1: The summer of 1995 was a dizzying time for the people working at Netscape.
In August of that year, the company went public.
“The Netscape initial public offering (IPO) was both spectacular and historic,” Ben Horowitz writes in The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers.
“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.”
Just 18 months earlier, the company didn’t exist. Now it was worth $3 billion.
The New York Times described the Netscape IPO as “world-shaking.”
Signs of trouble, however, were on the horizon.
The same month that Netscape went public, Microsoft announced it would include its Internet browser, Internet Explorer, in its upcoming breakthrough operating system release, Windows 95.
For free.
“This posed a huge problem to Netscape,” Ben writes, “because nearly all of our revenue came from browser sales.”
Netscape had to respond. Fast.
Their strategy would be to make money on their Web servers. Which Ben was in charge of.
The challenges were immense: “We got our hands on an early release of Microsoft’s upcoming Web server Internet Information Server (IIS),” he recalls.
“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. I figured that we had about five months before Microsoft released IIS to solve the problem or else we would be toast,” he remembers.
“In the ‘old economy,’ product cycles typically took eighteen months to complete, so this was as exceptionally short time frame even in the ‘new economy.'”
Ben went to see his boss, Mike Homer.
“With the possible exception of Marc [Andreessen, Netscape cofounder], Mike was the most significant creative force behind Netscape,” Ben writes.
“More important, the worse a situation became, the stronger Mike would get,” he notes. “During particularly brutal competitive attacks, most executives would run from the press. Mike, on the other hand, was always front and center.
“When Microsoft unveiled its famous ’embrace and extend’ strategy—a dramatic pivot to attack Netscape,” Ben writes, “Mike took every phone call, sometimes even talking to two reporters at once with a phone in each hand. He was the ultimate warrior.”
The two of them spent the following months creating an overarching response to Microsoft’s threat.
“If they were going to give our products away,” he observes, “then we were going to offer a dirt-cheap, open alternative to the highly expensive and proprietary Microsoft BackOffice product line.”
To do so, they acquired two companies to provide a competitive option to Microsoft Exchange.
Then, they “cut a landmark deal with the database company Informix to provide us unlimited relational database access through the Web for $50 a copy,” Ben explains, “which was literally hundreds of times less than Microsoft charged.”
They constructed the package, named it Netscape SuiteSpot, and prepared to launch it on March 5, 1996, in New York.
2: “Then, just two weeks before the launch, Marc, without telling Mike or me, revealed the entire strategy to the publication Computer Reseller News,” Ben writes.
“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. — Ben
“Within fifteen 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 you do the f***ing interview yourself.
F*** you,
Marc
Ouch.
3: Ben went home and explained the situation to his wife.
“I was very worried,” he recalls. “I was twenty-nine years old, had a wife and three children, and needed my job.
Her response? “You need to start looking for a job right away.”
But our story doesn’t end here.
“In the end, I didn’t get fired,” Ben writes, “and over the next two years, SuiteSpot grew from nothing to a $400 million a year business.”
What’s even more surprising? Ben and Marc became friends and later business partners after selling Netscape to AOL for $4.2 billion.
Thirty years later, they still lead the wildly successful Private Equity firm Andreessen Horowitz.
“Marc. . . upsets me almost every day by finding something wrong in my thinking, and I do the same for him. It works,” Ben writes.
More tomorrow.
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Reflection: When tension and harsh feedback show up in my work, do I shut down and get defensive, or lean in and look for the opportunity to build something stronger together?
Action: Identify one current conflict or piece of tough feedback in my world and take a concrete step this week to engage it constructively—clarifying the stakes, seeking shared understanding, and focusing on a path forward rather than on blame.
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