So you have a new book,
"What You Do Is Who You Are," and you do a great job
of defining what corporate culture really is
and what it isn't.
Can you help me understand that?
Sure and this was a struggle that I had as CEO
because everybody is like,
"Ben, pay attention to your culture."
I'm like, "Great, how do I do that?"
That was basically the end of the advice
so it was kind of, okay, you've got to figure it out.
And it turns out that a lot of what you kind of will get
from a HR consultant or whatever it turns out to be,
almost the opposite of what you want.
So they'll be like, "Well, have an offsite
and everyone will pitch in on the values
and then you can put in people's performance reviews."
But culture ends up being all the things that people do
when you're not there and when you're not looking
so it's, "Oh, did they return that phone call today
or next week or not at all?"
"Did they show up to the meeting on time?"
"Did they work until five o'clock or eight o'clock?"
You know, in a business deal was it about the price
or about the partnership?
And all these kind of little behaviors that you have,
which okay, put it in the performance review,
you don't know if they made that —
you don't know if they returned the phone call,
you don't even know if they got the phone call
and so that's what culture ends up being,
it's all the kind of things that you do.
And so the reason for the title of the book
comes from the Bushido which says,
"A culture is not a set of beliefs, it's a set of actions."
And the book is about how do you get the actions
to be what you want them to be.
And how do you get the actions to be?
If it's not going to an offsite and writing down
a list of rules, how do you pick what the rules are
that define those priorities and how do you get people
to follow them?
It's very subtle, it's little things that move
the culture and I like that term move the culture
as opposed to set the culture because you're not really
dictating it.
So I'll give you just a little example
that we use at the office.
So one thing that all venture capitalists kind of
aspire to or say they are, they all value the entrepreneur,
we love the entrepreneur, we respect the entrepreneur,
we respect their process.
But then if you get into the actual dynamic of the business,
what happens it's, "Oh, you need money?
I have money, you got to come to see me
and then I'll decide if I'm going to give you the money."
And so then at that point, who's the big person,
who's the little person?
And then you see it in their behavior,
they show up 30 minutes late, it's kind of legendary
if you're an entrepreneur.
They're not going to invest in you,
they just ghost you, they don't even respond,
so we had that theoretical problem
when we started the firm , in that we wanted to respect
the entrepreneurial process and how hard it was,
but how do you do that?
And so I set a little trick which was a rule
that kind of upset and shocked people which is
if you're late for meeting with an entrepreneur,
you pay a fine, $10 a minute.
And oh, you had to go to the bathroom?
You're five minutes late, great $50.
Oh you had a really important business call,
you're 10 minutes late, $100.
And they're like, "Ben, why am I paying you to work here?
That doesn't seem fair."
I'm like, "Because I need you to understand
how hard it is to build a company
and I need you to understand so much
that you plan to be on time.
And I know that business call was important,
I know you had to go to the bathroom,
but if it was your wedding you wouldn't have been late."
So it's gotta be that important to you
and so that kind of thing, every time they go to a meeting
people have to think about that,
why am I on time?
Oh, I'm on time because it's really hard to build a company.
And for every company a different culture
might be more appropriate than another,
can you give me examples of cultures that work very well
for specific companies and wouldn't work for others?
Sure, well like Amazon,
who has one of the strongest cultures
in the technology business,
has this thing about frugality.
And they set it so hard like in the old days
when you got to Amazon you got a desk
that was made out of a door and some two by four,
we can't even afford desks, that's how cheap we are.
And that really went with their strategy
of being the low price, basically the low cost provider
always.
So the promise to their customers was
if you go with Amazon, you don't have to price check
because we're going to be lowest.
Contrast that with Apple,
they just built a five billion dollar campus
and I don't know what the doorknobs costs
but they're probably 1000s of dollars,
that kind of thing.
Why is that?
Well they're all about high design, beautiful products,
these kinds of things.
They're never going to have a cultural value
of frugality, it wouldn't make sense for them.
And you know,
Apple's products are a lot more beautiful
than Amazon's products and Amazon's products
are a lot cheaper.
And so which one do you want
and your culture has to support your business strategy
and that's why every culture isn't right for every company.
And there's not, it's not a good culture
or a bad culture, it's a cohesive culture
that achieves the goal that you want.
And a lot of your examples come from Silicon Valley,
is there anything you feel like Wall Street
could learn from the experimentation around culture
in Silicon Valley?
Yeah, I think that Wall Street culture is,
anytime you have an industry that's really old,
you get kind of cultural things
that last and you don't know why.
We have one of these things in Silicon Valley,
most of Silicon Valley culture was set years ago
by a company called Intel.
And Intel had this amazing founder,
Bob Noyce, who really transformed the culture of business
from basically the East Coast super hierarchical,
the executives have their own special parking spots
and so forth to a more egalitarian, meritocratic culture,
and the idea was that the best engineers were as important
to the business as the top executives.
And so they wanted to make sure they heard
the best engineers and their voice got told and all that.
So they had casual dress and cubicles and all this stuff.
So we all have all that in Silicon Valley still,
but everybody's forgotten why.
And so you're not coming to work in your pajamas
because we want you wearing your pajamas at work,
you want people to kind of dress the same
so there's not a hierarchy of fashion
and all that kind of thing.
And I think Wall Street
has a lot of those old things as well.
We saw in Hollywood, right?
Which is the origin of the whole Me Too movement
a lot of that came from the very early days
and they just left it in the culture.
It was never a good idea but then like they kept it
and it was never a good idea.
And so things that get in the culture,
unless you really look at them and say,
"Okay, we have to change,"
the inertia will keep them there.
And you've had a long career as an entrepreneur
as well as an investor, what is the biggest mistakes
that you've made when it comes to culture
or a single one?
Oh I've made so many.
The one that I remember the most
is I thought, "If I lead by example, then everybody
"will just follow my culture," which isn't true at all
because, look people come in with their own cultures.
There's the whole subcultures going on all over the company
and as the company grows they don't even know you.
I'll never forget I had this,
I felt like, I was generally an honest person,
nobody's 100% honest but pretty honest,
and I had a guy running products who was always lying,
telling everybody just false promises this and that,
hiring people, telling them we're going to do this,
telling customers that, and I had no idea.
And then somebody just mentioned to me,
yeah everybody's just telling these fantastical stories
in that area.
And I'm like, "No that can't be, no way."
You know, I was just shocked, like how could
they be lying all the time?
I don't lie all the time.
And it was just,
yeah that was a culture that he had come from,
from another company that was into over marketing.
And so if you don't set the culture,
the culture just is what it is,
it's not how you behave necessarily.
And when you're doing due diligence
on a potential investment are there red flags you look for?
You said it's hard to identify culture
just walking into a place.
But is there anything you can look for
that's an indication if something is good culture
or bad culture?
I mean, I think that you can get clues,
it's very hard in our position in the kind of time frame
that we have to examine a company.
One thing,
it's very rare that you would have the founder or the CEO
make stuff up or kind of exaggerate
or fake it till they make it
or whatever they call lying these days
without the whole company being like that
because that is something that tends to be contagious.
So you can clue in on that.
There are things where
you have multiple founders in the meeting
and some of them are afraid to say what they think
like even in a pitch meeting and these kinds of things.
Those are all cultural cues and aspects
but I would say this, very few founders
have a great sense of how to build a culture,
so it's something that they learn as they go.
You know, it's not like, we don't see people come in
who are cultural masters, like Toussaint Louverture
or something like that.
And if you look at a company like WeWork,
where they had a lot of culture and some of it
was very beneficial to what they built
and some of it ended up not being as much so,
what is your assessment of something like that?
Well, that's one of those ones
where a lot of time your strength is your weakness.
They had this amazingly optimistic culture,
Adam had convinced the whole company
they could do anything and they were going to change
the future of work and so forth.
And that had a great power to it,
not only in raising a lot of money but also the quality
of the people they were able to hire,
the kind of momentum they had behind the whole thing,
and people who kind of partnered with them and
worked with them all kind of started to believe in,
because there's such a powerful optimism
but I think that when you are that optimistic,
generally, and WeWork I don't know intimately,
but it's really easy for people to shut down bad news.
We're changing the world, we're doing this,
everything is going to go well,
we said it, it's going to happen.
And then somebody goes,
"Well our accounting systems
really aren't up to speed with the business,
we can't even track of what we're doing here."
"No, it's going to be fine."
That there is really problematic
because there's no way that the issues
that came out of WeWork weren't known in WeWork but somehow
that information didn't travel to where it needed to go
and that is often a cultural problem
about can you hear the bad news as well as the good news.
You don't seem to shy away from discussions
about race and diversity
and it seems we're in a moment right now
where there's a lack of diversity in leadership
in many companies but there's a lot of diversity
among employees who are starting to ask questions
very blatantly to managers.
What do you suggest that managers say
and what should they do in order to address that?
Yeah, I think that people are approaching diversity
from a weird perspective
which is from a pressure,
they're getting pressure from the press
or from their employees or so forth
and they're not sure what they should do
but what they really want is the sticker
that says, "I'm not sexist, I'm not racist or whatever,
I love women, or I love Hispanic people,"
and the problem with that is if you start from there
then you're actually solving the wrong problem
and that what you're trying to do
is get to some numerical breakdown or this or that
or the other.
When the real thing is people want their talent to be seen
and their talent to be valued.
Let me give you a story about this that made it very clear
for me.
So my friend, Steve Stoute who used to be president
of Sony Urban Music, and he calls me up one day
and he goes, "Ben I used to be president
of Sony Urban Music," and I'm like, "Steve I know that,"
but that's his personality he tells me stuff I already know
when he wants me to really listen.
And I go, "I already know that,"
he says, "Yeah, but it wasn't urban music,
it was black music but we had to call it urban music
because black music, that would've been racist."
And I was like, "Well that's kind of silly,"
and he goes, "No, no, no that wasn't the really dumb thing,
the really dumb thing was,
because we called it urban music
I can only market it in cities," and I was like,
"Wow, that's really weird," he's like,
"Yeah, there are no black people living in rural areas,"
I was like, "That is so stupid," and he goes,
"No, no, no you're not listening to me Ben,
I was president of Sony Urban Music,
Sony Urban Music, I had Michael Jackson,
what white people don't like Michael Jackson?
It wasn't black music, it was music.
And because they made me market it as black music,
we cut off the market."
And I was like, "Wow, that's exactly how we do it
in corporate America, but we call it, it's urban HR,
we call it the diversity department."
And so rather than it being talent
it's female talent, Hispanic talent,
African American talent,
but no, it's talent and the problem is,
we're not able to see the talent because it's not
the same talent that we have necessarily.
And so how it works in a company is
and why people care about the leadership is,
oh you've got a woman running your group,
guess what, there's a lot of women in it,
you have a white man running your group,
a lot of white men in it, asian person,
a lot of asian people.
And that whole dynamic perpetuates
because why, I know what I'm good at, I value it highly,
and I can test for it in an interview.
And specifically I can't see what I don't have
and that is what feels most un-inculsive
once you get there, once you actually get the job.
And so we had this problem at our firm
very early on, we had an asian guy running research,
everybody was asian, woman running marketing,
everybody's a woman and so forth.
So I'm trying to diagnose this.
And I go to our head of marketing, genius woman,
Margit Wennmachers and I say,
"Margit what is in your hiring criteria
where no men have been able to get the job?"
And she says, "Helpfulness."
And I'm like, snap, I don't know a lot of helpful men.
But the more important thing about that
was we're a venture capital firm,
we're in the services industry,
what job did we have where being able to anticipate
somebody's needs before they even said anything
wouldn't be an incredible asset to the company?
But we didn't have that criteria in most of our profiles,
we couldn't see it, I couldn't see it,
I was talent blind and until we can see it
because the talent is out there.
And you draw, especially in this book,
lessons from all different cultures
and all different stories,
what inspired you to look across history
and across cultures that you're not a part of
and have you received any pushback from going across,
you're interested in rap and all sorts of different history.
I'm not Haitian but I wrote about the Haitian Revolution
and I wasn't in prison but I wrote about prison.
And I'm not an ancient Samurai warrior
but I wrote about that and so forth.
I think the subject matter was treated
with kind of the right lens with the right amount of respect
and honesty that I haven't gotten a lot of,
I haven't gotten negative pushback,
it's been mostly supportive.
But I think it's been very important,
each one of those is kind of critical in what it does.
So for example, people will go,
"Why are you talking about prison culture?"
And prison culture turns out is very instructive
because if you're hiring into a company
people come with a lot of cultural building blocks,
so they know how to show up for an interview
and dress correctly, they know how to be on time,
they know how to do certain things,
they have kind of cultural things that you can build on.
In prison you're really starting from first principles,
people come in with very very little
and so going through
how Shaka Senghor built that culture,
built the prison gang culture and then changed it
is one of the most illuminating things that I have ever
kind of been through as a process, understanding that
in any kind of cultural example I've seen.
So it turns out to be, I think very effective.
And looking at Andreessen Horowitz's portfolio
is there a favorite bet the that you have in there
that you're really excited about what the company's doing
that the media isn't covering already or you know?
So, one of the companies that
I'm personally involved in that
is an amazing company that I think the media's,
because it's infrastructure, doesn't pay much attention to,
is a company called Databricks
which basically is the infrastructure for AI,
it's kind of the big data database.
They're solving an amazing set of problems
from, people working with it to cure cancer,
to people doing threat detection
on kind of massive attacks
from state actors and these kinds of things.
And it's just, I would say really incredible
what you can do if can actually harness the mass
amount of data that's out there.
And are you still interested in Bitcoin at all?
Yes, oh yeah, well not just Bitcoin.
- Sorry. - The whole of cryptocurrency.
Yes.
Cryptocurrency, blockchain technologies
are we think going to be transformational in the future.
And the reason is it's a new computing platform
is a way to think about it.
And it's deceptive because
like other new computing platforms,
it's worse in every way except for one.
So if you think about the smartphone,
like it was a way worse computer than the PC,
try doing a spreadsheet on that,
it doesn't have a keyboard, the screen is tiny.
And so if you looked at it through that lens
it was terrible.
But, it had a GPS and camera on it
so you could build Instagram, you could build Lyft,
you could never build that on a PC,
you'll never build it on a PC.
Blockchain's like that, the new feature is trust,
meaning I don't have to trust a company,
or the government, or my lawyer, or anything.
I could just trust
the game theoretic and mathematical properties
of the platform and then I can program new things
and there's been, the early things,
Bitcoin is a great example, I can program money.
People will go, "Bitcoin, it's this, it's that,
it's not a real currency."
The thing is 10 years old and it's got 170 billion dollars
in value and it's just software.
It's just a software program with four guys working on it
and so you go, "Well how is that?"
It's because it's got trust and people trust it
as a store of value and that's an amazing thing
and if you think about being able to program everything
from a new judiciary
to art.
So art now exists in the, it's all virtual,
art is virtual,
like how much does the canvas and the paint cost?
Almost nothing.
But because you know that was painted by Basquiat,
no one else has one, it's worth a lot of money,
what if you could do that digitally?
Well that's something that you can do
with this kind of technology,
so there's all kinds of amazing possibilities,
early days, but we're fired up about it.