The Inventor and the Entrepreneur

In the middle of our last day of visits in the valley we were visited by Ben Horowitz of Andreessen Horowitz.

Ben is the rare VC that has maintained very close contact with his engineering roots to maintain an incredibly detailed perspectives on his ventures. He also reveled in his position as a engineer who has consistently been in a position of business leadership. From that perspective here are some great takeaways from the discussion:

• Two is the magic number. Ben noted the best founder teams have two people: an inventor (technical) and an entrepreneur (business). One builds. One sells. And they have an even partnership (50/50). This is in stark contrast to other investors we spoke with who said an even split was implicitly flawed.
• Startups need to be 10x better to overcome inertia – not just twice as good.
• There are two ways that relationships fail:
• Not enough tension – the partners aren’t pushing each other to mutually grow.
• Too much tension – the partners push so much stress on one another that it forces the relationship apart
• True entrepreneurs have an irrational desire to build a company. It’s never worth the money (even when you succeed).
• Running a business consists of euphoria and terror. Lack of sleep enhances both.
• Don’t hire people if you don’t know what to look for. At LoudCloud Ben ended up hiring and firing two whole executive teams while he learned what to look for. This is an expensive way to learn.
• To be great you need to be the right person for a particular company at a particular point in time.
• Don’t outsource. Building software is really hard and iterative. If you don’t have a technical founder nobody will be putting the love and care into the codebase that will enable it to scale.
• A Thiel Test – do you have any beliefs that everyone disagrees with you about?
• A bias against MBAs is that they are socially advanced, but this socialization is antithetical to breakthrough thinking.
• If you want to do a startup be in Silicon Valley – be immersed in the best practice – be with the best and the brightest.
• Truly revolutionary ideas look similar to stupid ideas. Stupid ideas also look like stupid ideas.
• Join a rocketship startup to make money and learn about a subject area. However, you won’t learn how to find and form a company doing this.
• Prepare for the dog catches bus problem. What happens if your business is a slam dunk success? Are you ready?