The Hard Thing About Hard Things

Ben Horowitz co-founded Opsware in 1999, which Hewlett-Packard acquired for $1.6 billion in cash in July 2007. Later, he and Marc Andreessen co-founded a venture capital firm Andreessen-Horowitz, which invests in several tech companies. While many people talk about how great it is to start a business, very few are honest about how difficult it is to run one. Ben Horowitz offers advice on building and running a startup through his book. This post is about my favorite parts from his book.

@bhorowitz's Tweet in May 2014 – best book party ever

The hard thing.
The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is laying people off when you miss the big goal. The hard thing isn’t hiring great people. The hard thing is when those “great people” develop a sense of entitlement and start demanding unreasonable things. The hard thing isn’t setting up an organizational chart. The hard thing is getting people to communicate within the organization that you just designed. The hard thing isn’t dreaming big. The hard thing is waking up in the middle of the night in a cold sweat when the dream turns into a nightmare.

I will survive.
If you are going to eat shit, don’t nibble.

When things fall apart.
People always ask me, “What’s the secret to being a successful CEO?” Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves. It’s the moments where you feel most like hiding or dying that you can make the biggest difference as a CEO.

Life is struggle.
Every great entrepreneur from Steve Jobs to Mark Zuckerberg went through the Struggle and struggle they did, so you are not alone. But that does not mean that you will make it. You may not make it. That is why it is the Struggle. The Struggle is where greatness comes from.

Tell it like it is.
There are three key reasons why being transparent about your company’s problems makes sense: Trust, without trust, communication breaks; The more brains working on the hard problems, the better; A good culture is like the old RIP routing protocol: Bad news travels fast; good news travels slow. If you run a company, you will experience overwhelming psychological pressure to be overly positive. Stand up to the pressure, face your fear, and tell it like it is.

There comes a time in every company’s life where it must fight for its life.
If you find yourself running when you should be fighting, you need to ask yourself, “If our company isn’t good enough to win, then do we need to exist at all?”

When things go wrong in your company, nobody cares.
The media don’t care, your investors don’t care, your board doesn’t care, your employees don’t care, and even your mama doesn’t care. All the mental energy you use to elaborate your misery would be far better used trying to find the one seemingly impossible way out of your current mess. 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.

Take care of the people, the products, and the profits — in that order.
"Taking care of the people" is the most difficult of the three by far and if you don’t do it, the other two won’t matter. Taking care of the people means that your company is a good place to work. Most workplaces are far from good. As organizations grow large, important work can go unnoticed, the hardest workers can get passed over by the best politicians, and bureaucratic processes can choke out the creativity and remove all the joy.

Why startups should train their people?
There are only two ways for a manager to improve the output of an employee: motivation and training. Properly run startups place a great deal of emphasis on recruiting and the interview process in order to build their talent base. Too often the investment in people stops there. There are four core reasons why it shouldn’t: Productivity, Performance Management, Product Quality, Employee Retention.

Is it okay to hire people from your friend's company?
A good rule of thumb is my Reflexive Principle of Employee Raiding, which states, “If you would be shocked and horrified if Company X hired several of your employees, then you should not hire any of theirs.” The number of such companies should be small and may very well be zero.

The right kind of ambition.
Nothing motivates a great employee more than a mission that's so important that it supersedes everyone's personal ambition. As a result, managers with the right kind of ambition tend to be radically more valuable than those with the wrong kind.

The process of scaling a company is not unlike the process of scaling a product. 
Different sizes of company impose different requirements on the company’s architecture. If you address those requirements too early, your company will seem heavy and sluggish. If you address those requirements too late, your company may melt down under the pressure.

We needed to be better, but we also needed to be different. 
As we thought about what would make us both better and different, two core ideas greatly influenced our thinking: First, technical founders are the best people to run technology companies. All of the long-lasting technology companies that we admired—Hewlett-Packard, Intel, Amazon, Apple, Google, Facebook—had been run by their founders. More specifically, the innovator was running the company. Second, it was incredibly difficult for technical founders to learn to become CEOs while building their companies.

N.B. Ben's speech at Columbia as one of my favorite commencement speeches:

"Do not follow your passion. Follow your contribution. Find the thing that you're great at, put that into the world, contribute to others, help the world be better and that is the thing to follow."

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