This article was taken from the October 2014 issue of WIRED magazine. Be the first to read WIRED's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.
Ben Horowitz has helped build a world-class portfolio for Andreessen Horowitz -- the Menlo Park VC firm he cofounded in 2009 -- including Facebook, Twitter, Zynga, Skype, Airbnb, Fab, Box, Oculus, Jawbone, Lyft and Pinterest. As a founder entrepreneur, he took data-centre-software startup Opsware through various near-death experiences to an eventual $1.6bn (£950m) sale in 2007 to HP. As a blogger, he has built a cult following for insights that begin with rap lyrics from Kanye or Nas. And as an author, he has written a frank bestseller about building a business in tough times -- with advice on challenges such as firing a loyal friend and with chapter subheadings such as: "If you are going to eat shit, don't nibble."
Horowitz, whose book The Hard Thing About Hard Things portrays Andreessen Horowitz as so entrepreneur-friendly that partners are fined $10 for each minute they are late to a pitch meeting, was in Britain in June to attend the Founders Forum networking event.
After a breakfast discussion in which he explained where he saw today's investment opportunities -- Bitcoin; software-powered "full-stack startups" such as Uber and Zenefits; and companies rethinking the data centre to kill Cisco and IBM -- he spoke to Wired editor David Rowan about what he commonly recognises in the most creative entrepreneurs.
WIRED: What traits do you see in today's most disruptive entrepreneurs?
Ben Horowitz: The biggest thing in common that they have is they think for themselves in an astonishingly antisocial degree. Elon Musk is certainly like that, Peter Thiel is like that, Larry Page is, Mark Zuckerberg, Kanye West... They have a very strong belief in something of their own creation, and really no regard as to whether people like it or not.
Not caring what people think -- could there be an autism/Asperger's-spectrum element to that? The Aspergian aspect is a little different --
I have an autistic daughter. You can think of autism or Asperger's as a deviant nervous system. If nervous systems follow a bell curve, a lot of the entrepreneurs, and geniuses like Einstein and Van Gogh, are three standard deviations out. There's a development of the ability to profoundly think for yourself: you can think through anything from first principles and generally come to a better conclusion than somebody who has read all the literature. It's quite a rare skill. Larry Page is the most amazing example that I've come across.
Can this be learned? I think that you can certainly get better at it.
You can train yourself to start from first principles. It's harder as you get older -- the more you know, the more it messes you up on that dimension. It's an unnatural feeling to go, OK, don't assume the sky is blue. Making zero assumptions is a challenging thing to do. The big thing is being completely open-minded and making yourself aware of what you have a bias towards. Courage is more of a developed skill.
Who's the most courageous entrepreneur you've worked with? Mark Zuckerberg. When I met him in 2007, he had a full-scale revolt on his hands from his executive team. They all wanted to sell the company; one was leaking all the company information to the press to force him to sell. For him at 23 to stand up to them and say, I'm not going to do that; in fact, I'm going to replace all of you who want to sell the company...
How do you keep up with what's happening? Certainly Wired is great, then there's a set of stuff underneath Wired, like Reddit, Hacker News. Then in the firm, you've got Marc Andreessen, who spends all day reading stuff -- and now tweeting. That tweet-stream used to be my email inbox from him, so it's a wonderful service to the world that he tweets. We have people who are always discovering new things, like Balaji Srinivasan, to learn from. He runs the Stanford Bitcoin group, he's a professor of computer science and statistics at Stanford -- the amount of depth that he has on so many subject areas is really compelling. Then there's a constant steam of entrepreneurs coming in with new ideas. You get an amazing education. We see 2,000 pitches a year; I personally see about seven a week. And we make about 20 investments out of those.
If you were running WIRED, what would you put on the cover this month? The re-architecting of the data centre is really interesting. We've seen a huge number of companies that are able to use the cellphone supply chain to build EMC-grade, IBM-grade stuff by applying software to it -- multi-petabyte arrays using cellphone memory that are highly reliable. That's changing every layer of the software stack -- it wipes out Cisco, EMC, Oracle, IBM, a huge amount of revenue and market cap that's up for grabs. We've just announced investment in Mesosphere -- we call it "one over VMware."
They lay an operating system on top of all your stuff. Twitter deployed it, and it's working great -- it got rid of the Fail Whale. There's nothing you could buy from any incumbent data-centre guys that would get you that result. Another company called Cumulus Networks that we're in [is making a] software networking switch that goes into the core of Cisco's business, ten times faster at a third of the cost. What's not to like?
Who'd be on the cover? Don't put a fake Satoshi Nakamoto on it... [Laughs] I still think that 95 per cent of the Bitcoin coverage is so far off base it's amazing. [Andreessen Horowitz has invested in Bitcoin companies Coinbase and TradeBlock.] What does it mean to have a distributed ledger with no central authority? We've spent a lot of time with the US regulators. Despite what the popular press writes, it's not anonymous -- it's pseudonymous and it's very traceable.
They very easily arrested all the guys from Silk Road: once they got the site, they could trace everybody through Bitcoin. It's like email. That's great -- because cash is very hard to trace. So the regulators are not so inclined to kill it. And there's a lot of political movement not to depend on the banks for everything, given what happened in the not distant past.
[Laughs] The talk with the regulators isn't how we should shut it down, it's how to make it as safe as possible.
The Hard Thing About Hard Things (HarperCollins) is out now
This article was originally published by WIRED UK
