more about the influence your dad had on you? You mentioned that lesson of "nothing's fair" or "life isn't fair." Tell me about your dad.
· Ben Horowitz
[00:00:00] S1: He was what's known as a red diaper baby. My grandparents were communists. They went to secret meetings. They had cards. My grandfather was fired during the McCarthy era from being a junior high school teacher for being a communist. And he grew up a communist and he started out on the left. He was editor of a very famous New Left magazine called Ramparts Magazine, which he was editor of. And he was involved in the Black Panthers with Huey Newton and, you know, in the Oakland chapter, Eldridge Cleaver. Dropped out of politics and he reemerged eight years later on the right. He really understood the ills of communism and socialism, which helped me a lot. One of the things that he said to me that always stuck with me, he's like, "Son, go to the library. Pick any book on socialism. There's hundreds of books. And in that book, I guarantee you, you will find page upon page, chapter upon chapter of how to divide the wealth. You will not find a single sentence on how to create wealth." And I was like, "Oh, wow, that's not a very good system, is it?" I learned a lot about systems thinking from that. He wasn't this new age father. In the old days, your father, they wouldn't even talk to you until you got to be like 12. And you get these little snippets of wisdom. And one of the ones I actually put in The Hard Thing About Hard Things, but I had three kids. I was young and I remember it was like 102 degrees. The air conditioner was broken. The kids were going crazy. Like one of them poured a whole bottle of apple juice, like a gallon of apple juice into the rug and apple juice is steaming out of the carpet. But I'm just sitting there, I was looking like I was going to die. And my father looks at me and he goes, "Son, you know what's cheap?" I said, "What?" He goes, "Flowers are cheap." I said, "Okay." He said, "You know what's expensive?" I said, "No, what?" He said, "Divorce." He had been married four times. So he knew what he was talking about.
· Patrick O'Shaughnessy
[00:00:00] S0: As you look out today in the world, I'm curious what things are captivating you most and maybe even most inspiring you. You have such an interesting perch. You get to see so much.
· Ben Horowitz
[00:00:00] S1: What's going on in coding now is quite phenomenal. We kind of went through this period where, "Okay, AI can write code. Cool. Okay, you can vibe code stuff. A lot of security holes. Fine." But I think over the winter break, it turned a corner where really good programmers were going, "Whoa, this helps me. I just became 100 times more productive." And I can't remember any technology where, like, just all of a sudden you wake up and everything, the whole world just changed like that. That's happening on a pretty regular basis, I would say. We spent a bunch of time with people in Hollywood who are using AI. I think AI will help you make movies both better and at much lower cost, because you can shoot a scene and then have the AI do a variation of that scene that's very, very good. So you don't have to do – if you're an actress, you have to shoot a scene like 15 or 20 times or something. Wouldn't it be nice to shoot it three times and then you just take the pieces you like and make it what you want. It's a little underestimated as a tool for creatives, I think. That's true in music, too. I was a young person when hip-hop started and the huge criticism of, like, "This is not music. They're just taking music and they're remixing it and they're rapping over it and it's a bunch of bullshit. It's a novelty." It was postmodern art. And I think we're going to get into post-postmodern art with what people will be able to do with AI and music. And that was one of the most exciting times in music. The invention of the new art form is when it gets really exciting.
· Patrick O'Shaughnessy
[00:00:00] S0: What specific people have had the largest impact on you personally and how?