Ben Horowitz Shares Hard Lessons About Growing a Business

Monday, April 21, 2014

William Blair & Company hosted Chicago's leading technology entrepreneurs and investors on April 17 for an event with a Silicon Valley icon who knows a thing or two about those fields. Ben Horowitz, the co-founder of venture capital firm Andreessen Horowitz and Loudcloud, visited Chicago's 1871 innovation hub to share insights on entrepreneurship from his recent book, The Hard Thing About Hard Things.

During a discussion that was moderated by J.B. Pritzker, co-founder of Pritzker Group and one of the driving forces behind 1871, Horowitz talked about the need for entrepreneurs to be ready for and embrace the gut-wrenching experiences that come with building a business.

"Don't be an entrepreneur if you don't like the struggle," Horowitz said. "This is the process that you go through; that's where you get good [at being a leader]."

Horowitz talked about the struggle he endured in trying to grow Loudcloud, a company that went public in the midst of the Internet bubble implosion in 2001, endured three rounds of layoffs, and barely staved off bankruptcy before Horowitz made the critical—and much-maligned at the time—decision to sell off the company's cloud computing business in 2002 and reorganize as a software company called Opsware.

Investors were among those who doubted Horowitz's judgment. Opsware's stock plunged from about $2.00 a share to $0.35 a share following the announcement of the spin-off. But Horowitz was able to execute on his vision and rebuild the company. When Hewlett-Packard acquired Opsware for $1.6 billion in 2007, the stock was worth $14.25 a share.

"It was probably the most unpopular decision I've ever made, but it turned out to be a really good decision in retrospect," Horowitz said. "If you're an entrepreneur, the worst thing you can do is to worry about what other people think."

Horowitz said he decided to write the book because he realized that although he had read a mountain of books on management, none of them focused on the skill set that CEOs need to manage the things that come up when companies struggle, such as layoffs and demoting friends.

"Most management books are written from the perspective of 'here's all of the things you can do to not screw up your company.' But there's no book about 'well, now that you've screwed up your company, what do you do?' And anyone who's been a CEO knows that is a much more important thing to know."

Chicago Mayor Rahm Emanuel and McDonald's President and CEO Don Thompson also spoke at the event. Mayor Emanuel noted that 1871, which provides working space for digital start-up companies, is now one of 10 innovation centers in Chicago. The mayor also noted that the number of jobs in the city's digital industry is expected to double over the next five years.

"That's exactly what we're trying to build to bring great research to the city of Chicago."

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