The Hard Thing About Hard Things

Ben Horowitz: The Hard Thing About Hard Things

The problem with most business books is they present a formula for problems that ultimately have no formula. You’re reading something with no practical value and you’re not really learning anything. There is no formula for dealing with complexity that’s always changing. “There’s no recipe for leading a group of people out of trouble,” writes Ben Horowitz in The Hard Thing About Hard Things. The book is one of the best business books I’ve read in a long time.

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.

Most management books focus on how to avoid screwing up – or at least covering your ass if you do. Ben provides insight into what to do after you screw up.

Just because there is no formula doesn’t mean things are hopeless. Advice and experience can help guide us. But that’s the difference between Ben’s book and most: he shows you what it’s really like to make hard decisions, without offering you a three step formula. Horowitz walks you through his considerations, deliberations, thoughts, mistakes, regrets, difficulties. Through that journey, we learn. “Circumstances may differ, but the deeper patterns and the lessons keep resonating.”

Fear. Here is an interesting point on fear that’s representative and telling.

It taught me that being scared didn’t mean I was gutless. What I did mattered and would determine whether I would be a hero or a coward. I have often thought back on that day, realizing that if I’d done what Roger had told me to do, I would have never met my best friend. That experience also taught me not to judge things by their surfaces. Until you make the effort to get to know someone or something, you don’t know anything. There are no shortcuts to knowledge, especially knowledge gained from personal experience. Following conventional wisdom and relying on shortcuts can be worse than knowing nothing at all.

Seeing the world though different lenses.

Looking at the world through such different prisms helped me separate facts from perception. This ability would serve me incredibly well later when I became an entrepreneur and CEO. In particularly dire circumstances when the “facts” seemed to dictate a certain outcome, I learned to look for alternative narratives and explanations coming from radically different perspectives to inform my outlook. The simple existence of an alternate, plausible scenario is often all that’s needed to keep hope alive among a worried workforce.

We can’t do everything.

My father turned to me and said, “Son, do you know what’s cheap?”
Since I had absolutely no idea what he was talking about, I replied, “No, what?”
“Flowers. Flowers are really cheap. But do you know what’s expensive?” he asked.
Again, I replied, “No, what?” He said, “Divorce.”

Something about that joke, which was not really a joke, made me realize that I had run out of time. Up until that point, I had not really made any serious choices. I felt like I had unlimited bandwidth and could do everything in life that I wanted to do simultaneously. But his joke made it suddenly clear that by continuing on the course I was on, I might lose my family. By doing everything, I would fail at the most important thing. It was the first time that I forced myself to look at the world through priorities that were not purely my own. I thought that I could pursue my career, all my interests, and build my family. More important, I always thought about myself first. When you are part of a family or part of a group, that kind of thinking can get you into trouble, and I was in deep trouble. In my mind, I was confident that I was a good person and not selfish, but my actions said otherwise.

The best thing about startups.

Marc (Andreessen): “Do you know the best thing about startups?”
Ben: “What?”
Marc: “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”

The type of friends you need in your life.

No matter who you are, you need two kinds of friends in your life. The first kind is one you can call when something good happens, and you need someone who will be excited for you. Not a fake excitement veiling envy, but a real excitement. You need someone who will actually be more excited for you than he would be if it had happened to him. The second kind of friend is somebody you can call when things go horribly wrong—when your life is on the line and you only have one phone call. Who is it going to be?

Doing the hard things, not the fun things. Ben had a lot of mentors, Bill Campbell was one of them. Being present and letting people know where they stand is incredibly important. Four star General Stan McChrystal couldn’t have been the leader he was without being out there with the troops sleeping in the same conditions with the same risk. Here is an incredibly important lesson on leadership that most people miss.

After seven weeks, we came to an agreement with EDS. They would buy Loudcloud for $ 63.5 million in cash and assume its associated liabilities and cash burn. We would retain the intellectual property, Opsware, and become a software company . EDS would then license our software to run both Loudcloud and the larger EDS for $ 20 million per year. I thought it was a great deal for both EDS and us. It was certainly far better than bankruptcy. I felt 150 pounds lighter. I could take a deep breath for the first time in eighteen months. Still, it wouldn’t be easy. Selling Loudcloud meant selling about 150 employees to EDS and laying off another 140.

I called Bill Campbell to tell him the good news: The deal was signed and we would be announcing it in New York on Monday. He replied, “Too bad you can’t go to New York and be part of the announcement; you’ll have to send Marc.” I said, “What do you mean?” He said, “You need to stay home and make sure everybody knows where they stand. You can’t wait a day. In fact, you can’t wait a minute. They need to know whether they are working for you, EDS, or looking for a fucking job.” Damn. He was right. I sent Marc to New York and prepared to let people know where they stood. That small piece of advice from Bill proved to be the foundation we needed to rebuild the company. If we hadn’t treated the people who were leaving fairly, the people who stayed would never have trusted me again. Only a CEO who had been through some awful, horrible, devastating circumstances would know to give that advice at that time.

Figuring out what the customer wants is the innovator’s job. And innovation requires a combination of skills.

It turns out that is exactly what product strategy is all about—figuring out the right product is the innovator’s job, not the customer’s job. The customer only knows what she thinks she wants based on her experience with the current product. The innovator can take into account everything that’s possible, but often must go against what she knows to be true. As a result, innovation requires a combination of knowledge, skill, and courage.

I’ve talked about the important role that coding will play in the future. Horowitz offers a simple lessons for programmers and managers alike: “all decisions were objective until the first line of code was written. After that, all decisions were emotional.”

Tell it like it is. When you start losing the truth is the first thing to go and everyone sees it.

One of the most important management lessons for a founder/ CEO is totally unintuitive. My single biggest personal improvement as CEO occurred on the day when I stopped being too positive.

As a young CEO, I felt the pressure— the pressure of employees depending on me, the pressure of not really knowing what I was doing, the pressure of being responsible for tens of millions of dollars of other people’s money. As a consequence of this pressure, I took losses extremely hard. If we failed to win a customer or slipped a date or shipped a product that wasn’t quite right, it weighed heavily on me. I thought that I would make the problem worse by transferring that burden to my employees. Instead, I thought I should project a positive, sunny demeanor and rally the unburdened troops to victory. I was completely wrong.

I realized my error during a conversation with my brother in-law, Cartheu. At the time, Cartheu worked for AT& T as a telephone lineman (he is one of those guys who climb the poles). I had just met a senior executive at AT& T, whom I’ll call Fred, and I was excited to find out if Cartheu knew him. Cartheu said, “Yeah, I know Fred. He comes by about once a quarter to blow a little sunshine up my ass.” At that moment, I knew that I’d been screwing up my company by being too positive.

Why should you it like it is? A few reasons: it builds trust; smart people will see through the lies anyways; it fosters a positive culture and ensures everyone is working from the same page with the same information. The pressure to be positive as a leader is incredible. People are looking to you and you want to inspire them. But the best way to do that is to be real with them. For example, if you’re trying to foster a culture where failure is ok, but you don’t get up there and talk about one of your massive personal failures, the culture won’t even have a chance to change.

The Hard Thing About Hard Things is the best business book I’ve read in a long time. Perhaps one of the best ever.

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