Andreessen Horowitz Makes It a Foursome–Adds IronPort's Scott Weiss as Investing GP
High-profile venture firm Andreessen Horowitz added another investing general partner to their group today, with the appointment of IronPort co-founder Scott Weiss.
Weiss is the fourth investing GP at Andreessen Horowitz, which also includes Marc Andreessen, Ben Horowitz and John O’Farrell. In addition, there are now seven operating partners and 25 at the firm in total.
In hiring Weiss, Horowitz said he was looking for someone who deeply understood the entrepreneurial process, as well as company-building.
“I felt as if we wanted someone who knew what we knew about creating, building and running a start-up.” he said. “And, in bringing in a new GP, we also wanted someone who was not at a loss to express themselves.”
Weiss is indeed experienced as an entrepreneur and tech exec. He co-founded IronPort, the messaging security appliance company that was sold to Cisco for $830 million, and also was one of the first employees at Hotmail, which is now owned by Microsoft.
While he said he had avoided becoming a VC–although he has been a board member and angel investor–he was attracted by the different approach at Andreessen Horowitz.
“I never expected to become a VC–it did not seem like my cup of tea,” said Weiss. “But I felt Marc and Ben were really innovating and disrupting the venture industry.”
Here’s the long blog post from Ben Horowitz on Weiss, and even more about how they pick a partner at the firm:
Picking a General Partner
In my career, I have never seen a position in any industry with more varying criteria than General Partner at a venture capital firm. Some firms hire pure investors, some firms hire operators, some Wall Street analysts, some firms hire sales people, some firms hire lawyers, and others hire reporters. Interestingly, many different models have worked, but in all cases the criteria by which the General Partner is selected says a lot about what you should expect as an entrepreneur from the firm. With that in mind, I will explain in detail our criteria at AH in the context of the type of firm that we strive to build and our newest general partner, Scott Weiss.
When we started Andreessen Horowitz, our vision was to build the kind of venture capital firm that we would have wanted to take money from. For us that meant a broad set of capabilities for the firm and a sharp view of what kind of general partners that we wanted. Two aspects of the original vision that deeply depend on the kind of general partners that we hire are:
We will help develop founders into CEOs.
We will have deep respect for the entrepreneurial process.
A Little Help
Many VCs excel at picking companies, evaluating CEOs and bringing in professional CEOs, but generally do very little to help a promising founder develop into a CEO. We believe that founding CEOs run the very best technology companies, so naturally we wanted the firm to focus on this issue. As a founder who developed into a CEO, I know that there is no manual and it is a nearly vertical learning curve. If you have never been a CEO, the number of things that you must learn can be absolutely staggering. So staggering that you might not even be sure what to ask.
By staffing with general partners who have founded companies and run them, we can answer some of those questions without the entrepreneurs having to ask because we’ve been down the same path and made the same mistakes. Basically, our entrepreneurs can learn from our screw-ups.
Euphoria and Terror: The Entrepreneurial Process
If you have ever started a company, you most certainly know the intense level of uncertainty and anxiety that’s fundamentally part of the process. When we started Loudcloud, for a time I was so unbalanced that my insides literally felt like they were boiling. One particularly challenging day, my co-founder (and current partner at AH), Marc Andreessen said to me: “Do you know the best thing about starting a company?” I looked at him in disbelief as if to say: “There is a ‘best” part?” He replied: “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”
All venture capital firms claim to love entrepreneurs, but that’s different than understanding and respecting the entrepreneurial process and the associated degree of difficulty. When the only emotions you experience are euphoria and terror, your highs are very high and your lows are very low. This kind of yo-yo emotional state can rattle a VC who may hear a massively aggressive forecast for the business one day then despondency the next. We strive to sort the emotional rollercoaster from the actual progress.
Beyond that we want to build a culture that reflects this understanding. Some elements that we have put in place include:
Be on time for meetings with entrepreneurs and pay attention–When you found a company, your entire life goes into it. Venture Capitalists in Silicon Valley are notorious for both their tardiness and distractedness. Entrepreneurs often joke about VCs who show up to meetings late then spend the entire meeting on their phones and computers. At Andreessen Horowitz, if you are late to a meeting with an entrepreneur, the fine is $10 per minute.
Always let entrepreneurs know where they stand–When you work around the clock working to build the company of your dreams and you present them to a venture capital firm, you deserve a clear response. 100% of the entrepreneurs who pitch us get a prompt and specific answer. If the answer is no, then we always provide the reasons why.
Provide informed tactical advice–Once following a game, the great baseball manager Tommy LaSorda went on a talk radio show and was second-guessed about one of his on field decisions by a listener. LaSorda succinctly replied: “this fucking job is not that fucking easy.” He basically summed up how I’ve always felt about being a CEO. As CEO, you know an incredible amount of detail about all aspects of the company: Every minor bit of customer feedback, the strategies of every competitor, the exact strengths and weaknesses of the engineering organization, the things that you screwed up in the product architecture, the impending performance and scale dangers, the mood of the company, and so on. All of this data gets factored in every time you make a decision, prioritize a feature or revise the product strategy. The knowledge gap between you and any board member is usually very large and growing. As a result, naïve, unsolicited product strategy advice such as, “you should build an Android app right away” is both useless and annoying. On the other hand, specific advice about techniques for integrating the new executive you just hired can be exceptionally helpful. In order to give the right kind of advice and refrain from giving the wrong kind of advice, you have to realize that running a company is not that frackin’ easy.
The General Partner Criteria at Andreessen Horowitz
With these things in mind, we developed our hiring criteria for General Partners. The actual list is quite long, so I will focus on 3 top criteria and how they reflect the firm that we are trying to build.
Has the candidate co-founded or been a very early member of the executive staff of a successful company?
The best way to understand the entrepreneurial process is to go through it. If you haven’t been through it, it’s kind of hard to learn from a book. This is particularly true for the psychological aspects of the process.
Is the candidate an expert product picker as demonstrated by a primary role in picking winning products?
In the end, regardless of our other goals, we are in the business of creating returns for our investors. It follows that we must be world class at picking investments. In venture capital, this means picking the best entrepreneurs and the best markets. An excellent proxy for those capabilities is the ability to identify and build massively successful products, because the best teams going after the biggest markets build the most successful products.
Will the smartest entrepreneurs want to work with her?
In venture capital, it’s not enough to be able to pick the best entrepreneurs; you must also have access to them. There are many VCs who may be great at picking entrepreneurs, but whom no great entrepreneur will want to work with. These VCs tend not to do so well.
Why Scott Weiss
Let’s see how our newest GP, Scott Weiss stacks up against the criteria.
Has Scott co-founded or been a very early member of the executive staff of a successful company?
Scott co-founded and ran IronPort, the leader in messaging security appliances, until their acquisition by Cisco for $830M. Check.
Is the candidate an expert product picker as demonstrated by a primary role in picking winning products?
Prior to founding IronPort, Scott was employee #13 at Hotmail. At the time, many experts in the email market dismissed hotmail as a toy/spam system. That he was able to pick a winning consumer product then move on to found company that built a winning enterprise product says a great deal about him as a product picker.
Will the smartest entrepreneurs want to work with him?
This is the dimension where Scott shined the brightest. In reference checking him with entrepreneurs with whom he had worked, they were effusive in their praise. They said things like: “Investors as board members can be a toxic combination of high IQs, high insecurity, and lack of knowledge. Scott is the antidote for that poison. He is smart and confident, but has tremendous respect for what I go through and what it means.” Bottom line is that if I was an entrepreneur again, I’d want to work with Scott.
As with any search, our criteria turned out to be a combination of implicit and explicit characteristics. To that end, we really wanted the new GP to bring an innovative and entrepreneurial mind set to our firm as well. We wanted someone who understood and embraced our values and would take them to the next level. With Scott, we got all that and more. He actually proposed several new ideas for the firm during the interview process. One idea that I particularly like and look forward to implementing with him is 360 performance reviews for General Partners. This means that we will solicit detailed feedback from the people in our firm, the other GPs, and the entrepreneurs that the GPs work with in order to improve the performance of our general partners. I can hardly wait to read Andreessen’s reviews :). In a profession where most venture capitalists work their entire careers with no explicit feedback from the companies that they are supposed to be helping, this is a great innovation.
Finally, we have a bias and perhaps even a prejudice towards technical founders, so we were impressed to see Scott’s product picking prowess despite no formal technical background. And it’s always smart to add some diversity to the team.