What You Do Is Who You Are: An expert guide to building your company’s culture

by Ben Horowitz

Revel in being discarded, or having all your energies exhausted in vain; only those who have endured hardship will be of use. Samurai who have never erred before will never have what it takes.

At Amazon, Jeff Bezos famously said, “Your fat margins are my opportunity.”

There’s a saying in the military that if you see something below standard and do nothing, then you’ve set a new standard.

Moore’s law, which holds that microchip capacity doubles every eighteen months while its price falls in half

Imagine a culture of strict accountability that punishes failure—a very common culture back east, where executives strove to maintain their status, and failure was to be avoided at all costs. Now consider an idea that has a 90 percent chance of failing, but that would pay off at 1,000 to 1. Despite it being an extraordinarily good bet, the company that punishes failure will never fund it.

Western Union famously passed on the opportunity to buy Alexander Graham Bell’s patents and technology for the telephone. At the time, phone calls were extremely noisy and easy to misinterpret, and they couldn’t span long distances, and Western Union knew from its telegram business that profitable communication depended on accuracy and widespread reach.

Companies—just like gangs, armies, and nations—are large organizations that rise or fall because of the daily microbehaviors

But they will never forget how it felt to work there, or the kind of people they became as a result.

The secret to finding a breakthrough idea, as Peter Thiel says, is that you have to believe something that nobody else does.

Slavery had been around since the beginning of recorded history. It was endorsed by all the major religions; long and detailed sections of the Bible and the Koran are dedicated to it. In the 1600s, more than half of the world’s population was enslaved.

broken cultures don’t win wars.

The father of the Haitian Revolution earned his freedom by forming a special bond with a white man.

knew that his slave culture had great strengths and that creating a new civilization out of whole cloth—as Lenin would later try and fail to do—

People don’t easily adopt new cultural norms and they simply can’t absorb an entirely new system all at once.

This usually inspires overwhelmingly short-term thinking, which eradicates trust.

Without trust, communication breaks. Here’s why: In any human interaction, the required amount of communication is inversely proportional to the level of trust.

Building a great culture means adapting it to circumstances. And that often means bringing in outside leadership from the culture you need to penetrate or master.

Louverture painstakingly, systematically, and relentlessly moved his slave army to higher and higher levels of conduct.

Greene came up with a shocking rule: Partnerships should be 49/51, with VMware getting the 49.

Greene said, “I had to give our business development people permission to be good to the partners, because one-sided partnerships would not work.” Her rule was actually met not with resistance but with relief. Her people wanted to create mutually beneficial partnerships, and Greene’s rule gave them permission.

Ovitz sums it up: “Cultures are shaped more by the invisible than the visible. They are willed.”

Cranney was a Mormon Republican from Boston who wore a suit and tie, was deeply suspicious of everyone, and was one of the most competitive people on earth.

sales and marketing have to go to battle every day, so people in those groups need to fall in line.

He believed that you were either selling or being sold: if you weren’t selling a customer on your product then the customer was selling you on why she wasn’t going to buy it.

crucial four C’s. To sell, you had have 1) the competence—expert knowledge of the product you were selling and the process to demonstrate it (qualifying the buyer by validating their need and budget; helping define what their buying criteria are while setting traps for the competition; getting sign-off from the technical and the economic buyer at the customer, and so forth) so that you could have 2) the confidence to state your point of view, which would give you 3) the courage to have 4) the conviction not to be sold by the customer on why she wasn’t going to buy your product.

He was fond of saying that most reps had a Wizard of Oz problem: they lacked either the courage, the brain, or the heart to be successful by themselves.

I broke our cultural rule and put Mark in a walled office; that way if he did slip up—and he certainly would—it wouldn’t be public. Equality

It did not matter that the campaign had taken all the steps necessary to prevent the attack, because John Podesta imitated what Hillary Clinton did, not what she said. The talk said, “Secure your email”; the walk said, “Personal convenience is more important.” The walk almost always wins. That’s how culture works.

While it’s likely that the Democratic Party’s emails would have been hacked even if Clinton hadn’t been dismissive of email security, the point is that when you are a leader, even your accidental actions set the culture.

If he put that much effort into Uber’s culture, where did it go wrong? The problem was that the mind-set implicit in such values as Meritocracy and Toe-Stepping, Winning: Champions Mindset, Always Be Hustlin’, and The Best Idea Wins elevated one value above all: competitiveness.

That’s the nature of culture. It’s not a single decision—it’s a code that manifests itself as a vast set of actions taken over time. No one person makes or takes all these actions. Cultural design is a way to program the actions of an organization, but, like computer programs, every culture has bugs. And cultures are significantly more difficult to debug than programs.

What you measure is what you value.

It’s impossible to design a bug-free culture. But it’s vital to understand that the most dangerous bugs are the ones that cause ethical breaches.

When it comes to ethics, you have to explain the “why.”

Kalanick’s code was dangerous but unique—only Uber had it. The new values are safer—but they could be anyone’s.

Does “Do the right thing” mean make the quarter or tell the truth? Does it mean use your judgment or obey the law? Does it mean you can excuse losses by claiming some moral imperative?

It’s also critical that leaders emphasize the “why” behind their values every chance they get, because the “why” is what gets remembered. The “what” is just another item in a giant stack of things you are supposed to do. So for Uber to merely say We do what’s right, period, means the company missed a big opportunity.

If you remember one thing, remember that ethics are about hard choices.

No matter how difficult such questions seem, your task will never be as challenging as implanting ethics in a slave army during a war.

The samurai, the warrior class of ancient Japan, had a powerful code we call “bushido,” or “the way of the warrior.” This code enabled the samurai to rule Japan from 1186 until 1868—nearly seven hundred years—and their beliefs endured long after their reign. The samurai are the taproot of Japanese culture to this day.

A value is merely a belief, but a virtue is a belief that you actively pursue or embody.

The reason so many efforts to establish “corporate values” are basically worthless is that they emphasize beliefs instead of actions.

Culturally, what you believe means nearly nothing. What you...

awareness of mortality underpinned both loyalty and scrupulous attention to detail.

We have three rules here at Netscape. The first rule is if you see a snake, don’t call committees, don’t call your buddies, don’t form a team, don’t get a meeting together, just kill the snake. The second rule is don’t go back and play with dead snakes. Too many people waste too much time on decisions that have already been made. And the third rule of snakes is: all opportunities start out looking like snakes.

Instead, after a three-hour dinner, I invited Shaka back to our house, where we talked for another five hours. He was maybe the most insightful person I had ever spoken to about how to build a culture and run an organization.

If you’re not honoring the culture yourself, nobody fucking believes you. The principles were my natural principles. I believed in them. I was also willing to defend them. This shifted the culture to a better place.

one of the best techniques for changing a culture—constant contact.

Culture is an abstract set of principles that lives—or dies—by the concrete decisions the people in your organization make. As a leader, this gap between theory and practice poses huge challenges. How do you get an organization to behave when you’re not around to supervise? How do you make sure the behaviors that you prescribe result in the culture that you want? How can you tell what’s actually going on? How can you know if you’ve succeeded?

Your own perspective on the culture is not that relevant. Your view or your executive team’s view of your culture is rarely what your employees experience.