>> charlie: welcome to the program. we begin this evening with the "new york times" columnist, david brooks. >> if you're a very ambitious guy with russian patriotism who wants to change history, this is going to grab you. so i think he is somewhat motivated by that, not just narrow self-interest and i think the people around him in the country still has that russian idea of history. so i'm not convinced they are a normal country, that they're a country that responds to carrots and sticks, they see themselves driven by a larger purpose. so i fear they get to a place where they can't turn back, even when the incentives are there. >> charlie: also one of the interesting people from silicon valley, ben horowitz from the firm andreessen horowitz. >> when we were entrepreneurs,

we always felt that the best companies, including our own, were the ones run by the inventer, the people who started by the company and venture capital, at the time, was set up for the opposite. the inventer would invent and get it to a certain point then you bring in the adults who knew how to build a business. >> charlie: david brooks and ben horowitz next. >> there's a saying around here: you stand behind what you say. around here, we don't make excuses, we make commitments. and when you can't live up to them, you own up and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most.

but i know you'll still find it, when you know where to look. captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> charlie: david brooks is here, he is an op-ed columnist at the "new york times" and a regular contributor to pbs "newshour", teaches on moral philosophy at yale and co-teaching weekly seminar studies in grand strategy. a recent appearance at the ted talks in vancouver, canada, in which he talked about eulogies and resumes. >> so i have been thinking about that problem and what was helping me think about it is a

rabbi who wrote a book of faith in 1965, said there are two sides of our natures, which he called adam one and adam two. adam one the worldly, ambitious external side of our nature. he wants to build, create, create companies and innovation. adam two is the humble side of our nature, not only the do but to be good, to live in a way internally that honors god, creation and our possibilities. adam one wants to conquer the world, adam two wants to hear a calling ando bay. adam two accomplishment, adam two consistency and strength. one wants to know how things work, two is wonders why we're here. the two sides of our nature are at war with each other where you're living in perpetual self confrontation between the external success and the internal value. we ha happen to live in a sociey

that favors adam one and often neglects adam two and that turns you into a shrewd animal that treats life as a game and you become a cold, calculating creature who slips into mediocrity who knows there's a difference between your desiredself and your realself. >> charlie: where with you been? >> writing a books teaching undergrad. >> charlie: writing a column and making speeches. >> yes. >> charlie: can you tell us what the book is about? >> yeah, the book, well, i guess i can say its name, i think it's going to be called "the road to depth." it's about people who've led rich inner lives and a distinction between the resume and the eulogy virtues. there are some things you put on the resume that you bring to the market and some things that get mentioned in your eulogy and

these are non-overlapping characters and qualities. like a lot of people, i think most of my time -- spend most of my time thinking about the resume. it's about how people over time have developed the eulogy virtues. >> charlie: this is part of your pep talk in 2014 which you can get online. >> yeah, hundreds of thousands of people do this. >> charlie: they do. the interesting thing about the subject, it is the notion a long time ago i heard somebody say, imagine your death decades from now, hopefully, and think what you would like for people to say about you, and then get on with living that life. >> yeah. it's easier said than done. so sermons and even books don't get you there. i was writing a column a couple of years ago about how hard it is to communicate through words, and i got a great email from a

guy named dave jolly, a veterinarian in oregon. he had great sentences, one was is what the wise person says is the smallest part of what he gives. the message is the person. he's saying what comes out of our mouths when we speak to the people around us may register but it's the way you act in the smallest of ways, the disciplines, the habits, the considerateness or inconsiderateness, that's what gets communicated and those habits and behaviors were give ton you by somebody in your life and so on and so on back into the dimness of time. so that is worth remembering that we talk about these things that i write for a living but it's the behaviors. >> charlie: behavior trumps words. >> it is what children learn from their parents and when you think about when you go back to people who mattered most to you in your life, you -- or even teachers -- you sort of remember what they said, but you remember the way they are, and those things that are sometimes hard to communicate, i just ran across a sentence, that when i

was young i admired intelligence, as i get older i admire kindness. but the people who go deep inside don't think they're wonderful, they think they're sinners and they're combating the sinfulness. and the people who are oppressive, hard character, have this sense that they've fought themselves and in some small way they've defeated themselves. it's this combat that's what's missing in culture that used to be in culture and now we think we're wonderful inside. it's the little word we associate with desserts is sin, and that word sin once prevalent in the culture is nearly absent from the culture and that's a gigantic historical shift. >> charlie: one of the things i remember you said in a column years ago was the following -- a lot of people always talk about finding themselves, and you thought it was more important to lose yourselves. lose yourself for something that

was grander and broader and more purposeful than yourself. >> this is the biblical logic whether jewish, christian, muslim. the business logic, economic logic is inverse, investment needs to return. risk reaps rewards. biblical logic, greatest failure is humility. to get your desires you have to renounce your desires. the bible is filled with paradoxes and that's a moral, not an economic logic and i think people used to be more aware of that logic. you know, there's a famous book which i highly recommend people to read which millions of people have read called man search for meaning by victor frankel and he goes against the common view to have the commencement address which is today find your passion, look inside, what do i want to do, find your passion. he was a guy, he was in europe and was put in the concentration

camp, and he said, i didn't plan on this. this wasn't the life i would have planned if i was choosing my passion, but this is what life presented for me. he said the crucial question is not what i want from life. it's life is questioning me. what is life questioning me to do. so he's there in the concentration camp and he said life has presented me with a suffering and he said suffering became a problem on which i did not want to turn my back. first he decides to suffer well, the nazis will not take away his dignity, but second he would study suffering, and this is what life thrust upon him. the lesson is don't look inside for what you want to do for your calling, look at the world and what questions is the world thrusting on you? being a columnist was the opportunity that came along and presented its ownself with a set of challenges. if you're in your 20s, it's foolish to think what's my

calling. let life happen to you. >> charlie: leave that to circumstance. the great philosopher bill mero was here and he doesn't have a planned life. life has spoken to him as he moved along. i think he said you have to be alert and responsive. i'm not giving justice to it, but it was you have to make sure that you're responding to the stimuli that might change you. >> yeah. i wouldn't only do that. i think you take the circumstances and i think it's important to serve a cause that's greater than one lifetime. so something you can't complete. there's a jewish phrase, you do not have to complete the task but neither are you free from starting it. think of a cause that will still need to be done after you're dead and that will give you a longlong obedience to somethingd

that transcends life. >> charlie: this came to you because? >> one, a mid life crisis. second, the feeling that this is not being served by the public the way it was in the '50s and '60s. there was just a lot of that out there and, so, to me there's a gap there. third, when you write a column, you've got to shift ground every few years or else you get steal. so i've -- stale. so i've tried to shift ground. >> charlie: in terms of subject matter? >> i think so. staleness is a great threat to people that do. this sometimes when you shift you make a total fool out of yourself but it's important to shift. over the course of my life, my writing career, i've trod the same ground hopefully one level down each book. i wrote about consumption, then baubles in paradise, then pay tim, neuroscience and down to moral philosophy. i don't know what's further

down -- >> charlie: what did you teach at yale? >> i teach two classes, one called grand strategy. these are both great books classes. grand strategy is grand strategic thinkers fro thinkers. about how a nation and individual should think about the biggest issues of its situation. >> charlie: what's the reading list for that? >> we do some bismarck, we just did lincoln, we do some cold war. one of my cold war proffer profs john gattis. paul kennedy that did a book at the logistics of world war ii and charlie hill, those are the three grand figures. >> charlie: i think the most popular class at yale. >> a very good class. i'll say one good thing about it is we spend one term -- it's a two-term class. one term going through the books, and the next the students have to present to us, and we pretend we're like a panel of

the president and his advisers and they present a policy and then we cut them off every sentence and we say, have you really thought about that? that makes no sense. through thought about that study? and we just try to rip them and it's totally fun. you don't want to make them cry but hit them hard. >> charlie: it's totally beneficial. i believe in that confrontation as a way to harden the truth. >> they present to us twice, the first time we really tear them to shreds. they come back five weeks later, so they're so much better. if you look at self-made millionaires. this was a book called the millionaire mind. what was their collegiate gpa? 2.75. they were not good students. but they had a common thing, somebody said they were too stupid to do something and they set out to prove them wrong. that's a common trait of people. >> charlie: and to make your parents proud, especially fathers and sons. >> i came across a study a number of years ago. >> charlie: which said?

which was th the opposite, if you look at the great figures in history, a widely disproportionate number of them had their father die when they were about 12. >> charlie: those that were successful? >> good and evil, stalin, mozart. the theory would be your father, maybe your mother dies when you're 12, you have a sense of complete insecurity so you become ferociously motivated to establish some security for yourself. i told my kids who are all over 12 that i failed them. i'm still here. >> charlie: they would have been stronger. >> absolutely. >> charlie: you've also been writing about politics and putin. >> i still do my day job. >> charlie: so here we are, with the crisis in ukraine. tell me how you see it and what the possibilities are and the options. >> i'm a relative press mist on this subject. what's fascinating to me about this situation is rarely do we have a world crisis so dependent on the mind of one man.

>> charlie: vladimir putin. right. so the interesting thing about him is he is obviously a cold-eyed cynic, but also something of a true believer, and it's possibly both those things. i had written a column earlier about he had sent his regional governors these books, 19t 19th century works of theology, but they were a certain sort of theology of russia's exceptionalism, russia's exceptional roles in history combined with a russian theocratic and belief that god will complete russia by establishing its glory. if you're an ambitious, cold-eyed guy with russian patriotism who wants to change history, this is going to grab you. so i think he is somewhat motivated a bit like that, not

just narrow self-interest and i think the people around him in the country still has that russian theology of their history. so i am not convince they did are a normal country that they will respond to carrots and sticks, i think they see themselves driven by a larger purpose. and i guess i fear they're going to get to a place where they can't turn back. even when the innocentsives are there. >> charlie: would that loss of face -- >> without a sense of loss of identity that this is their mission. >> charlie: yeah. obviously, they're going to do it slowly. they could just contribute to the internal collapse of ukraine and then come in. but they're sort of a relentless pressure, and we face this interesting question, which is also a psychological question, is obviously we're not going to send troops into the ukraine, we're not going to do that, but does it ever become necessary to arm the ukraine, to raise the costs? and if you do arm the

ukrainians, for example, do you deter putin because he'll think, oh, it will cost me something, or do you inflame him? that's a debate that's happened within the administration and they decided it would inflame him. but you're really guessing about his psychology all the way through the process, and a very opaque person sphoo are you suggesting that sanctions and nothing we can do can deter or, in fact, if we know that he knows that we can inflict pain that will make russia a miserable place, he might be. >> a couple of things. i only know what i've read and the translations in the russian press, and i've certainly read enough statements there that, you know, we survived stalingrad, a few sanctions, that's really not who we are. i have friends who are russian who says if you take every russian kid out of english boarding school, that will have

effect on the oligarchs and they'll put pressure on him. >> charlie: will he respond to oligarch pressure? >> he can trade one for the other and i'm not enough of a russia expert to know whether he runs the oligarchs or they run him. >> charlie: is this argument picking on individuals in which they target sanctions? >> that was the goal. again, back to psychology. i think the obama administration has handled this quite well. in general, they have been firm, understood the problem, been inpinged by allies and the law, but they have been as lenient as they can be given the circumstances. but when we started the sanctions, we sort of eased our way into them, relatively light, and you could say the proper psychological approach would be give everything you've got in the first blow, so he's surprised as opposed to con temp chows. clearly, judging from his

statements in the past months, there has been at least a broadcast of contempt that you guys can't touch me and they have a lot more leverage than we do. >> charlie: what does that say about the u.s. in the 21s 21st century? >> i think we have underestimated to the sense there was such a thing as a post-cold war order, that even though the post-cold war didn't go as we wanted. i covered ukraine, africa and the middle east in the years of the '90s and everything seemed to be turning up roses. the peace process, mandela coming out of apartheid and a sense of openness. the national borders were going to matter less, that global communication would matter more, global trade and the sense of we can be free now, and i think what we've learned is a couple of things -- one, establishing political order is more important than being free. it's easy to be free.

establishing just authority and just order is where there is failure. >> charlie: is this part of your passover column? >> yeah, so i wrote a book, a column about exodus. we all go to the movies, charlton heston, the disney movie, oh, we're free, we're free! and that's the movie version. i mentioned that when our founders -- i think it was john adams, benjamin franklin and thomas jefferson, wanted to put moses on the great ceiling. >> charlie: i know that from your column. >> it wasn't because he was a liberator, it's because he took a people off in the wilderness and imposed law on them, and, of course, that's what they were doing with the constitution. we've had liberation around that, but writing the constitution was the act of genius. so this is a perpetual failure of us. >> charlie: the capacity to -- to impose just authority.

and francis has devoted a lot of his career to this problem. so we don't know how -- well, it's hard to. we don't put enough emphasis on imposing law and order on places. and two quick examples. i was in the soviet union as it was collapsing. we sent over economists because we thought, if we just get the right privatization reform, then we'll get the invisible hand working and they'll get order. and, in fact, they needed cops and they needed prosecutors and they needed judges. >> charlie: did they need a mcarthur? >> i don't know if i would go that far. they needed social trust. the more contemporary example is foreign aid. foreign aid, they're compassionate people and want to help and be kind and gentle. but if you actually talk to the people in much to have the

developing world, they've got a problem with hunger, but also they can't go out at night because somebody's going to shoot them in the back of the head. and if you do not establish law and order with honest cops, real prosecutors or any prosecutors and honest judges, doesn't matter how much aid you dump into a place -- >> charlie: i'm also thinking of examples. was there rock after the invasion? >> absolute total. it's a faith in spontaneous order that if you set people free, they will spontaneously form communities and build civil societies. belief in spontaneous order and that is rarely the case. >> charlie: look at libya. exactly. >> charlie: they killed the dictator -- >> you know, the elks, the knights of columbus will come in, form little communities, and then democracy and that and that. but if you don't have social

trust, if you don't have deep institutions that stretch back generations, you can just as easily get chaos, and this is something we talk about in our grand strategy class. a lot of how you see that sort of thing happening depends on your view of human nature. if you have an overly rosy view of human nature that people are naturally cooperative then you won't worry too much about order. but if you have a low view of nature that people are ungrateful, then the problem of establishing order is going to be uppermost on your mind and you can realize if you don't do it, society can get really nasty. >> charlie: where do you think obama would be in all of this in terms of understanding this and the instinct to create order? >> i do think he understands it. he's a student of randall neiber and has a view of how barbarous human beings can become. we don't have an apparatus in government that does this

enough. we have military that could blow people up, blow things up, and foreign aid feeding people, pharmacies that do drugs and great stuff, but we do not have an official order of creating political institution. that was a problem in afghanistan and iraq where this is how you set up municipal authorities, police forces, so we really have struggled with that. we don't have what we came to call nation building. >> charlie: i'm thinking of something out of a significant and serious and hugely disruptive event, world war ii. would you use japan and germany as a model? >> and it was pretty intrusive. >> charlie: yeah. i really hesitate to say this, but i do think it's historically true that the british empire -- believe me, i'm not supporting the british empire -- but i think the places they left, they left behind some tradition.

>> charlie: because it was the traditional rule of law. >> i think they left that behind to some degree with all the flaws. >> charlie: interesting where the chinese are finding that now, the necessity, when they talk about reform, some of things they have to deal with, whether climate or rule of law, because of corruption and confidence of the citizenry and the government and all has to do with survival and political survival. >> right. >> charlie: but clearly there is a reckoning of something like that. >> and i could say even in our own domestic politics, a piece written by beater binart who said if you look at the elections of the last 20 years, americans tend to vote for the candidate who seems most orderly. say in 2008, the financial crisis hits, mccain is suspending his campaign, obama is marching calmly along and seems orderly. >> charlie: that's when the campaign turned. >> you look at the bush-kerry race or 9/11 happened, bush, you may have liked him, not liked

him, may or may not support his policies but he seems to offer some security. so people generally understand that the highs in politics are not as low as the lows are low. by that i mean our political leaders can do a lot more damage than they can good. there's an upside to political, government action but a huge down side if they mess it up. so, therefore, you want somebody who is going to be sort of stable and i do think our voters tend to pick the most stable candidate. >> charlie: when you look at the president, where -- you wrote another column that i remember something about, you know, what the president needs to do now. in part, you seem to be suggesting, look, any chance of legislative action is either gone or will be there's special with what might happen in the mid-term elections that are coming up. so what should he do? >> lay the ground for his successor. it's going to be tough to pass big things. he actually talks this way, too. i can't remember who did it first, but he is using the white

house to create coalition around opportunity. say reducing inequality. there's a great opportunity to take republican's businesses, organizations, create coalitions, meetings, foundations, he did this with his initiatives for black men. you create a groundswell, and maybe there won't be legislation now, but there will be a greater chance for, say, real opportunity of legislation, real inequality battling legislation for the next person. and that will involve some ideas from the left and right, that will emerge from the ground-up. i was really struck by -- this is again my theme for the night -- that we overemphasize politics. we just had the commemoration of the civil rights -- >> charlie: in austin at the j.f.k., in one place. >> and there have been great books. >> charlie: at the l.b.j.

library. >> and when you go back and look at that, johnson did great legislative work, no question. but without the march on wanted the year before, was it possible to pass? i don't think so. so the work, two heros of mine, randolph and rustin, came up with this wacky idea, we should march on washington. at first all the big civil rights organizations said we don't want to do that. we want to work within the system. >system. rustin, a great controversial activist. >> charlie: one of the intellectual forces. >> his is a life, just to detour, a life of great humility and praise. he was being groomed to be the gandgandhi of the passivist movement. he went to jail as an objector to world war ii, an heroic

prisoner, battling segregation in jail, battling racism and getting national attention for the abuse he was taking for really battling segregation. but the early part of his life he was extremely promiscuous and gets caught with sexual acts in prison and later in pasadena has a morals charge and, after that morals charge, in those days it was illegal to be gay in public, i guess, he could never be the leader. he had to be behind the scenes. so he submerges his ego, serves randolph, serves martin luther king and, behind the scenes, does so much good for the country even though he himself can no longer be the star, and that's an active, heroic service, you have to put your ego on hold given your past. >> you also wrote in which you said this is global affairs with the head chopped off, political leaders are not at the forefront of history, real power is in the swarm. >> i think we've seen that.

well, putin is the example. >> charlie: right. is the exception, i mean to say. when i was covering the soviet union collapse, we had leaders who were pretty dominant figures in the world, whether margaret thatcher, mandela, reagan, you would say they were large fecial. large -- large figures. now it's the village square. so the mainly -- major confrontation is the autocrat versus the village square. we're seeing that in ukraine and the arab strain, libya, little bits and pieces in china, and those two forces, the square and the autocrat are one of the defining features of our day. so i was beginning to say, when i talked about how order is essential for our era, that's the crucial confrontation in giving the square the power to

organize is crucial. you look -- >> charlie: but it also makes order more difficult. >> right, but you have to teach people to accept authority and hierarchy. you look at the occupy wall street movement and it was not a lasting movement because they wouldn't accept authority and create -- >> charlie: within ranks. yes, and everything is a flash in the pan if you don't have authority and institutional structures. >> charlie: great to have you, david brooks, "new york times" columnist. can't wait for the book. when will it be out? >> a year. >> charlie: back in a moment. stay with us. >> charlie: ben horowitz, co-founder of andreessen horowitz, a mentor to the new generation of tech

entrepreneurs. mark zuckerberg calls him one of the most important leaders not just in silicon valley but the global knowledge economy. his insights on founding, managing and investing in tech companies are compiled in his new book, it is called "the hard thing about hard things: building a business when there are no easy answers." i am pleased to have ben horowitz at this table for the first time. how could that be? >> thank you so much. i appreciate very much being here. >> charlie: marc andreessen has been here many times on the show. >> and he's always good. >> charlie: so you once described him, i think, as the beyonce and you the kellie roland. >> charlie: tell me about your background, what brought you to silicon valley? >> an interesting thing. i grew up in berkeley, my grandparents were communists, my father is a fairly colorful

figure, a political rabbl rebele rouser. my mother was a nurse. it was a defense transition for me to go here. i learned about computers when i was a kid and i just thought they were going to be everything and changed the world. if you're into computers, you end up in silicon valley. >> charlie: you just loved them at first knowledge? >> yeah, well, i loved, you know, working with them. i was always the kid who you buy me an alarm clock and i take it apart to figure out how it works, so i was kind of an engineer at heart. and when i understood the math on how fast things were growing, when i first kind of understood moore's law in the eighth grade, i never forget the feeling, like the world is going to be completely different. >> charlie: you got to silicon valley, what did you do? >> i joined a company called silicon graphics, which was, for

those in silicon valley, was the google of its day, where every engineer wanted to work. they had the greatest engineers, the best environment for engineers and they made these computers that were -- >> charlie: with jim clark. yeah, jim clark. >> charlie: oh, yeah. and they were the computers that made the movie the terminator. what an amazing thing. it was just kind of love at first sight. as soon as i got there, i was, like, this is so much better than the other jobs i had which were, like, being a bellhop and waiter. i couldn't believe it was called work. >> charlie: did you make your way to netscape? >> yeah, over the years, i made my way to netscape and actually just got myself an interview there. >> charlie: with marc? i did interview with marc, my partner, and he was a kid. he must have been 23 years old when he interviewed me. >> charlie: it wasn't a traditional interview, was it? >> no, no. it was mostly him trying to

learn everything i knew. it was just, like, what do you know about everything? right. why did you go into venture capital with him? >> so when we were entrepreneurs -- >> charlie: because i announced it on this program, i think. >> that's right. you were the very first thing that we did. >> charlie: yeah. when we were entrepreneurs, we always felt that the best companies, including our own, were the ones run by the inventer, the ones run by the people who started the company, and venture capital, at the time, was set up for kind of the opposite. like the inventer would invent things and get to certain point and bring in the adults, the guy who built the business. >> charlie: you thought they were better at the founder because the founder was a technologist generally. >> because we're in a technology business. you're in the business of doing things in a better way, kind of a better way of doing things. so, at some point, somebody is going to catch the invention that you've made and you're going to have to invent

something again. and if the inventors aren't running the company, if the innovator isn't running the business, that's the end of the business, and what we saw is the great, great technology companies, places like hewlett packard, microsoft, oracle or google were all run by the founders because they could keep hitting new product cycles, which the ones run by professionals end at the product cycle. >> charlie: it's often the case venture capital firms force founders because they're providing money and bringing in somebody who's a dazzling business person. >> yes, yes. and, you know, startups can drive venture capitalists crazy, if you come from a financial background used to getting straight as and you look at a company and it's oh, my gosh, it's chaos in there, and freaks them out and has them bring in a professional, but that's strategically dangerous. >> charlie: soon after aol

acquired netscape, did you and mark and a couple of others founded it elsewhere. >> at that time it was loud cloud, kind of the original cloud computing company. if you go back in the literature, cloud wasn't used till loud cloud. we were the ones who put it on computers. didn't work out that well. we were about eight years too early. >> charlie: interesting aspect of technology to me, sometimes you can be too early. >> oh, absolutely. in fact, that's the more common mistake than being too late is too early. >> charlie: what does it mean to be too early? >> well, a lot of the internet bubble is too early. a lot of the ideas from 1999 that everybody laughs at and made the funny movies about and .bomb and all that, but the cost structure was wrong. it was very expensive. it was proprietary hardware and there was no cloud really

available. and the audience was tiny. the internet at the peek of netscape, there were about 55 million people on the internet and half of those on dialup, so that's not a big market. but that same idea, if there were 2.5 billion people on the internet, might work, so that's really what it means to be too early. the seeds are not sewn for you to grow your wonderful garden. >> charlie: and microsoft had some products that were too early, too, as big as they were. >> oh, yeah. >> charlie: th as technology oriented as they were. >> their technology called courier was a tablet, quite a brilliant design, and the guys who built it have a new company called 53 which is building quite an amazing product, probably the best product for a design for tablets that's in the world right now, and they were the microsoft guys who built the tablet long before apple and arguably with a better design, but it was too early, microsoft,

for a lot of reasons, canceled it and, you know, here we are. >> charlie: what are the reasons? >> can you have multiple operating systems, the cost, is it going to work in the market. there's always reason. >> charlie: why did you write this building a business when there are no easy answers? two kids, 20 years old and just sold their business to facebook for $2 billion, let's go to silicon valley! >> yeah, let's go, right. >> charlie: it's that easy. turns out those guys -- well, you've interviewed a lot of them so you realize how unusual they are who build these things. >> charlie: what's unusual about them? what do they have? you're an advisor to them. >> well, one is an unbelievable original view of the world. they believe something, peter

says what do you believe that nobody else does. >> charlie: great saying. it's a great interview question because even if you know it's coming, it's very difficult to answer. it's okay, if nobody else believes it, my interviewer doesn't believe it, what can i say? i can say marc answering that question. maybe you know something he doesn't know and now he'll know it. >> right. so you need someone with that original thinking and then the other side of that which is the courage to kind of both say it and then build a company around it and that's a tremendous amount of courage and, really, the underpinning of the leadership that you need to build a company. so aristotle said courage is the first virtue and the reason is you need it to activate any of the others. you may have integrity until, like, you're going to lose your job over your integrity, then you may lose your courage and your integrity. >> charlie: right. so courage is fundamental and

what's required to build a company and is very rare to have that kind of brilliance and that kind of courage in the same person to build one of these things. >> charlie: what's the most common mistake they make? >> well, there are so many mistakes. you know, i think one -- >> charlie: yes, i know. i think probably the most common mistake is trying to be consistent. what happens is you get an idea, sell people on the idea, investors, employees, and you get into it and the idea turns out to be wrong, but you want to be consistent and you hold on to it longer than you should. it's better to be right than consistent and that's hard to learn, particularly early in life. >> charlie: what's been the reason for your success of your venture capital firm with marc? why is his name first? >> well, he's beyonce

(laughter) it was actually an argument where he wanted my name first and i wanted his name first. >> charlie: really? yeah. >> charlie: why did he want your name first? >> one of his points is it has a better ring to it. and then he wanted to make it clear that it was the partnership and not kind of his thing. i argued the other way because, for me, we needed people to know who we were, which is the whole reason we used our own brands on it. his brand was just so much better than mine that having him first would make it so everybody would know him, even though nobody knew me. >> charlie: you invested early in facebook. did you know something we didn't know? >> well, you know, facebook, i think that, for me, not only early, but -- >> charlie: marc's on the board of facebook. >> yeah, marc's on the board and we had known mark for many

years. >> charlie: mark zuckerberg. mark zuckerberg. and the original investment and how long, you know, we've held the stock and kind of not worrying at all about the i.p.o. pricing and so forth is all about mark zuckerberg, who at least in my view is definitely one of the greatest tech c.e.o.s there is. very, very, very smart, very courageous, done a great job of managing the company. so a lot of things people have identified is, oh, like facebook has this problem, you know, teenagers are drifting, or facebook has that problem, they're not on mobile yet. all true, but if mark zuckerberg is running the company, don't worry about it, he will solve it. this is not a static company. >> charlie: or like he doesn't know that. >> yeah, he knows it and is going to do something about it. >> charlie: he's known for a long time he had to figure out a way to get advertising on

mobile. >> he doesn't have to make nuclear fusion work, just advertising on mobile (laughter) >> charlie: how about skype, what did you see in skype? >> skype was a different kind of thing which, at that time, nobody wanted to buy skype from ebay, even though the skype phenomenon was impressive, but there was an intellectual property issue where ebay didn't own all the intellectual property to have the company. in fact, they didn't own the most important piece of intellectual property. so when people possess the investment, they said, well, there's a chance that the founders will sue the company, shut down the service and then your $2.5 billion will be nothing. so you can't make a $2.5 billion purchase if it's going to be worth nothing. we looked at it differently. we looked at it from the founder point of view which is the last thing founders will want to do is shut down skype.

so even though they might be able to do it legally, they'll never do it. so it's just a matter of what is the price at which they'll sell us back the intellectual property and that turned out to be reasonable, which you would expect, and that's how we were able to do that investment. >> charlie: did you make the investment in oculus before facebook? >> yes. >> charlie: how much before? four months. it was one to have the best investments -- it was one of the best investments we've ever made, very good return. >> charlie: marc is on the board of facebook? >> well, he recused himself from decision making. nobody tells zuckerberg what to do, even if he had wanted to. >> charlie: oh, mark zuckerberg has that kind of personality, too. he knows what's best for facebook? >> yes. people have been trying to tell -- i think he even said people have been trying to tell me i have been wrong all my life and, so far, i haven't been wrong. >> charlie: what's happening to the stock prices of tech

companies? >> they go up and down. they go up really fast and go down and bounce a little -- >> charlie: seriously, tweets, mark raised questions about high evaluations. >> well, you know, on private companies is a little different than public companies. >> charlie: no, i understand. there has been kind of a shift with traditionally public market investors getting into investing in private companies and that's, you know, partly because the rules of public companies have changed enough that private companies stay private much longer. so things that used to be public investments are usually private investments in terms of the stage of company, so anytime you have a lot of capital entering a certain stage of a market, you know, prices go up. it's kind of the nature of it. that's definitely happening in sort of the later rounds of venture capital. >> charlie: here's something i do not understand. i have no idea about whether

it's going to be successful or not. you know what i'm talking about, bitcoin. >> we're in silicon valley where many of us are super excited about it. >> charlie: really? yes. >> charlie: you could start by tell us who invented bitcoin (laughter) >> whoever did should get the kind of noble prize in mathematics and computer science. it's an amazing computer science breakthrough in that it solves a 30-year-old problem and enables you to transfer, not copy, but transfer a piece of digital property from one person to another, and that's never been possible before. >> charlie: what do you mean by digital property? >> money, an mp3, a contract, digital car keys, anything where i can have something and then i can give it to you and i no longer have it. that's just not been possible. so when you think about, well, what is that change?

well, it kind of changes everything. you you have money on the internet. one problem for media companies has been that, you know, there's no easy way to kind of buy anything. so if you don't have something that people really want, then you have to rely on advertising dollars, which you need tremendous scale for because people don't want to put their credit card on the internet because when they do someone will take it and bill them every month and you have to call them tuesday at 3:00 a.m. to get it back. so it solves that problem. i can give you a dollar or a penny and i can read your article or a nickel and, like, we're done. you don't have my address or your phone number, you just have my nickel. i can load my browser and read stuff. >> charlie: spam. everybody gets spammed all the time. easy with bitcoin, charge

everyone 100th of a cent for spam, done. so you need a stock exchange and a third party to do a lot of things to act as a trusted service. but bitcoin because you can transfer property, you can trade stocks like the new york stock exchange. >> charlie: so you think bitcoin is stunning or whatever word you use. >> the internet of money. >> charlie: and what are those people who talk about most of the people are engaged in bad conduct, criminal transactions. >> well, i think that's a little bit of a misunderstanding of what has gone on. in fact, you notice that a lot of guys have gotten arrested who used it for crime because it's actually very traceable because what bi bitcoin is a ledger. every transaction gets recorded in a ledger.

it's pseudoanonymous. i can send you an email from "fred flintstone" but it comes from me. but if somebody wanted to figure out who sent it, they could. that's how bitcoin is as well. so it's not really an anonymous guarantee, it's a pseudono, pse, ma'am now guarantee -- pseudoaanonymous guarantee. >> charlie: the internet is here and will exponentially grow. >> it's really interesting and we're at the very early days of it. you know, what happens if you can put anything on the network. i think probably the most interesting applications are things that people haven't thought about. i mean, it's probably not programming your house. >> charlie: exactly. we get pitches on that.

oh, when you walk in the door, the lights turn on. what if my wife's asleep on the couch? >> charlie: what do you mean by the internet of things? >> well, it's much more anything that you have can be connected to the network and, so, at that point, you can -- there are a lot of services and other things, like one example is just like security, so if you have, you know, security cameras now, then you've got to kind of -- you know, they sit somewhere, like maybe you can record them to a big car driveway you never look at and so forth, but with the internet of things, they can be connected to other things, like, you know they can be connected to the cloud and people can analyze the data and figure out interesting steps. >> charlie: it's easier to teach an invariety to be a c.e.o. than a teach a c.e.o. to be an invariety. >> yes, i really believe that.

the c.e.o. skill set is a mystic skill set. one of the things i try to do in the book is demystify it. why do you have an organizational design? why do you put a process in place? why do you have a meeting? these kinds of things are important. >> charlie: your single biggest personal improvement as c.e.o. occurred on the day when you stopped being positive. >> yes. that's an interesting story. it actually was a conversation i was having with my brother-in-law who worked for the phone company climbing the telephone pole and installing people's phones and so forth. i knew one of the executives at the company he worked at and i asked him, do you know chuck? and he said, oh, yeah, chuck comes along once in a while and blows a little sunshine up my butt. you know, it took me aback. i was, like, wow. so i wonder if people are saying that about me? they probably are.

and it kind of just got me to understand that, you know, as a leader, honesty is one of the most powerful things because honesty is the basis for high-quality communication and, in companies, communication is really the most fundamental and important thing. >> charlie: coming to the end here. this thing about you and rap music. >> that thing (laughter) >> charlie: you look different than a normal rapper i know. >> yeah, that's true. well, life has taken me down a different path since i started rap. >> charlie: it's an interesting story how you started. it had to do with a friend. >> yeah, was shot. >> charlie: yeah, was shot and blind. >> blind. >> charlie: tell the story because it was a heart warming story. >> it was kind of out of desperation. a friend i grew up with who was more like a brother to me, he got shot and became blind and incredibly depressed as you would expect as a kid who got

shot in the face, and i was trying to search for ways to cheer him up and, at the same time, you know, this whole, like, thing, this rap music thing was erupting in new york in 1986, and when i listened to it, i was, like, wow, these guys have nothing at all, but they're very proud and positive about it and just talking about what they're going to do despite the fact they come from these areas and have all these problems. and i thought, you know, first, i is sent him the music. that's the first thing i did. but then i thought, you know, we could be a rap band and rap about being blind and, like, that would be just so cool, it would be the best, and we called it the blind and deaf crew. and it's kind of, you know, the power of the art form and the power of the music has been with me since that time. >> charlie: but he got into it and it changed his attitude. >> oh, yeah. it made him a whole new person. you know, in my view, it saved him and, you know, he's doing great now.

>> charlie: helped him with the depression. >> right. >> charlie: you wrote this book for young entrepreneurs so they would know how to be a good c.e.o. and have a realitiesest view. great to see you. >> great to see you. >> charlie: "the hard thing about hard things." thank you for joining us. see you next time.

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