Ben Horowitz: Why Hesitation is a CEO’s Worst Enemy

28:00And that's generally where the founder probably can't run this thing anymore. That's how it happens. 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 you know, 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. My most anxious better to have like CEOs who are like C -minus students.

28:41Why is that? Yeah, the little physicist was like, well, like, it's just good to be used to filling. 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 all thing, you know, okay, like you've got through it, keep going. You know, I'm a match. That's a lot of the thing that we try to do. So you know, it comes back to the, your 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 paid you'll go through a sea.

29:26Yeah. Yeah. And you know, like, I mean, a lot of why I wrote that book was just to analyze it. I think what happens is, you know, And particularly, when I wrote it, and I think it's come back and been true now, it's 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 heard all these smart people and it was all great. But like, that's not all how it happens. And I've spent enough time with everybody from like Mark Zuckerberg to Sam Aldman and so forth that like they all go through that same thing that you, who has, you know, your start -to -line company go through like you screw a lot of things up and fail massive consequences.

30:12But you, you, you have to kind of maintain your confidence. Actually, I was at a storytelling event last night and I was chatting with someone that 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 the, you know, goals and objectives or okay, or whatever management technique, like you need like a, you know, a basic like eighth grade education to like do any of that stuff.

30:47It's not that complicated. The difficult part is the feeling that you have when you have to do it. It's very like the hard game of matter, a re -orgaise, you're redistributing power. So you're going to have people really fricking 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. Knowing how the organization should work to make communication better is not that complex. Yeah, I think about, I was at Airbnb for a long time and just the again, Brian, who I don't know even know if he had a job before Airbnb.

31:21Oh, yeah. I spent a lot of time with Brian and he, yeah, after COVID, he at all kind of clicked for him. And then he did that, he and the good talk on founder, 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, you know, all this stuff in the United States are very senior your people and, you know, he didn't, he wanted us to defer to them, but you can't defer as the seat yok, you know, because you know what Airbnb should be doing. He may know what like, and finance should do, but you know what Airbnb should do and this kind of thing.

31:57And then it gets really wild when you, like you can't defer decisions as to she, you gotta like understand what people are saying and go, now we're gonna 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, I know. I mean, they're really hard to learn without kind of doing and without often without paying the consequence. And I, you know, like, you know, like I make mistakes. I, I have a conversation with Ali the other day and I was like, 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.

32:39And he said, why'd you put it off? I said, cause things were going too good. I didn't have to deal with it. And he's like, yeah. He said, I know that. Like, I'd say, Ali is one of the, he's got the kind of best private company CEO out there. And he's making a mistake. And I'm making a mistake. So it's just tough. You said that one of the, maybe the main reason founders' failed CEOs is they lose confidence. And you had some ideas that you guys have to help founders work through that. Or they're 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.

33:14So the first thing is, well, what would it give you? Well, like if you can get stuff done. So for what if I could give you a network that is good as Bob Iger's network day one, like the day you step into the job. And so 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 give 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 unlike a CEO to CEO Basish as opposed to an investor to CEO and And just kind of feel that.

34:06Early in the French days, we used to do this thing. I think I'm gonna bring back in some form this thing called the Seague O 'Barbacute. And it was like, a lot of people have these events where 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 I said, why would we just have to barbecue? And like I would barbecue, we get everybody in my backyard. I must 500 people at the peak, which is why I had the kind of stuff. I couldn't get much food after that.

34:43And then, you know, we'd have Larry Page in Mark Zuckerberg in Kanye West. And so you're a CEO in there, we're providing 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. you. And so then when I go back to my company, 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 of our kids crying out loud and that couldn't do. And so, you know, that's, but it's all, the whole idea was always like, okay, do you feel like you can do it? Because that's, You know, that's half the bow to it.

35:25And look, having been in, and you know, 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. And because as we said, founders can get to the next product. And that's something that, you know, almost no professional CEO is able to do, like they've been rare cases. but Jerry 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?

36:06Well, you know, the common startup wisdom keeps changing. You know, like one of the early ones that was running and kind of brain articulated it. And then now I think a little bit of what people have gone to is It's also wrong. So, the first idea that was wrong was like, okay, build a team of senior executives. You know, what's in these? You get product market data 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 pace to your ability to integrate and then manage them. Because if you bring in a bunch of senior people and you don't know really how they match your company or how that function works or so forth, then you're going to start deferring.

36:57And 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 about 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 -grandeer, Ursula, at Databricks was running sales. And I'm like, Ollie, you're gonna have to hire somebody who knows sales, because Ursula is a PhD in computer science.

37:39Like, I like that, right, damn. That's probably not where you're gonna 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 it's fine. Why? I said, like, you know, a lot of what's sales, there's a lot of knowledge in how to build a worldwide sales reference. You know, you need knowledge of customers, territories, territory splitting, rip profiles. Like, there's just like a litany of stuff that you really can not only learned by doing trial and error, and you don't know aim. And so like you're phenomenal, like let's get you, you know, and he's still, he's a very senior executive in the company now, but we need somebody who knows that.

38:23And the idea that there are companies that go, okay, we're just not going to hire that because we're in gender 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 DCs give, because they watch some fucking podcast, are all fucking stupid. Like it's just, there's a lot of depth that he says. You have to know the answer to the next question, the next question, and the next question. And it does drag, be crazy. Like, one of the other things that happened along these lines, just to show you how little you know as an investor about what it means to be CEO.

39:06One of the, we were at a board dinner, one of the CEOs, says to me, he goes, we had one of our CEOs says, 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 an unplug some time. And I said, I was like, what the fuck are you talking about? He's not on plug and like he's getting shit all the fucking time like he's got to deal with that like I 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 so it's The you hear something from like somebody who but if you happen 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.

39:54I was like oh, so anyway So but it's you know like he was very innocent. I was still on a 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, I mean, like, and I think actual CEOs know it. And that's kind of how people in my profession can get a bad wreck because like giving advice, or that's not something that you know with something that you heard is very dangerous, I think. So speaking of advice that you've shared that might be at a date now, you are famous for writing one of the most popular pieces of literature for product managers.

40:37There'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 nearly as an example of a full training document. Still, people or 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 around just. And one thing about product management is it's a job that's completely different at every company.

41:17Like, and there is no training for it. So like everybody kind of figures it out as they go. So, and depending on what's being emphasized, like they'll get wrapped around the axel on, you know, like if it's under price 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, you know, the product requirements document, okay, I think. And those are like these tasks, but none of those were the job. And what I was trying to get out and get product manager, bad product manager was the job is fundamentally the leadership job.

42:04And 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 buy them, I can't promote them, and so forth. And which is kind of the essence of 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.

42:51Like 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 may or may or may not need to do. I don't know if you need to do it, but like the thing is, you know, 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? Like, you know, be the leader.

43:37I think the details of it, you know, of any kind of thing that was kind of tasks specific was like really for my group AdNetscape in like 1996. Whenever I had a hell of a running. So it was, you know, as a kind of document I read out of frustration. But I am glad that the people so like it. And I think leadership in general is undervalued, under estimated, it's the most powerful thing. And most of the great companies, Gentson is a great example, like what a phenomenal leader he is, not just in video, but of the whole industry. And he doesn't have authority over the industry, but like he drives it for.

44:26And that's why they, good product, Gantz, your bad product manager is so important because that thing, if you learn how to do it, that's the thing. I didn't realize he wrote that initially as just an internal document. And then he made it. And that's the other thing. It was kind of before blogging took off. So it's just an internal thing. And I probably should've later. It was, I was just getting so mad, you know, and by the way, our crowd management team at the time was like very good, very talented people. They just, they just were not getting that concept. So, you know, like David Wyden set Coastal Ventures, Ragu Ragu Ram, who was the one on the PCO of VMware.

45:06I mean, like the team was like that team. But they were driving me crazy. And so I just, I was like, I can't yell at people anymore. I have to like explain to myself. And so it's a good thing. If you You find yourself yelling at people like you probably have explained what you want. It was the other big take right from that. Do you ever think that piece would be so long lasting and so I don't know? No, I don't know. 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 -trotter manager, bad -trotter manager. It's like bad dog.

45:41Bad -trotter manager. Bad -trotter, bad -trotter manager. That was kind of the emotion I had. So, you know, it's kind of shocking. Yeah, some of the planes that you write. I would say that that's 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, anybody has the 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.

46:21There's always this kind of sense that the PM is not the mini -CO, how dare you call yourself that. I actually think that's exactly what the PM is. They're basically the closest to the CO. Their kind of job is to think like the CO 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 or were stupid shit. But like 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 at the product wrench and you have to get all the way to there and kind of work backwards for that and you can't do that with that leadership because it is about, okay, we want to build that.

47:11And you're not necessarily, day, question comes up with every idea or this or that. I mean, you're just the keeper of the vision. You know, and that's true for CEOs too. Like, you don't mind every idea on a company coming from the CEO. Like that's, I think it's a 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's got a consolidate, they get all the good ideas, prioritize them, decide which good ideas we're going to do, and then get everybody on the same page, very high fit, understanding of what that is.

47:53And it is a CEO kind of function. Now, it doesn't mean like I'm better than you, it just means that's what I'm doing. 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. Okay, so I asked Adam Newman, we work 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 like literally just funding that.

48:37And I think it's gonna 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 calculated, which is, and it is something I learned You know, 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 mini series about right and so like to judge them on that You want to judge people on what they do well not what they screw down and And yeah, because that's where you see the talent, and if you look at what Adam did well, it's truly a attacker.

49:38Like we work, everybody knows how we work. It's like it's a, it's a more important commercial real estate brand than we work, like you can't. And so I quit an accomplishment. And then, yeah, and there were so many things that went into that and, yeah, 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 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, it's just that it's a big mistake.

50:26and I credit Mark, his mark is one who called him up originally and just said, hey Adam, what are you doing? Cause it's like, we watched what you did, we worked and we thought it was pretty impressive. And so I think that, you know, that's probably the biggest secret there. It's not really about AI, but I think that, like looking, you know, Judge, All day, this one said, you know, coach players and what they can do. And I think that's very true. You know, judge people on what they can do. You know, coach people on what they can do. Like help them take their strengths and use them as opposed to over focus on their weaknesses and just, you know, hand -raining about the one fucking thing they don't know how to do.

51:14Because look, everybody's uneven. What it's like, what you're describing essentially, this is the job of an investor is to find and underappreciated asset and invest or 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 is the idea, because the initial ideas and where they end up usually. It changes a lot with everybody reinvesting. So, you know, you kind of had to make the judgment on the person.

51:55And, you know, how would you do that is really, really important. One of the things we emphasize inside the frame is, like, we're investing in strength, not lack of weakness. Like, I want to know, like, how good it, like, are they world -class? Do they have a world -class strength? and, you know, can that be anybody? And like, 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 them like, I go to all Adam's board, maybe you know, Mark'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 when he's like, like, okay, that's not your best idea.

52:42Like, that's a good world trip, 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. We're not gonna invest in it. Adam Newman, after we built, we worked. That's crazy. It's also why you guys invested in Cluey, I imagine. Similar. Yeah, yeah, yeah, that's right. Like, I mean, like, if you look at what those guys did, those like some like high level market in genius, too. Nah, 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.

53:16Sam Altman said, we're in a big bubble, which is, you know, that's saying a lot. I'm curious just how you think it. So what does it say? So you got to, 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. Well, so you got to give Sam credit for like what is it his interest to say it in 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. 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 and saying all investors and entrepreneurs chasing this already, it's like, they love them because the press are generally haters.

54:13And 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. I'm so all just put it there. Whereas what I'm gonna say won't be as smart, but it will, I don't really have an extra grime here. I mean, I could have an accident and say, okay, like, let's go to all the other investors out. I'll say to massive bubble. But what I would say about that is, 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 bubble, you need capitulation.

54:59In that, you need kind of everybody to believe it's not a bubble, because then the price is really going 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 2011 or 12 when everybody thought it was a tech bubble, if you can imagine that. It should absolutely was not. But because there were like 1400 articles saying we were in a tech bubble. And yeah, I mean, you know, we're prices were then compared to where they are now. But I knew, because everywhere you're saying, it was a bubble, a wedding bubble, like I knew that.

55:42The prices were higher, but the reason the prices were higher was we're getting to global market. AI prices are higher than prior prices, but if you look at the revenue growth and numbers, we did not see anything like it. The products are working. Chatchy to Sam's product worked so amazing. We've never seen that before. Like not even Google, not anybody. And so that's real. And we have companies that went from zero to 800 million in a year and that kind of saying. And so it's not a, I would say there's a basis for the price is 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.

56:34The technology is very immature, is amazingly as it works. There's a long way to go to improve it. So it's very possible when you have that technological change that the positions that these companies have achieved with their high revenue isn't sustainable. in that there'll be a competitive change that either kind of lowers prices or any number one emerges or that kind of thing. And so, yeah, that's possible, but I went and characterized that as being like a financial bubble in that. Like, you go back to a great .com bubble that everybody is always waiting for it to happen again, which I was CEO during.

57:20The 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 try to know that the internet was a, of course, it's a big deal. But like if you go back to 1996, at Netscape we had 90 % browser shit and we had 50 million users. So there are 55 million people on the internet in total. and half those were on dialogue. So, and then to build a product like E -Vite, 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.

58:04And, but the investors kept pouring money in. And then eventually, you know, everybody went bankrupt because there was a 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 did nobody'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.

58:42So that's not an effect. So the thing that you could say is they're not going to keep growing like that or like in so for it. 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 -blower how good this stuff is. And so I don't know. If I had to bet, I would bet not a bubble. Yeah, I think there will be some dislocation. I think companies that I think they always invest your 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.

59:28That's sound of bubble. Four founders starting companies these days when you look into the future of the AI industry, say, five, ten years. How do you think things will play out slash where do you think the biggest opportunities are remain and where you guys looking to invest most? In infrastructure, I think that there is obviously like a real estate power cooling play. I think that's a little outside of kind of hardcore technology investment that we do. But there's another layer which is like who can run, you know, take a given -o -consource model, who can run it, the cheapest with the kind of lowest latency, and that's gonna be extremely valuable, like whoever has that.

1:00:16And you know, Google has been historically very good at that and so forth. And I, Sam, was really trying to build that now a stargate. And so I think that's gonna be a very important layer value. I think that on the foundation model side, you have to be very selective as an investor. In order to compete in the foundation model world, our basic rule of thumb is you have to be able to, without much product progress, phrase at least $2 billion, because that's basically what it can cost you to train something that gets you competitive enough to make money. And they're just jury chief founders like that.

1:00:56So Ilya is one of those, you know, Miri's one of those. Faith A is one of those. But like that's the kind of class of person you need. And there's, you know, whatever they're soundly less than ten of those in the world. And so 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, yeah, if you look at Sam, like he's making most of his money off Chachy PT, almost all his money off Chachy PT now. And Chachy PT is like, you know, it looks like it's got a real, like it or not, it's got a real mode. It's very hard to knock it off.

1:01:41It's a push. There's a lot of, you know, everybody's taking a shot of it. People, great distribution like Google and, you know, Elon and, and Zuckerberg and everybody and like the things just keeps going like it is. So I think the applications are both more complex and 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 bad. In fact, But here's how wrong it is. Back in the 80s, that same phrase was used, but it was thin wrapper around an RDDMS. With database. Yeah, yeah, yeah. So it met companies like Salesforce, where basically just look in wrapper.

1:02:30And I think that that's kind of the mistake people made. So like we're in at this company, Cursair, and if you look at the camera scene per share, they've built like 14 different models to really understand 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 Curricier about how they should design their programming mean so for it. And that's like real. That's not that's not just a thin layer on a foundation model. And I think there are many, many applications like that. And and so I I think there's going to be a lot of opportunity at the application layer.

1:03:19There's going to be some opportunity at the foundation model. And of course you can invest in Sam, you can invest in anthropocryctal and so forth and as well. But there will probably be like a very small number of companies that that set and then almost unlimited number of companies at the application layer. And then as the technology advances, well of course, see more things we can body day eye. I mean already, you know, a ton of the cars are working like really well now. You've drove long, long, long, long times. It's like, they think Sebastian won the challenge in 2006 when he drove the self -driving car across the country.

1:04:02And we're here, we are 20 years later, and now they're deployed. So that was a long time. Robots, I think, is harder problem itself to drive from cars. So I'll see how that goes. But yeah, there's so many of a lot in that world as well. Wow. Okay. There's a lot to this answer. something that is 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. It's the thought that the way to win in this space and to build a mode is, as you said, build your own model slash app reprise your data that you build through people using your product, thoughts on that.

1:04:44Yeah, I mean, I think that's end -to -just thing what's required. So it turns out that the universe is long tailed, and 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, in any domain turns out to be, I think more complex than we thought. And so I like the early things, and people were running around saying, okay, there's going to be one big brain to rule them all on these kinds of things. That's kind of not played out yet. And in fact, like if you look underneath the covers, you have LLM's which have generalized pretty, you know, like in fascinating ways, but they've kind of also asymptoted in that, But we have run out of data for the most part.

1:05:44And so if you look at the GPT -5 LLM, 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. Another hand, reinforced learning side, has been linear, but it doesn't generalize. So if you build a great 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 look at there. But that certainly opens to the door to something that's more user -friendly, that's more effective in any number of domains, then just the basic foundation model infrastructure.

1:06:38Now those models are incredibly important and they're, and I think, open AI is probably 80 % of the revenue in AI or something like that now. Like it's just awesome. So that foundation model is really, really important. And then like the basic consumer app is really, really important that just answers whatever 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 David's their data that becomes very different like data breaches having a lot of success there because Okay, well once you're inside a company.

1:07:22Guess what like you care about access control and that's hard with an AI well You know, it gets trained on some stuff. How does it know who has access to that information, who doesn't, and so forth? You have semantic issues. So if you look at an enterprise, flying 10 enterprises, they all have a different definition of what a customer means. Like you would think customer is a basic thing. Well, is that a department at a chain T? Is it a chain T? Is it like a person at a chain T? Is like what the hell is the customer? And it turns out to be very, very meaningful. particularly if you're trying to figure out like important games like Churn and this and that and third.

1:08:05So like that kind of stuff matters. So I would just say like the problem spaces, a lot bigger than you can just attack with a basic foundation model. And currently, maybe that will change. And like if that changes, then certain prices will have in retrospect look way inflated and others Well, look, you know, too low, but that is too big. So a big takeaway from this is that there's still tons of opportunity for founders to start companies building AI products. I mean, you can solve so many. Everything that we can't solve a 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 WayMout, And one of the things when you get into like what took so long to make Waymos so safe like they are now It wasn't the things that everybody reported on the podcast It wasn't the sleet and you know heavy rain and it was people It was like the human who was dragging 75 and the 25s on it was very hard for the AI to anticipate because it was rare are important.

1:09:20And the number of rare important crazy shit that humans do is very high. And I think that goes for all of AI. So to make things work really well, you have to understand 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 this so important? Why is something spent all that time on? It starts with, I think, my view of the US and its role in the world. So my personal view is like, it's very, very, very important. Not for society to be completely fair because is not going to be completely sure or completely equal because we've never had one that's been completely equal.

1:10:16But it's important that everybody have a chance at life, you know, and particularly,

1:10:24you 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 the trouble. And if you look at the kind of every country today, and this is by the way, so you want like the right amount of decentralized power, you don't want it to be completely 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, you know, we saw politicians selling it this way.

1:11:06Today, it's like, oh, it's power to the people. And then I know 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 Chuchesku or Stalin. Everybody died. Because when you give anybody that much power, nobody has a chance. There is no incentive. There is no carrot. There is only stick. And so you use that stick. And that's a nature, it's a system's problem. It's not a person problem.

1:11:43It's not starring as evil. Chuchesco is evil. It was like that system is evil. And that's a chick saying the fastest and maybe Hitler, Mussolini, it doesn't matter. Like that level of power is evil. 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 are starting to defeat it. But one of the things that, you know, if you look at kind of the Declaration of Independence or the Constitutional, like the language is very important, you know, it's we hold these truths to be self -evident. what does that mean? It means they're not myrrh.

1:12:28It's not the president's will. It's God's will. And so those rules are above the president. And then you work in that context and that 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 are all for you and jail and The kind of shield they hide behind as well like we have to keep the kids it But if you say something that I don't agree with and the kids hear it they're not safe, right? like so you the the kind of Transited property of bullshit like is gonna override and So it's really important that we have at least like one society and And as flawed as we are, as flawed as the US is 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, it's really, really important that the US kind of stays important and powerful in the world.

1:13:36And 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? You were the ones that industrialized. Yeah, and the ones that industrialized first and best and the ones that did became counties, right? Like you know Russia China like they they were slow on industrialization and they fell into this very freaking dangerous system Looking forward that's gonna 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 succeeded at that.

1:14:19You know, I don't like, we don't have to be the one winner or a dissuade that, but we do have to be like, in that tier. And you know, as I go around the world and travel, I can't tell you everybody, and then everybody was getting, by the way, very, very worried about us earlier. And they say, look, we need you to succeed. You know, don't destroy the dollar, don't like fall behind the AI, don't overregulate it too early. Don't do these things, please, because we need you to win. Like, because we're all counting on that. And I think it's the most important work that we do. It's why we're so involved in policy and so forth.

1:15:02I think this is also, you know, Jerry's going to be very, very true with crypto, which ends up being an incredibly important networking technology that compliments AI. And so that's, yeah, and that, you know, that work is I would say, be on for the money, like that's, you, 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 certainly more important in a 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.

1:15:49You run an organization called Hate and Full, which is incredibly cool. Talk about what that's about, why this is so important to We kind of are ethos as a firm is kind of, well, it's something from nothing, you know, like this is a greatness of entrepreneurship. You start with nothing and then you make something really important. And that kind of, that is also how hip hop started where you have like a bunch of kids who didn't even have instruments. And they kind of created something out of nothing. and the people in that world always talk about that. And one of the really unfortunate things that happens is the people kind of who invent the art form.

1:16:34And 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, people have forgotten about or are struggling to make ends meet and so forth. So what we created was this thing called the Paid and Full foundation named after the rock Kim Eric B. Som, which I did call rock Kim and asking for permission to use the name so we just take it. And what we do is we give essentially pensions to the old rappers that enable them to kind of continue their work. And then we have a big event, go to page and full foundation .org for tickets, which is amazing, where they can get the award and they're celebrated by all their peers and so forth and it's really phenomenal.

1:17:30But you know, so some of the awardees have been rockin, Scarface from the ghetto boys. Frank San Chante, Grandmaster Kaz, Kumo D. This year we're honoring George Clinton for being Shampo, Cool G -Rack and Graham Pooba. And also, Jolly all from Houdini. And it's just, it's very, I can't even describe how high impact it is on these guys. I mean, I think we're at Kim was touring close to 290 year and he got his award and Kim met with his first album in 15 years and is doing amazingly well and all this time. You know, everybody's going, oh yeah, that's the greatest rapper of all time. So like they're finally going back and remembering all the things he did.

1:18:15I brought San Chante. 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 super high in fact, it's a great thing. You know, it's a hip hop fan, I say, dream come true. So it's not only good. What's the origin story of you and hip hop? I imagine many people look at you and wouldn't imagine you, you see these records behind you, gif that you, you're so deep into the community, just how did this all begin? Well, so I actually wrote a blog, crossed on it called The Legend of the Blind MC, which I think would be, if you're really interested, it's worth reading, but it's kind of a story of me becoming a rapper and like how that occurred and how it went and so forth.

1:19:06But like I always say, the very short story is, You know, I was in New York when at the birthday hip hop, and when I really became big, kind of 84th or 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, music kind of becomes mainstream. It would take its very shape by business. And like in the early days, there's no, yeah, everybody's just coming out with whatever idea they have and so forth. And 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 brought on Eric Tornberg beyond his many talents.

1:19:53He's also really big into rap himself. Yeah, yeah, I need to get that to good reminder. I need to make sure I guess to pick for my band. This was incredible. Is there anything else that you want to leave listeners with or share before we get our very exciting quick lightning round? Yeah, I mean, I would just say on, you know, like if you're a CEO and 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, you know, like self -evaluation is, one of my favorite quotes is, when my old manager saw me, it's like, I was, no, and they're, no, from this day on, no credit will be given for predicting rain, only credit for building an arc.

1:20:50And I think that's more true for CEOs than anybody, you know, you have to build arc, like it doesn't matter, like if you predict your going to fail, you still fail. It gets you nothing. 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. We'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? Yes, so two got, I learned a lot from one is the weirdest people in the world, which it's a kind of big history book, but through an anthropological kind of cultural lens.

1:21:35And it's really fascinating. Explains an awful lot about how society works and how little changes in the rules completely change the culture. You know, one of the things that he basically endeavors to explain, okay, why did the West get ahead on the rest of the world? And it kind of comes down to like a weird anomaly with the Catholic Church where they've kind of enforced monogamous marriage. And it turns out that the natural state of humans is polygamy, but the problem with polygamy is there's no cooperation among men, which is a problem. And as a result, and then everything is secret. So there's no shared, there's no sharing of knowledge because it's all kept in the family and what he calls kin based culture.

1:22:29At least it's 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. And so you can't build science, you can't build cities, you can't build big companies. And you know, so because the West kind of and forced, broad, monogamous marriage early, it was able to kind of be involved in all these things. And he kind of shows why and how he does these psychological tests today with people from kind of monogamous marriage culture, kind of like Western culture and kin -based culture. And the psychology is completely different. And he gives examples like, yeah, if a person murders another person, is that still murder, if that person who did the murder as your brother, in Western society, yeah, that's a murder.

1:23:19In Kenbe's culture, it's not 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, just a maybe book. So, that's one. I take another book that I recommend a lot of shock his book, his first book, writing my lines. He has a new book that I think is better, which is called How to Be Free. So I'm going to start. It's not quite out. I think maybe it's releasing, it's releasing like that's what I recommend. So what it does, it goes through like how did he work his way out of prison and solitary very confinement to his current psychology.

1:24:07And what are the techniques she used? It's, they're very powerful, very powerful ideas. So I think that like, she always asks me, like how do you deal with it? Like how do you deal with it? That's gonna like work like balance, or like then a psych, what are you talking about? And they're work like balance for she, or particularly like entrepreneur CEOs, like come on. But like, what do you do? Do you meditate? You do desidate that. but he kind of goes through the things that we really ought to do. So that's what I would recommend of somebody's wondering like, how do you deal with all of this pressure?

1:24:42I love this. Just the whole idea of shock, being this help for CEOs, someone that killed someone went to prison, let a prison gang. I just love that. How well we're all in the business. I'm starting out to be really complicated. Thanks to my 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? So, in any organization, like the fundamental thing is trust. And so, you're bringing in a bunch of no -trust people and so, you can. And like in, it's kind of like a military organization. It's a gang.

1:25:24And 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 and you know I learned a lot from him a ton to him about it. So like that From a management standpoint, it's a I would just say it's an important Kind of a boundary case of how you build culture and So he is very very smart. I mean just show and I've got to look like I said You have to look at people about, you know, their greatness, not the worst thing they ever did.

1:26:08I know there's a lighting round, but can you just share one example of something you did that was like, wow, that's a really good lesson. Someone's trying to create a good culture that worked for him. Yeah, so like Ron thinks that he did that I thought was,

1:26:24really smart is, well, I did a couple of things. One is just like a simple thing was, He just made everybody eat lunch together in the game. Just to kind of build rapport relationship trust. It's all one thing we're all together in that. I think it'll particularly in the remote world and so forth people really underestimate how powerful just that idea can be. And then another thing he did is he made kind of like morality, you know, he had kind of very specific things about, you know, if you, you had to be good to your word internally and externally. And so normally again, you went like, you know, like I said, it's kind of like a Kimberley's culture thing.

1:27:16But it made it much more powerful when he said, look, like you, you can do devious, like shit outside the gang either. And he had a bunch of examples of that that I went through in the book, but it's a very like it, 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. and I'm 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, but like in Shaka's organization, like that's as big a kind of tea as lying internally. And, and these things I think kind of being really important.

1:28:01We're gonna link to this book. This is 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. Yeah, 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 lighting around. Is there a favorite recent movie or TV show you have really enjoyed? Yeah. So, on TV, I really like Slow Fork Sins, which is like a show about the MI6 kind of cast off guys.

1:28:36And then I haven't seen a lot of movies lately, but I watched centers that went to the the editor for the center is in it. 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 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 really enjoyed that. Yeah, I hate scary movies, but I watched it and loved it. Wasn't that scary. It wasn't that scary, but still, you know, zombies popping out of corners.

1:29:18Yeah, it's not my jam usually. Is there a product you recently discovered that you really love? Could be a gadget, could be clothes, could be something else? I bought a coffee machine called the TechnoVorm Mocha Master, which is freaking incredible. In fact, a friend of mine saw it, I was like, what is that? and I just bought a Purim too, cause it's so awesome. Maybe like this thing makes coffee that it's just like pressured. Like there's no bitterness, it's completely clean. It's amazing. You like it? The only problem with it is I can't drink coffee that it doesn't make anymore. That's a good thing about them.

1:29:58Well, that might be, that might come out someday in the AI future. Yeah, yeah. Two more questions. One, do you have a, is there like motto that you often come back to find really useful in work or in life. The thing that I was saying has had the biggest impact on me is something my father said to me years ago, which is life is unfair. And that, that's he was like really, really simple, but I think that the thing that defeats people more than any other thing that I've seen just in life is the expectation of some fairness, 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, it happens to everybody that don't happen to other people that are completely unfair, but it doesn't matter because that's the way it is.

1:30:54And as soon as you get that idea out of your mind, then you can just deal with it. Like, Like, oh, yeah, of course it's not fair, but I'm gonna, 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, you know, and it's as an individual, like if you wanna make the world a better place, whatever, but, for as an individual, do not expect anything to be fair. It'll only be to be. Final question.

1:31:29This comes from Shaka actually. You gave me so many great suggestions. I had to save this one for last. 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 what? I think probably follow the leader. by where I came. I thought that was so. And the reason is kind of what we had kind of gotten into earlier, which is leadership. So when he came out with that song, which he was like, we get him maybe the greatest hip -hop song I've ever written. You know, he's telling people to to like follow him, follow the leader.

1:32:22And just to have the idea that he was the leader of the entire art form, now just his band, it is like an amazing idea. And then the way he expressed it was incredible. And then he's got other great concepts of mayor. that would give you like, it's hard to listen to that record and not have confidence. I think from a competitive, purely competitive standpoint, stillmatic, from Nas, I mean, that's one with the Eater. That's the one with Get Yourself a Gun, that's the one with you to man. It's kind of like all of those, like, the idea of competition is kind of into capsule item, that album, so that would be the other one.

1:33:11And then funk. God, for one nation under a group, for sure. One nation under a group, because it's kind of like, this is how do you initiate people into like a concept or an idea and, you write, how do you infuse them? Like one nation under a group is all about joining the nation. And like it's so musically interesting and kind of getting people to be part of that. That does from like, I don't, if you asked me tomorrow, I'd call you have three other ones. Incredible. I'm going to go listen to these. Ben, final question, we're huckin listeners, be useful to you. If you get something that makes you better, please take it.

1:33:55If you need an unwarded vice on it, let me know. But like my job is to help everybody build something great. So if you're a voucher for Nerr, thank you for that. Also check out Payton Full Foundation at org if you wanna learn more about it. Yes, that's not proper. 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. Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify or your favorite podcast app. Also, please consider giving us a rating or a leaving review, as that really helps other listeners find the podcast.

1:34:34You can find all past episodes or learn more about the show at Lenny'sPodcast .com. See you in the next episode!

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