The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz

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The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

by Ben Horowitz

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.


Key ideas

There’s no recipe or formula for dealing with the complex, hard things

Being scared did not mean you are gutless. What you do matters, and would determine whether you’ll be a hero or coward

Do not judge things by the surfaces. Until you make a great effort to get to know someone or something, you don’t know anything

Leadership is getting somebody else to follow you, even if only through curiosity

Looking at the world through such different prisms and social groups helped him separate the facts from perceptions

Learn to look for alternative narratives and explanations coming from radically different perspectives to inform your outlook

“What is cheap? Flowers. What is expensive? Divorce.

When you are part of a family or group, thinking about yourself first can get you in trouble

Some business relationships become too tense to tolerate, or not tense enough to become productive after a while

In raising money privately: look for a market of one. You only need one investor to say yes so it’s best to ignore the other 30 who say no

In start ups you only experience two emotions: euphoria and terror. Lack of sleep amplifies both

Bill Campbell: the key to his success is no matter where he goes, he’s everybody’s favorite person

You need two kinds of friends in your life:

ones you can call when something good happens and you need someone to be excited for you

the other is the kind of person you call when things go horribly wrong

“If you’re going to eat shit, don’t nibble. Things are always darkest before they go completely black

Treat the people leaving fairly so that the people staying will still have the same trust in you

What are you not doing? Usually what you’re not focusing on is what you should be

Many times conventional wisdom has nothing to do with the truth

Lesson: start up CEOs should not play the odds. When you are building a company, you must believe there is an answer. You cannot pay attention to the odds of finding it

There is no secret to being a successful CEO. But if there is one skill that stands out, it is the ability to focus and make the best move when there are no good moves

It’s in the moments when you feel most like hiding or dying that you can make the biggest difference as CEO

First principle in bushido: keep death in mind at all times

“Life is a struggle” -Carl Marx

The struggle causes failure especially if you’re weak. Most people aren’t strong enough

The struggle is where greatness comes from

Don’t put it all on your shoulders. The burden will hurt hardest to whoever is most responsible. But share every burden you can, get the maximum number of brains on the problems

There’s always a move. Running a business is complex like 3D chess

In the technology world, tomorrow looks nothing like today

Everyone makes mistakes, CEOs make thousands of mistakes. Giving yourself an F doesn’t help

If you want to be great, this is a challenge. If you didn’t want to be great, you should’ve never started a company

CEOs should tell it like it is, never by overly optimistic

Employees can handle loss much better because they aren’t married to the company

Give the problem to the people who can fix it, and would also be personally motivated and excited to solve it

If something goes wrong, people need to know why so that they can fix the problem together

3 reasons why being transparent about your company makes sense:

Trust. Without trust, communication breaks. The required amount of communication is inversely proportional to the level of trust

The more brains working on the hard problems, the better

A brain, no matter how big, cannot solve a problem it doesn’t know about

A good culture is like IP routing protocol: bad news travels fast, good news travels slow

bad company culture discourages spread of bad news

discussing problems openly and freely allows for quick solutions

In laying people off, don’t delay, be clear to the reason, admit to the failure

Managers should lay off. Explain what happened, clear and definitive

Firing an executive:

Root cause analysis, figure out why you hired the wrong person for the company

Hiring for scale too soon, re-qualifying for the same job, leaving a failing leader in their place

Preserve reputation of fired executive, most likely a team failure so best to portray that way

Demoting a loyal friend, Confucius approach: the good of the individual must be sacrificed for the good of the whole

Finding a silver bullet versus many lead bullets

No avoiding the problem, have to go straight through. Sometimes you have to fight

Take care of the people, products, and profits, in that order

Hire for strength rather than lack of weakness

Be clear on what you want them to do, and also why

In good organizations, people can focus on their work and have the confidence that if they do good work, it will benefit both the company and themselves

Being a good company is an end in itself

The manager should do the training for his employees himself

In building a technology company, people are the most important asset

Training is one of the highest leverage activities a manager can perform

Important to clearly set expectations when training the employee

One reason people quit: they hated their manager. They were appalled by the lack of guidance, career development, and feedback. They weren’t learning anything

Start with functional training: the knowledge and skill needed to do job, as well as expectations

Ask managers and highest level performers to help train. This will help build positive company culture

Take your best people and encourage them to share and teach their most developed skills

Training must be mandatory. Two types of training are functional and management training, which should be easily implemented

Two ways for a manager to improve output of an employee: motivation and training

No better time investment that will improve productivity in your company than developing a training program

The best product managers take full responsibility for the product from the top down

The job of a big company executive is very different from a small company executive

Big company execs tend to be interruption-driven

Small company execs, nothing happens until they make it happen

Screen in the interview process, take integration as seriously as interviewing

Time running vs. time creating

As a great general manager, you must hire and manage people who are far more competent at their jobs than you would be

How to hire someone good:

If you have been thinking about starting or growing a YouTube channel or Podcast show, writing your first book or creating your first course. I consult creators all around how to monetize their passion and creative dreams. Book a free consult with me here to find out how we can work together so you can start making money online now.

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Know what you want, act in functional roles, have clear expectations for first 30-days, write what strengths you want and what weaknesses you’re willing to tolerate, will they be effective, who do you need support from

Set metrics that match your priorities. Supplement a great product vision with strong discipline around the metrics

Anything you measure creates a set of employee behaviors

Management debt is when you make a quick and expedient decision that is short-term, but has an expensive long-term consequence

Companies execute well when everybody’s on the same page and everyone is constantly improving

Good CEOs will make the tough decisions and quickly because they’ve paid the management debt before

Good HR organizations can’t create a great company culture, but they can tell you when you and your managers aren’t getting the job done

The best way to approach management QA is through the lens of the employee lifecycle, from hire to retire

Minimizing politics always starts with the CEO

Politics: people advancing their careers by means other than merit and contribution

Giving people a raise when asked and not by merit causes others to follow suit

Hire people with the right kind of ambition

Build strict processes for potentially political issues and do not deviate

Nothing motivates a great employee more than a mission that’s so important, it supersedes everyone’s personal ambition

When interviewing candidates, watch for small distinctions that indicate whether they view the world through the “me-prism” or the “team-prism”

Job titles? Employees want them, and eventually people need to know who is who to get their work done

The Peter Principle: people will be promoted in a hierarchy as long as they perform their job duties competently. They will keep being promoted until they become incompetent at their threshold level

The law of crappy people: for any title in a large organization, the talent on that level will eventually converge to the crappiest person with the title

Mark Andreessen: titles are the cheapest things people ask for from their company, and if it makes them feel better, it’ll cost nothing to outbid other companies in the recruiting process

Mark Zuckerberg: de-levels titles process in order to increase fairness and boost morale

As an organization grows, it’s important to provide organizational clarity whenever possible

Being an effective employee isn’t just about intelligence, it’s also about working hard, reliability, and working well with the team

You can only hold the bus for one person. Sometimes you have to mitigate the negative consequences of a star player, as long as they are a positive contribution to the team

Bringing on someone who has the right experience at the right time can help you radically speed up your time to success

The right reason to hire a senior person is to acquire knowledge and experience in a specific area

Ask yourself: do I value external or internal knowledge more for this position?

This will help you determine whether to go for experience or youth

Managing senior people: will they bring their own habits and culture from their old company? Will they work the system? How do you keep them accountable?

Demand and expect cultural compliance, set a high and clear standard for performance, use standards based on other high performers in their field

Performance: results against objectives, management, innovation (hitting goals but not ignoring future), working with peers

One on ones: well designed communication architecture

The key to a successful one on one meeting is understanding that it is the employee’s meeting, not the manager’s

The primary thing that any tech company must do is build a product that is at least 10x better at doing something than the current prevailing way of doing that thing

The second thing is take the market before somebody else does

Culture does not make your company

Culture matters to the extent that it can help you achieve the above goals, preserve your key values and help performance in the future. It makes people want to work at your company, yourself included

Culture is designing a way of working that distinguishes you from competitors. Helps you identify employees that fit with your mission

If you want to build an important company, you’ll have to learn the black art of scaling

Find a mentor, and find some experienced, been-there-done-that executives who already know how to scale

The challenge is to grow but degrade as slowly as possible

Start up employees start as jack-of-all-trades, but scaling requires specialization

Organizational design: split up a company by function or by mission

Figure out what needs to be communicated. List the most important knowledge and who needs to have it

Figure out what needs to be decided and organize accordingly

Prioritize the most important communication and decision paths

Identify issues and the processes to resolve them

A process is a formal, well-structure communication vehicle

Engineer accountability into the process system

When evaluating an employee, base it off of their ability to perform at current scale, not future scale

Investing in courage and determination is an easy investment

The most important thing learned as an entrepreneur was to focus on what you need to get right, and stop worrying about all the things you did wrong or might do wrong

If you have been thinking about starting or growing a YouTube channel or Podcast show, writing your first book or creating your first course. I consult creators all around how to monetize their passion and creative dreams. Book a free consult with me here to find out how we can work together so you can start making money online now.

Download the PDF Summary here

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Most difficult skill learned as CEO was the ability to manage his own psychology

Someone doesn’t become a CEO unless they have a high sense of purpose and cares deeply about the work they do. In addition, they must be accomplished enough or smart enough that people will want to work for them

Everyone learns how to be a CEO by being a CEO. There is no job that fully trains or prepares you

Everything that goes wrong is the CEO’s fault, especially founder-CEOs as there is nobody else to blame

The key is to not get married to the positive or dark narratives of your company

If you don’t like choosing between horrible and catechistic, don’t become a CEO

WFIO = we’re fucked, it’s over

Every company goes through 2 to 5 of these

`Make friends and talk to people who have been through similarly challenging situations

Focus on the road, not the wall

Don’t punk out or quit, great CEOs face the pain and deal with it

There’s little difference between a hero and a coward except what they do despite the fear

Two key characteristics they look for in entrepreneurs: brilliance and courage

Courage to make the right decision. Courage, like character, can be developed

In life, many decisions where you’ll choose between easy-crowd-wrong decision, and hard-lonely-right decision. As CEO, consequences of these decisions are magnified 1000 times

Two core skills for running and organization: knowing what to do, and getting the company to do what you know

There are two types of managers:

1) those who like setting the direction of the company

2) those who like making the company perform at the highest level

you need both characteristics to be a great CEO, but those who lean towards one can learn the skills of the other

The primary purpose of a company’s organizational structure is for decision-making efficiency

Most important attribute to be a great CEO: Leadership

The measure of the quality of a leader: the quantity, quality, and diversity of people who want to follow her

Three traits of what makes people want to follow a leader:

1) ability to articulate the vision

interesting, dynamic, compelling – Steve Jobs attribute

2) the right kind of ambition

truly great leaders create an environment where the employees feel the CEO cares more about the employee than herself – Bill Campbell attribute

3) the ability to achieve the vision

Andy Grove attribute

Peacetime and wartime CEOs, hard to be both

Peacetime = a company has a large advantage over its competitors and core market is growing. They can focus on expanding their market and reinforcing the company’s strengths

Wartime = company is fending off an imminent, existential threat

Peacetime and wartime tactics can be extremely effective when employed at the right times

Most management books are written about peacetime management

It’s hard but not impossible to develop skill sets of both

Being a CEO is an unnatural job and requires learning how to do things the unnatural way

Giving feedback as foundational building block, the critique sandwich

Be authentic and come from the right place, such as wanting employees to succeed

Stylistically, your tone should match the employee’s personality. Be direct but not mean

Feedback is a dialogue, not a monologue. The goal should be to open up the discussion because they should have more data about their position than you

As a CEO, you should have an opinion on everything

Key questions they ask regarding a CEO and the company

1) does the CEO know what to do?

2) can the CEO get the company to do what she knows?

3) did the CEO achieve the desired results against an appropriate set of objectives?

Some employees make product, others make sales. A CEO makes decisions. Therefore, a CEO can be most accurately measured by the speed and quality of those decisions

Great decisions are made by CEOs who display an elite mixture of intelligence, logic, and courage

You must systematically and continually make acquire knowledge in the company’s day to day activities

Executing well requires a broad set of operational skills

Great CEOs constantly assess whether they’re building the best team

Accountability vs. creativity paradox: holding people accountable for their deadlines, next to encouraging people for solving the hard problems and having the courage to identify them

Senior people should be able to forecast their results more accurately than junior people

It’s better to believe people have good intentions, are smart, intelligent, and creative, especially with your own employees

You owe it to your people, the employees and all the people that report to your managers and executives, to hold the executives to a high standard

Selling your company rule of thumb: if you are very early on in a very large market and if you have a very good chance of being number one in that market, then you should stand alone

Most important lesson in entrepreneurship: embrace the struggle!

Embrace your weirdness, your background, your instinct. If the keys are not in there, they do not exist

If you have been thinking about starting or growing a YouTube channel or Podcast show, writing your first book or creating your first course. I consult creators all around how to monetize their passion and creative dreams. Book a free consult with me here to find out how we can work together so you can start making money online now.

Download the PDF Summary here

FOLLOW US HERE > |YouTube |Spotify | Instagram | Facebook | Newsletter | Website

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