One day, while working at Lotus, one of my coworkers showed me a new product called Mosaic, which was developed by some students at the University of Illinois. Mosaic was essentially a graphical interface to the Internet — a technology formerly only used by scientists and researchers. It amazed me. It was so obviously the future, and I was so obviously wasting my time working on anything but the Internet.
Several months later, I read about a company called Netscape, which had been cofounded by former Silicon Graphics founder Jim Clark and Mosaic inventor Marc Andreessen. I instantly decided that I should interview for a job there …
During the first interviews, I met everyone on the product management team. … The next day, the hiring manager called back to let me know that they wanted me to interview with co-founder and chief technical officer Marc Andreessen. He was 22 at the time. …
Interviewing with Marc was like no other job interview I’d ever had. Gone were questions about my resume, my career progression, and my work habits. He replaced them with a dizzying inquiry into the history of email, collaboration software, and what the future might hold. I was an expert in the topic, because I’d spent the last several years working on the leading products in the category, but I was shocked by how much a 22-year-old kid knew about the history of the computer business. I’d met many really smart young people in my career, but never a young technology historian. Marc’s intellect and instincts took me aback, but beyond Marc’s historical knowledge, his insights about technologies such as replication were incisive and on point.
After the interview, I phoned my brother and told him that I’d just interviewed with Marc Andreessen, and I thought that he might be the smartest person I’d ever met.
A week later, I got the job. I was thrilled. I didn’t really care what the offer was. I knew that Marc and Netscape would change the world, and I wanted to be part of it …
Once at Netscape, I was put in charge of their Enterprise Web Server product line. … By the time Netscape went public in August 1995, we had grown the Web Server team to about nine engineers. The Netscape initial public offering (IPO) was both spectacular and historic. The stock initially priced at $14 per share, but a last-minute decision doubled the initial offering to $28 per share. It spiked to $75 — nearly a record for a first-day gain — and closed at $58, giving Netscape a market value of nearly $3 billion on the day of the IPO. More than that, the IPO was an earthquake in the business world. As my friend and investment banker Frank Quattrone said at the time, “No one wanted to tell their grandchildren that they missed out on this one.”
The deal changed everything. Microsoft had been in business for more than a decade before its IPO; we’d been alive for 16 months. Companies began to get defined as “new economy” or as “old economy.” And the new economy was winning. The New York Times called the Netscape IPO “world-shaking.”
But there was a crack in our armor: Microsoft announced that it would be bundling its browser, Internet Explorer, with its upcoming breakthrough operating system release, Windows 95 — for free. This posed a huge problem to Netscape, because nearly all of our revenue came from browser sales, and Microsoft controlled more than 90 percent of operating systems. Our answer to investors: We would make our money on Web servers.
Two months later, we got our hands on an early release of Microsoft’s upcoming Web server Internet Information Server (IIS). We deconstructed IIS and found that it had every feature that we had — including the security in our high-end product — and was five times faster. Uh-oh. … So I went to see our department head, Mike Homer.
Mike and I spent the next several months developing a comprehensive answer to Microsoft’s threat. If they were going to give our products away, then we were going to offer a dirt-cheap, open alternative to the highly expensive and proprietary Microsoft BackOffice product line. … Mike named it Netscape SuiteSpot, as it would be the “suite” that displaced Microsoft’s BackOffice. We lined everything up for a major launch on March 5, 1996, in New York.
Then, just two weeks before the launch, Marc, without telling Mike or me, revealed the entire strategy to the publication Computer Reseller News. I was livid. I immediately sent him a short email:
To: Marc Andreessen
Cc: Mike Homer
From: Ben Horowitz
Subject : Launch
I guess we’re not going to wait until the 5th to launch the strategy.
Within 15 minutes, I received the following reply:
To: Ben Horowitz
Cc: Mike Homer, Jim Barksdale (CEO), Jim Clark (Chairman)
From: Marc Andreessen
Subject: Re: Launch
Apparently you do not understand how serious the situation is. We are getting killed killed killed out there. Our current product is radically worse than the competition. We’ve had nothing to say for months. As a result, we’ve lost over $3B in market capitalization. We are now in danger of losing the entire company and it’s all server product management’s fault.
Next time do the fucking interview yourself.
I received this email the same day that Marc appeared barefoot and sitting on a throne on the cover of Time magazine. When I first saw the cover, I felt thrilled. I had never met anyone in my life who had been on the cover of Time. Then I felt sick. … I was 29 years old, had a wife and three children, and needed my job. Felicia looked at the email and the magazine cover and said, “You need to start looking for a job right away.”
In the end, I didn’t get fired, and over the next two years, SuiteSpot grew from nothing to a $400-million-a-year business. More shocking, Marc and I eventually became friends; we’ve been friends and business partners ever since.
People often ask me how we’ve managed to work effectively across three companies over 18 years. Most business relationships either become too tense to tolerate or not tense enough to be productive after a while. Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship. With Marc and me, even after 18 years, he upsets me almost every day by finding something wrong in my thinking, and I do the same for him. It works.
Excerpted From “The Hard Thing About Hard Things,” by Ben Horowitz. Copyright © 2014 by Ben Horowitz. Reprinted courtesy of Harper Business, an imprint of HarperCollins Publishers. Reach him @bhorowitz.