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Ben Horowitz, the co-founder of the Silicon Valley venture capital firm Andreessen Horowitz, has a new book about what makes for a purposeful culture.
In What You Do Is Who You Are (Oct. 29; HarperCollins),
Horowitz offers lessons from history as well as from his own experience to
answer the question that’s top of mind for executives now more than ever: “How
do you create and sustain a culture you’re proud of?”
Horowitz spoke with Fortune’s Andrew Nusca in a
wide-ranging interview. Below is an excerpt from the Q&A (Read it in
FORTUNE: One of the things businesspeople like to stew on
is whether culture can be changed—especially if it’s a bad one. Now that you’ve
written your book: Can it?
HOROWITZ: If a guy who’s born a slave can take a bunch of slaves and turn them into one of the greatest fighting forces in the world [referring to the Haitian Revolution’s slave revolt], you absolutely can change the fucking culture at your company. That’s a mistake that people often make—that you can’t.
One of the more striking examples of that is Sun Tzu running
a concubine army and changing the culture around [military] drills in an
instant by cutting people’s heads off. It’s very possible. It’s a matter of
technique and commitment to change.
People can come in and water down a culture, but if you’re
taking away the old culture, you need to give it a stronger purpose than it
had. [When it removed controversial CEO Travis Kalanick] Uber didn’t quite
replace the culture with a stronger culture. That’s one of the mistakes it
made. Travis’s culture was really compelling, creative, powerful, and
motivating—the “super pumped” virtue. He did a lot right and had one very big flaw
in the code. But they lost a lot of what he did right in the transition, and
you can see that attrition today. (Editor’s note: Horowitz’s firm famously
passed on investing in Uber, choosing rival Lyft instead.)
Let’s talk about office space purveyor WeWork, which is
dominating news headlines right now for having a corporate culture so
all-encompassing and detached from reality—it’s literally The We Company—that
it hid the problematic business underneath it. In light of the book’s lessons,
what do we draw from this?
It’s easy to shit all over everything Adam [Neumann,
WeWork’s co-founder and former CEO] did now—the swing and the miss with the
IPO, [the takeover by] SoftBank, all of that. But what he accomplished wasn’t
trivial; it was very real. WeWork started with a giant vision: “We will
change the way that work happens, and make it much more human.” He built a
culture around that, and lived it himself. And it was such a compelling
narrative that he was able to raise nearly as much money as anybody has
privately and build a very talented workforce—those employees are really very
good. And from a business standpoint, he created a consumer brand on a real
estate company. Who’s done that? Maybe Donald Trump, I guess.
A slightly different category, I think.
Yeah (laughs). The core thing in WeWork’s culture was
optimism: “Dream bigger.” It ended up being the Achilles heel because there
were clearly things that were not expected in the business, and I’m sure people
said something along the way, and I’m sure bad news was difficult to deliver in
that environment. That’s where cultural design is very complex. And you have to
be careful of that. I talk about that in the book. The Samurai are an honor
culture. But you need to be polite and have rules of engagement—you can’t just
have strong, massive cultural concepts and not define the limitations on that.
From afar, that seems like the mistake [Neumann] made.
QUOTE OF THE DAY: “The size of the commitment that
SoftBank has made to [WeWork] in the past and now is $18.5 billion. To put
things in context, that is bigger than the GDP of my country where I came from
(Bolivia). That’s a country where there’s 11 million people.” — SoftBank
executive Marcelo Claure in an address to WeWork’s worried staff. Read
the leaked transcript from the all-hands meeting.
NOT SO FAIR: Fair.com, a flexible car ownership
startup valued at $1.2 billion will be laying off 40% of its staff. It is also
removing its CFO, Tyler Painter, who is the brother of the CEO. He’s being
replaced in the interim by Kirk Shryoc.