Managerial Leverage Assessment
by Ben Horowitz • Co-founder & General Partner at Andreessen Horowitz (a16z)
Ben is a legendary venture capitalist and author of 'The Hard Thing About Hard Things'. He was previously the co-founder and CEO of Opsware (formerly Loudcloud), which was acquired by Hewlett-Packard for $1.6 billion.
🎙️ Episode Context
Ben Horowitz discusses the psychological struggles of leadership, emphasizing that the hardest decisions often involve choosing between two terrible options. He revisits his classic 'Good Product Manager, Bad Product Manager' concept, arguing that PMs must act as leaders without authority. He also shares insights on managerial leverage, the current state of AI infrastructure, and why maintaining US dominance in AI is critical.
Problem It Solves
Founders struggling with senior executives who aren't performing, or founders burning out trying to 'coach' experienced hires.
Framework Overview
As a CEO, you cannot 'fix' or train senior executives (C-Level/VP) the way an Engineering Manager trains junior devs. Managerial leverage is binary: either they are providing you with ideas and momentum, or they are draining your energy.
🧠 Framework Structure
Don't play school: You hire executive...
The Leverage Test: If you are telling...
The Reverse Flow: Leverage exists onl...
Hire for strength: Look for spikey ta...
When to Use
When evaluating the performance of direct reports who are in VP or C-suite positions.
Common Mistakes
Thinking you can 'coach' a bad VP of Sales into a good one, or delaying firing because they are a 'nice person'.
Real World Example
Ben advising Ali Ghodsi (Databricks CEO) to stop trying to improve low performers and instead find people who could teach him.
If I have the ideas about what your department should do next... then that's no leverage. What's leverage is if you're telling me what you should do.
— Ben Horowitz