Ben Horowitz: Founders Should Learn How To Be CEO

Ben Horowitz

Andreessen Horowitz co-founder Ben Horowitz thinks founders should learn how to be the CEO of the company they founded.

Speaking at IGNITION West, Horowitz, talked about his own experience as a CEO in the late 1990s. If he wasn’t the founder of his company, he wouldn’t have been able to handle the hard times.

After four months of co-founding Loudcloud, the company was generating $12 million in revenue. 

“Then the wheels came off the entire industry. We got through that… there was no way to raise money privately. All the private guys knew that. There was a window in 2001, where Loudcloud and PayPal went public. After going public, our revenue dropped from $75 million to $55 million. The stock price went down and we got sued,” Horowitz said.

Horowitz said, “we were still a public company with no revenue.”

It went from $2 a shares to 35 cents a share. Then grew it to $14.25 a share and sold for $1.5 billion to HP, he said. He doesn’t think he could have done that had he not been the founder.

“In technology, you are in the innovation business. In order to hit the next product cycle, you’re going to have to reinvent the company.  If you look at long lasting technology companies — IBM, HP, Intel, Facebook, and Amazon — all of them are run by founders who play a prominent role in them. The innovation comes from the founder,” Horowitz. 

The professional CEO doesn’t have the knowledge base. The founder has seen the employees get hired and know what customers have said. That’s how you come up with your product strategy. “It’s easier to learn the skill set of CEO,” he said.

Business Insider CEO Henry Blodget, who moderated the discussion at IGNITION West said, the thinking in the 1990s was that it is necessary to move the founder out.

Steve Jobs is a classic example.

“The thing that’s confusing for investors is that founders don’t know how to be CEO. I didn’t know how to do the job when I was a CEO.  Founder CEOs don’t know how to be CEOs, but it doesn’t mean they can’t learn. The question is… can the founder learn that job and can they tolerate all mistakes they will make doing it?” Horowitz said.

Facebook co-founder and CEO Mark Zuckerberg learned how to do the job.

“He hadn’t had any experience, but he learned how to do the job. In life, you don’t have a level of confrontation and the nonsense you run into when you’re a CEO. CEOs aren’t born,” Horowitz said.