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The Hard Thing About Hard Things by Ben Horowitz

The Hard Thing About Hard Things by Ben Horowitz

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 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.

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 favorite 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.

Recommended Books

Book Summary by Sam Harris

The Hard Thing About Hard Things has been the most recommended book to me from numerous conversations with great entrepreneurs on my podcast Growth Mindset Podcast. It’s reached the point now that if I ask for a book recommendation for business advice, I add ‘other than the obvious Hard Thing About Things’.

Why is it so good? Most business books focus on how to do things correctly, whilst Ben acknowledges upfront there is no such thing as a perfect business and however much planning you make, screw-ups will inevitably happen. He addresses all the major screw-ups that have occurred during his time leading billion $ corporations and how his team made decisions to turn things around or screw things up further.

He outlines the hardest decisions he had to make and the awful situations you find yourself in. They say entrepreneurship is the about crazy highs and terrible lows and this book paints the full ugly picture of what life is like in the daunting face of disaster. A true understanding of what you can face as an entrepreneur is invaluable which I believe is what makes this book a favourite.

 

CEO lessons

Peacetime vs Wartime CEO’s

Peacetime CEO’s — thinks long term and is a reasonable human being

examples: strategic culture builders, follow protocols, sets goals, makes back up plans and minimizes conflict

Wartime CEO — obsesses about the immediate need and couldn’t give a damn about anyone

Examples: let the situation define the culture, violates all protocol, doesn’t have time read books about goals, has no backup plan and conflicts with anyone that gets in the way of the plan.

No recipes to success or Silver bullets to solve problems.

There is no recipe to run a company, motivate a team when things fall apart. Just try the best ideas you can and don’t give up

Keep a clear head — Embrace the struggle

‘Life is struggle’ — In the moments you feel like hiding and dying, that is when your role is most important and you can make the biggest difference.

If you statistically have 1 in 10,000 chance of success your task is the same, make and execute a plan.

The way of the warrior: Keep death in mind at all times. Live each day like it may be your last and conduct yourself properly in all your actions.

Tell things like it is

You may experience overwhelming pressure to be overly positive. Stand up to the pressures, face your fear and say things as they are. Breed a culture of trust and get people working on problems instead of covering them.

A healthy company has a culture of sharing bad news and freely discusses it’s problems and solves them.

Rephrase the worst case scenario

Just picturing the worst possible situation isn’t that helpful. Lay-off everyone, waste your shareholders’ money, lose your house (and your parents if they invested), disappoint customers and ruin your reputation….

Instead, ask ‘What would you do if we went bankrupt’. It can be a source of good ideas and potential pivots. In Ben’s case, the answer was to launch a new software company using an internal product they’d built. Then ask yourself if you can do that without going bankrupt?

Large Organisations are slowed down by single people

Whenever a large organisation tries to do anything, it always comes down to a single person who can delay the entire project.

A manager may think they don’t have the authority to make a decision or purchase, an engineer might get stuck. Minor hesitations can cause fatal delays. Make sure you remove all roadblocks and if anyone gets stuck on anything it must be diagnosed within 24 hours.

Take care of People, Products and Profits (in that order)

Crucially important. If you don’t put people first the other two won’t matter.

Enjoying the work

Making it a pleasure to work for the company means people feel they can be effective and efficient in their work and make a difference. Being a good company is non-essential when things are going well. But things always go wrong. And being a good company can be the difference between life and death.

Face the hard decisions head on

Make the hard decisions quickly and don’t put them off. Good CEO’s take the hard answer to organisational issues upfront before it accrues debt. e.g. Given the choice of cutting a popular project today that isn’t in the long-term plan or keeping it for morale reasons, they cut it today.

Hiring

There is no perfect human or employee, hire for lack of weakness and a willingness to tackle their weaknesses, rather than hiring for strengths alone.

When things go well, there are many reasons to stay at a company —

  1. Your career grows as the company grows, attractive jobs naturally open up
  2. You’ll be impressing your friends and family. Your friends and family will think you a genius for choosing to work at the “it” company
  3. Your résumé gets stronger by working at a blue-chip company in its heyday.
  4. Oh, and you are getting rich.

However, when things go poorly, all those reasons evaporate and become reasons to leave. In fact, the only thing that keeps an employee at a company when things go horribly wrong — other than needing a job — is that she likes her job, despite the hardships

So on that note the book advises when expanding your team, consider:

  1. Hire for strength rather than lack of weakness
  2. Have clear expectations of who you are hiring with a realization that there is something seriously wrong with every employee in your company (including you). Nobody is perfect.
  3. Involve multiple people in brainstorming but make the final decision solo. Consensus-based decisions tend to sway the process away from strength and towards weakness.

Minimise Politics

As companies scale important work can go unnoticed, this must not be tolerated. Credit for hard work can be taken by managers and politicians and bureaucratic processes can choke creativity and drain the joy from the workplace.

Importantly principles for managing:

  1. Hire for the right kind of ambition. they must believe in the company and want it to be successful (and thus themselves as a by-product) and not for themselves to be a success first
  2. Maintain strict policies and processes on organizational design, performance evaluations, promotions, and compensation. Importantly — Don’t overcompensate an employee because they get a better job offer.
  3. Promote experienced employees by measuring results against objectives, management skills, innovation, and their ability to work well with others.
  4. Keep up regular performance management and employee feedback with a good system of one on one meetings between the employees and managers. These are an essential platform for employees to discuss their unheard brilliant ideas, pressing issues, and chronic frustrations.

Peter Principle

In a Hierarchy, members are promoted whilst they work competently. Ultimately they get promoted to a position they are no longer competent int (their ‘level of incompetence’). They are unable to earn further promotion and stay in a role they are not good at.

Don’t fall into the ‘Peter Principle’! (Hopefully following the advice above and being aware of the principle will help avoid this…)

Summary

The book follows his story as it happened and leaves you with a real sense of how to approach problems. They say your success is defined by how many hard conversations you’re willing to have, and this book gives you the mindfulness to recognise the situations you need to step up and some of the tools to do it.

Just reading bullet points from a summary isn’t the same as reading the whole story and if you want to actually have the lessons written above ingrained into your approach, then it is worth your time to read it. Enjoy the book and embrace the struggle to succeed.

Book Review by Leena Rao

Imagine your business is down to its last stretch of runway and your investors refuse to put more cash into it. Your friends and your most trusted advisers tell you that it’s probably time to throw in the towel, but as a last-ditch effort to find some capital, you decide to take the company public.

You are half-certain that the company will go completely bankrupt during the actual roadshow, making the entire process superfluous. You put on a brave face for each banker you meet, and keep an eye on your phone for the call that you’re hoping won’t come. And then it does.

But the call isn’t about your company, it’s about your family — the only thing in the world that’s more important than your company. Your wife has had an allergic reaction to her medicine and stopped breathing. In that moment, you feel a fear that you’ve never felt before. Everything that matters to you is slipping away. This is Ben Horowitz’s story, as told in his new book, The Hard Thing About Hard Things: Building A Business When There Are No Easy Answers.

When I first heard that Horowitz was writing a book, I thought of my husband. Because of my job I’ve always known that being a founder is hard, but watching Suneel create and launch Rise made me realize how emotionally taxing the journey can be.

As supportive as I try to be, I know there’s nothing like Suneel hearing empathy from someone who’s been through that and worse. That’s why he, and many other founders, have come to rely on Horowitz’s routine writings in the blogosphere.

In the past year or so, a publisher approached Horowitz, attempting to convince him to put his thoughts into book format. He thought that if he did it, it would have to be different from other books that address how to be successful as a CEO. First, he wasn’t doing it for the money. He’s donating the book’s earnings to the American Jewish World Service in order to support its efforts to help women fight for their basic rights throughout the world.

Second, there was something missing in the management advice book world. As Horowitz explained to me in an interview, he drew a lot of inspiration from a book by former Intel CEO and president Andy Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company. Horowitz saw a way that he could expand on what Grove tackled in his book by talking about the real problems and issues entrepreneurs face in the context of his own experiences.

He told me in an interview, “I would have never wanted to write another management book. There are so many of them and everybody says the same thing about them, and they are all the same — they give the exact same advice. It’s like a diet book, they all say eat less calories, exercise more, and every single book has the same conclusion. So I didn’t want to write another one of those. But having been on the other side I really felt like there was a missing book, which was what happens when everything goes wrong, and you have set it all up right.”

The first thing that struck me as compelling about Horowitz’s book is his brutal honesty around his own missteps when it came to being an engineer, founder, husband and more. Of course, many would say it is easy to be honest about struggle and startups when you’ve had a $1 billion-plus exit to HP and now lead a successful venture capital firm. But when you read Horowitz’s account, his honesty comes across as genuine. And my sense is that his honesty is part self-reflecting and part inherent, and translates into the book because it is a trait he has had for some time — for better or worse.

Horowitz spends the first few chapters establishing his own story, from growing up in Berkeley (his father is conservative writer and policy advocate David Horowitz), to meeting his wife Felicia in LA, and then the unfolding of his career. He gives the reader an inside view into his humble start as an engineer at NetLabs, and his beginnings working for his future venture and business partner Marc Andreessen.

Horowitz really delves into the story behind Loudcloud, and then Opsware, which was born of Loudcloud. It’s in this moment in time Horowitz appears to have had the bulk of his education as a CEO, manager, and founder. Loudcloud, and Opsware, and this by no means was an easy road. In fact, the way Horowitz describes the journey, it was an epic disaster at some points. He recalls in the book that Loudcloud was running out of money and the company decided to IPO because private investors wouldn’t invest any more cash.

On the roadshow, Horowitz says he was sure the company would go bankrupt. And in the midst of all this and his travel, his wife Felicia had a serious health scare, as outlined above. These sorts of hardships are the reason why he spends so much time on the actual journey versus the outcome, which was that HP acquired Opsware for over $1 billion in 2007.

With this background set up, Horowitz spends much of the rest of the book around advice, and shares anecdotes from these times at various points. He also inserts quotes from rappers like Nas, The Game and others within chapters. Clearly, this isn’t your traditional, how-to founder advice. He tackles the real problems and challenges entrepreneurs face, because these are the questions he asked his mentors and problems he tackled along his journey.

For example, he spends an entire chapter on how to lay employees off. Another chapter addresses when it’s okay to poach from a friend’s company. Horowitz also devotes time to advising on how to minimize office politics, how to establish titles and measure performance, and how to train employees and tell a good product manager from a bad product manager.

But where Horowitz separates himself is in his advice around how to control your own psychology and demons as a CEO and founder. These are real problems that every CEO and leader faces, as sometimes they are their own worst enemy. As Horowitz writes in one passage:

By far the most difficult skill I learned as a CEO was the ability to manage my own psychology. Organizational design, process design, metrics, hiring and firing were all relatively straightforward skills to master compared with keeping my mind in check. I thought I was tough going into it, but I wasn’t tough. I was soft. Over the years I’ve spoken to hundreds of CEOs, all with the same experience. Nonetheless, very few people talk about it and I have never read anything on the topic. It’s like the fight club of management: the first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown. At risk of violating the sacred rule, I will attempt to describe the condition and prescribe some techniques that helped me. In the end, this is the most personal and important battle that any CEO will face.

Horowitz also delves into the next chapter of his professional life as a venture capitalist. Here he covers the history of founding A16Z with Andreessen, the reason behind the firm’s focus on hiring former founders as VCs and its replication of the CAA agency model in the VC world. He goes into detail around how he and Andreessen have segmented the firm into networks, which include large companies, executives, engineers, press and analysts, and investors and acquirers.

So what makes this different from the scores of business advice books out there? Horowitz has essentially taken much of the advice that a mentor like Bill Campbell (a.k.a. the startup whisperer to some household names in technology) has bestowed upon him and Andreessen, as well as many of the other top CEOs in Silicon Valley, and made it accessible for entrepreneurs around the world.

It’s fair to point out that Horowitz’s ways of approaching problems may not necessarily be the right way for everyone. He’s speaking from his specific experience running an enterprise tech company and if you don’t want to be a founder, CEO, or senior leader in an organization, this book may not be helpful to you.

While there are some drier ‘how-to’ parts of the book, there’s also anecdotes from Horowitz peppered in. You won’t find many many similarities between Horowitz’s outlook and advice and the perspective you might find on Wall Street.

One of the chapters of the book is titled “The Struggle,” and offers founders a level of empathy that is almost too real (this was part of a post he wrote on TechCrunch in 2012). He deliberately doesn’t sugar coat anything, because he knows better than most that the world of a founder, is paved with hardship and can be very bitter. My bet is that Horowitz’s book becomes gospel for startups. His stories already have.

Source: techcrunch.com

Editorial Reviews

From Booklist

*Starred Review* It’s fairly evident that this is a collection of blogs, loosely strung together, united in their varied perspectives on start-ups, CEO-dom, and business in general. Though Horowitz is a cofounder of Andreessen Horowitz and his credentials reside mainly in Silicon Valley, he’s imparted some valuable insight on hard lessons learned that apply to any manager, whether in the executive suite or not. As with most experiential books, it is all about him—but it’s written in such an engaging and universally acceptable manner that no one could object. Leave aside his background, for the moment. Who would realize, for instance, that executives worry about things like initiating layoffs, hiring the right people, training, and minimizing politics, among others? It’s a refreshingly honest take, and his colorful (and, yes, profanity-laced) language breaks down any other misperceptions about the role and the person. Plus, his imagination is compelling, such as the comparisons between peacetime and wartime CEOs: Peacetime CEO always has a contingency plan. Wartime CEO knows that sometimes you gotta roll a hard six. After all, the success equation is easy: the hard thing is getting it done. –Barbara Jacobs

Review

“More than any other business book released this year, “Hard Things” gives an insider’s perspective on what it’s like to lead and scale a startup.” (–Business Insider’s Best Business Books of 2014)

“This is easily one of the essential books every business leader should read if they’re looking for proven and honest management advice.” (–Entrepreneur’s 25 Amazing Business Books from 2014)

“The most valuable book on startup management hands down” (PandoDaily)

“There is more than enough substance in Mr. Horowitz’s impressive tome to turn it into a leadership classic.” (The Economist)

From the Back Cover

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 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. 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 favorite 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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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 YorkerFortune, the Economist, and Bloomberg Businessweek, among others. Horowitz lives in the San Francisco Bay Area with his wife, Felicia.

Originally published: 4 March 2014

AuthorBen Horowitz

Genre: Biography

ISBN: 9780062273208

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