pmarca

The CEO’s Weekly Checklist

2012-05-14T20:23:40Z

In his latest blog post, my partner Scott Weiss offers a few suggestions for what a CEO should be doing on top of his or her expected responsibilities. You can read his checklist here.

Filed under: Uncategorized

Our Philanthropic Commitment

2012-04-25T20:45:29Z

We are delighted to announce that the six General Partners of Andreessen Horowitz, with our families, are all committing to donate at least half of all income from our venture capital careers to philanthropic causes during our lifetimes.

The reason is simple. We are fortunate to work with some of the best entrepreneurs and technologists in the world, and in the process help create great and valuable companies. That activity, done well over decades, can generate a lot of money that can then be productively deployed philanthropically back into the society that makes it all possible. We love participating in this process, and we hope that our philanthropy can, over time, help make the world a better place.

As an initial catalyst, we are making an immediate group donation of $1 million to a set of six vital Silicon Valley-related nonprofit organizations. Those causes, and their respective sponsors, are:

Ben and Felicia Horowitz: Via Services
Jeff and Karen Jordan: Ecumenical Hunger Program
John O’Farrell and Gloria Principe: Second Harvest Food Bank
Marc and Laura Andreessen: Fresh Lifelines for Youth
Peter and Martha Levine: Canopy
Scott and Pamela Weiss: The Shelter Network

Signed,
Ben, Jeff, John, Marc, Peter, and Scott

Filed under: Andreessen Horowitz, Philanthropy

A Clarification With Respect to Yahoo

2011-12-09T17:57:06Z

Over the last several weeks, there have been erroneous reports in the press that my partner Jeff Jordan and/or I might become an operating executive of Yahoo in some capacity.

To be crystal clear, neither Jeff, nor I, nor any of our partners at Andreessen Horowitz, are in the running for, or would accept, any operating role at Yahoo, including CEO, acting CEO, chairman, or executive chairman.

Jeff and I have high regard for Yahoo, but we are fully committed to our day jobs as general partners at Andreessen Horowitz and board members of our portfolio companies.

Filed under: Uncategorized

Merging Glam and Ning

2011-09-20T23:01:07Z

Today, my company Ning, where I serve as chairman and cofounder, is announcing that it has agreed to merge into Glam Media. In this post, I’d like to briefly explain the whats and whys, and to thank a lot of people who have worked very hard to get us to this point.

Ning is my third company, founded several years ago by Gina Bianchini and myself, and run for the last couple years by my close friend and colleague Jason Rosenthal. Over the last two years, Jason and his team have brilliantly executed a dramatic transformation of the company and today Ning hosts over 100,000 social networks covering every conceivable topic and interest, from 50 Cent to Sarah Palin and beyond. Ning’s mission has always been “your own social network for anything” and the team at Ning has worked hard to achieve this.

Glam is a company founded by longtime entrepreneur and innovator Samir Arora. I first met Samir almost 15 years ago in his role as founder and CEO of NetObjects, one of the first, and best, web and e-commerce development systems, later bought by IBM. Before that, Samir was a longtime senior contributor at Apple, where his work led to Apple’s famous “Knowledge Navigator” vision video and then later, through a long and winding road, to the Apple iPad.

In Glam, Samir and his outstanding team have built one of the leading premium content networks on the web. Glam’s high-end content has amazing reach: 200 million users and 2.6 billion page views across 2,500 publishers, with advertising participation by 1,000 premium brands. Combining Ning’s social technology, user base, and 100,000+ networks will immediately boost Glam’s reach to 240 million users and 3.1 billion page views, add recurring subscription revenue to Glam’s business model, and most importantly, set up the combined company to be the leading social media content company on the web.

As consumer behavior broadly moves from old media to the web—as software eats content—the opportunity for high-end online content is gigantic and our combined company will be in the pole position in this huge market. To that end, I am also delighted to announce that I will be joining the board of directors of Glam after the completion of the merger, which we expect to occur in the fourth quarter of 2011. I’m thrilled to be able to work with Samir and his team at Glam, as well as Jason and his team from Ning, to build an amazing combined company.

Now, I owe some people huge thank you’s.

To Jason, the management team, and all of the wonderful current and former team members at Ning who have worked so hard to get us here, as well as our extremely supportive investors along the way, thank you so much. Working with you over these last several years has been one of the highlights of my life, and I look forward to working with you for years to come.

To Samir and the Glam team, thank you for building Glam into such a great company. I’m excited to pursue the huge combined opportunity with you.

Finally, a very special thank you to Gina, my cofounder and longtime friend and colleague, for all of your insight, innovation, hard work, and commitment going back all the way to the beginning.

Filed under: Ning

Primer for Hiring Execs

2011-09-14T21:56:32Z

Andreessen Horowitz prefers funding companies whose CEO is a co-founder. We also prefer founders who are technical. Put the two together, and you often have a CEO who has to hire executives into roles (e.g., marketing, sales, customer support, finance) she has never done before.

How in the world do you interview and recruit someone for a role you’ve never done before? Start with Ben’s latest blog post “Hiring Executives: If You’ve Never Done the Job, How Do You Hire Someone Good?“.

Filed under: Business, Startups

Amazing cofounders

2010-10-14T18:32:25Z

One of the best parts of my job as a venture capitalist is that I meet super-interesting and super-motivated cofounders all the time. As you might expect, most cofounders have compelling personal histories that have shaped them as entrepreneurs—stories such as “started coding at age 10 before ever seeing a computer”; “enrolled at Stanford at age 16 and graduated in 3 years”; “founded and sold two businesses while in high school” and so on.

Against this backdrop of amazing stories, we recently met an entrepreneur whose personal background is so jaw-dropping that it ought to written into a Hollywood movie script. Head on over to Ben’s Blog to hear the story of Christian Gheorge, co-founder of a company named Proferi, which we recently funded along with our colleague and friend Aneel Bhusri at Greylock. The story begins with in Communist-ruled Romania in the 1970s. Go read the rest of the story.

Filed under: Startups

Good Ambition, Bad Ambition

2010-09-09T00:43:54Z

Ben’s last post on minimizing corporate politics generated a bunch of interesting comments. One set of commenters essentially asked, “gee, why should an employee be motivated first by a company’s success rather than by their own success”? Frankly, this surprised both of us.

So I suggested that Ben answer this line of questioning directly, which he does in his latest post The Right Kind of Ambition. In addition to his trademark rap quote, he also quotes esteemed management philosopher Theodore Geisel—a.k.a. Dr. Seuss—speaking in the voice of Yertle the Turtle. That’s got to be the first time Drake and Dr. Seuss appear on the same page of, well, anything.

Filed under: Business, Opsware

Fighting Fire With Fire

2010-08-24T20:15:06Z

As companies grow, they often get more political—by which I mean, people start advancing their own agendas by means other than merit or contribution.

Ben explains in his latest blog post what a CEO can do to minimize corporate politics. It’s not intuitive. For example, Ben points out that CEOs need to give career guidance to junior employees in a very different way from giving advice to executives. Read the post to learn how to minimize politics—especially around the traditional flash points of performance reviews, promotions, and re-orgs.

Filed under: Business

Growing Pains

2010-08-03T00:30:12Z

These days, entrepreneurs spend a lot of time thinking about scaling their products. No one wants to build the next Facebook only to watch their technical infrastructure crumble when user growth takes off.

Entrepreneurs rarely think as much or as deeply or as rigorously about how to scale their companies. Best practices for scaling human organizations are harder to find, and the whole endeavor feels much more like an art than a science.

Ben leaps into this information void with his latest blog post titled Taking the Mystery out of Scaling a Company. This post will be the first of a series Ben will write on this topic because each skill CEOs must learn to scale their companies—such as designing and rolling out re-organizations, hiring functional executives for functions they’ve never done personally, optimizing incentive systems, and so on—need a post (or three) of their own.

Filed under: Business, Startups

Our First Cloud Investment

2010-07-13T19:40:58Z

Ben Horowitz and I co-founded one of the first cloud computing companies which we named, appropriately enough, Loudcloud. So we’ve been thinking about the cloud longer than most folks. In fact, we had to call ourselves a “managed services provider” in those days since no one was talking about “cloud providers” in the year 2000. I have to say it’s gratifying to see both the cloud name and the cloud computing architecture going mainstream in the past few years.

This time around, we’re thinking about cloud computing as investors rather than entrepreneurs. On his blog, Ben walks through why we invested in Okta, our first cloud investment. We couldn’t be more excited.

Filed under: Startups, Technology

Telling It Like It Is

2010-07-13T00:37:08Z

As the ranking officer, the CEO has a huge impact on their company’s culture. This is especially true in startups where the whole company is watching the CEO’s every move, every interaction, every decision. As a result of this micro-scrutiny, CEOs can feel like they need to be the company’s Chief Morale Officer, continuously and relentlessly accentuating the positive and downplaying the negative.

As Ben shares in latest blog post, he often felt this way as a first-time CEO. He also shares how (and why) he quickly got over this need to be unfailingly positive—and how this was a turning point in his development as a CEO. Go find out why CEOs need to tell it like it is.

Filed under: Business, Opsware

The Job of a CEO

2010-07-07T21:06:17Z

Every job in a startup is (usually) hard: building a new product is hard, marketing a new product is hard, selling a new product is hard. But no job is harder than the job of a CEO. Also, no job is murkier: what do the best startup CEO focus on day after day?

Ben walks through our thinking on what the CEO ought to be doing from the vantage point of how we evaluate CEOs as we decide whether to fund their companies. The job is not easy to describe, much less ace. In my view, my friend and colleague Ben has done a fabulous job of both.

Cue the Kanye West.

Filed under: Business

Training—At a Startup?

2010-07-07T21:06:33Z

Conventional wisdom: startups don’t have the time or dollars to invest in training. Training is only for big companies who can afford it, both cash- and time-wise.

Not surprisingly, Ben picks a fight with conventional wisdom in his latest post, Why Startups Should Train Their People. The post describes why and how even startups should invest in training. No company operates so flawlessly that the right training at the right time doesn’t make a huge, measurable difference.

Filed under: Business, Startups

Big Enough for the Job?

2010-05-06T01:17:12Z

A question I hear a lot at startup board meetings is this one: "is the current VP of Marketing or VP of Sales or CFO big enough to do this job in 18-24 months when we go international or need to build an indirect sales channel or do the roadshow for our IPO?"

While you always want the best executive team you can recruit, there are downsides to asking this question too early or in the wrong way. Ben enumerates the risks in his latest blog post The Scale Anticipation Fallacy, then offers his suggestions on the right way to evaluate and develop your executive team.

(As you can tell, our blogging agenda for the next few months—and maybe longer if the fan mail keeps coming in—is a comprehensive set of posts on entrepreneurship, management, strategy, fund raising, and leadership. Coming soon: the return of my archive on these very topics. Stay tuned.)

Filed under: Startups

Why Do We Prefer Founders as CEOs?

2010-04-28T23:46:15Z

When I introduced our venture firm on this blog in July, I wrote extensively about the types of entrepreneurs and companies we want to fund: technical founders, brilliant and motivated entrepreneurs, product-focused companies, and so on. I got widespread head nods on most of the criteria.

But many people were skeptical about the "founder-as-CEO" filter. To express their skepticism, people would ask me some variant of this central question: "shouldn't the founding CEO just get the company jump started, then recruit a professional CEO to drive once the company is up and running?"

While we agree that startup CEOs and "grow the company" CEOs need dramatically different skill sets (a point Ben hinted at in his last blog post), we wanted lay out our thinking on why we prefer funding startups whose founding CEO plans to run the company for a good long time. Cue the hip hop.

Filed under: Business, Startups, Technology

Big Company Execs in Startups

2010-04-21T20:13:52Z

My good friend Steve Blank does a great job of describing the metamorphosis a scalable startup needs to undergo to become a big company. During that metamorphosis, many startups hire executives from big companies to help scale the business. Some go on to do a good job.

But I've seen more than a few of those big-time execs get organ-rejected within the first couple of months of the tranpslant. Ben published a post today about this exact phenomenon called Why is it Hard to Bring Big Company Execs into Little Companies.

In the post, Ben dissects the reasons why big company execs can flounder in startups, how you can spot warning signs during the interview process, and (perhaps most importantly) what you need to do to integrate the freshly hired exec into your company. Read it to save yourself a lot of heartburn created by hiring the wrong exec or failing to do your part to integrate them into the company.

Filed under: Business, Opsware, Startups

What Some VCs Do That We Don’t Like

2010-04-13T20:44:08Z

My partner Ben and I have been active angel investors for years and now full-time venture capitalists for 9 months. But prior to that (and for most our lives), we've been entrepreneurs.

Now that we've sat on both sides of the table—and have spent more time with other venture capitalists—my partner Ben has a few observations to share about what he likes and dislikes about what some VCs do. Mostly what he dislikes. Though to be fair, he has recommendations for behavior he'd like to see instead, so it's not just a rant.

And yes, there's a quote from a rap artist (Dr. Dre, to be precise).

Filed under: Startups, Technology, Weblogs

Announcing Ben’s Blog

2010-04-07T21:27:31Z

For those of you who have been keeping up with this blog, you’ll know that my partner Ben Horowitz has been very actively blogging—and folks are paying attention. His post on All Things Digital called The Case for the Fat Startup struck a nerve in the startup community, prompting my good friend Fred Wilson to write a counter-post called Being Fat is Not Healthy, in turn prompting Ben to write a counter-counter-post defiantly titled Revenge of the Fat Guy.

Now for those of you who clicked on the last link, see what happened there? Yes, astute reader: Ben has his own blog now. Go, subscribe, and prepare for a slew of insightful and provocative posts from Ben on leadership, entrepreneurship, venture capital, and much, much more. Also lots of quotes from rappers.

Case in point: Ben’s first post on his own blog demystifies super-angel investor Ron Conway and features lyrics from The Game. Find out why the savviest entrepreneurs trip over themselves to raise money from Ron.

Filed under: Finance, Opsware, Startups, Web/Tech

The Revenge of the Fat Guy

2010-03-20T16:47:42Z

[This post is by Ben Horowitz.]

Fred Wilson wrote a counter post to my The Case for the Fat
Startup that you can find here. Before countering his counter, I’d like to say
that Fred is one of my favorite VCs and has a marvelous track record of
success. Further, I’d like to thank Fred for posting his article, as it enables me to
clarify a couple of subtle but important points. 

I actually agree with Fred in the base case and never said
otherwise: entrepreneurs should build the product that everybody wants before
raising a boatload of cash to build the company. But Fred says one thing that
is confusing and another that’s just not accurate:

Only
raise a boatload of cash once you’ve achieved product market fit. Product
market fit isn’t a one-time, discrete point in time that announces itself with trumpet
fanfares. Competitors arrive, markets segment and evolve, and stuff happens—all
of which often make it hard to know you’re headed in the right direction before
jamming down on the accelerator.
Only Marc
and I could have pulled off the Loudcloud/Opsware miracle; other entrepreneurs
shouldn’t even try.  We
certainly didn’t script the movie the way it turned out. I’m not recommending
that you as an entrepreneur pattern your own startup after mine. But as an entrepreneur,
you have to deal with adversity, as we did with Loudcloud/Opsware.
My experiences there are highly relevant to other entrepreneurs. In fact, they
are more relevant than Fred’s pattern matching.

Let’s talk about each point in turn.

Product Market Fit Myths

First, I agree that the best way to build a big company
would be to find product market fit and then raise a bunch of money to build a
big business. But sometimes, things aren’t so clear. Let me try to describe
some of the ways things can get messy as a series of myths about product market
fit.

Myth #1: Product market fit is always a discrete, big bang event

Some companies achieve primary product market fit in one big bang.
Most don’t, instead getting there through partial fits, a few false alarms, and
a big dollop of perseverance. By the time it got acquired, Opware had achieved
product market fit for a category of software called data center automation.
But it wasn’t at all obvious that was going to be our destination while we were getting there. We actually achieved product market fit in a number of smaller
sub-markets such Unix server automation for service providers, then Unix server
automation for enterprise data centers, then Windows server automation, and
eventually network automation and process automation. Along the way, we also built a few products that
never found product market fit. 

Similarly, Joel Spolsky of Joel on Software and
Fog Creek Software fame has an exciting new company called Stack Overflow. He has
achieved product market fit in the collaboratively edited Q&A market for audiences such as software engineers and mathematicians.
Is this the primary product market fit? Neither of those markets seem that big.
Will he need significant new features to find the big product market fit?
Probably. Should he invest or stay lean? Good question, and there’s no formulaic
answer.

Myth #2: It’s
patently obvious when you have product market fit

I am sure that Twitter knew when it
achieved product market fit, but it’s far murkier for most startups. How many customers (or site visits or
monthly active uniques or booked revenue dollars, etc.) must you have to prove
the point? As I explain above, there may be multiple sub-markets, each of which
need their own product. I show below that Fred himself didn’t realize that
Loudcloud had achieved product market fit even though we had. It’s usually not
black and white.

Or let's try a consumer products example. Apple's first iPod shipped in
November 2001. It took nearly two years (91 weeks, to be precise) to sell its first million units. In
contrast, Apple's iPhone 3GS shipped June 2009 and shipped 1M units in 3 days. At what point is it obvious to the original iPod team that they've achieved product market fit?

Myth #3: Once you achieve product market fit, you can’t lose it.

Fred implies that we raised a boatload of money for Loudcloud prior to achieving product market fit. This is not true. Four months after founding Loudcloud, we had already booked $12M in customer contracts, so we had product market fit by most measures. I’d defy any VC including Fred to point to a company with a $36M run rate 4 months after founding where the VC advised, “stay lean until you achieve product market
fit.”

But after that bolt out of the starting gate, the market for cloud
services changed dramatically. After Exodus went bankrupt in September 2001, the market for cloud
services from semi-viable companies went to zero and we lost product market
fit as a cloud services provider. We had to rebuild completely and would ultimately find product market fit in a different set of markets altogether.

Myth #4: Once
you have product-market fit, you don’t have to sweat the competition.

It’s
fine to stay lean if you are not quite sure that you have product market fit
and there are no competitors in your face every day. But usually there are. In fact, the best markets are usually the ones in which competition is fierce because the opportunity is big. How
long should you stay lean before attacking? Again, there is no formula that works in all (or even most) cases.

Exceptions that prove the rule

Now, there are some companies such as Twitter (one of Fred’s brilliant investments) for which the above myths are actual truths. However, I propose that
Twitter is more exceptional than Loudcloud or Opsware in that most
entrepreneurs are dealing with a situation that looks much more like Opsware
than Twitter.

The Marc and Ben Special

Second, let's talk about the Marc and Ben Special. Fred writes: “Ben explains that Loudcloud raised $350mm in four rounds of financing (including an IPO) in the first 15 months of
its life. Marc Andreessen and Ben Horowitz can do that. Most of you can not.”

It's true that we raised a lot of money, and not all first-time entrepreneurs can raise that much money. But that's not my point. The most important fund raising that we did as it relates to The Case for the Fat
Startup was the very last round (as is very clear in the original post). We
raised that money as Opsware, long after we had lost all of our
magic fairy dust. Marc had moved on to found Ning and I was the CEO who nearly
ran Loudcloud into the wall. I am quite sure that I did not have exceptional
fund raising capabilities at that point.

In summary, let me repeat that I agree with Fred in the base case: first build
the product that everybody wants, then raise enough money to build the company. If you can build a big company that way, by all means do it.

Having said that, your story will almost certainly not be that
clean. You might achieve partial product market fit at the same time as a scary
competitor, you might not be sure that you have product market fit, you might
lose product market fit. When one or more things happen, no pattern matching will save you. You will have to figure out for your own unique situation a)
whether there is a clear and present market and b) if there is, how you can
take it.

Fred implies that what we did at Loudcloud/Opsware was
extremely difficult and while Marc and I could pull it off, other entrepreneurs
shouldn’t try it. My point is that trying it isn’t really a choice. As an entrepreneur, you will sometimes (maybe more often than you like) find yourself in a difficult situation. I hope to have provided some
insight on how you might come out alive when that happens.

Filed under: Uncategorized

The Case for the Fat Startup

2010-03-17T21:33:29Z

These days, nearly all the entrepreneurs who come pitch at our venture firm Andreessen Horowitz highlight how little money they are raising and how "lean" they are planning to run the company. While we don't want to invest a single dollar more than a company needs, there is a case to be made for raising enough money to win the market.

My partner Ben makes this case convincingly in his guest post on AllThingsD titled "The Case for the Fat Startup." Read it, and along the way you'll also hear the story of how Ben navigated our company Opsware through the turbulent dot-com implosion to a $1.6 billion acquisition by HP Software in July 2007.

Hint: he didn't do it running lean.

Filed under: Uncategorized