The Hard Thing about Hard Things: Building a business when there are no easy answers
The hard thing isn’t setting a big, hairy audacious goal. The hard thing is laying people off when you miss the big goal.
As a straight-talker and lover of rap music, Ben Horowitz has gained a following of nearly 10 million people for his blog. His views on leadership and technology are interlaced with hip hop lyrics and his experiences as CEO of a company eventually acquired by Hewlett-Packard for $1.6 billion, and cofounder of Andreessen Horowitz, a Silicon-Valley based venture capital firm. His aim with this book was not to present a recipe for building a successful company – as he says there can never be a formula for dealing with hard things – but as his story and the lessons he learnt.
During difficult periods as the dotcom bubble burst, Horowitz went through tough times – as CEO he suffered countless sleepless nights over fear of bankruptcy and stressful times when he felt like he was going to die. In an attempt to make himself feel better, he tried asking himself, “What’s the worst thing that could happen?” but the answer always came back the same – going bankrupt, losing everyone’s money, and laying people off. So he asked a different question “What would I do if we went bankrupt?”. The answer was that he would buy out the software they had developed, and start a new software company. So, in secret, and knowing they were in deep trouble, he set a small team onto separating the software, and he moved his mindset from being a peacetime CEO to a wartime CEO. When a major customer went bust, he realised it was time to try and sell the main company Loudcloud and start Opsware as a new company. After coming to a deal with EDS, he felt he could finally take a deep breath, and on the advice of an experienced board director, immediately talked to staff about who would be staying with Opsware, joining EDS, or being laid off. Horowitz comments: “If we hadn’t treated the people who were leaving fairly, the people who stayed would never have trusted me again.”
Spend zero time on what you could have done, and devote all of your time on what you might do. Because in the end, nobody cares; just run your company” – Ben Horowitz
This baptism of fire in a technology start-up gave Horowitz so much valuable experience that he wanted to share with other CEOs – in an often lonely and stressful job – what he learnt. While not a step by step guide, he outlines what worked for him, and what he now advises CEOs and founders to do in his new venture capital firm, including what you should do after you have screwed something up – something most management books steer clear of.
The book covers everything from: how to hire and fire people (for the right role at the time); how to run one-on-ones (listen more than you talk); how to define what a good manager and bad manager looks like to help staff understand what is expected of them; how to demote a loyal friend; how to set up a fair performance evaluation process and ensure you don’t give into demands; to how important training is.
Key insights include:
- Whenever a large organisation attempts to do anything, it always comes down to a single person who can delay the entire project – seemingly minor hesitations can be fatal. Horowitz scheduled daily meetings with his critical software team to quickly remove roadblocks
- He felt horrible asking the team to put their home lives on hold for six months while they worked all hours on the new product, after very many tough times. But much later afterwards, he cried when he found out that instead of asking them to do too much, the team had enjoyed the challenge
- In his weekly staff meetings, he asked ‘What are we not doing?’ as it is often the things we are not doing we should be focussing on. The answer that came out of one of those meetings resulted in a successful new acquisition
- It’s the moments where you most feel like hiding or dying that you can make the biggest difference as a CEO. Most entrepreneurs will face a struggle, when things fall apart. The struggle is not failure, but it can cause failure – many people are not strong enough to get through the struggle
- CEOs should tell it like it is – don’t be too positive and think you have to always project a sunny demeanour and take the problem on your own shoulders. Share the problem with people who will be personally excited and motivated to fix it. Telling things as they are is a critical to building trust – fundamental to a successful company
If there is no prototype for a successful CEO, he says there should be three key traits: the ability to articulate the vision; the right kind of ambition (caring about the employees more than yourself so that they care about the company); and the ability to achieve the vision. As the rapper Jay Z said, “I move onward, the only direction, Can’t be scared to fail in search of perfection.”
About the author Ben Horowitz is the cofounder and general partner of Andreessen Horowitz, a Silicon-Valley based venture capital firm. Previously he was cofounder and CEO of Opsware, formerly Loudcloud, which was acquired by Hewlett-Packard for $1.6 billion. He blogs about his experiences as a software engineer, CEO and technology investor.
Reviews “Ben’s experience and expertise make him one of the most important leaders not just in Silicon Valley but also in the global knowledge economy. For anyone interested in building, growing or leading a great company, this book is an incredibly valuable resource – and a funny and insightful read.” Mark Zuckerberg, Cofounder and CEO of Facebook
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Author: Ben Horowitz