The Exchanges

Q And as you were saying, one of the key or interesting things in the book is that there's not one, one culture that wins, right? Different cultures, what worked for Amazon didn't work for Apple, I think.

A Yeah, no, right, right. So yeah, one of the things I pointed out in the book is, Look, Amazon was famous for its frugality, you know, frugality, like, when you, and there, when the first employees came in, you know, your desk was a door with two by fours holding it up and that kind of thing, so like, we're not even gonna buy a desk, like, we're gonna get an old door and put it up, because that's how much we want to save money, but that was very key to their strategy, because the Amazon strategy, if you guys remember his original chart, um, was to be the low price leader in everything, Uh, because that way, as a consumer, you wouldn't have to price compare, you just know you could get it at the best price at Amazon, and that, um, meant that you had to really control cost if you were gonna do that. That was, it was integral to the overall strategy of being the everything store. Apple, like, so you could say, oh, frugality, work for Amazon, I'm gonna do it, but like, Apple doesn't have that value. Um, and nor should they, or nor can they, because they, like, their strategy is to have the best, most beautiful tools in the world for their customers, and so they spare no expense. In fact, Steve Job got fired, uh, originally for sparing no expense, and that was exactly what got him fired from Apple in the beginning, um, and, but that was, you know, in their campus, even their campus i…

AI assessment note: “You can have, you know, two different cultures”

Q That's a fascinating story. Um, maybe for the entrepreneurs in the room, like, how do you, how do you originally, you start a company, how do you set the culture? You, I think you, you quote, um, Patrick Alderson, one, one of the co-founders of, uh, Stripe, as in saying that the, the first 20 people are the people that set the culture. Is that, is that how that works?

A Yeah, so I, I think he's not quite right about that. He grew his Stripe so slowly, um, that, uh, you know, that comes into play. Look, I do think it's very influential, um, because people, You know, as I said, people try to adopt, ah, the working habits of the people that are there, but as you grow fast, um, and as you bring in leaders from different cultures and different companies, they're gonna, you know, they're gonna start to modify it, ah, and things are gonna start to change and evolve, and so you, you know, you have to do things that are stronger than just, okay, I hired 20 people who I think I like, And I think are going to behave the way that I want them to, and everybody's going to follow that. That's not actually strong enough. I give you an example of something we did at, uh, Andreessen Horowitz. So I had the problem going in of. I wanted, and every VC says this, I wanted us to respect entrepreneurs. I want us to respect how hard it was to build a company, um, and, and have the whole firm feel like that. Okay, we know what you're doing. We know what it's about. Every VC says this. How many VCs show up to meetings on time with entrepreneurs? How many VCs actually get back to you if they're not investing in the deal and tell you why? Like, that's very disrespectful to go Present all your work to somebody and then have them ghost you when you're trying to find out wha…

AI assessment note: “I think he's not quite right about that. He grew his Stripe so slowly”

Q And how do you think about the trade-off of enforcing something like this, either at Anderson Horowitz or in, in companies that you work with, you know, typically the, the, you know, the high performer who's not a cultural, turns out to not be a cultural fit, is that somebody that you fire because of culture, or do you keep them? How do, how do you make it work?

A Yeah, look, um, one, I think you have to ask people to Play in the culture. Um, it particularly, and look, it's not gonna be across everything. Um, so you, you know, if you start out and you say, okay, we have, and I call them virtues, not values from the samurai, because it's, I, I, I'm concerned with the behaviors, not the, not the ideas. Um, but, like, not everybody's gonna have every virtue that you want them to have in life. Uh, it's just that the people are people, they're messed up. So you have to say, okay, well, what are the things that I gots to have? Um, and that, like, I'm gonna have zero tolerance for anybody not doing, and I'll find Andreessen if he's late for a meeting, so, like, I have no tolerance on that one, because it's such a core value of ours. Um, but there are other things where, like, people may have a, you know, they, they're just coming from such a different place, and they're such a high performer, and it's not a core value that's critical to the strategic position of your business, where maybe that isn't. The most important thing. And, and I think companies end up having subcultures as a result of that. And so, I'll give you a really interesting example on subculture. So do you remember the Amazon article in the New York Times where they basically said Amazon's like the worst place to work in the world. It's like hell on earth. Uh, and all of us in …

AI assessment note: “it's not a core value that's critical to the strategic position of your business”

Q Just something that's not in the book, maybe from your experience of investing, what have you seen in terms of, um, companies that scale globally and actually have literally different cultures from different countries? How do you, how do you include those? Yeah,

A so I, I think what it comes down to is what things, and when you think about the culture, it's like, what do you need to have that's universal? And to me, um, the things that have to be universal are the things that, Support the business strategy. And, you know, which is why, like, for us, I don't care where you work at Andreessen Horowitz, like, if you don't respect entrepreneurs, you are defeating our whole brand, our whole message, our whole positioning in the market that, like, So I gotta have that. Um, but there aren't that many things like that that I have to have. You know, it's a handful. Um, whereas, you know, I, I think there's kind of a lot of unstated parts of a culture that you're never gonna state, and, um, some of those are, will be different. You know, if you're in Spain, people are gonna take big lunches. You can't stop them. They love it. That siesta, all the whole thing. I mean, it's crazy. Drink at lunch. I never, you know, I, I had a hard time adjusting that culture when I spent time there, but it's, so, but that's, you know, that's not anybody's business strategy to not have a big lunch, right? Like, that's not, that's just kind of how you do things in your place or, or whatever. You know, some places everybody eats lunch at their desk, and that's the culture, but it's not an important part of the culture. It's just, you know, that's just how it went, and …

AI assessment note: “the things that have to be universal are the things that, Support the business strategy.”

Q How do you create an inclusive culture, uh, particularly with respect to, you know, gender, minorities?

A Yeah, yeah, yeah. So I, I learned a lot. I think that, um, in general in tech, People do it. They're almost destructive with how they try to do inclusion, and I, um, let me explain why. So, and I learned a lot of, this is something I, I spent a lot of time on, and I, uh, learned a lot on, um, but the, the breakthrough for me was a conversation I had with a friend of mine, Steve Stout, who's been in the paper a little bit for the Knicks. For those of you who are Knick fans, he's doing work with the Knicks and causing trouble there, but, um, he, You know, he, he's a kind of boisterous type, charismatic personality. Called me up one day, he goes, Ben, I used to be president of Sony Urban Music, and I already knew that, you know, I've known Steve for years, but I knew he was saying that to me for a reason, he wanted to tell me something else. Uh, and I go, yeah, Steve, I know you were president of Sony Urban Music. He's like, yeah, but it wasn't Sony Urban Music. It was Sony black music, but they wouldn't let us call it black music because that would be racist, so we had to call it urban music. And I said, well, that's silly. And he said, no, no, that wasn't what's silly. What's silly is because they called it urban music, they didn't let me market in rural areas. It was only allowed to market in cities. Like there's no black people who live in, like, rural areas. And I was like, w…

AI assessment note: “They're almost destructive with how they try to do inclusion, and I, um, let me explain why.”

Q Yeah. And, and related question is, is, um, is Uber or maybe WeWork, like are those cultures that are examples of culture that fail or cultural failures?

A Well, well, let me say this, like, there, there's not a company in the world that's got total cultural cohesion where everybody behaves the way you'd like them to at all times. Um, that, that just doesn't exist. Nobody gets close to that, ah, but you can get to, you know, good, good enough, you know, better, you know, not having a fatal flaw. I think, um, you know, Uber and, Uber had a very compelling culture under Travis with a very bad issue. Um, and, and I can get into that, but, ah, when you get into it, like, how do you know it's not working? Um, I, I think the little thing that tells you is when people's behavior really surprises you, um, and you're like, wow, I didn't think we had, I can't believe that person's running around taking credit for that person's work, or lying all the time, or you're going like, you know, what's going on? That, that, those are signs. There's actually an example, um, I have in the book, and I want to be careful about this, because when I talk about it with not enough Context, people don't know what I'm talking about, but one of the things that I, you know, I go through in the book, I go through leaders and people who define culture in different contexts, and one of the contexts, uh, is by a friend of mine, Shaka Senghor, who built a culture in prison, um, you know, as a leader of a gang called the Melanics, uh, and the reason I use those examp…

AI assessment note: “Uber had a very compelling culture under Travis with a very bad issue.”