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The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers
A lot of people talk about how great it is to start a business, but only Ben Horowitz is brutally honest about how hard it is to run one.
In The Hard Thing About Hard Things, Ben Horowitz, cofounder of Andreessen Horowitz and one of Silicon Valley’s most respected and experienced entrepreneurs, draws on his own story of the founding, running, selling, buying, managing, and investing in technology companies to offer essential advice and practical wisdom for navigating the toughest problems business schools don’t cover. GET FREE AUDIOBOOK
His blog has garnered a devoted following of millions of readers who have come to rely on him to help them run their businesses. A lifelong rap fan, Horowitz amplifies business lessons with lyrics from his favourite songs and tells it straight about everything from firing friends to poaching competitors, from cultivating and sustaining a CEO mentality to knowing the right time to cash in.
His advice is grounded in anecdotes from his own hard-earned rise—from cofounding the early cloud service provider Loudcloud to building the phenomenally successful Andreessen Horowitz venture capital firm, both with fellow tech superstar Marc Andreessen (inventor of Mosaic, the Internet’s first popular Web browser). This is no polished victory lap; he analyzes issues with no easy answers through his trials, including
demoting (or firing) a loyal friend;
whether you should incorporate titles and promotions, and how to handle them;
if it’s OK to hire people from your friend’s company;
how to manage your own psychology, while the whole company is relying on you;
what to do when smart people are bad employees;
why Andreessen Horowitz prefers founder CEOs, and how to become one;
whether you should sell your company, and how to do it.
Filled with Horowitz’s trademark humor and straight talk, and drawing from his personal and often humbling experiences, The Hard Thing About Hard Things is invaluable for veteran entrepreneurs as well as those aspiring to their own new ventures.
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Summary of The Hard Thing About Hard Things Pdf
Most business books have the flaw of presenting a solution for issues that, in the end, have no formula. You’re reading stuff that has no practical application and isn’t actually teaching you anything. There is no ever-changing formula for coping with complexity. In The Hard Thing About Hard Things, Ben Horowitz argues, “There is no prescription for guiding a group of people out of difficulties.” One of the greatest business books I’ve read in a long time is this one.
Setting a large, hairy, ambitious aim isn’t the difficult part. When you miss a major goal, it’s difficult to lay people off. The difficult part isn’t finding wonderful individuals. The difficult part comes when those “wonderful individuals” acquire a feeling of entitlement and begin to expect unreasonable things. The difficult part isn’t creating an organizational chart. Getting individuals to communicate inside the organization you just created is difficult. The difficult part is not dreaming big. The difficult part is waking up in a cold sweat in the middle of the night when your fantasy develops into a nightmare.
Most management books concentrate on how to avoid making mistakes, or at the very least how to cover your arse if you do. Ben, on the other hand, offers advice on what to do if you make a mistake. You will make a mistake.
The lack of a formula does not imply that things are bleak. We can benefit from advice and expertise. But that’s where Ben’s book differs from the rest: he shows you what it’s like to make difficult choices without giving you a three-step technique. Horowitz takes you through his thoughts, discussions, ideas, blunders, regrets, and challenges. We learn from that adventure. “While the circumstances may change, the fundamental patterns and teachings remain the same.”
Fear may be beneficial.
Here’s an insightful observation about fear that is characteristic of the book and telling.
It showed me that being afraid did not imply that I was weak. What I did mattered, and whether I was a hero or a coward depended on it. I’ve frequently reflected on that day, recognizing that if I’d followed Roger’s advice, I would never have met my closest friend. That event also taught me not to assess things just on the basis of their appearance. You don’t know anything unless you put in the effort to learn about someone or something. There are no shortcuts to knowledge, particularly personal experience-based understanding. It’s possible that following common knowledge and taking shortcuts is worse than knowing nothing at all.
Seeing the world via many perspectives.
Seeing the world through so many various lenses helped me distinguish between facts and perceptions. This aptitude would come in handy later in my career as an entrepreneur and CEO. I learnt to search for alternate narratives and explanations originating from fundamentally different viewpoints to shape my attitude in especially severe scenarios when the “facts” appeared to imply a specific end. The mere availability of a different, believable option is sometimes enough to keep a frightened workforce hopeful.
We just cannot do everything.
“Son, do you know what’s cheap?” my father said as he turned to face me.
I said, “No, what?” since I had no understanding what he was talking about.
“Flowers. Flowers are really inexpensive. “However, do you know what’s costly?” He inquired.
“No, what?” I answered once again. “Divorce,” he said.
That joke, which wasn’t really a joke, made me realize I was out of time. I hadn’t made any important decisions up to that time. I had the impression that I had infinite bandwidth and could accomplish all I wanted in life at the same time. But his joke made it plain that if I kept going down this path, I may lose my family. I’d fail at the most essential thing if I tried everything. It was the first time I had to push myself to look at the world through eyes other than my own. I saw myself pursuing my job, all of my passions, and starting a family. More importantly, I was constantly concerned with myself. That type of thinking may get you into difficulty whether you’re part of a family or a group, and I was in a lot of trouble. My thoughts convinced me that I was a wonderful person who was not selfish, but my actions proved otherwise.
The most appealing aspect about startups.
“Do you know what the nicest thing about startups is?” says Marc Andreessen.
“What?” says Ben.
“You only ever feel two emotions: pleasure and dread,” Marc says. And I find that not getting enough sleep helps them both.”
Friendships that you need in your life.
You need two types of friends in your life, regardless of who you are. The first kind is someone you can contact when something nice occurs and you need someone to share your joy. Not a phony enthusiasm cloaked in jealousy, but genuine delight. You’ll need someone who is more ecstatic for you than he would be if it occurred to him. When things go tragically wrong—when your life is on the line and you only have one phone call—the second sort of buddy is someone you can contact. Who will it be this time?
Doing difficult tasks rather than enjoyable activities.
Ben had several mentors, one of which being Bill Campbell. It is critical to be present and to let others know where you stand. General Stan McChrystal, a four-star general, could not have been the leader he was without sleeping under the same circumstances with the same danger. This is a very crucial leadership lesson that most people overlook.
We reached a deal with EDS after seven weeks. They would pay $ 63.5 million in cash for Loudcloud and absorb all of its obligations and cash burn. We’d keep the Opsware intellectual property and turn into a software firm. For $ 20 million per year, EDS would license our software to run both Loudcloud and the bigger EDS. It seemed like a good bargain for both EDS and us. It was certainly preferable than bankruptcy. I felt like I’d lost 150 pounds. For the first time in eighteen months, I was able to take a deep breath. It wouldn’t be simple, however. Loudcloud was sold to EDS for around $150 million, and another 140 people were let go.
I contacted Bill Campbell to inform him that the contract had been signed and that we would be announcing it in New York on Monday. “Too bad you can’t make the announcement in New York; you’ll have to send Marc,” he said. “What do you mean?” I asked. “You need to remain at home and make sure everyone understands where they stand,” he stated. You can’t put it off another day. You just cannot wait another second. They need to know whether they’re working for you, EDS, or if they’re searching for jobs.” Damn. He was correct. I sent Marc to New York and prepared to inform everyone of the situation. Bill’s modest bit of advise proved to be the rock upon which we rebuilt the firm. The ones who remained would never have trusted me again if we hadn’t handled the individuals who were going respectfully. Only a CEO who has gone through some dreadful, dreadful, and catastrophic situations would be qualified to provide such advise at the moment.
The innovator’s task is to figure out what the consumer wants. And invention need a mix of abilities.
That, it turns out, is precisely what product strategy is all about—finding the appropriate product is the work of the inventor, not the consumer. The client can only guess what she wants based on her previous experience with the goods. The inventor may consider all possibilities, yet she often has to go against what she knows to be true. As a consequence, creativity need a blend of expertise, talent, and bravery.
I’ve already mentioned how crucial coding will be in the future. Horowitz has a simple lesson for programmers and administrators alike: “until the first line of code was typed, all choices were objective.” All subsequent choices were emotional.”
Let let all hang out.
The truth is the first thing to go when you start losing, and everyone can see it.
One of the most significant management principles a founder/CEO may learn is completely counterintuitive. My single most significant personal development as CEO happened when I stopped being too optimistic.
I felt the strain as a young CEO—the pressure of having workers rely on me, the pressure of not understanding what I was doing, the pressure of being accountable for tens of millions of dollars in other people’s money. As a result of the strain, I took defeats very seriously. It weighed hard on me if we failed to gain a client, missed a deadline, or delivered a product that wasn’t quite perfect. I reasoned that shifting the load to my staff would exacerbate the situation. Instead, I decided to display a cheerful, upbeat attitude and inspire the unburdened soldiers to victory. I was entirely mistaken.
During a talk with Cartheu, my brother-in-law, I realized my mistake. Cartheu was a telephone lineman with AT&T at the time (he is one of those guys who climb the poles). I’d just met a top AT&T executive, whom I’ll call Fred, and I was eager to see whether Cartheu knew him. “I know Fred,” Cartheu admitted. He comes over once per quarter or so to put some sunlight in my arse.” At that moment, I realized I’d been ruining my firm by being too optimistic.
Why should you be so forthright?
Several reasons: It develops a good culture and guarantees that everyone is working from the same page with the same information; it builds trust; and it ensures that everyone is working from the same page with the same information. As a leader, the pressure to remain optimistic is enormous. You want to inspire the people who look up to you. But the most effective way to do it is to be honest with them. If you’re attempting to create a culture where failure is OK, but you don’t stand up there and speak about one of your huge personal failures, the culture won’t change.
About the Author
Ben Horowitz is the cofounder and general partner of Andreessen Horowitz, a Silicon Valley–based venture capital firm that invests in entrepreneurs building the next generation of leading technology companies. The firm’s investments include Airbnb, GitHub, Facebook, Pinterest, and Twitter. Previously he was cofounder and CEO of Opsware, formerly Loudcloud, which was acquired by Hewlett-Packard for $1.6 billion in 2007.
Horowitz writes about his experiences and insights from his career as a computer science student, software engineer, cofounder, CEO, and investor in a blog that is read by nearly ten million people. He has also been featured in the Wall Street Journal, the New York Times, the New Yorker, Fortune, the Economist, and Bloomberg Businessweek, among others. Horowitz lives in the San Francisco Bay Area with his wife, Felicia.
Originally published: 4 March 2014