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The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers, by Ben Horowitz
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Ben Horowitz, cofounder of Andreessen Horowitz and one of Silicon Valley's most respected and experienced entrepreneurs, offers essential advice on building and running a startup—practical wisdom for managing the toughest problems business school doesn’t cover, based on his popular ben’s blog.
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 analyzes the problems that confront leaders every day, sharing the insights he’s gained developing, managing, selling, buying, investing in, and supervising technology companies. A lifelong rap fanatic, he amplifies business lessons with lyrics from his favorite songs, telling it straight about everything from firing friends to poaching competitors, cultivating and sustaining a CEO mentality to knowing the right time to cash in.
Filled with his trademark humor and straight talk, The Hard Thing About Hard Things is invaluable for veteran entrepreneurs as well as those aspiring to their own new ventures, drawing from Horowitz's personal and often humbling experiences.
- Sales Rank: #2520 in Books
- Published on: 2014-03-04
- Released on: 2014-03-04
- Original language: English
- Number of items: 1
- Dimensions: 9.00" h x 1.01" w x 6.00" l, 1.04 pounds
- Binding: Hardcover
- 304 pages
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.
Most helpful customer reviews
1 of 1 people found the following review helpful.
Entrepreneurial Review
By Marco Garcia
Before I start reviewing “The Hard thing about Hard Things” by Ben Horowitz, allow me to briefly explain what entrepreneurial thinking means to me. When asked to define entrepreneurial thinking, I answered by saying, “it is a mindset that embraces self-evaluation and creativity, and always tends to action.” In other words, an effective entrepreneur is always assessing himself to understand who he is, what he can (and cannot) do, and whom he knows (and counts on) so that he may creatively and rigorously devise a plan of action. Of course, there is much more to entrepreneurial thinking than my definition encompasses. Here is a couple of key criteria that I will also use to review the book: (1) effectual reasoning, and the (2) stewardship principle.
Entrepreneurial Thinking Definition
Ben Horowitz is a great entrepreneur according to my definition. Throughout his book his demonstrates (1) self-awareness and (2) creativity, and (3) how he put these into action.
Firstly, self-awareness. In the first chapter, “From Communist to Venture Capitalist” he explains who he is, where he comes from, and what he knows. He explains that “being scared doesn’t mean [being] gutless.” Having enough confidence in yourself to be bold is a key aspect of entrepreneurship; he displayed a great deal of boldness when he bought tangram to secure business with EDS. Then, Ben continues to tell us about his communist background, and how that is an advantage: “I realized that embracing the unusual parts of my background would be the key to making it through. It would be those things that I would bring to the table that nobody else had.” Lastly, he explains his mindset in terms of the following four criteria, which helped him immensely throughout his career: (1) to separate facts from perspective, (2) to “turn your s*** in” which means to be responsible for yourself and your work, (3) to not rely on first impressions, especially those based on appearances, and (4) to “look at the world through priorities.” It is therefore clear from chapter 1 that Ben Horowitz knows himself very well, and because he does, he is both confident and prepared to push himself to the limit.
Secondly, creativity. There are many examples of creativity in the book, but I’ll point to one in particular that shows rigorous creativity. After LoudCloud achieved a period of stability, most CEOs would try to remain in that state, but Ben thought differently. He asked himself, “What are we [LoudCloud] not doing?” The answer was well fought, but it eventually came out: they are not being a software company. And so, Ben rigorously devised a plan to save his and his employee’s careers. After selling LoudCloud, he would start a software company called Opsware and focus on systems automatization. To come up with this decision shows how creativity may be the answer to a struggle. Sometimes it is better to think of alternative solutions than just going forward or backwards, and this is exactly what Ben demonstrates time after time in his book – of course, assuming that everything he says he did is true.
Lastly, action. At this point I am sure that you have noticed that Ben is a man of action – whenever he says something he immediate acts upon it – but I’ll elaborate to further prove this. To save LoudCloud from going bankrupt, he only had two months to resolve his company’s problems in order to save business with his biggest client, EDS. He did, and on top of that was also able to start a group of ten engineers on a project named “Oxide,” whose goal was to separate the opsware software from LoudCloud. Ben did all of this in the 2 months period he was given, meaning that he – and his company – did not wasting any time. Ben asked his employees to come at 8am and leave at 10pm everyday (of course he also stayed those hours). He made sure that everyone worked diligently when they had to “turn their s*** in.” They accumulated enough momentum during the beginning of the 2-month rally to carry them throughout. So when the time ran out, Ben had successfully saved his company and business with EDS. That is why action – and traction – should always be the result of self-awareness and creativity.
Effectual Reasoning
Effectual reasoning has three main principles: the (1) bird in the hand, which means understanding the resources that you have at your disposal, (2) crazy quilt, which means building from the bottom up with an end goal in mind, and (3) pilot in the plane, which means that you want to be in control but not always have all the information. In his book, Ben doesn’t talk explicitly about these principles, but he definitely demonstrates them.
(1) Bird in the Hand. Ben went to college during the computer boom in Silicon Valley. When and where he studied (the resources) provided him a key advantage over other competitors because he had the knowledge to tap into a market that was underdeveloped and growing exponentially. Moreover, he understood that that point in time would also produce people of likeminded prospective. And so, Ben was able to team up with exceptional individuals such as Marc Andreessen (smartest person, according to Ben), Scott Kupor (director of finance), Mark Cranney (head of sales), Shannon Callahan (head of recruiting and HR), Margit Wennmachers (sultan of networking), and Frank Chen (head of product management) to name a few. This is how Ben demonstrates using the resources available to him.
(2) Crazy quilt. Ben’s end goal was to become a successful CEO, but he didn’t know how to get there. And so, he did what any other person would do in his situation: take a step forward and see where that leads him. His first step was to quit his old job and work for Marc Andreessen at Netscape. Circumstances and other people’s involvement lead him to take another step: build Loudcloud with Marc Andreessen. Interesting to note here is that if Ben had not quit his first job, he would not have met Marc Andreeseen and therefore not been able to build LoudCloud. Also, had Marc Andresseen not employed Ben, he would not have recognized Ben’s potential. Again, involvement from other people and circumstances then lead to Ben’s third step: selling LoudCloud and creating Opsware. As you probably guessed, other involvement from other people and circumstances lead to the next step: selling Opsware to HP and creating a venture capital firm with Marc Andreessen. And so, understanding that there are infinite ways of reaching your end goal is important, because it enables you to be flexible with ideas that come along the way. Flexibility to allow other people’s input, and to take advantage of opportunities that you hadn't foreseen. Ben demonstrates this in his journey to become a CEO, and to be honest, he became quite proficient at it.
(3) Pilot in the plane. Suffice it to say that Ben delegated work to the executives of his companies, but he always partnered with Marc Andreessen because he knew that Marc Andreessen set of skills complemented his: Marc Andreessen was the public face of the company because he thrived in that environment; Ben stayed in the background managing the company. He then goes to explain that the most important asset of a company is its employees. In light of the-pilot-in-the-plane principle, it makes a lot of sense that you keep your employees motivated because you will distribute the workload to them. Specifically in chapters 5 and 6, Ben explains the importance of taking care of the people, and creating the right in of culture in your company. The reason why the first priority of a company should be to take care of its people according to him is because they are the most knowledgeable individuals of your company. They know what the problems and strengths are because they do the work; managers, executives and CEOs orchestrate from above and may lack on smaller details. In order to have awareness of those smaller details migrate from the employees to the managers and then executive a great company culture has to be created. A great company culture is one in which workers are encouraged to talk about problems and strengths equally. Where they are awarded and recognized based on merit and not on lobbying skills. Where workers are encouraged to “move fast and break things,” meaning that workers should innovate and strive to cause breakthroughs. In this environment, workers like to go to work because it is interesting and genuinely fun. And when a worker wants to work, he/she is the most valuable asset of a company. That is why Ben knows how to delegate work and responsibility among the different hierarchical levels of his company. In analogy, a plane not only needs a pilot to operate satisfactorily. It also needs a co-pilot, stewardesses, a control tower, engineers, an air marshal, and passengers or else flying a plane is: not possible, not profitable and not safe. Ben knows this.
Stewardess Principle
This principle states that workers are individuals and for that reasons they must be encouraged to use their skills for the better of the company. Just like effectual reasoning has several components to it, so does the Stewardess Principle. Several of the key dimensions of the Stewardess Principle that I wish to discuss are: (1) culture, (2) motivation, and (3) power distance. Ben applies these dimensions to his company, and the result is obvious.
(1) Culture. Suffice it to say that Ben dedicates an entire chapter of his book to discuss how important it is to create the right culture in your company. Specifically, one has to minimize politics, encourage the right kind of ambition, and continuously have one-on-ones. By doing this, a company encourages and ensures that its workers have the right work ethics.
By minimizing politics (which means lobbying in order to achieve promotions or benefits) one reinforces the notion that if an employee works hard he/she will be rewarded accordingly. But most importantly, working hard becomes the only way to move up the ladder. No slacker will be able to lobby his/her way to the top. As a result, workers will not feel treated unjustly.
By encouraging the right kind of ambition, one avoids individual agendas or people trying to gain success at the expense of the company. The right kind of ambition is when a worker genuinely wants the company to succeed, and if the company succeeds he/she succeeds with it. The wrong kind of ambition, by contrast, is when a worker wants to succeed regardless of the company’s success. The way to encourage the right kind of ambition, according to Ben, is to seek out those employees with the wrong kind of ambition and fire them before they can rot others, and to screen possible employers while interviewing.
By establishing one-on-ones workers are able to voice any issues to their managers. According to Ben, during one-on-ones managers should do 10% talking and 90% listening. The main point of a one-on-one is for the worker to voice his thoughts and his concerns. This way if there are any problems in the company, the managers become aware of them and may pass the information along to executives and ultimately the CEO.
(2) Motivation. Motivation follows a well-established culture. If Ben had not established an excellent culture in his company he would not haven been able to ask his workers to come to work from 8am to 10pm for months at a time. As if that was not enough, Ben asked this of his workers on three consecutive occasions. This is evidence of what well-motivated stewards are capable of doing.
(3) Power distance. This dimension explains that because companies are hierarchical systems there is a potential for people to use power to abuse their subordinates. To prevent this from happening in his company, Ben placed top priority on one-on-ones. He almost fired one of his executives because he didn't do his one-on-ones. The point of one-on-ones is mentioned above, but they also an additional psychological effect. When managers listen to works, it shifts the power balance for the duration of the one-on-one. As a result, workers feel that the power distance is bridged, allowing them to work more closely with managers. And that is highly desirable.
And so, this is how Ben Horowitz exemplifies what a successful entrepreneur and CEO is. His self-awareness and creativity (and a few other personal traits) took him all the way to where he stands: co-founder of the Andreessen Horowitez venture capital firm valued at $4 billion.
1 of 1 people found the following review helpful.
The Easy Thing About "The Hard Thing About Hard Things" is Reading It
By Jeffrey Matthews
The easy thing about “The Hard Thing About Hard Things,” Andreessen Horowitz co-founder Ben Horowitz’s book about “Building a business when there are no easy answers,” is reading it.
That’s because it’s funny, to-the-point, and way more well-informed by real-world experience than most books that give advice ever are.
Like 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.”
And, “Managers must lay off their own people. They cannot pass the task to HR or to a more sadistic peer.”
And, “The job of a big company executive is very different from the job of a small company executive…big company executives tend to be interrupt-driven. In contrast, when you are a startup, nothing happens unless you make it happen.”
But it’s not just catchy phrases and aphorisms that make the book something pretty much anybody who wants to build a company should read, it’s the experience that created them: Horowitz provides in brutal (and, for aspiring entrepreneurs, invaluable) detail the excruciating real-life experiences behind the advice, from his years as a Silicon Valley engineer and then as the CEO of a start-up with more near-death experiences than Keith Richards before its successful sale to HP.
Like how to fire people. What to say at the “all-hands” when you just had your first layoffs. What to tell an employee who asks if the company is being sold when it is being sold, but not yet. Why every company needs a “story,” and what makes a great company story (hint: see the letter Jeff Bezos wrote to Amazon shareholders in 1997.) When not to listen to your board. Even, literally, what questions a CEO should ask a prospect being considered for the key, all-important job in any start-up: head of sales.
I'm not a fan of “how-to” books, particularly those concerned with managing people, because they tend to be heavy on theory and light on reality, but the chapter emphatically titled “WHY YOU SHOULD TRAIN YOUR PEOPLE" proved the value of the author's experience because it explains the trap in which an engineer I know happens to find himself.
He is a software engineer for a start-up that was acquired by a large, fast-growing Silicon Valley company whose name rhymes with “Shalesforce.com.”
He is smart, highly motivated, eager to learn, and yet he is miserable at his job for precisely the reason Horowitz spells out as follows in “WHY YOU SHOULD TRAIN YOUR PEOPLE”:
“Often founders start companies with visions of elegant, beautiful product architectures that will solve so many of the nasty issues that they were forced to deal with in their previous jobs. Then, as their company becomes successful, they find that their beautiful product architecture has turned into a Frankenstein. How does this happen? As success drives the need to hire new engineers at a rapid rate, companies neglect to train the new engineers properly. As the engineers are assigned tasks, they figure out how to complete them as best they can. Often this means replicating existing facilities in the architecture, which leads to inconsistencies in the user experience, performance problems, and a general mess. And you thought training was expensive.”
That line is the exact truth. Just ask the engineer at Shalesforce.com. His managers—if they exist—ought to read this book.
In fact, anybody who wants to start a company, or work for a company, or build a company, or invest in a company, ought to read this book, because that’s not the only hard-learned truth in here.
Some others include:
“In high-tech companies, fraud generally starts in sales due to managers attempting to perfect the ultimate local optimization [i.e. optimize their own incentive pay].”
“The Law of Crappy People states: For any title level in a large organization, the talent on that level will eventually converge to the crappiest person with the title.”
“The world is full of bankrupt companies with world-class cultures. Culture does not make a company…. Perks are good, but they are not culture.”
“Nobody comes out of the womb knowing how to manage a thousand people. Everybody learns at some point.”
“The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown.”
And maybe the best of all, because it encapsulates so much of what the book is about: “Tip to aspiring entrepreneurs: If you don’t like choosing between horrible and cataclysmic, don’t become CEO.”
This book, on the other hand, is a choice between good and great, so read it.
Jeff Matthews
Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett”
(eBooks on Investing, 2013) $4.99 Kindle Version at Amazon.com
0 of 0 people found the following review helpful.
There is no recipe but courage
By Herve Lebret
“Every time I read a management or self-help book, I find myself saying, “That’s fine, but that wasn’t really the hard thing about the situation.” 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. The problem with these books is that they attempt to provide a recipe for challenges that have no recipes. There’s no recipe for really complicated, dynamic situations. There’s no recipe for building a high-tech company; there’s no recipe for making a series of hit songs; there’s no recipe for playing NFL quarterback; there’s no recipe for running for president; and there’s no recipe for motivating teams when your business has gone to crap. That’s the hard thing about hard things— there is no formula for dealing with them.” This is how Horowitz begins.
Horowitz gives advice to entrepreneurs. And it is not business school-like advice indeed. “People often ask me how we’ve managed to work efficiently across three companies over eighteen years. Most business relationships either become too tense to tolerate or not tense enough to be productive after a while. Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship. With Marc and me, even after eighteen years, he upsets me almost every day by finding something wrong with my thinking, and I do the same for hi. It works.”
I began my review by quoting the first page. I will quote here with his final page: “Hard things are hard because there are no easy answers or recipes. They are hard because your emotions are at odds with your logic. They are hard because you don’t know the answer and you cannot ask for help without showing weakness. When I first became a CEO, I genuinely thought that I was the only one struggling. Whenever I spoke to other CEOs, they all seemed like they had everything under control. Their businesses were always going “fantastic” and their experience was inevitably “amazing”. But as I watched my peers’ fantastic, amazing businesses go bankrupt and sell for cheap, I realized I was probably not the only one struggling.” […] “Embrace your weirdness, your background, your instinct. If the keys are not there, they do not exist.”
The book is not an easy read. So you may not enjoy the book if you do not need to apply it now. Still it is a great book.
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