If you’re running a company, your output is decisions . . . you’re rated on quality and speed . . . [and] if you have to make the trade [between quality and speed], which you always have to, you generally go towards speed, because you have a lot of decisions to make and if you don’t make them fast . . . you freeze the entire organization.
[Whereas with venture investing,] basically quality is everything . . . [and] we’ll go around the horn 50,000 times if we have to, to make sure that we’ve explored every corner and every crevice of the discussion and we [haven’t] missed something.
In some ways we have . . . a framework in our minds about how we think about investments and deals . . . but we’re willing to go in many loops [with investment decision-making] where we’d never do that in a company.I heard this from Ben Horowitz on a16z’s podcast.
I’ve been thinking a lot about individual and team decision-making in organizations lately, and this thought is pretty incredible, I think. That is, the speed of decision making should really depend on whether you’re an operator or an investor. As a company operator, speed is king, and as an investor, quality rules.
With a successful career as a tech executive under his belt and a book about executive management inspired by hip hop, Ben Horowitz has become a management icon. And in recent years he’s emerged as a household name as a well-reputed VC investor—the “Horowitz” in Andreseen Horowitz. To hear how clearly Ben thinks about the trade-off between speed vs. quality in decision-making speaks to how he’s personally transformed over the years, seemingly according to what his roles have demanded from him, first as an operator and later as a pure investor.
Still, this begs the question about how one should look at investment decisions within a company, am I right? I’m looking forward to exploring that.