Ben Horowitz: evaluation

Transcript context

…Kind of going back to the origin story of A-Sixteen-Z something you guys were really big on was helping founders stay COs become great COs, not replace them with professional COs. I want to flip this question on you. When does it actually make sense to replace CO? When are people not going to make great COs? There's a very consistent thing that happens, which is when somebody doesn't make it and it kind of starts with confidence is the way I would put it. So if you invent a product, you kind of recruit a team so forth, all of a sudden you're CEO, but you don't run a big organization, you don't know how to do that. Most founders are like that. And so, if you don't know what you're doing, you're going to make mistakes and they all make a lot of mistakes. And then when you make those mistakes, they're very expensive. They could cost you to do a down round or they could cost you to lose a company or they could cost you a customer or you scrub the product. They're very high impact and not just on you, but everybody who you talked into joining you. And so that kind of motion can really cause you to lose confidence. And then if you lose confidence, what happens is you hesitate on the next decision. And as we talked about, hesitation is very dangerous because one, it locks up the company, but even worse what happens is if you have senior people working for you, they get very nervous and they feel like they need to jump into that void and make the decision for you. And that's when it gets political, very political, because people are vying for power inside your little screwed up company. And so now you've got a political dysfunctional organization and that's generally where, okay, the founder probably can't run this thing anymore. That's how it happens. So most of what we do as a firm is to try to help people with that confidence problem and there's a whole series of ideas that we have around that, but you kind of have to somehow climb the confidence and the competency curve together. It's very hard to do and particularly if you're an engineer and you're used to getting things right or if you've been a straight A student or something like that, it's very disconcerting. Sometimes it's better to have CEOs who are like C minus students. Why is that?…

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