Silicon Valley's stealth power

  @FortuneMagazine February 27, 2014: 6:44 AM ET
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Horowitz in his Menlo Park office


Ben Horowitz, the venture capitalist, is talking about the legends who watch over him in his Menlo Park, Calif., office. On one wall the stern faces of some of the forefathers of computer science -- the likes of Alan Turing and John von Neumann -- stare from inside a row of picture frames. Another wall is reserved for boxing greats: Ali, Frazier, and Foreman, James "Cinderella Man" Braddock, Sugar Ray Robinson, and a handful of others. "It's a little bit of a reminder to myself of what we are looking for in an entrepreneur," Horowitz says. "Great genius and great courage." The genius part is self-evident; without it there would be no Apple or Google or Microsoft. The courage part is less obvious. But Horowitz says no other quality -- not vision, not creativity, not charisma -- is more essential to succeed as an entrepreneur. Building a company is a lot like boxing, he says, and not because of any rush that comes from landing a metaphorical punch on your opponent. Building a company is hard and lonely. It demands relentless focus. And no matter how well you do, you must be ready to be pummeled again and again. "In boxing, you get hit, it's painful, then you sit on the stool when the adrenaline is gone and you feel that pain," he says. "And then you fight the next round."

Horowitz isn't a boxer, but he knows what it's like to be down for the count. Loudcloud, the company he co-founded with Internet wunderkind Marc Andreessen and two other Netscape alums, nearly went belly-up -- not just once or twice, but half-a-dozen times. Horowitz, who was CEO, not only rescued it, but also led it to the Silicon Valley equivalent of a knockout victory, selling it to HP for $1.6 billion in 2007. Horowitz used "force of personality and willpower to make a business out of it," says Herb Allen III, the CEO of Allen & Co. "It was one of the hardest turnarounds in technology, and it was a complete turnaround." Two years later Horowitz teamed up with Andreessen again to start Andreessen Horowitz, a venture firm that has raised $2.7 billion, backed the likes of Airbnb, Facebook, Pinterest, Skype, and Twitter, upended the clubby VC world with a new business model, and soared into the industry's top ranks in record time.

Through it all, Horowitz, 47, had been content to toil in the shadow of his best friend, Andreessen, a voluble, opinionated fellow who revels in the spotlight. ("He was Beyoncé, and I was Kelly Rowland," wisecracks Horowitz.) But as the visionary Andreessen was out burnishing the firm's public profile, Horowitz, its de facto CEO, was quietly racking up a reputation as the go-to mentor for a new generation of entrepreneurs. Drawing largely on his experiences at Loudcloud, he's counseled everyone from Facebook's Mark Zuckerberg to Jawbone's Hosain Rahman to Skype's Tony Bates, now a Microsoft exec. Increasingly, CEOs of traditional Fortune 500 companies are seeking his advice too. With his low-key, no-nonsense style and his devoted following -- not to mention his use of profanity -- Horowitz is often compared to Bill Campbell, Intuit's chairman, who has advised the likes of Jeff Bezos, Steve Jobs, and Eric Schmidt, and is known throughout the Valley as "Coach." "Ben is the management guru to all of the young entrepreneurs in the Valley," Zuckerberg says.

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Yet as ingrained as Horowitz is in the culture of the Valley, he defies expectations in many ways. The son of a Marxist intellectual turned ultraconservative thinker and provocateur, Horowitz grew up in nearby Berkeley, playing football on a high school team where he was one of the few white kids. While he and his wife, Felicia, live in tony Atherton, Horowitz is a Raiders fan who says he's more at ease hanging out with his childhood friends in one of his old haunts in Oakland. He happily passes up Valley gatherings to stay home preparing barbecue for an evening with his eclectic entourage. (The festivities inevitably include watching a boxing match on TV and jamming to hip-hop until late into the night.) On his widely read blog, Horowitz sprinkles his management advice with rap lyrics from the likes of Nas and Kanye West, who have since become friends. And Horowitz is not the typical CEO "whisperer" who advises entrepreneurs on tech trends, strategy, or business school wisdom. CEOs call on him when they have to fire a friend or make an unpopular decision, or when they realize that despite their well-laid plans, they're getting clobbered in the market. "That's when CEOs get serious," says Andreessen. "That's when they go talk to Ben." Horowitz has compiled his insights for the wider world into a forthcoming book called, appropriately, The Hard Thing About Hard Things.

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