# AI Reshapes Venture Capital and Founder Evaluation

**Podcast:** a16z Podcast
**Published:** 2026-10-10

## Transcript

I think it was midnight, and my phone rings.
Unknown caller, so I'm like, oh, it's Kanye.
I go, yay, what's up?
And he goes, hey, Ben, I heard you're having a barbecue tomorrow.
And I was like, yeah, yeah, I am.
I want to record in your studio.
And I'm like, yay, I don't have a studio.
Are their strengths world class?
Or are they the best in the world at something?
And then you overlook everything else.
That's what makes a company great, and that's what makes an entrepreneur great.
Not, oh, they don't know how to do this.
Wow, they know nothing about finance.
There's so many things that are wrong with every entrepreneur.
Every great entrepreneur has got something like horribly wrong with them, but that's okay.
You know, it's what are they truly great at what they're great at?
What separates a great entrepreneur from everyone else?
For Ben Horowitz, it isn't the absence of weaknesses.
It's having a strength so exceptional that everything else becomes secondary.
Today's episode comes from our recommended listening series.
where we feature standout conversations from people across our broader network.
This one comes from Vintage and Vintage, where host James Norman sits down with A16Z co-founder Ben Horwitz for the show's inaugural episode.
Ben shares what he learned going from engineer to first-time CEO, how those experiences shake the founding of A16Z, and why evaluating founders means looking for world-class strengths rather than trying to find someone who checks every box.
They also get into AI.
And why Ben sees this moment as bigger than the internet.
As the cost and difficulty of building software collapses, creativity becomes increasingly important.
Opening the door for people with deep knowledge of a problem to turn that knowledge into a product.
And throughout the conversation, James and Ben return to a shared influence, hip-hop.
From the lessons Ben took from Nas at his lowest point, to why he created Pated Full to recognize the pioneers who shaped the culture.
Welcome to...
the first episode of Vintage & Vintage.
This is the first one?
The first one.
All right.
Well, that's good.
We're getting off with a bang.
Right.
You know, step into the game.
But to start the conversation is Vintage & Vintage.
You are a certain vintage of entrepreneur.
We also have a certain vintage.
Old vintage.
We have a certain vintage of wine as well.
So like, and all the wines are connected to like the relationships.
This is a continuum, right?
But it's actually like Mondavi.
So Robert Mondavi, you know, they kind of set the tone for American wine.
But by 93 though, There was like this like virus vineyard situation in Napa.
Yeah.
And so they had to go public under duress.
Like, oh, we got to get this money.
We got to keep going.
Yeah.
Didn't turn out that well because Wall Street directors came in and like abused the name.
And now you have the Robert Rondi B.
Wine that people would know today.
But it kind of fell apart by 04 and the family had to pick up the pieces.
But the youngest son came along and decided to make Continuum.
And he wanted to shoot for the stars, take all the learnings he had, inner workings of how they make great wine and make this.
And so this was born out of struggle.
And similar to my guest today, did the same in Silicon Valley.
Set the tone for cloud computing.
Had to sell the heart of the company to keep the thing going.
Even after going public, stock dropped as a result and had to crawl out of that.
But like took the knowledge one had in the team and the inner workings of how the thing was managed, Opsware, and, you know, clawed your way back from people's like, they're counting them out.
Nah, they're not going to make it.
It's a dot-com boom bust.
But it's like, you know, got the $1.65 billion exit.
And so Continuum is special and legendary.
My guest, special and legendary.
But it's great because of the struggle.
And so this is the hard thing about hard things in the bottle.
And this is my guest, Ben Horowitz.
All right.
That's a very nice introduction.
Thank you, Ali.
Or so I call you James.
Most people know you as James.
I'm talking from the new me days.
Right.
So actually, hold up.
Actually, take a look at the year in the wine before that.
2017.
Okay.
We did something pretty funny and crazy.
Was that the CEO barbecue with Kanye?
It was.
Oh, boy.
It was a day in the studio with Ye.
Yeah, that was wild.
So for you listeners, what happened was we were having the CEO barbecue, which is a big event at my house and so forth.
And it's like, I think it was midnight, and my phone rings.
You know, I heard, I guess I didn't turn off the ringer and I look at it, unknown caller.
So I'm like, oh, it's Kanye.
And so I answer the phone and I go, yay, what's up?
And he goes, hey, Ben, I heard you're having a barbecue tomorrow.
And I was like, yeah, yeah, I am.
He's like, can I come?
I was like, sure, you can come.
He goes, oh, can Kim come?
And I'm like, yeah, Kim can come.
Of course you can come.
Well, can Chris come?
Yeah, Chris can come.
And he goes, okay, great.
I want to record in your studio.
And I'm like, yeah, I don't have a studio.
And he goes, okay.
And so they're like, okay.
Then, like, I wake up, 6.30 in the morning, I get a call.
Hey, Ben, this is Noah.
I'm Kanye's engineer.
He's like, I'm just calling about the specs on your studio.
And I'm like, I don't have a studio, Noah.
He's like, what do you mean you don't have a studio?
What are we going to do?
Kanye's expecting a studio.
We've got to have a studio.
I'm like, oh, shit.
So I call Chris and Nate.
I'm like, who do we know who has a studio?
And they're like, Howie.
And I'm like, okay, well, let's call him because Kanye's coming over.
We need a studio.
And so we call you.
We're like, what are you doing, Howie?
He's like watching Netflix.
And I'm like, okay.
I was like, is that studio you have portable?
And he's like, yeah.
Yeah, it's portable.
And so long story short, you drove the studio down to my house and we set it up in the room.
And then a lot more crazy stuff happened.
Ye was playing us the Pablo album.
Yeah, we went through a lot of them.
We went through Pusha's album.
We went through basically all of his stuff.
Yeah, basically all of it.
Yeah, so he was, that was a legendary day.
That was a crazy thing.
That was a legendary day, no doubt.
There were a lot of beefs at that barbecue too.
conflict, which we could get into later, but we'd probably should take up the whole podcast with that.
Yeah, that would be the hip-hop champ situation.
Hip-hop's important.
Like, we're both hip-hop heads.
When did hip-hop become a thing?
You know, when did it be like, oh, I can see myself in that and it's motivating me to do things?
Like, how'd that come to be?
Yeah, so it's kind of a slow thing.
So I, you know, I was probably like 12 years old when Rapper's Delight came out.
That was kind of the first one that a lot of us heard.
You know, if you weren't in New York.
I think the first one where I was really like, ooh, this is going to be very different was when Run DMC Hard Times came out.
And I was like, this has a whole other feel to it than anything I've heard.
So I was like really into it.
But the thing that made me like locked into hip hop, so I went to school in New York.
I have this friend who I grew up with who...
had gotten shot in the face, like in some kind of weird gun accident, and he was blind.
And so, you know, I was very worried about him.
We were super close.
And, you know, I would call home to my mom.
I was like, how's Seth doing?
Is he all right?
Is he going to be okay?
She's like, you know, he hasn't spoken to anybody since he's been shot.
He's just, you know, sitting in the hospital.
Everybody's worried he's suicidal, this and that and the other.
And so I got the idea of being like a dumb 18-year-old kid.
I was like, you know, hip-hop is so great.
Like, it's like the most, like, you can have nothing, and you'll rap about your shoes.
And like, my shoes are the best.
And I'm like, you know, he needs that feeling.
And so I would record the DJ Red Alert and Chuck Schiller shows.
That's where all the good stuff was.
Yeah, yeah.
You know, I would sit there on Saturday night.
Everybody else would be out, and I'd be just like recording.
And I would send him, like, the tapes of the show.
And then I called home.
to see how he's doing.
And they're like, well, he's talking now, but all he'll talk about is hip hop, you know, and DJ Red Alert and, you know, Rock the Bells and all that.
And I was like, oh, cool.
So then when I went out that summer, we started a hip hop group called the Blind and Deaf Crew.
Blind and DEF.
And we rapped about being blind.
I wrote most of the lyrics.
I wrote things like...
The Blind Deaf Crew, you know where fly.
Three of us, but we got four eyes.
Oh, man.
You know, just talking, rapping about being blind.
And so then I was very attached to it after that.
You know, and it's, you know, hip-hop is very business-oriented, as you know, particularly in the early days.
It was all about business.
Strictly business.
Yep.
And so, you know, when I started writing on business, So many of the ideas came from those old hip-hop songs.
And so I started just, you know, putting the lyrics at the top of the post, mostly to give credit where credit was due.
Because if, like, you know, I hear an idea and then I write an idea.
This is my inspiration, so I'm going to, you know.
Yeah, just put it out there so, like, you know it came from, I didn't come up with this idea.
It came from Rakim or it came from Rick Ross or whatever.
And so then I got really associated with it and all that kind of thing.
Okay.
It was funny, though, because knowing where I'm coming from, I'm of a different vintage, though, right?
Yeah.
So it would be impossible for you to be growing up on the West Coast and be of your vintage and actually, like, grow up in hip-hop because it just didn't travel.
There's no DSPs and stuff, so it's like— Versus, like, you know, I'll be six years old listening to— you know, wherever it's Hammer or whatever.
I'm nine listening to 36 Chambers.
You know what I'm saying?
Yeah, yeah.
So it's like a different walk.
Yeah, no, no, no.
Actually, so my friend Roland Fryer, the economist at Harvard, just wrote a piece in the Wall Street Journal kind of on, you know, did hip-hop had a bad influence in society?
And the way he did this study, which turns out, no, it had a positive influence, was because...
No radio stations played it, so you could track the cohorts from the cities that had hip-hop and see how they did versus the cities that didn't have hip-hop.
And it turns out the cities with hip-hop outperform.
The inspiration level is just like, you know, they're a level.
That's the drive.
You're getting into college.
You're doing your thing.
And now, like, you're getting into entrepreneurship.
How do we get into, like, I'm going to work at and work with Mark and do all these things?
I own a position to be an entrepreneur very easily in that, you know, by the time I was...
25, I was married.
I had three kids.
Like, so I was just trying to keep the lights on.
That's normal life right there.
Yeah, yeah, yeah, yeah.
You know, keep the lights on.
That was my main thing.
And, you know, it was a little, you know, starting a company was a much more unusual thing in those days.
You know, it's kind of more systematized now.
So I started as an engineer at a company called Silicon Graphics.
Was it Ken?
Yeah, Ken Coleman.
Yeah, yeah.
Ken hired me in there.
You know, I kind of learned the ropes, learned how to.
be an engineer, learn product management, that kind of thing.
And I ended up going to Netscape.
A lot of ex-SGI guys were there.
And that's where I met Mark.
And, you know, I was still just trying to, like, I was happy to be, like, making money.
And, you know, Netscape went public.
I think I got a million dollars out of that, which was crazy.
I couldn't even believe it.
I was so rich.
So you thought.
Yeah, yeah, yeah, yeah.
So I thought.
And then, you know, once Netscape kind of got sold, Mark is like, hey, we should start another company.
You know, I didn't cross my mind to do something like that.
And I was like, well, who's going to be the CEO?
He's like, you.
And I'm like, all right.
I'll try.
You know, I don't know anything about being CEO, but that's kind of how I got started.
I mean, it also actually speaks to a lot of, you know.
the sinusoidal trajectory of, say, a company that finally gets to an opportunity.
So, like, the first time you really step into something, there's going to be downs, right?
Always.
Like, I don't know anybody who doesn't have, like, not just downs, but existential, what we call the wiffio.
moment, we're fucked, it's over.
Like that, like you can't build a company without that.
Like that happens.
And a lot of, look, a lot of companies fail just because the founders can't handle that moment.
It's a tough moment.
Yeah, it's definitely, I find it to be like this whole, I mean, I'm new to the investment game over the past five years, but like I do find it like the people is everything.
I'm very good at picking a company.
Yeah.
I feel like it's probably an ever going evolution to like identify great people.
Yeah.
Yeah, well, it's really hard because you only know so much about them, and it's a little like dating, right?
They're coming, they're putting their best foot forward when they meet you.
So you really have to get deep into their background.
But then, like, it's also, it's one of those things where you're one person in life, and you're another person under extreme pressure.
Like, those are two different cats.
Yeah.
Your whole chemistry starts working differently.
Yeah.
So, like, how people are going to perform in that situation is really, you know, if you haven't seen it, you don't know what's going to happen, to be honest with you.
And, I mean, this is, like, one of the reasons, you know, Elon love him or hate him, God bless him, that guy is very good under pressure.
Yeah, like, he is, like, there's no amount of pressure where he's not going to perform.
You know, that is what you want.
And that's why he's probably the greatest entrepreneur of our time.
So when you're all the way down to extreme down, what is one bar that comes to mind as you, you know, maybe it's popping your mind, but like, oh, I got to keep going.
Well, it's probably from ether, you know.
What is it?
Left me for dead, stiff and rotten, the Nas line.
You know, like that's the feeling like, okay.
Because you remember, Ether came out when Nas was at his lowest.
He was way down.
And Jay-Z was like literally the biggest rapper in the world at that point.
And he got hit with the Takeover where Kanye did the beat.
So like it was that fucking, you know, like everybody was like, wow.
And then Jay-Z rapped his ass off that great fucking song, Takeover.
And Nas, at the bottom, bottom, bottom that any rapper could possibly be at.
And he said it, you know, you left me for dead.
Right.
You know, and so that's the feeling you want, like, no, I'm going to come out with ether.
Right.
When you think I'm dead, I'm going to come out with ether.
I think the same thing, and now, like, because of Kendrick, we have the evolution of Not Like Us, which is like ether 2.0.
It is, it is.
It's a little, that's a little different one to me in the way that went down, because Kendrick's career was also on the...
Right.
During that battle.
But he wasn't as far down as Nas was at the time.
Yeah.
But Drake was like Jay-Z, there's no question.
But that was more, you're taking rap in a direction I don't like.
Right.
Right, right.
You know, so I'm going to have to get out of my room.
I'm going to have my way with you.
Stop talking to myself.
Right, right, right.
album of introspection.
I'm going to come out of that and I'm going to deal with you right now.
I don't like you.
That's a little different feeling for me, but I got you.
All right, so we digress.
Back to the tech thing that all y'all want to hear about.
So build the company, sell the company.
I don't know why nearly immediately after that you decided to go build a venture firm and then mess around with NuMe, but tell me about this 2008 to 2011 time where like, You said, I'm going to build a venture capital firm.
And when you did it, it was nothing like the other stuff, really.
I mean, the way you approach people, all these people running around the building.
Who's a partner?
Who's not a partner?
Like, what's going on in this building?
You know?
Yeah, yeah, yeah.
Well, so the idea was it kind of came out of how hard it was to build the company.
And I always felt like, well, if you're a founder and you start something, you know, you don't know how to be a CEO.
You don't know how to build a company.
And you kind of think, at least in those days, I thought, oh, the venture capital firm would help me with that.
And they weren't really set up for that idea.
They were kind of like really, really good at picking entrepreneurs.
They made a lot of money for their LPs.
And they were very smart guys.
But, you know, to build a company, you need to feel.
like you can run a company.
And that means you've got to be able to call important people.
You've got to be able to kind of have somebody to talk to who really knows what you're going through, who can, you know, help you with things.
You need to be able to have, like, turn on a recruiting army.
You've got to...
You know, these days you've got to be able to deal with, like, policy issues and this kind of stuff.
And so, you know, the idea behind Andreessen Horowitz was really like, wow, what if we made a better product not for LPs but for entrepreneurs?
The first thing you have to do is, like, forego, like, a lot of your salary because you have to take the fee monies and build this platform to, you know, help entrepreneurs kind of build their company.
And that was kind of the initial idea with it.
And then we always...
thought the thing that we could provide entrepreneurs that they would value most would be this network.
And we always thought of the firm as a network.
And so how does the, you know, how can you, like if I could call anybody, if that kind of bleeds into everything you do because now like you feel like somebody.
This was the idea behind the CEO barbecue.
Oh, if I go to a barbecue and I'm me, just like this little entrepreneur, and then I see Mark Zuckerberg, Larry Page, Kanye West.
okay, I must be important.
Like, I feel like I have a whole nother feeling about myself, and that was, like, a lot of the idea of the firm.
Because it was a network, you know, one of the things I thought, I was like, you know, like, I'm looking at all these venture capital firms, and not any of them are networked, like, literally into any black people.
And I know that's, like, a crude way of saying it, but, like, I was like, wow, that's an opportunity for me.
I'm going to fucking build that network.
I'm going to build the definitive.
network in Silicon Valley for, like, black entrepreneurs, black entertainment people, everything.
And that's going to give me a huge advantage because that's a whole, like, important part of the world.
And so that brought me to NuMe, which was like, you know, I was looking under every rock.
I mean, NuMe was definitely under a rock.
And so this woman, Angela.
ran it, and it was an accelerator for black entrepreneurs.
There was a lot of talent in NuMe.
So there was you, there was Chris Bennett, Chris Lyons, Nate Jones, Fred Hudson.
Oh, yeah, Fred Hudson.
Yeah, yeah, from Pigeon Lee, yeah.
A lot of talent and a lot of ambition, I would say, out of NuMe.
So that ended up being a really good idea, at least for me.
I think for the firm, we got a lot of value out of it.
We're a major investor in Wonder School.
You know, we had Chris, and Chris still works here.
He's done a lot of things.
You know, Nate worked here for a while.
Yeah.
All those kinds of things.
So, yeah, it's been— Yeah, for the small investment.
Yeah, yeah.
I went, I spoke at Numi twice.
Right.
Aaron and Namdi do 645.
Aaron came up to— Oh, yeah, yeah, yeah, yeah, yeah.
Like, you know, Aaron popped up.
They popped up to do— He was like, I'm going to be bent.
I'm going to see what's going on.
Like, you know, they started their thing.
That's good.
I should have hired Aaron.
That's the one that Chris Lyons got, but— Being a VC is about picking winners.
Tell me something about picking winners.
How do you manage emotion?
How do you become great at picking winners?
It's a tricky thing because really what ends up mattering is the entrepreneur.
Like if you just, if you had a perfect rating system and you could exact go like, do you want this entrepreneur or this idea, you would take the entrepreneur every time.
The problem is, you know, as you were saying, like, it's hard to evaluate entrepreneurs.
You don't know that much about them when they come in, and you don't know how they're going to perform under pressure.
And so then you need the idea to help you evaluate the entrepreneur.
Like, what did they go through in their life to get to that idea?
And how good an idea is it?
And, like, you know, how much...
original work did they do to get there and that kind of thing.
So like that ends up being the lens at which you see the entrepreneur.
Now, the mistake to make is like there's something you don't like about the idea and you pass on a great entrepreneur like that's a mistake or, you know, vice versa.
You're like, this is a great entrepreneur, but you don't realize his idea is no good.
So not as good as you think.
So it is tricky in that sense.
And then...
Yeah, you don't know how they're going to perform under pressure.
And then the other thing that, like, the other trap that, you know, we'll get into from time to time is, you know, we have all these great analytical people, and they'll be able to figure out everything that's wrong with any idea or any company or any entrepreneur.
But that's not what matters.
What matters is, are there strengths?
world-class?
So are they the best in the world at something?
And then you overlook everything else.
Like kind of going back to Elon, like he's got some personality issues.
You know, like he upsets people from time to time, but like his strength is so ridiculous that you would put money on that every time.
And I think you want to look at the magnitude of the strength.
And I think that like every entrepreneur we see who gets to us is pretty good.
But are they like, Are they better than everybody else at this?
And that's what makes a company great and that's what makes an entrepreneur great.
Not, oh, they don't know how to do this or, wow, they know nothing about finance or they're, you know, whatever, they're done with marketing.
Like there's so many things that are wrong with every entrepreneur.
Every great entrepreneur has got something like horribly wrong with them, but that's okay.
You know, it's what are they truly great at what they're great at?
When you think about, you know, picking the person and be like, well, those things, not so good, but this person's going to make some moves.
Definitely sent waves through Silicon Valley, but blowback from the culture on like, you know, the firm kind of getting behind the Trump campaign to some degree, you know?
And so when you think about something like that, do you think about it as, well?
I know something some people don't, so this person's going to, you know, arise as the winner or this person is the winner.
And so I'm going to play the game with the winner.
Is the former or the latter?
How do you think about the decision making?
With the Trump thing, you know, like we try to be as apolitical as possible, but we had run into massive problem with the Biden administration on kind of two fronts.
One was crypto and then the other was AI.
Crypto, they basically, they didn't outlaw, so they did these extra legal things.
So they kicked all the crypto entrepreneurs out of the banking system.
They hit them with Wells notices that were like fake lawsuits, you know, on things that were just undefined.
And so we were trying to get them to like, can we just have some laws?
Can we have some regulation?
And they blocked all of that and they just kind of attacked the industry because they didn't want it.
And so we were stuck there.
But the bigger problem around that was we didn't have a relationship with the administration.
I mean, we couldn't get one.
And it drove me crazy because, like, I mean, I called everybody I knew to try and, like, can we get a meeting with Biden?
And people called me arrogant, like, who are you to ask for a meeting with the president?
You deserve a meeting with Biden.
Yeah.
But, you know, then I come to find out, like, so I spoke to Sundar at Google.
I spoke to Dave Ricks at Eli Lilly.
And nobody had it.
Yeah, Tim Cook, nobody got a meeting with Biden the whole four years.
And then the same thing happened to us in AI, where they went as far as, like, the last executive order from the Biden administration was to say it's illegal to sell a GPU without prior government approval for that sale.
So, like, it would have literally taken us out of the AI, you know, competition at the chip level.
The thing that we decide is, okay, like, we've got to have a relationship with who's ever the next president.
And at the time we endorsed Trump on tech, he was clearly going to beat Biden.
Like, there was no question.
Then, you know, Kamala came around.
And so it was like, OK, what if she wins?
Like, we knew we weren't going to have a relationship with Biden, so there was nothing to lose.
With Kamala, you know, I had known Kamala Kamala.
came to the CEO barbecue.
Like, she'd been in my house many times, so forth.
So I knew her.
And I called her up, and, like, I actually wrote a tech policy for the campaign.
You know, they didn't want to take a tech policy position, which that made me nervous.
I've got to be quite honest with you on.
On that, you know, we made a donation to her just so that we would have a relationship there.
Anytime you're involved in politics, people are going to be mad.
You know, they're mad at Nicki Minaj now.
They're mad at Kanye.
They're mad.
From my position, I have to make the world work for new tech companies.
Like, that is, you know, our responsibility as kind of the big VC.
I mean, for me, like, probably not a decision I could make, but I'm not sitting in your position either.
I also don't run a big building as a money machine.
You know, there's two different sides to that.
Let's look at it this way.
From your vintage, you come from like real hippie.
This is Silicon Valley.
People's running around in the streets, probably no shoes on.
Like that Silicon Valley, right?
Yeah, no, it used to be different.
Yeah.
Yeah, and so like that Silicon Valley was like, let's call it performatively inclusive.
It was exclusive.
Since this is why we did NuMe and all these things, like you could be involved, but kind of not because it was a thing.
But now...
We're kind of in the space of performatively exclusive, but it's quite the special time for it to be inclusive because AI has commoditized the ability to build.
Yeah.
You know what I mean?
Like people who were otherwise not in the game can now be the expert and be the best.
Don't matter if you went to MIT.
Okay, so I have a little different version of the history.
And you got the history, so I'm not going to argue the history.
So this is why we're here.
Yeah, so I think in the early days, the only people who wanted to be in tech in the 80s were like, You know, Jews, Chinese, and Indians, men.
Like, there were just very few women who majored in computer science who did anything like that or anybody else.
You know, and Ken was, like, super exceptional.
Tech wasn't sexy.
Yeah, it wasn't built to be exclusive.
It was like, these are the people who are participating.
I know what I'm good at.
I value it highly.
I can test for it in an interview.
I'm hiring me.
Like, that's just generally how it goes.
So, like, once you start that way.
That's how it grows.
And, like, not that nobody can get in, but the people that get in are, like, hyper-exceptional, like, can.
You know, like, it's not that different than hip-hop, right?
Eminem can get in.
That's a very high level.
Yeah, that's a very fucking high level to be Eminem.
I mean, like, Jesus Christ, like, that guy is.
But, like, if you're a mediocre white guy, like, you got no chance.
No.
And, like, some of that is because.
It's the media.
It's the culture.
I always tell people this.
I say, when I'm explaining how people self-select and how the media has shaped our worldview, I'd be like, if I come in the room dressed like this and the next guy comes in the room with a pocket protector and glasses and can't talk well, who's the better developer?
Yeah, right, exactly.
Oh, it's me.
Yeah, you have to overcome that.
You have to overcome that.
So I think that what we did is we said, look, you know you.
But you don't know the skills you don't have.
And you have no idea how to test for them.
And you have no idea that they even exist.
So, like, how do you, how do we get around that?
And so, you know, we created this hiring process where we have people from different backgrounds look at every job profile and go, hey, you know, like, if I was hiring that, I would look at these things.
You know, you need a relationship person.
Actually, how we got Chris was, It was really a relationship job, but the hiring manager had been an investment banker.
So he had all these investment banker criteria.
And if anybody knows Chris Lyons knows he would flunk that test.
But I was like, well, this is a relationship job.
So, like, let's look for people who are, like, relationship people.
And I was like, he is a, like, world-class relationship guy, like, really good.
And so...
Because we hired him on that criteria, which was the right criteria for that job, that meant once he got on board, we knew why we hired him.
If we had thought that we hired him for financial modeling and he was black, he would never got promoted.
He's been promoted like eight times.
And that's because we know what he is, right?
Like we know the special thing that he has.
Philosophically, I think the right answer is you really want to widen the bar.
lower the bar, raise the bar.
You want to widen the bar so that you can see all the criteria that you would need in that job, even if you don't have it.
You have to get hired on the same criteria.
Right.
I remember when I went to get a job as an engineer.
So, like, there was a moment and we got a job for an engineer for, like, a year.
Yeah.
And I'm the only black person there.
I was like, cool.
I was like, all these people are talking crazy here.
This person is talking sideways to me at work.
Now I understand why this doesn't work because if you don't run the process properly.
you end up putting, you end up not being able to build a real culture.
Like, these people actually can't work together.
They don't respect each other.
Yeah, yeah.
They don't know why they hired you.
You know?
Yeah, it's crazy.
Well, there's a funny story that I had this crazy conversation with Stout.
And, you know, he calls me up.
He goes, Ben, I used to be president of Sony Urban Music.
And I was like, yeah, Steve, you know, it's Steve.
You know, he's talking loud.
And I was like, I know.
And he goes, yeah, but it wasn't urban music.
It was black music.
They made me call it urban music to not sound racist.
And I was like, oh, shit, that was stupid.
And he's like, no, no, no.
The stupid part was because we called it urban music.
I wasn't allowed to market in rural areas.
Like all black people live in the city.
I was like, that's dumb shit.
And he's like, no, I don't even think you're listening very carefully.
I was president of Sony Urban Music.
I had Michael Jackson.
What white people don't like Michael Jackson?
It wasn't fucking black music.
It was music.
But the program for it made it smaller than it was, not bigger than it was.
And I was like, you know, that's what we did in Silicon Valley.
We had urban HR.
It's like, no, it's talent.
It's not black talent.
It's talent.
You just have to be able to see the talent.
You got to be able to listen to the music.
And then now it's gone the other way, as you said.
Like, I agree with that.
It's like, oh, it's a meritocracy.
Well, what does that mean?
Well, I'm going to hire me.
It's like, okay.
But I think, like, it's been a big advantage for us in venture capital.
Like, I mean, you know this.
Like, we get to people that they're never getting to.
Right.
Because we've got people who can do those things that they won't hire because they can't.
Not because they, it's not a racist thing.
It's they can't see them.
They can't see it.
They can't see them.
They're blind.
They're talent blind.
And, you know, like, you know, and we're, like, all of us are talent blind.
That's why you need, like, a process and a methodology to open it.
Yeah, you need a process to, like, open your aperture and stuff.
Yeah.
You know, Margaret, the legendary Margaret Wenmark, is running marketing for us.
She's around forever.
Yeah, yeah, yeah.
Yeah, she's here at the beginning, right?
Yeah, yeah, from the very beginning.
I remember when I met her, I was like, oh, man, I need someone like this one day.
Yeah, she had all women working for her.
I was like, Margaret, why can't any men past year, what's in your profile they can't fucking qualify for?
She's like, helpfulness.
She's right.
But think about that as a criteria.
How valuable is that in venture capital?
Everybody wants a venture capitalist who's helpful.
But I, you know, I know how to interview for that and so forth.
And so, like, by developing that, you know, at the time, we were, you know, predominantly men.
Now I think we're like 54% women, but we didn't have any women criteria.
We just had, like, helpfulness as a criteria.
You know, these are the things that change, that make you stronger.
not like you're not compromising.
You're actually getting better by being able to see.
If you can see all the talent, like we're all in a talent war.
We're all competing for talent.
If you can see more talent, you're going to win.
We're getting to the climax here in terms of like, all right, now we have AI.
Like I actually, I'm actually feeling a little bit of an itch.
Like I'm not building right now.
Like I literally can't make it through a day without generating some code and building something because it's crazy.
It's crazy, right?
I'd be on cloud code on my phone and it's like, You know, now, like, for instance.
By the way, I was talking to Deshaun.
He became an engineer.
Oh, yeah, no, no.
No, but I told you, Sean.
I was like, hey, man, you don't have to hire anybody to build this stuff.
He's like, all right, I'm hopping.
And now he's addicted.
Yeah, he's addicted.
He's out of his mind.
Right.
I got an agent here.
I got an agent here.
I only got four people.
Maybe I can make it two.
Like, you know, like.
He's almost like an AI fiend.
He's an AI fiend.
I think there's, like, literally, I think there's going to be AI rehab at some point.
Yeah, yeah.
Because it's like, if you right now, if you can't force, if you're not, like, in your bed at night, like.
go to sleep, go to sleep, then you're not on it.
Because, like, there's so much that can be done.
It's, like, it's crazy.
But I guess my point is that going back to, like, the larger aperture of opportunity here, like, now we can, like, open up the stratosphere for, like, people who would not have been a fit before.
Like, if I come to you, I've never built a product in my life.
I've never worked at a tech company.
Oh, yeah, I worked at this oil and gas company.
I really know how this process works.
I'm going to build this company.
It'd be hard to accept that this might work.
Right?
But now you could be like...
You can go from idea to company very fast.
Right.
Without being able to hire.
All the barriers that were there before aren't there.
I 100% agree.
I mean, like, that's why I think it's like, it's more important to get people into tech because they're not even getting into tech.
They're just getting into ideas.
It's like, okay, here's...
And this is, by the way, it's happening in every, like, creativity.
Creativity is the thing.
Yeah, if you can use the tools, all you need to do is be creative.
This opportunity is probably even bigger because, right, any idea you have, you can make.
You can manifest.
We both were around when the internet began, was on BBS boards and Prodigy.net and all these things.
CompuServe, yeah.
Yeah, all that.
A million little discs sitting around.
Yeah.
You know.
AOL used to fucking send a disc to you.
Like you couldn't open your mail without getting in the AOL.
Yeah.
Cereal box, oh, it's AOL.
Yeah, memory was...
I was expecting a toy.
Yeah, memory was hard to come by back then.
I used to go to the store.
I used to get like a box of them and just like, can't put tissue in that.
Now I record on that.
But the internet was big.
I mean, that's how we both got to this conversation right here.
But like, to me, it's like...
This is bigger.
This is like the fourth industrial revolution.
Like, what's your...
It's bigger.
I think it's clearly bigger than the internet.
People talk about it like it's a sector.
Like, we're talking about, oh, it's a bubble like crypto.
I'm like, crypto is a thing.
It's a conduit, but like, it ain't AI.
You know, AI is a new computer.
Right.
Like, it's like the reinvention of the computer.
Imagine the entire computer industry got invented, but instead of it developing...
over 80 years, it developed over two years.
And then, like, that's AI.
And then it's more powerful on top of that.
Anything you think you can solve, you can solve.
You know, and we've already seen it.
Like, people are taking it so for granted because they're so worried about, like, Skynet or whatever.
But traffic deaths, huge problem.
Solve with Waymo.
You know, cancer, we're solving that for sure.
Any idea, any, like, major problem, like, is getting figured out with AI right now, like it is wild.
So like as an entrepreneur, it's like, just find a problem.
Right.
You know, and you can go like solve it and people will be like fired up and willing to pay you and you've got a business.
I mean, it is like that powerful.
So you've been through a bubble, like a real bubble.
you know, there's money going out here that ain't coming back to people.
Like, where is the bubble-esque part of this?
I don't want to be concerned with it, but where is, for everybody who's talking about a bubble, where is the bubble component to this?
Well, I mean, you got to remember, right, oh, the internet bubble.
Well, like, the internet's here.
It's kind of important.
We could have made a lot of money on it.
Look, where bubbles come from and where the internet bubble came from is, like, there's technology and how that advances, and then there's...
Consumer adoption, and that's like goes more in fits and starts.
And then there's investor sentiment.
Right.
And investors are like manic depressive.
They get overexcited and then they get totally depressed.
It's never going to work.
And they'll actually, so there's a kind of an opposite of the bubble going on right now, I think, a little bit with investors.
But in the internet time, what happened was investors were like, the internet, it's the biggest thing ever.
I'm putting all my money on it.
And it's never going to go down in price.
Okay.
The problem was the time they decided to do that, there was like 50 or 60 million people on the internet.
Half of them were on dial-up.
It was very expensive to build these things.
There wasn't a big enough market to make money in selling a lot of the ideas that people had.
So, like, the thing crashed down.
I mean, right now, though, like, Chesuby ain't making no money.
These guys are like, Gemini, they're giving away, Chesuby, they're giving away for free.
How can we catch up with Anthropic?
Like, just keep running this computer.
Well, kind of.
OpenAI went like zero to $20 billion since November 2022.
Yeah, yeah.
So, like that.
And by the way, you know, the price of a token is dropping like 100-fold a year.
Yeah, wait for that crossover.
Like, consumer adoption is going faster than anything we've ever seen.
The technology works and is advancing as fast as everything we've seen.
And are people going to get...
Because we're so early in the cycle, there are companies that are in a good position now that there will be a technological change and they'll get wiped out.
But that's not really a bubble to me.
That's just like investing.
That's just how it goes.
That's part of times.
People were trying to say, oh, the demand for NVIDIA chips is artificial.
They're just investing in companies.
The demand for NVIDIA chips right now is just unlimited.
They can't make enough chips.
That is actually true.
And so a lot of the narratives around...
The AI bubble, I just think, aren't correct.
Now, will we hit a bubble at some point?
Yeah, quite possibly.
I mean, look, we had a bandwidth bubble.
A bandwidth bubble in 2001.
We had too much bandwidth.
Like, how could that even be possible?
Like, we're at the beginning days of the internet.
How could you have too much bandwidth?
Well, the bottleneck moved.
Right?
Like, we had a bandwidth bottleneck, and then that became like, oh, the servers weren't good enough.
We couldn't even put the bits on fast enough, you know, to serve the video.
We quite possibly could have a temporary glut in GPUs if we, like, don't have enough power or, like, you know, cooling or whatever.
Like, that's obviously possible.
So the big thing that's different about AI is, in my generation and in every generation, you could not throw money at a problem.
Right?
Like, if I want to catch you in your company and I said, I'm going to hire a thousand engineers tomorrow, now, I have data and I buy enough GPUs, like, I can solve shit.
And the greatest example to me is, right, like, OpenAI got to $10 billion in revenue and Elon started a cult.
Oh, yeah.
And he, like, you know, he's almost at product parity with them, you know, in, like, a couple of years.
This is an important position, though.
So how does this change how you choose what you're investing?
The world, to me, they've seen the change happen, but they're not changing the way they're thinking around, like, this is the deal I should do.
This is the person I should beg.
You have to reshape how you think about investing in a company.
It's hard to calculate.
So there's ones that you wouldn't expect to sustain that do.
So, like, one of my favorite examples is Eleven Labs.
Oh, yeah, those guys.
Eleven Labs.
okay, of all the things, if you rewind back to when we made the first investment, that you would go, okay, they're probably vulnerable to the big guys, is, well, the big guys aren't going to be able to make their models talk.
Really?
They will be able to.
Of course they'll be able to make their models talk.
But it turns out that Eleven Labs, a very, very clever company, one, they got in the developer stack.
They built a better product for developers.
What does that do?
Well, they've got a built-in set of customers, and then they're in the data feedback loop.
Oh, they're getting every, you know, voice case and so forth, and they're training their model on better proprietary, like real-world, in-use data.
Then they built the product kind of subtleties around it.
So, oh, yours can talk, but I can talk in Spanish.
exactly like I'm talking in English with the exact intonations, laughing in the right way, everything perfectly.
Oh, guess what?
I get the Netflix deal.
I get the Televisa deal.
Now I've got more feedback.
And now I've got more feedback.
So I'm kind of building up a voice product that's very, very special and that, yeah, you could throw more GPUs at yours.
But you may not be able to do the things I do because I've got better data.
I've got, you know, like I've got a model that's really tuned to the use cases that have value as opposed to like every damn thing that everybody wants to do.
And so like there are things like that.
On the other hand, you know, like every software company, SaaS company in the world is trading at a very low multiple right now because there's a real belief that, hey.
even as a customer, I can rewrite sales for it.
No, it's real life.
I was like, you know what happened?
I got in Cloud Code, right?
This must have been a year ago.
I got in Cloud Code.
I had already been in Cursor.
Before that, I'm copying from JCPT.
So I got in Cloud Code.
I was like, this goes crazy.
I'm never going to look at code again.
And then the next day, I was like, cancel HubSpot.
I'm building my own CRM.
I was like, this thing sucks.
I want it to work for me.
I could just build my own.
One week later, got my own CRM.
Yeah, there you go.
Affinity?
Cancel.
Got my own fundraising platform.
Yeah, yeah.
You have to build something that's very special for me to be like, I'm not going to build it myself.
And right now, obviously, that's unique to engineers or product-oriented people.
But the time may come where you're on a website and you're like, I don't want it this way.
Can I have it this way?
So I think the world, or at least Wall Street, is anticipating that a lot.
Now, look, there are other things that those companies have.
And for your business, building something for you.
Like, if it's for, at the individual level, probably a little different than, you know, American Airlines running whatever SAP or something.
Like, that's a little harder to figure out what the hell that is.
And then, you know, they've got data and, you know, blah, blah, blah, blah, blah.
But still, yet and still, like, that's a real thing where you can chase you by using GPUs that you don't even own, that Anthropoc owns.
can chase down HubSpot for your use case like that.
Oh, right.
Like that.
You wouldn't even consider doing that.
No, it wasn't even consideration.
But now, it's reverse.
When I look at buying some software, I'm like, is this really worth $400 a month?
Or should I spend four days and just have my own?
You know, like, it's a reverse consideration.
Yeah, yeah, yeah, yeah.
Cheers, sir.
All right.
I'm going to actually bring out my paper for my signature question.
I want to get my signature questions right.
All right.
This is about legacy.
When the next vintage of VCs talk about Ben Horowitz, what do you want them to say?
What's your mark on the game?
That's something I really don't think.
Mike Tyson had a great question on legacy.
He's like, what are you talking about?
I'm just going to be dust dirt.
It's a crazy question.
I don't think about that.
You know, for me, I hope that people feel like I...
move the culture of investing to a better place, to one that's more about helping people build companies than, you know, just making money.
So that would be, that'd be my hope.
Okay, so before we finish up that question then, I was talking about VC, think about Ben as the human.
Because your name's on the firm, they made you have your name on the firm.
Like, you know, you have this direct association all the time.
Me as a, you know, Ben as a human.
When you leave, it's like, what makes you feel accomplished?
What makes you feel like, oh, I did my thing?
Yeah, I mean, you know, I really feel like it's the, you know, the people who work here.
Like, you know, going back to the NFL analogy, you know, the coaching tree idea and that kind of thing.
Like, I mean, to me, you know, how many, you know.
who are the great people who worked here and then like did they become better people while they were here and like that's the main thing on the business front you know i think you know on the personal personal front like paid in full to me is really really important and i intimidate everybody into coming as you know thank you for your uh for your contributions you know if we forget the people who kind of sacrificed their lives to inspire us then, you know, you get into a very nihilistic existence.
We're going to make those guys feel as important as they should feel.
And then in return, like, we just get so much more meaning out of who we are.
And so that's, you know, that's super important to me.
Yeah.
I think, you know, as that can grow, that can become, you know, the SAG, the pension plan, the...
the, you know, the base of, you know, how hip hop continues, I think it's a, I think it's an important thing that probably should have been done a long time ago.
People are too busy talking about urban radio.
Yeah, you know, like, it's so funny how many, like, one of the things that got me to start Peyton Full is so many, like, podcasts and this and that saying, somebody ought to do something about this.
Someone should give them their flowers before they're gone.
Yeah, yeah.
It's like, well, let me go back to my, my back.
Yeah, yeah, yeah, exactly.
Like, so I was just like, well, why don't I just do it?
And, you know, like I said, I get way more out of it, I think, than everybody.
So, you know, it's an easy thing to do in that sense.
What's something that, you know, you think is going to happen, you know, in the next, say, 8 to 12 months as a result of, you know, the current landscape in technology?
So I think the infrastructure for AI is just...
out of date is not strong enough.
It's just like wrong.
And it is very reminiscent to me of the infrastructure for cloud computing being wrong.
Like everybody in the beginning of cloud computing is like, oh, we'll just take, you know, our software, we'll put it in the cloud, we'll put it on the other side of the wire, and then that'll work.
But, you know, it didn't work at all.
And eventually we rebuilt everything from storage to networking to, you know.
the way operating systems work and virtualization and, you know, containers and this and that and the other.
And, like, you know, the whole thing got reconstructed.
If you look at AI, I mean, just start with the workload, right?
So, somebody makes a database query.
You kind of know what that is.
Somebody makes an AI query.
Like, I think it'd run for a week.
I mean, who knows what, like, you know.
So, like, what is the underlying set of systems that handles those requests that manages that correctly and so forth?
Like, it doesn't exist yet.
If you look at...
I mean, NVIDIA, God bless them, but like, you know, you want to talk about a power-hungry, low-yield, you know, chip built for something entirely different.
Yeah, for playing video games.
Yeah, for playing video games.
And, you know, now that we know like a fair amount about the models, is that the right answer?
Probably not.
Then the models themselves, like in these models, you literally have to suck down all the data on the internet.
to get them training.
Like that seems like a lot of training.
Is that going to be where we end?
So I think that the, you know, from the model on down, everything's going to change and there's going to be a lot of opportunity in that.
All right, man.
Well, thanks for joining us.
All right.
No, no, great.
Great to be here.
Like great to kick it off.
Yeah, for sure, man.
No, it's going to be a great series.
Appreciate you kicking off with me.
Yes, sir.
All right.
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