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The hardest part of being a CEO
isn't designing the perfect
organization or setting flawless
objectives; it’s the psychological
struggle. It's the feeling you get
when you’re staring into the abyss,
forced to choose between two
horrible options.
This
is the world of
Ben Horowitz, co-founder of
Andreessen Horowitz
(A16Z), a venture capital firm with over
$46 billion in committed
capital, and the author of
The Hard Thing About Hard
Things. He has backed market-defining
companies from
Facebook and Stripe to Airbnb,
OpenAI, and Databricks.
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Before launching A16Z, Horowitz
co-founded Loudcloud,
famously taking it public with just
$2 million in revenue, an
event often called
“the IPO from hell”, and
later sold it for
$1.6 billion. Through
near-death startup battles and years
of coaching hundreds of CEOs, he
forged a
management philosophy that defies
conventional wisdom, offering hard-earned insights on
leadership, scaling, and building
enduring companies.
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In a recent podcast with
Lenny Rachistky
, Horowitz distilled the essential
mental frameworks required to
navigate the pain of leadership,
build world-class teams, and
understand the current AI landscape.
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This isn’t a guide to management
techniques, it’s
Ben Horowitz’s High-Stakes
Leadership Playbook, a map for the psychological
gauntlet every leader must run.
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In this post,
Ben shares:
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Why
“founder
mode” is
both half
right and
half
dangerously
wrong
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The story
behind
Good
Product
Manager/Bad
Product
Manager—and how it
went viral
despite
being
written in
anger
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Where the
biggest AI
startup
opportunities
still
remain
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Why
leaders
need to
run toward
fear,
never
away
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The one
trait that
predicts
when a
founder
will fail
as CEO
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Inside
Paid in
Full—his
nonprofit
that
provides
pensions to
pioneering
hip-hop
artists
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The Psychology of a Leader: Why
Hesitation is Your Worst
Enemy
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A. The Core Challenge: Running
Toward Fear
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According to Horowitz, the single
worst mistake a leader can make is
to hesitate. This paralysis isn’t
born from easy choices; it comes
when you face two horrible
decisions, and every fiber of your
being wants to avoid both.
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The essential psychological muscle a
leader must build is the ability to
look at those two awful options,
determine which is "slightly
better," and move forward
decisively.
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Horowitz lived this principle when
he took his company public with only
$2 million in revenue. "That's
obviously a bad idea," he admits,
but the alternative was going
bankrupt, which was a worse idea.
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He knew the press would call him
stupid—Business Week even ran
a story titled "The IPO from
Hell"—but moving forward was less
bad than the alternative. That
ability to run toward the pain is
what separates great leaders from
the rest.
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B. Your Own Mind is the Biggest
Obstacle
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Drawing on insights from his friend
Shaka Senghor, who survived 19 years in prison
and chronicled his transformation in
How To Be Free: A Proven
Guide to Escaping Life’s
Hidden Prisons, Horowitz makes a powerful point:
the harm you inflict on yourself
with your own beliefs is far greater
than any external pressure.
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"All the things that you perceive
that are happening to you that are
bad... is very small compared to
like... if you believe it," he
explains.
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For founders, this is critical. The
most common reason founding CEOs
fail is that they make inevitable,
high-impact mistakes, which causes
them to lose confidence.
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That loss of confidence leads
directly to hesitation, creating a
power vacuum that invites internal
politics and dysfunction. A primary
role of A16Z is to help founders
maintain that confidence, because
your own psychology is the biggest
enemy you will face.
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C. Success is an Accumulation
of Small, Hard Things
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Success isn't a single stroke of
genius that gets written into a
triumphant narrative. Horowitz
learned from a pilot that plane
crashes are often a series of small,
individually manageable bad
decisions that compound into a
catastrophe. Success is the inverse.
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It's
a series of small,
difficult-to-do things that
doesn't seem to have a high
impact, but leads to the next
small, hard-to-do thing,
eventually resulting in a
positive outcome. This slow
accumulation of navigating difficult
moments is the reality of building
something great.
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The Counterintuitive Truths of
Building a Company
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A. The True Value of a
Leader
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A leader adds no value making a
decision everyone already agrees on;
the organization would have done
that without you.
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A leader's only true value is
added when they make a difficult
decision that most people
dislike. This
requires telling people what they
don’t want to hear, which
they won't like in the short term.
But over the long run, that courage
is what saves the company.
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B. "Managerial Leverage": Hire
People Who Make You Great
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When
Ali Ghodsi, the CEO of
Databricks, was struggling to turn around
underperforming executives, Horowitz
gave him stark advice: "You don't
make people great. You find people
that make you great".
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As a CEO, you aren't an expert in
every function, so the idea that you
can coach someone to be a
world-class marketer when you know
nothing about marketing is a dumb
idea.
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True "managerial leverage" comes
from hiring world-class leaders who
bring ideas to you and push the
company forward. If you are the one
constantly pushing them and giving
them all the ideas, you have no
leverage. When you feel that
leverage is gone, you must make a
change.
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C. Invest in Strength, Not Lack
of Weakness
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When evaluating people, judge them
by what they do well, not by their
biggest mistake.
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Horowitz points to A16Z's
controversial investment in
Adam Neumann
as a key example.
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The world wanted to throw Neumann
away for his failures, but
Horowitz’s firm chose to focus on
his spectacular strengths.
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The principle is to invest in a
person's world-class strength and
help them manage their weaknesses,
not discard them for being flawed.
"Everybody's uneven," Horowitz says.
Your job is to help them take their
strengths and use them.
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D. The Product Manager as the
"Mini-CEO"
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Horowitz stands by his famous "Good Product Manager, Bad
Product Manager" essay, clarifying that the PM
role is fundamentally a leadership
job that requires influence without
authority. He fully embraces the
"mini-CEO" analogy.
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A CEO's job isn't to have every idea
but to consolidate good ideas, set a
vision, and align everyone to
achieve a goal. That is precisely
the function of a product manager.
It doesn’t matter if you write a
good spec; what matters is that the
product wins in the market.
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Good Product Manager vs. Bad
Product Manager: At a Glance
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| Aspect |
Good Product Manager
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Bad Product Manager
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Ownership &
Mindset
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Acts as the
CEO of the
product. Owns outcomes, defines
success, and takes full
responsibility for
delivering the right product
at the right time.
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Looks for direction and
blames others (funding,
engineering, competition).
Measures effort instead of
results and makes excuses
when things go wrong.
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Planning &
Execution
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Knows the
market, product, product
line, and
competition
in depth. Devises and
executes a winning plan with
no excuses.
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Starts without context and
lacks a clear plan. Expects
others to define the path.
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Role with Teams
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Manages the
product team and defines the
“what,” letting engineering
own the “how.” Avoids
getting bogged down in
project management or gopher
tasks.
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Becomes part of the product
team, micro-manages the
“how,” and gets sucked into
day-to-day operational
noise.
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Communication
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Communicates
crisp requirements in
writing and
verbally. Documents positions on
key issues and sends regular
status reports on time.
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Relies on informal, verbal
updates. Forgets or delays
status reports. Complains
when decisions don’t go
their way.
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Marketing &
Positioning
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Considers the
story for press and
analysts, asks smart questions, and
focuses on clarity over
technical minutiae.
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Focuses on covering every
feature and technical
detail. Assumes press and
analysts “don’t get it.”
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Customer & Revenue
Focus
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Keeps team focused on
customers and revenue
goals. Defines products that can
be built and deliver value.
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Focuses on competitors’
feature lists or impossible
products. Lets engineering
build whatever is most
technically challenging.
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Problem-Solving
Approach
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Decomposes problems,
anticipates flaws, and
builds real solutions
proactively.
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Bundles problems together,
reacts late, and spends time
putting out fires.
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Collaboration &
Materials
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Creates reusable
collateral, FAQs,
presentations, and white
papers
to empower sales and
marketing.
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Spends all day fielding
ad-hoc questions and
complains of being swamped.
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Discipline &
Accountability
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Defines their own role,
stays disciplined, and
consistently delivers.
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Waits for instructions,
avoids accountability, and
lacks discipline.
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Understanding the AI
Revolution
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A. Why This Isn't a Bubble (The
Way You Think It Is)
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While many are screaming "bubble,"
Horowitz argues this moment is
different from the dot-com era. Back
then, companies had no viable unit
economics. Today's AI companies have
products that work "so amazingly"
well and are generating massive,
real revenue growth.
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The primary risk is not a lack of
value but potential
competitive displacement
as the very immature technology
evolves. The businesses are working;
the question is whether their
current positions are sustainable.
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B. Where the Opportunity Lies
for Founders
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Foundational Models:
Building these is incredibly
capital-intensive and limited
to a very small number of
founders who can raise at
least $2 billion.
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Application Layer: This
is where enormous opportunity
exists. Horowitz dismisses the
"thin wrapper" narrative as
"really wrong". He points to
companies like Cursor, which
has built 14 different
specialized models to serve
developers, creating a
proprietary data moat through
user interaction. The problem
space is far larger than a
single foundational model can
solve, especially in the
enterprise, where issues like
data access control and
semantics are complex.
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C. The Geopolitical Importance
of AI
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Horowitz argues it is "fundamentally
important... to humanity" that the
United States leads in AI. Just as
industrialization determined global
economic and military power in the
20th century, AI will define it in
the 21st.
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He believes the U.S. system of
decentralized power is the best
protector of individual opportunity
against authoritarian systems where
concentrated power has repeatedly
led to disaster. "We need you to
succeed," he says, quoting allies
from around the world.
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Don’t miss this
Lenny Rachitsky podcast,
where
Ben Horowitz drops hard-won
lessons for founders.
Watch the video to catch the full
conversation.
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$46B of hard
truths: Why
founders fail and
why you need to
run toward fear |
Ben Horowitz
(a16z)
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Conclusion
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Leadership is a psychological
battle, defined not by brilliance
but by the courage to make hard,
unpopular decisions. Success is
built on a foundation of investing
in people's strengths and
understanding that the path is one
of continuous, painful struggle.
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Ultimately, how you feel about
yourself as a leader is paramount.
Horowitz’s parting advice serves as
a final, powerful lesson: "There's
no credit will be given for
predicting rain, only credit for
building an ark". It doesn't matter
if you predict failure; you still
failed. Your job is to build the ark
and find a way through the storm.
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