a16z Podcast - The Stories and Code of Culture Change

Episode Date: December 7, 2019

There are some common tropes that can kill your company culture -- whether it's that corporate values can be weaponized; "fake it til you make it"; the "reality distortion fields" of visionaries vs. liars; and so on. All of this just reveals the confusing, sometimes blurry line between the yellow zones and red zones of behavior, because the very things that are strengths can also become weaknesses (and vice versa!). The fact is, in any complex adaptive system (which is what a company is), even the seemingly smallest behaviors will move the culture where the loudest proclamations do not.That's why so much of culture -- whether building and setting it or fixing and changing it -- comes down to the difference between actions and words, to the tacit vs. the explicit, to the difference between what you do vs. what you say (and what employees see vs. what they hear). So in this episode of the a16z Podcast, based on a conversation that recently took place at the Computer History Museum in Silicon Valley, Sonal Chokshi interviews Ben Horowitz about his new book, What You Do Is Who You Are, probing on all the tricky nuances of the themes covered in it -- and also how to practically apply principles from it to the tech industry and beyond.Are mistakes of omission more important than mistakes of commission, when it comes to ethical lines? What can employees, not just leaders, do when it comes to culture? Where does the idea of "culture fit" come in? What happens when startups go from being the pirates to being the navy? Drawing on examples of culture as code from a thousand years ago to today -- spanning empires, wars, revolutions, prisons, and even hip-hop -- Horowitz shares the power of song and story. Including even violent, "shocking" ones that reset cultures... because they make you ask, WHY?!100% of the proceeds from the book will go to anti-recidivism, and to making Haiti great again

Hi everyone. Welcome to the A6 and Z podcast. I'm Sonal. And today I'm so excited since we finally have our interview, the A6 and Z podcast way of co-founder Ben Horwitz on his new and best-selling book, What You Do Is Who You Are, How to Create Your Business Culture, How to Create Your Business Culture, The Business, Culture, Between Me and Ben, probes on the themes of business, culture, and tech from the book and beyond, with lots of nuance discussion on everything from common tropes, such as reality distortion fields, faking, It Till You Make It, Silicon Valley folklore, whether companies and people can change, diversity and inclusion, and so on. All told through some tough stories. On that note, just a note for listeners with kids in the car, that this podcast talks about historical themes with various mentions of violence. Finally, we try to share some practical advice throughout for both leaders and even for employees going through cultural change and crowdsource questions from our audience as well that are answered at the end. You can read more about and order the book at A660s. and Z.com slash what you do. 100% of the proceeds will go to anti-recidivism,

helping people get out of jail, stay out of jail, and towards making Haiti great again. We're here to talk about Ben's bestselling new book, What You Do Is Who You Are, which is really about culture. And we all know it's important, but no one really tells you how to shape it, how to set it, even how to fix it when things go wrong. And what I love about Ben is he's not only a builder, but a bridger of cultures. And that's why it's so significant that we're sitting here at the Computer History Museum because this represents the heart of Silicon Valley, which itself has been going through lots of cultural change.

And so the first question I want to ask you, Ben, is a very obvious straightforward question to actually define culture because you say it's not corporate values, it's not perks, but then what is it? Yeah, and one of my kind of favorite semi-definitions of culture or pieces of it is from the Way of the Warrior, the Bushito, which is the ancient coat of the samurai.

And they say, a culture is not a set of beliefs, it's a set of actions, which is where the title of the book came from. So it's not what you believe, it's not what's in your heart, it's not what you tweet, it's what you do, that's who you are culturally. But when you get into a company context, it ends up being really small, subtle things that determine your culture, determine the way you treat each other, determine the way you treat your business partners and your customers, and they're very amorphous, nearly invisible things. Do you return that phone call in an hour, in a day, in a week?

Never? Do you go home at five or at eight? When you do a business deal, it's about the partnership or the price. All these things, that's your culture, and they're not in your KPIs or your LKRs or your mission statement or any of that. And then how do you move and shape them? Because the conventional kind of method, I can tell you, doesn't work, which is, oh, we'll bring in the HR consultants and we'll have an off-site

and we'll put a bunch of values on the board and then once a year in people's performance reviews will say, does he have integrity? What are those values again? The real thing is like, how do you know if you return the phone call? You don't even know if you got the phone call. And so, like, how do you get that behavior

going in the direction that you want it? And that's, you know, what the book is about and that was really the hardest, most difficult thing for me to learn as CEO So I thought it was a good thing to write a book about. Sitting in Computer History Museum, I think of the book as culture as code. And you actually use a lot of words. I'll read some of them out loud, but you describe culture as code,

you talk about programming culture, you talk about reprogramming culture, you talk about how it's hard to debug, every culture has bugs. I mean, you basically use a lot of digital words, but your examples are all analog. I mean, the most recent one was maybe 20 years ago, and it was from prison where there wasn't a lot of technology. And frankly, they go back over a thousand years. Specifically, the example that comes to mind is the samurai.

What drew you to that example of culture as code and why? Well, it's interesting. The first example is the Haitian Revolution, which is an amazing story because it's the only successful slave revolt in human history. And it's a story of how to Sanovovichur reprogram slave culture to be kind of military culture, which is an incredibly difficult job for many reasons. but the tragedy of the Haitian revolution

is they lost the culture almost the instant they won the revolution and it was a kind of crazy story about what happened to Tucson who was double-crossed by Napoleon and thrown in jail in a diplomatic meeting and Jean-Jacques Desolines took over and went completely different direction, yeah, yeah, yeah.

But the Samurai Code lasts at least a thousand years depending on how you count it, and so I really wanted to kind of go through all the things they did to make it last so long, and amazingly so. So with the samurai code lasting so long, it's another programming word, it was a system. And I have to ask about this, because on one hand in the book, you say, hey, you can't have platitudes, but it was a system of words. Like, they had a code with eight principles. And so how do you reconcile that? You can describe your actions and words. I'm not anti-word. So one of the things with culture

that you run into is things that you think that you want to put in your culture can get weaponized against you. And they tell a story in the book about Slack. So Stuart Butterfield early on had this cultural value empathy. And his intention was, look, I don't want people to just state their point of view.

I want them to understand the other person's point of view thoroughly and then decide if they still want to argue the point as opposed to just going at each other. Well, it was a person. It doesn't define where the boundaries were and so forth. And so what it ended up happening is, employees would be getting their performance reviews, and the manager would say, well, I need you to improve here and there.

And they'd be, well, like, you're in violation of the culture. You're not being empathetic. And so he was like, okay, got to get rid of that value. That's not going to work. And the summary, they developed over a very long time, but it's amazing how they had sort of points and counterpoints and where the virtues worked in a sense. virtues worked in a system that would govern itself. So for example, you know, they were an honor

culture. If somebody dissed you or insulted you, they had to go. That was it, because that insult was really, could have been a diagnostic to say, is this guy weak? Can I besmirch his honor and get away with it? Because if I can do that, I can probably stab him in the head or rob him or whatever. And there's a really great story in the Hagukari about a samurai who has a flee on his shoulder. And another person says, excuse me, you have a flea on your shoulder and the samurai cuts his head off. And you go, wow, that was like a pretty harsh response. And they asked a samurai, why did you cut his head off? He's like, look, I'm not an animal. I don't have fleas. call me that

and so when you have a kind of a virtue like that you need something to balance it and you know one of the things that they did is really established a very elaborate system of how they treated each other in this virtue known as politeness

and politeness means the best way to show someone love and respect and respect is very very important because you know you don't want to say they're an animal with a flea and it's everything to how you bow to how you set up the tea ceremony to every aspect of how you make somebody maximally comfortable

so that they feel how you feel about them. But, right, if that was fake just so you didn't get your head chopped off, then that really wouldn't be good either. So one of the things in the code is politeness without veracity is empty. It has to be honest. It has to come from the right place.

It has to be true. And so these are the kinds of ways that they created a system that built a much kind of stronger and long-lasting culture. That is honestly my favorite example from the book, because you describe this interlocking system of eight values in the Bushito code. Virtues. Oh, virtues. They did them. Let's talk about the difference between that. They didn't just put them on the wall.

Virtue is what you do. Well, actually, you are trying to rebrand the word values into virtues. Well, it's not so much of rebranding. It's a different thing. A value is what you believe, what you want to be, what you aspire to, a virtue is what you do. And so I think from a chief executive perspective in a company, you want to think through not just what you want, but how you're going to get it. And when you talk about culture, people just go, well, here's what I want, and then I'll just tell people it in all hands, and then I'll get it. And that never happens.

Like, then you know what your culture is? Hypocrisy, because I have all these values on the wall, and I don't do any of them. So it's trying to kind of move the mindset into how do you do it. Like, what are the mechanisms? What are the mechanics? What do you think the power of storytelling is then in disseminating and sharing that culture? In fact, one of the lines in your book is that stories and sayings define cultures. I have to ask what the difference is between the story and those sort of hypocritical value statements on a wall.

Like, what power does story have? Yeah, so, well, I'll give you an example. Well, let's stay with the samurai for now. My favorite. So there's a great story. So one kind of really powerful cultural virtue is loyalty. And then there's kind of a question, okay, well, like, how do you show its importance? How do you kind of make that stick?

And one way is either in a company or in an ancient Japanese warrior society, you can do that through a story that's so compelling that people literally can't get it out of their head. And so here's a story I'm going to tell you that you won't be able to get out of your head. Oh, no. So there was this lord in ancient Japan. His name is Lord Soma. And, you know, in those days, the status symbols weren't what we have today. But one of the things that they had that, like, everybody was kind of proud of it. They had a good one was their genealogy.

And it was on scrolls, and it would be written out in generations of who your ancestors were. And the more you knew who you were, like, that was a big thing. And Lord Soma had the best genealogy in all of Japan. It had a name was a Chichen, Marikoshi. And then working for him was a samurai who was, like, just a mediocre guy. clumsy, always getting things wrong, messing things up, but he was always sincere and loyal. One day, Soma's house catches fire, and it's engulfed in flames.

I mean, it is like burning down, and there's no way to deal with it or put it out. And inside the house was the Chikin Marikoshi, his genealogy. And the samurai runs into the house engulfed in flames. Lord Soma's shocked. He's horrified. They watched the house just. burned to the ground and they know he's dead. And they go in and sure enough, they're looking

for him and he's face down and it's horrible. But then they notice that he's in a pool of blood. And they're going, why is he in a pool of blood? You know, he just ran into a fire. And they turn him over and there's a slit in his stomach. And they open the slit and inside it is the genealogy. He cut himself open, put the genealogy in and saved it. And it was known from that day as the blood genealogy. And everybody knew that even if you were mediocre, if you had that kind of loyalty, you could be great. So that was a story.

No one's going to forget it. And I am sure everyone in this room is wondering, quite honestly, why are all your stories so far so violent? I'm wondering that right now, too. I think I can only answer that with another violent story. Some of them I got before I was actually like writing the book. Like, it's just me and Shaka in the backyard, and I'm barbecuing, and, like, he tells me these stories, and I'm like, wow, when you hear it, just think that's how I heard it.

So Shaka, who's in the book, went to jail for a murder he did commit. He was in jail 19 years, seven years in solitary confinement. But this story is about his first day in jail, so in prison. Him and a group of guys are in quarantine, which is where they keep you until they put you in general population. They come out into general population. in the very first day, they're in the recreational area and a prisoner walks up to another prisoner

and stabs them in the neck with a shank, pulls the shank out, the prisoner bleeds to death, dies, the other prisoner, throws the shank in the trash, and walks into the cafeteria and has a sandwich. And Shaka said, you know, all the prisoners are looking like, where in the hell are we at? And I had to ask myself, could I do that?

And I said, wait a minute, you murdered a guy to get in here, you did do that. And he said, oh no, Ben, I didn't do that. He said, I was dealing drugs. One of my customers came. He was supposed to come by himself. He brought another guy. The other guy's in the back seat of the car. I'm already traumatized because I had been shot like 18 months earlier.

This guy in the back of the car is supposed to stay in the back of the car. He opens the door. He comes out. he comes at me real aggressive, I react, I had a gun in my pocket, I shot him. That's what I did. This guy spent two weeks taking a two-liter bottle and filing it into his shank.

Then he decided, am I going to stab this guy in the stomach and wound him, or am I going to stab him in the neck and kill him? I couldn't do that. But I had to ask myself, could I do that? Because that's what it took to survive here. And that is new employee orientation. That's getting indoctrinated.

You guys laugh. I'm about to explain to you why the book is so violent. That's how you get oriented into such a violent culture with an experience like that. People join a company. First thing they do. First thing all of you did when you join a company. Who's successful here?

Who's the person everybody looks up to? What's their behavior like? Oh, that guy's making all the money. He's got the big job. He's the one, the golden boy. Oh, and he just, took credit for her work, that's what I have to do to succeed here. That's cultural orientation.

That's way higher impact than the value statement. And I have conversations with CEOs all the time. I'm like, look, you have to take onboarding seriously. You have to take new employee orientation seriously. You have to train your managers and your people on what's expected of them behavior-wise in the culture from day one. And they don't listen to me. So I needed a real story.

that they would remember and understand that would get them to do the right thing. Because culture, it feels very invisible. You're like, why do I have to do that? Like, I see that person doing something wrong, but it's not that wrong, and I don't want to hurt their feelings by calling them on it. But you're not looking at the knock-on consequences,

the knock-on cultural consequences that you're setting up by not addressing it. And so a lot of what the book is about is, you know, can you recognize culture? So a lot of the examples in the book are things that people are not familiar with and the reason for that is nobody can see their own culture like it's just that's just my way of doing things that's my culture that's my behavior well like maybe it's not but you can't see it

because it's you but you can see prison culture you can see slave revolt culture these kinds of things yes and something to borrow from and think about and kind of riff on in your own way I want to let people know that shock is actually a wonderfully kind empathetic person no he's amazing one of the great stories in the book is how he transformed not only his own culture from that super violent culture, but also the culture of the Melanics, which was the gang he ran. And I know a lot of the guys, his guys that got out. And, you know, it's an amazing transformation that somebody could do that.

I want to ask you about that. I know Shaka because he's a friend of yours and both actually just a plug for this. Ben and Shaka co-host a podcast series called Hustle and Tech, which is guides to technology for everyone. You can find that on our website. But what's really amazing is that in the book, the story was about how he took a group of outcasts and built a more cohesive team, and

that's how you described it in the book. For me, I wondered, coming at it from, again, this theme of the vantage point of Silicon Valley, I understand what you're saying about using examples that are shocking and strong that you can learn from, but part of me was like, why is there a jail example in a book about business culture?

And so, then I wondered, well, maybe can we draw an analogy between a group of outcasts, like, technologists like in this room, and they can do the same thing, and we can draw less from that, or is that too far stretch? Look, so let me tell you where the analogy doesn't work. People in Silicon Valley, some people may be outcasts.

They may have, like, not fit in as a kid and, you know, spent more time with the computer or what have you. People get to prison very often because they're really severely abused as kids. And so the thing that prison culture, or prison that I thought was very instructive was we can tell culture for granted here, because when you hire someone, you can expect certain things. You know, you can expect them to be reasonably on time for their interview. You can expect them to be literate.

You can expect them to, you know, there's just a lot of cultural things that you can take for granted. Like more functional things, yeah. Yeah, whereas in prison, you know, there's really nothing you can take for granted, including things like literacy and so forth. So when you go through the way Shaka built the culture of the melanoma, he really had to start from first principles. And sometimes in a culture, in a company, you've got to do that same thing.

One of the things that Shaka did to kind of create loyalty is he just had the guy spent a lot of time together, eating together, working out together, and it was required to be a member. And these things, just that proximity and the nature of how they did it and so forth kind of built the culture. So one of my portfolio companies,

nation builder and the CEO Leah Endress calls me up one day and she's like Ben we just our cash collections are always late and not 100 percent and I said well you have like big customer satisfaction issues she's like no no no like we're just not collecting the money and she's like but I tell them you know like we need to collect the money and it never happens and I don't get it and I was like well you know you have to start from first principles I took her through what shock it did and I said like this is how we're going to apply it here I want you to hold a meeting every day with the cash collections team. Every day, eight in the morning, everybody comes to work like we're having a meeting.

And in that meeting, the very first thing that I want you to say is, where's my money? And then what you're going to find out is they're going to have all kinds of weird reasons why they can't get you your money, and they're all going to be very easy to fix because it's a cultural problem, not an actual problem. And so sure enough, she goes, she calls me up after the first day. She's like, you're not going to believe it. You know what one of the biggest things is? We have an email that we send to collect the cash, an auto email that's really poorly written.

And I'm like, you know, it's not a big company. And so she every day has this meeting and works through it. And like pretty soon they were, you know, collecting literally twice as much cash as they had been previously. And it was just a culture change. But it was a culture change taken from a prison example. and because you can't make cultural assumptions when you're in prison, so often CEOs make cultural assumptions they shouldn't. I love that you brought up first principles

because I'm fascinated by first principles-type thinkers. I think some of the greatest CEOs, scientists, innovators, are first-principles thinkers. And one thing I often wonder, I always ask myself this when I observe the evolution of technology and innovation, is are there maybe two camps of people, people who can be first-principals thinkers, and some who can't.

And the Silicon Valley folklore story of Reed Hastings, CEO of Netflix, you tell this briefly in the book of how he wanted to pivot the Netflix business from DVD to streaming. He would say he didn't want to pivot it. He said the plan was always to be a network. He wanted to evolve the network, in his view, from the outset to a streaming service, yeah.

So I shouldn't use the word pivot because that's even more powerful, frankly, from a first principal's perspective, that he had the vision up front and the confidence to know that I'm going to pace myself by doing the DVD business before I do the streaming business.

But then he built a successful DVD business and then he kicked out the leaders of his DVD business from the room when they were talking about the streaming business which felt like a very bold first principles move at Silicon Valley folklore. You tell the story in your book.

I read that and I was like would you really advise your CEOs to do that? Was there something about him uniquely that he could make such a bold move or is this really advice that people in this room should actually go translate into their work? It was actually analogous to the move that Toussaint Loveture made in the Haitian slave revolt.

The leader of the, you know, as I said, the only successful slave revolt in human history, he was obsessed with culture and one of the things that he wanted to move from a kind of a broken slave culture to a world-class military and not only military, but like societal culture because he thought Haiti could be a first-class culture. country and one of the decisions he made just to make that priority clear because like the default culture in a slave revolt is revenge a revenge culture when it came to the decision of what to do with the plantation owners the slave owners you know he could have executed them he could have seized the land he could have done a lot of things he actually left them in place let them keep the

plantations but said he had to pay the workers as opposed to have them as slaves and in order to facilitate that, he lowered their taxes. So that was a decision to set the culture away from revenge and towards reconciliation and caring about the economy and caring about the go forward. Reed wanted to get to streaming. His big fear was that a pure streaming company would come along and he would be stuck in the DVD business. And he couldn't figure out how to change the culture to do that. And then one day he said, even though the DVD business is 100% of the revenue, like imagine that 100% of the revenue, I'm going to let everybody

know that streaming's more important, and the way he did it is he kicked all the DVD people out of the executive staff meeting, and anybody who knows about companies knows that's a meeting everybody wants to be in, that executive staff meeting, so like, that's going to really hurt feelings.

But it wasn't like Reed was so great that he got to do it, and people would be okay with it, he was just willing to take that because the principle was so important, and the same way people were mad in the Haitian Revolution when Toussaint did that. But they were working towards something, you know, a higher cultural principle. You described it as creating a shocking rule that does that kind of a reset.

One recurring theme I noticed in the book, and for those who haven't read it, this is just something people in marketing and brand talk about too, which is the power of the why. And I noticed almost every other chapter, every other sentence, every other paragraph, you kept emphasizing this message, the why matters more than the what. the why matters, the why matters. And it seems obvious on the surface, but we really want you to share with us why the why is so important.

So I'll give you two very different examples. One is, well, Andrews and Hearts. One of the things that we wanted in the culture from the outset was we wanted to respect the entrepreneur and the entrepreneurial process. Now, there's not a venture capitalist in the world who won't say that. But there's a big cultural force

that screws that up in venture capital, which is this dynamic. I have the money. You want the money. In order to get the money, you've got to come see me and ask for the money, and then I get to decide whether you get the money. So that could make a person disrespectful. And I'll tell you what it does, because anybody here

raised venture capital money, how often did the VC show up on time for that meeting? Okay. And no one's raising their hand. You know, why is that? Well, they say it, but they don't believe it. They aspire to it, but it's a value, not a virtue. And so I said a rule early on, which was,

if you're late to a meeting with an entrepreneur, you owe me $10 a minute. And, oh, you have to go to the bathroom? No problem, $50. Oh, you had a really important phone call and the deal we all wanted to close. No problem, $100. And people would come to me, and they'd go, why?

Why am I paying you to work here? I'm like, look, because I need you to know how important and valuable an entrepreneur's time is when they're trying to build a company and you're not going to waste any of their time if you're here. You've got a plan when you go to the bathroom. You've got a plan when you have that phone call, and I know you can do it because if you were getting married,

you won't be five minutes late to the altar. You would have gone to the bathroom already. But every time, somebody's got a plan when they use the restroom, when they make their phone calls and so forth, which is every day at the office, they have to say, why am I doing this? Oh, I remember why because, like, we respect entrepreneurs and what it means to build a company. And so that's a kind of technique to move the culture, right? Yeah. I said to tell everyone in the room, since you gave that A6 and Z example, they actually formally call those breaks bio breaks. They

actually schedule in bathroom breaks into the schedule. But anyway, to your other example. So a different one, you know, ethics turns out to be really tricky in a company. And people, you know, they make fun of Dara at Uber for saying, like, we're going to be ethical. Our new corporate values just do the right thing, period. Yeah. It's like, what the hell is the right thing, you know?

It actually turns out to be fairly subtle much of the time. So in a company you could imagine, okay, we made promises to all the employees about what their stock was going to be worth and to Wall Street. about the numbers we were going to hit and like we live up to our commitments in order to make the number we got to get this deal in order to get this deal they need this feature but they need in a quarter and we're not going to deliver for a year so is it ethical to whiff the quarter and have lied to all the investors and the employees or is it ethical to stretch the truth to the customer and like get the money well you better be clear on that and you better get to some kind of higher

principle than do the right thing. And so a great example of this is in the Haitian revolution, this is a war over sugar. It's the British army, the Spanish army, the French army, and the slave army, all fighting for control of this colony. And so it is the most mercenary kind of endeavor that you could ever imagine. All of the European armies are letting their guys pillage all they want.

And Toussaint makes the decision that he's going to not... allow any pillaging in the slave army because you can't fight for liberty if you're taking people's liberty. And it was amazingly powerful thing because the stories, some of the stories in the book, but the story would be of like the Spanish army going in, setting the plantation on fire, killing all the animals, robbing everybody, raping the women on the plantation. And then the slave army would show up starving, and they would not touch the thing. No violence, no pillaging, no nothing. And the knock-on effect of that ethic was that Toussaint had the support

of the locals, including the white women in the colony, who referred to him as father, like amazingly to that level of loyalty. He didn't say, do the right thing, because the right thing pillage. You pillage, the guys get paid, they fight harder, they win the war, UN slavery. Like, that seems like pretty legit. So you can't just say, do the right thing. You have to say, here's what we're doing, and here's why we're doing it. And that's why I emphasize the why. The power of the why. I have two follow-ups on this, and I want to actually shift gears to more practical techniques based on these wonderful principles and violence stories as well. in the DARA example and the values

and why the why matters, I also read it and heard it a little bit as maybe mistakes of omission are more important than mistakes of commission that what you don't say is more important than what you do say. And so then it wondered, like practically, does that mean as someone in this room, for instance, wants to write their, figure out their code,

their Bushido for their company? Do they start with what they're not? Or is there room for them to figure out what they are? Like, how does that sort of play out practically? Well, now, I do think, one, like, the universe of what you're not is too big. Yeah, sure. But here's the thing that is true in every culture. And this is the thing that Toussaint did so effectively, you have to make ethics explicit.

If it's, oh, yeah, we're going to do the right thing. Oh, yeah, like, it's going to be, like, yeah, don't do evil. Yeah, don't be evil. That's just not good enough. and, you know, a great example of this is Uber under Travis. Travis will get criticized for building a bad culture, but he actually had the best-defying culture in Silicon Valley. And if you read the original values that he had,

always be hustling, you know, super pump, toe stomping, whatever. Like, they were all really creative, well-crafted, energizing kind of set of principles that they worked on, but he went way beyond that. They really trained people on them. They had Uber University, and they trained people on the culture. And it really stuck. And probably the most powerful virtue that defined the company was competitiveness. They were, like, massively competitive and really great at that.

But what he did not do is he didn't say where the line was. So ethics were just, like, unstated completely. And so a lot of people would interpret that competitive virtue, to be like whatever at all cost, you know, even say hashtag winning, right? And so when Susan Fowler joined the company, she gets sexually harassed her first day on the job, buyer manager, in writing.

Like she snapshots it sends it to HR. Now, anybody knows anything about HR law knows. If you get any kind of complaint, let alone one in writing with proof, you have to investigate it. Like, that's not like good practice. That's the law. That's the law.

Yeah, you just have to do that. But this HR person said, oh, that manager is a high performer. So, like, we can move you, but, like, we're not doing anything. There's no way, like, Travis wanted that manager to do that. It's just like a dumb-ass thing to do. Like, even if you didn't care about sexual harassment, like, that's idiotic. That's ridiculous. But when you don't counterbalance the culture, if you don't say what the ethical line is,

which we won't cross, particularly in business, because every conversation you have is how do we make the number, how do we get better, you know, how do we get more customers, how do we grow the user base, all that? And so if you don't have any counter measure on that that you talk about out loud, then it can run away from you very hard and very fast. And so that's why when you talk about what not to do,

it's really like where is the ethical line in this company? And then particularly in Uber's case, it was tricky because they were flirting the law on a lot of things. So the law wasn't even the line, right? because they're challenging the regulation, the laws of the land in place. And so what is the line? Definitely not something that every employee

would just figure out on their own. I loved that because one of the things that I think is a through line through the book is this idea that the very strength you have is also your weakness and that it's all a difference of degree, not a difference of kind, which I think is such a powerful idea

because there's a fuzzy area between the yellow and the red, you know, strength, weakness. So it's kind of on a continuum. I do have one question for you about the Uber example. I'm just curious about it because I love a comeback story and the idea that you can change. Do you think that Travis himself could have led that change at Uber

or that they needed to bring an outside person or that he could have come back like 10 years later like Steve Jobs at Apple on his second time? I guess my question is, can the same person actually make that change of a culture? Does it have to come from the outside? Yeah, so look, I think that Travis could have done it, but Travis would have had to change, if that makes sense. When Chaka changed the prison culture, and I go through it in the book, it couldn't change until he changed.

And I think that, you know, with Travis, he may be changed now, but he didn't change then. And I don't think he ever saw the lack of explicit ethics as the problem, getting the medical records from the women in India or that. sexual harassment or the hell application where they hacked the lifter like all of those things were individual incidents they weren't systematic I think in his mind so like unless you believe it's systematic and you know I go through the story in the book where they have the confrontation with the nation of Islam where Shaka realized that it was systematic the violence was systematic and that's when he changed and that's when they changed and he turned to his whole group the gang of the Melanics around.

Yes, yes. And I think that that's very unusual and difficult to do. There are other things where there's a competency issue. So, you know, there's a lot of Boeing in the news lately on the 737. And I think anybody's been in a company knows that there were people in Boeing that knew that thing wasn't safe. Like, there's no question. There were engineers that knew it wasn't safe.

And they think it's come out even that they told the CEO it wasn't safe. But somewhere in the culture, whatever it was, being on time with the product release or earnings or whatever became more important than safety. And in a place where lives are on the line, you probably can't have a leader that lets that stand culturally. So in that case, I would probably say you have to remove them because you have to shock the system hard enough to reset the culture to the point where they value safety over whatever it was that they were valuing. If he or someone else in this position who's trying to turn around or reset their culture did actually become, to your point, self-aware. What would they have

to do then to then communicate that to their company? Or how do they sort of convey that this is a shift? I think that it's very, very hard and detailed work. I don't make light of it. And probably the best example is kind of, you know, shock in the book. I hate to say read the book, but like that one's complicated. No, I actually do want to tell people to read the book because I actually think no matter how much we talk about it here, it doesn't do justice to the nuance and the layers of meaning within meaning within meaning without reading that. You can actually almost only convey that in the written form in some ways. But one thing about this idea that you have to be self-aware, have truths that you know. I also wonder if it's at odds with the sort of Silicon Valley

technologist culture of reality distortion fields to use the phrase that Walter Isaacson used to describe Steve Jobs. But the other thing is, we work in Vendon. venture capital. We see founders every day. There's a certain will to power that you need to get through and punch through an industry that is hard to penetrate. And you kind of have to have some lies that you tell yourself. So for me, it felt like a bit of a contradiction between lies and truth and being self-aware. Like, how can you be a founder and also self-aware at the same time? It feels like they're at odds. So, look, when you talk about a reality distortion field or like a founder who, like, you know, has a crazy idea or whatever.

That's innovation. And so on those ideas, what you're really saying there is 99.999% of the world believes X and the founder believes Y. But when it's really a breakthrough, the founder is actually right. So these people were all deceived or thought they knew the truth but didn't. And the founder did. And that's always what innovation looks like. but that's believing something but not knowing it and that's different than lying where you know

something and then you say something else to try and move things that's why i hate the term fake it tell you make it because that's like lie to get what you want that's got all kinds of bad cultural implications that's going to come back and eat you alive in your own company if you're not careful so i think that those are two different concepts i don't think you have to recognize Yeah, so some quick lightning round style questions with you on a couple of things. So one is superstars, 10x engineers, brilliant jerks, you know, other outliers in a company. When is cultural cohesion more important than those types of special, unique individuals and their performance? Like, is there a tension between the two?

Yeah, so almost all the time. John Madden had a great line on this. He said, look, on a football team, there's one guy that you can hold the bus for. like everybody's got to be on time but that person is so great that we're going to hold the bus and the reason it can only be one is you have to make it clear

to everybody else that you're going to let that person be outside the culture but you have to have great skill like John Madden was an amazing football coach and so forth so generally you wouldn't do it but if you want to do it they better be the one

okay so Pirates versus Navy and you've actually talked a lot in your other writings about wartime versus peacetime CEOs. I love that because it comes from the Godfather, the wartime, peacetime conciliary, one of my favorite movies of all time. By the way, I'm a big fan of Godfather 1,

not Godfather 2, and there's two camps on that. Godfather 2 is good. It's good, but it's not as good as Godfather 1. And Godfather 1 is not even talk about. Because you're an editor, Godfather 1, the editing was way tighter, I agree with that. I'm glad we agree. Or somewhat on that. But Pirates v. Navy, is there a phase

when every startup, and it inevitably starts off as pirates and becomes the Navy, how does someone navigate that cultural transition? So, you know, there's a great story in Andy Groh's book, Only the Paranoid survive about this. So when they had the, whatever, the floating point error, which was like, you know, and Andy Gross was like, it's not going to affect anybody. These guys are all stupid, F off, because Andy was, he didn't suffer fools. but it was a huge catastrophe for Intel

and what he said he learned and it was kind of this transition from Pirates to the Navy is when you're dealing with consumers how they feel matters these things, these other things matter more than the actual technical answer and so, you know, he had to make that transition.

I'm going to skip some of the other ones until we have time for everyone's questions. I'm going to ask some of the questions that came from the audience. So the first question is, Ben, given the importance of culture in any organization, how would you evaluate candidates for culture fit? Yes, I think that's very tricky because people can change their culture.

So one thing that you can get with exact culture fit is a lot of homogeneity, right? We went to the same school, we read the same books, we believe the same things, you know, and there's a power in that, but it's a slippery thing, so you have to be careful. So what I find to be powerful is to really define your culture. And, you know, like we have a very comprehensive culture document at the firm. And one of the things that we do, which actually learned while writing the book, is we don't let anybody sign their offer letter without agreeing to the culture, saying, I'm going to live in this culture, I'm going to adhere to these standards.

So, like, if somebody said, oh, they're not a culture fit. it's like why like what exactly about them doesn't fit into our culture and it's that an element we want in our culture or not want and like you have to be able to have the conversation at that level and so I would just say like

doing it in a fuzzy way is very dangerous doing it in a specific intentional way and knowing that people can change I would say would be the correct approach. This is a follow-up related question from another person just kind of them just kind of theming these you talked about building culture

What do you do if you walk into? This is now from the employee perspective. What do you do if you walk into a new company and you find yourself a misfit in terms of culture? I don't have any thoughts on that, but I'm very curious for what you think about that. Well, look, if you don't believe in the behaviors of that company and you're coming in at the individual contributor level,

you probably want to move on. I think it's very difficult because what will end up happening is that culture will change you. And I know a lot of you have probably worked in organizations where people berate each other. and then what happens, right? Like, if you're in that, like, you'll go home and do that. And, like, you'll pick that up.

And so you don't do that to yourself. Don't become a person you don't want to be. I would also add to that, because I've heard this from you so many times, and it's in our values, too, that we celebrate difference. It shouldn't be, the assumption should not be that someone following a code means that everyone's in the same cult mindset. Like, there's room for a variety of people in different ways of being. So, you know, Lynn, we talk about it out at the firm,

which is what I always say is, like, if you have an NFL, NFL team, you're going to have players that weigh 350 pounds and you're going to have players that weigh like 180 pounds and run fast. And if you have all 350 pound players, you're going to lose. And if you have all skinny guys who run fast, you're going to lose. And so we have to value each other's strengths. And it can't always be like I only value the strengths that I have. And that's basically where people screw up the whole diversity inclusion equation is they can't

see the talents that they don't have. And so then they try and use a proxy like race or gender or whatever. If you could see the talent, like you'll get diversity. You just have to be able to see what people can do. And I talk about this a lot in the book, but that really is important,

but you have to see and value the things that you can't do. Right. So this is also related. I don't know if you have a different thought on this angle. What can I do to change a culture at my company as a rank and file employee?

Like, do they go to HR, do they talk to someone? What advice would you have for this person? Well, to change the culture. Yeah, how can they change it from that perspective? I think the thing that's different in companies versus a society, in society like Jay-Z can change the culture. Companies, the hierarchy has a heavier weighting to it. So if the, like, let's say you wanted to change the culture so that everybody was, you know, on time and respectful of each other's time, and the CEO always showed up to everything a half hour late.

Like, it would be really hard to do. And so I think that if you're an individual coming in, you kind of have to compel the top of the organization to do it, for starters. Otherwise, like, you're just going to be fighting the tide. Yeah, and I have to say, I actually appreciate that you're someone that I can come walk into your office and tell you the truth of what I'm thinking and you don't actually. Yeah, and then, you know, as a leader, on the other hand, like, everybody's culture is broken in some way. Like, I never met a company that has anything close to 100% cultural coherence. Like, and people who tell you they have are just literally don't even know. They're lying to themselves.

They're full of shit. Look, it's a mathematical terms. It's a complex, adaptive path-dependent system. Like, everybody's behavior is moving the culture all the time, and you're going to have breakage and you're going to have slippage and you're going to have regressions and all that kind of stuff. So as a leader, if somebody says, like, I think we have a cultural problem, you know, you can't tell them to pound sand, or like you can, but that thing is going to fester and grow. We call that a kimchi problem for my Korean friends.

It's funny, too, because you say in the book, the goal is to be better, not perfect, which I think is a much more attainable thing for someone to do, which I loved. So here's another employee-oriented question. How can I evaluate company culture before I join? How can you tell from the outside? if you don't have a culture doc and the kinds of things that we and others do. Well, you know, like I think you have to ask specific questions

about the kinds of, you know, behaviors that you're concerned about. If you ask about a behavior, people won't know even to try and, like, headfake you on it. If I send somebody an email here, like, how long will it take to get back to me? Like, that's a very telling thing in a culture, right? Because people are either responsive or they're not. if I go to a meeting are people going to be listening to me or are they going to be like on their

laptops and computers because different companies run differently that way and so you just have to think about okay where are you going to be effective and what are the behaviors that like you want to be part of and what is going to drive you bananas right here's a oh my God I love

this question in the blood genealogy story you mentioned the samurai was a mediocre performer how do you decide whether or not to keep that mediocre performer without he or she having to demonstrate value in such an extreme way in an extreme situation. Yeah, you know.

I love that question. That's a great question. Raise your hand. Do you ever ask that? In the story, if you'll recall, the Lord Selma really had an affinity for the samurai despite all his issues. And I always say one of the things I really believe in is

you value people on the magnitude of their strength, strength, not their lack of weakness, and that's in kind of hiring and as you go forward. And the late Raiders owner used to say something I really like, it says coach them on what they can do. Like, not everybody can do everything, but like if what they can do is world class and you need that, then that's a real thing. And, you know, he would do his level best at whatever you needed him to do 100%. And, you know, that shows up more than just when he went and got the genie.

It's how you look at people. I would always rather have somebody world-class at something that I really needed than, like, above average at everything. And, you know, and horrible at something else. We have people in the firm like that, as you know, like, and I value that. And I'm okay.

And you do have to have that conversation. No, you can't go do that job because you're no good at that. I love that about our firm. I have you in this job. Yeah, I love that. And I love that. We're all really honest about that,

and we allow that. I have a, because we just, because we talked about Godfather earlier, I have to say that I call this my capo, theory of management, which is that there's a capo layer in every company, and I sometimes wonder to myself that kind of loyalty, does it actually

really pay off? Like sometimes, what I love about that question that person asked was it almost made me wonder, like, I don't want to be that blood genealogy person. Like, I'd rather be excellent at something than mediocre and have to prove myself that way, but not everyone anyway. That was a real test.

Okay, so this is a great one. As an investor and board member, this is kind of a governance related thing? How do you keep your company management responsible on the question of culture? Is it something that you actually even ask? Like, is it around processes, KPIs, priority versus profit? Does it come up at a board level? Yes. I know, look, it does. At least it does for me, because I spend a lot of time, at least with the CEOs in my portfolio, talking to them. And it starts with hiring. Like, let's not, I don't care about like your close rate on your candidates and all that right now. What I want to know is how are you onboarding them? How long

does it take them to get productive? What is your employee satisfaction? What are your attrition rights? And this is actually, this is the biggest mistake people make on diversity is they measure how many women underrepresented minorities are coming through the door. Yeah. That's not the metric. The metric is what do promotion? attrition, can play satisfaction like across race and gender. Like, can you see the talent? Do you value it? Do people enjoy their

career there? Because if they do, then you can get the talent. But if you don't recognize the talent and you just force people in so you can get the gold sticker that says you're not racist and sexist, then you're going to make everybody miserable, all your employees. So, anyway,

sorry. That's great. No. Okay, a couple more, and then we can wrap up. If you could be world class at only one thing, culture or product? Which do you choose and why? And by the way, for those in the audience who haven't read this book, one of the recurring themes Ben does talk about is this tension that culture is this abstract thing. So how do you make those choices? Let's not get confused about one thing. You can have a great culture and you build a product that people don't want. Your company's going out of business. Nobody's going to ever like that's that. So like the product

has to work for you to have a business. But having said that, And I talk to entrepreneurs about this all the time. The most important thing about your company isn't necessarily going to be the success or the deals you won or like the customers you had. It's going to be what that time was like. That time of your life and the life of all the employees who spent most of their waking hours with you at your company, what did that feel like? How did you treat each other?

How did you treat the people you work with? Did everybody's lives get better? Did they become better people or worse people? And that's your culture. And so that's like a real thing with incredible value. So I don't want to say, you know, just because you can't succeed through culture alone doesn't mean it's not incredibly important. Okay, so last one.

If starting a VC fund like A6 and Z today, what would be the most important to build the right culture? Well, you know, like it depends what your business strategy is. Not every culture is for everybody. And one of my favorite examples that I have in the book is, so you take Amazon, Amazon, one of their cultural things is frugality. And you know, they used to have, your desk used to be a door, like in the old days at Amazon.

And like a trestle table. So just to let you know, we're not going to buy you a desk, that's how cheap we are. But their business strategy was to be the low-cost leader, so that from a customer perspective, If I went to Amazon, I didn't even have to price compare, because I knew they had the lowest cost. And to get to that, you need to not waste money. You contrast that with Apple. Apple doesn't have that strategy.

They're not trying to be the low-cost, low-price leader. They're trying to build the best product possible, the most beautiful, best-designed, spare-no expense. Steve Jobs even got fired by sparing-no expenses first time around. And so you go to their campus, it costs $5 billion, and it's like gorgeous and the doorknobs cost like thousands of dollars, all that kind of thing. And that works for them. You know, that culture kind of produced the products that they produce and Apple's products

probably will always be more beautiful than Amazon's products, which are not very beautiful. But they'll also always be more expensive. And so that culture was right for Apple and the other culture was right for Amazon. So, you know, and for Apple to take Amazon's culture wouldn't have been productive for them because it didn't go with their business strategy. That's great. So I have one question that the Computer History Museum asked us to do as well. So you made the bestseller list, and it's in the category for advice and how to, which I personally

love the business category is not out yet, but I love that because I found the book very therapeutic and reading it, and there's something about personal development as well as career development and leadership in it. On that note, for you, sitting where you are today, knowing everything you know now and what you could tell your younger self, the Computer History Museum has a little. one-word initiative where they ask you to reveal one word of advice to a young person, and it could be for yourself or to any young person today. Could you share what your word is and the story behind it? Sure. Sure. Now, do I have it here? It's right here. I don't even

know what it is. I don't know if you can read it's persistence. This is for entrepreneurs. Because like, entrepreneurship makes you want to quit all the time, from fundraising to like everything going wrong, to problems with customers, to your employees telling you, your culture sucks. and like if you're not absolutely committed to getting better and learning and changing and making it go then you're not going to get there and if you think about the top top entrepreneurs they are amazingly persistent people

this is something that I think if you want anything in life this is what you need one last question I want to ask you about the process of writing the book because of course as an editor I have to know And also, frankly, before I met you and came to Andrews & Horowitz almost six years ago, I thought it was kind of sticky and gimmicky that you would put rap lyrics at the top of your blog post. I was like, no offense. I'm just going to say this out loud.

But I'd be like, who is this, like, white guy putting rap lyrics on his post? Judge me by my culture, now my color. I agree. I agree. But I had that thought in my mind. And I was like, what's up with this? And you also say in the book that the majority of your entrepreneurial and business and culture ideas occur to you when you're listening to hip-hop.

And so what I want to ask you, because now that I know you, and I know that there's layers and layers and meanings behind what you do, what specifically about hip-hop culture draws you, and what's the bigger cultural context for the rap lyrics that you put at the top of your blog post? Yeah, so rap music is very entrepreneurial in nature.

The original rap music, because they created a new musical art format of nothing, and, you know, nobody would put it on the radio. MTV won't play the videos. nobody would sign the guys for the first 10 years of rap music, nobody signed them. And so they did all these things. You know, they sold records out of the trucks of their cars,

that kind of thing. And they kind of built this whole thing that it ended up being the biggest musical art form in the world currently. And they tell those stories in the songs, and they're very related to the entrepreneurial journey. So I have a lot of those things in it. And then, of course, now I listen to so much rap music, a lot of other things come to mind.

So if you think about the opening quote for the Culture and Revolution chapter. It's from Naz, who I spent hours and hours talking about the Haitian Revolution with. And he had a song on his album Stillmatic, the introduction to the album. And this album, you have to understand his career, like they had buried him, like he was dead.

And Jay-Z came out with this very aggressive disrap against him, which he countered with a song called Ether. But the opening line is blood of a slave, heart of a king. And I was like, that's Tucson Lovercher, blood of a slave, heart of a king. And so those kinds of things. So it's kind of telling the hidden story in the book. You know, the rap lyric and the Shaka chapter from a young woman, Dajloaf, really describes the culture he came from well, but she's also from Detroit.

So it's just kind of the back story on the book. It's how I tell that for the really avid readers. But one of the things I've learned from you, and I agree, it's about judging a person. and based on their culture, not on their color, is that the influence of hip-hop is outsized in our culture. And you did an episode, you did an event with Dapper Dan. And that was a great example of how a man from Harlem, his design has influenced many, many, many other great designers.

And there's a riffing culture, but sometimes it's also a borrowing culture, remix culture, that's TikTok. So I think what I love about it is that hip-hop has had an outsized cultural influence in our world today. And it's very powerful because you constantly bridge these cultures for us, too. So I want to go back to culture, not color, because that actually comes from something that to Santa. So in 1797, he was actually running the colony as part of France.

There was a guy Vincent Vo-Blanc who hated the idea of a slave running a French colony. And he lobbied a French parliament. He said, look, the colony's been overrun by ignorant and brutish negroes. And Toussaint had to counter this argument. And the countered argument was really interesting because he said, look, black people are not savages. It's slavery that makes them so. And then he went on to basically break down point by point

why the Haitian Revolution was far less bloody and brutal and savage than the French Revolution. And some of the things I talked about, like they didn't pillage, made his case and he won that argument with the French Parliament. But it was so interesting to me the way he phrased it because it was the culture of slavery that created the perception

of these guys that had nothing to do with it. It just got a color assigned to it. And I think that, you know, with hip-hop, it's the culture of entrepreneurship. Yes. And it has nothing to do with being black. It has to do with that culture. And that's why I think that a lot of entrepreneurs

resonate with it. And, you know, we get divided up into these dumb demographics, you know, age, gender, color, zip code. But what you do is who you are. That's your culture. That's fantastic. I want to say to everyone, thank you for joining this episode

of the A6 and Z podcast. We're here at the Computer History Museum. Thank you, everyone, for coming today and joining us. Thank you. Thank you.