The Hard Thing About Hard

Things — Ben Horowitz — 
Summary and review
The Hard Thing About Hard Things has been the most
recommended book to me from numerous conversations with
great entrepreneurs. It’s reached the point now that if I ask for a
book recommendation for business advice, I add ‘other than the
obvious Hard Thing About Things’.

Why is it so good? Most business books focus on how to do things

correctly, whilst Ben acknowledges upfront there is no such thing
as a perfect business and however much planning you make, screw
ups will inevitably happen. He addresses all the major screw ups
that have occurred during his time leading billion $ corporations
and how his team made decisions to turn things around, or screw
things up further.

He outlines the hardest decisions he had to make and the awful

situations you find yourself in. They say entrepreneurship is the
about crazy highs and terrible lows and this book paints the full
ugly picture of what life is like in the daunting face of disaster. A
true understanding of what you can face as an entrepreneur is
invaluable which I believe is what makes this book a favourite.
CEO lessons
Peacetime vs Wartime CEO’s

Peacetime CEO’s — thinks long term and is a reasonable human

being

examples: strategic culture builders, follow protocols, sets goals,

makes back up plans and minimiizes conflict
Wartime CEO — obsesses about the immediate need and
couldn’t give a damn about anyone

Examples: let the situation define the culture, violates all protocol,
doesn’t have time read a books about goals, has no back up plan
and conflicts with anyone that gets in the way of the plan.

No recipes to success or Silver bullets to solve problems.

No recipe to run company, motivate a team when things fall apart.

Just try the best ideas you can and don’t give up

Keep a clear head — Embrace the struggle

‘Life is struggle’ — In the moments you feel like hiding and dying,
that is when your role is most important and you can make the
biggest difference.

If you statistically have 1 in 10,000 chance of success your task is

the same, make and execute a plan.

The way of the warrior: Keep death in mind at all times. Live each
day like it may be your last and conduct yourself properly in all
your actions.

Tell things like it is

You may experience overwhelming pressure to be overly positive.

Stand up to the pressures, face your fear and say things as they
are. Breed a culture of trust and get people working on problems
instead of covering them.
A healthy company has a culture of sharing bad news and freely
discusses it’s problems and solves them.

Rephrase the worst case scenario

Just picturing the worst possible situation isn’t that helpful. Lay-
off everyone, waste your shareholders money, lose your house
(and your parents if they invested), disappoint customers and ruin
you reputation….

Instead ask ‘What would you do if we went bankrupt’. It can

be a source of good ideas and potential pivots. In Ben’s case the
answer was to launch a new software company using an internal
product they’d built. Then ask yourself if you can do that without
going bankrupt?

Large Organisations are slowed down by single people

Whenever a large organisation tries to do anything, it always

comes down to a single person who can delay the entire project.

A manager may think they don’t have authority to make a decision

or purchase, an engineer might get stuck. Minor hesitations can
cause fatal delays. Make sure you remove all roadblocks and if
anyone gets stuck on anything it must be diagnosed within 24
hours.

Take care of People, Products and

Profits (in that order)
Crucially important. If you don’t put people first the other two
won’t matter.

Enjoying the work

Making it a pleasure to work for the company means people feel

they can be effective and efficient in their work and make a
difference. Being a good company is non-essential when things are
going well. But things always go wrong. And being a good
company can be the difference between life and death.

Face the hard decisions head on

Make the hard decisions quickly and don’t put them off. Good
CEO’s take the hard answer to organisational issues upfront before
it accrues debt. e.g. Given the choice of cutting a popular project
today that isn’t in the long-term plan or keeping it for morale
reasons they cut it today.

Hiring

There is no perfect human or employee, hire for lack of weakness

and a willingness to tackle thier weaknesses, rather than hiring for
strengths alone.

When things go well, there are many reasons to stay at a company

—

1. Your career grows as the company grows, attractive jobs

naturally open up
2. You’ll be impressing your friends and family. Your friends
and family will think you a genius for choosing to work at the
“it” company
3. Your résumé gets stronger by working at a blue-chip
company in its heyday.
4. Oh, and you are getting rich.

However, when things go poorly, all those reasons evaporate and

become reasons to leave. In fact, the only thing that keeps an
employee at a company when things go horribly wrong — other
than needing a job — is that she likes her job, despite the hardships

So on that note the book advises when expanding your team,

consider:

1. Hire for strength rather than lack of weakness

2. Have clear expectations of who you are hiring with a
realization that there is something seriously wrong with every
employee in your company (including you). Nobody is perfect.
3. Involve multiple people in brainstorming but make the final
decision solo. Consensus-based decisions tend to sway the
process away from strength and towards weakness.

Minimise Politics

As companies scale important work can go unnoticed, this must

not be tolerated. Credit for hard work can be taken by managers
and politicians and bureaucratic processes can choke creativity
and drain the joy from the workplace.

Importantly principles for managing:

1. Hire for the right kind of ambition. they must believe in the
company and want it to be succesful (and ths themselves as a
by-product) and not for themself to be a success first
2. Maintain strict policies and processes on organizational
design, performance evaluations, promotions, and
compensation. Importantly — Don’t overcompensate and
employee because they get a better job offer.
3. Promote experienced employees by measuring results against
objectives, management skills, innovation, and their ability to
work well with others.
4. Keep up regular performance management and employee
feedback with a good system of one on one meetings between
employee’s an managers. These are an essential platform for
employees to discuss their as yet unheard brilliant ideas,
pressing issues, and chronic frustrations.

Peter Principle

In a Hierarchy, members are promoted whilst they work

competently. Ultimately they get promoted to a position they are
no longer competent int (their ‘level of incompetence’). They are
unable to earn further promotion and stay in a role they are not
good at.

Don’t fall into the ‘Peter Principle’! (Hopefully following the advice
above and being aware of the principle will help avoid this…)

Summary
The book follows his story as it happened and leaves you with a
real sense of how to approach problems. They say your success is
defined by how many hard conversations your wiling to have, and
this book gives you the mindfulness to recognise the situations you
need to step up and some of the tools to do it.
The Hard Thing About Hard Things: Building a Business
When There Are No Easy Answers

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 Loud cloud 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.

Executive Summary: This is a book about Ben Horowitz's war stories. Ben Horowitz has good war stories,
if you care about the narrow space of Venture Backed fast growth technology startups. I'm not so sure
that they generalize to the point of making a good management guide. You might be better off reading
some Drucker.

First: the absolute preliminaries: Ben Horowitz co-founded LoudCloud with Marc Andreessen in 1999,
with a plan to do enterprise managed services (what has now grown to the SaaS and IaaS space). They
were technological pioneers in that space. They weathered the dot com bubble burst, but it was touch
and go (since most of their clients were other tech firms going bankrupt). They IPOd in a post-bubble
environment with a declining market. They pivoted to become Opsware, a tech services firm (i.e. further
up in the backend of the managed services stack). They pivoted as a public corporation close to
bankruptcy which is a nightmare I wouldn't wish on my worst enemies. They weathered NASDAQ
delisting threats, mass employee revolts, ..., the whole Mad Max scenario. So he offers the prospect of
excellent data from the inside. Ben also has a reputation in the valley as a no-bullshit guy, so this is
valuable

Second: some initial thoughts. To the extent that Ben's stories will generalize, they only apply to fast
growth venture backed tech startups that plan to IPO. It bears repeating that this is but one subset of
the technology space - the subset that gets a disproportionately large amount of press coverage and
fanfare. So much of the lessons are the kind that you've probably already osmosed from the Paul
Graham/Peter Thiel/A360Z/AVC crowd. And if you haven't, then you should probably start with Paul
Graham and Peter Thiel rather than jumping into this book, which has a narrower scope and doesn't
make much effort to make clear the context. That's okay, since it's aimed at the specific crowd, but just
be aware if you're not of that crowd and thinking of reading this book.

Ben tells the story from the technical CEO perspective, which is a fairly rare perspective to get, given the
depth of Ben's experience: Note that Paul Graham only walked the walk through a ~50 million dollar
acquisition, and never faced the challenges of being the CEO of a publicly traded corporation. Peter Thiel
did, but is ultimately a non-technical founder. Besides, the PayPal mafia is fairly cagey about the war
stories around PayPal given the extent of the internal fights (e.g. the ouster of Elon Musk from CEO) that
they want to cover up. Much of the other available writings are from the V.C. perspective, and lack
founder experience. 

Thus, this book does give us an opportunity to read the thoughts of a founder CEO all the way through
and beyond the IPO stage. But it is by no means a masterpiece that stands alone. It does offer an
incremental view if you are primarily interested in the narrow niche of venture backed startups, and
serves as a 4 star or 5 star book of anecdotes that have potentially generalizable lessons, if read
critically, while fully aware of the appropriate broader context. That's a big asterisk though. So I will
attempt to summarize the core lessons that I personally got out of the books, given that I am not solely
interested in this space:

1. Being CEO in a fast growth venture startup requires learning at an incredible pace. The job description
changes almost completely within 6 months given the growth rate. There isn't any way to get that
experience except networking with founders who have previous lived experience as founder CEOs of
large companies. This is why, for example, Zuckerberg had long walks with Jobs. A top notch VC firm will
definitely help you get that, which is why they are so valuable. The rotating board circuit in the top
Silicon Valley firms will provide this, if you can get them to sit on your board (Horowitz, for example,
holds Bill Campbell's advice in particularly high esteem). You probably can't, unless Sequioa, Founders
Fund, Andreessen-Horowitz, or KPCB is backing you.

2. At the end of the day, you have to make incredibly complex strategic decisions with extremely limited
information, which creates crazy stressful environments.
3. To Ben's credit, he does focus on good management, but mostly doesn't add anything new to the
corpus. It's mostly the usual good stuff: don't do arbitrary things, don't publicly shame people, don't let
people get away with enriching themselves at the company's expense through strong arming, don't do
short term things that jeopardize the long term, and if you do, it will rapidly become the culture and will
remain permanently broken. Again, a decent coverage of the standard MBA literature covers this space
better.

4. Being CEO is a lonely job. You cannot expect your executive team to understand all your decisions
given their limited scope. You also cannot spend the time to give them the broader scope all the time,
since that takes away from doing their own jobs. But if you don't, they might stop trusting you. It's
Catch-22s all the way down.

5. In addition, while the CEO mentor network can help with your emotions, they can't help you with the
decisions, since it will take them weeks to get up to speed on the context. You're really on your own on
these decisions.

6. It's also emotionally harder when your final decision is 55/45, and you're facing opposition from
underlings/your board that is 90/10 the other way, but lack the appropriate context. So you're on the
fence leaning one way, but others are convinced that you're wrong. At this point, you should just learn
to trust yourself, since you're the only one with the appropriate context. Your board should be more
experienced than you, so they should be aware of this information asymmetry. Consequentially, they'll
usually just rubberstamp what you decide anyway. This doesn't make the decisions any easier to make.

7. You absolutely need to develop decision making processes that are insulated from your own
emotional rollercoaster/insecurity. Ben likes writing things down until the words are convincing on their
own. I do too. Whatever your methods are, you will absolutely need to rely on them since you're going
to be alone in the decision making processes, and need some check to make sure you're operating
logically with no emotional biases. So develop those early. (I personally recommend the LessWrong
corpus, but you might find that too kooky. Your choice.)

8. Ben Horowitz really likes rap and hiphop. That's not my thing, but whatever, I can respect his artistic
side. Anyone who criticizes him for that aspect of his personality is really missing the point.

Context that Ben Horowitz did not mention that I think would have greatly improved the book:

1. The tides are turning, and the days when Venture Capitalists could oust founder CEOs and replace
them with "adults" are permanently gone. Zuckerberg, and the fact that founders (like Horowitz and
Thiel) now lead top Valley VC firms has permanently changed the landscape. So a lot of the fighting that
Ben had to do, and the perpetual underconfidence that he did it with, won't apply to future founder
CEOs. This book adds to the growing corpus that helps make your case to not be ousted, which partially
obsoletes that aspect of lessons in the book. Ironic, I know.

2. Fast growth tech startups that have a distinctive tech advantage can win despite terribly dysfunctional
management. When you're in a greenfield technology space, you can do whatever you want, and still
win just from the tech advantage. For example, Valve gets cited a lot for it's "no management"
structure, but they sit on a giant money spigot called Steam that just prints money. If I also owned such
an oil derrick, I could probably get away with mandatory sex parties every Thursday. This doesn't make
the case for workplace orgies.

3. There is great talk about how Ben rescued OpsWare from near disaster through their final acquisition
by HP for 1.65 billion dollars. But there is not a single mention of how OpsWare fared post-acquisition.
For all I know (and given the next point, I suspect) this was a shitty deal for HP.

4. It doesn't help that Ben Horowitz heavily raided the OpsWare executive team to form the core team
at his next venture (the VC firm Andreessen-Horowitz). That can't have been good for OpsWare at all.

5. Ben talks about how you really need your executive team to hit the ground running. You can cover for
one executive to get them up to speed, but you can't cover for every executive. Thus, you need to hire
top tier talent, often from outside. This is great. But this also forms a good explanation for why top
executives often seem to be from a different planet, move in completely different circles, and get paid
orders of magnitude more. But Ben doesn't cover any of these pathologies, or how it really is a
necessary side-effect of the realities of the executive responsibilities.

6. From Ben's raiding of his previous form for top executive talent, I get an increasing suspicion that the
top talent moves in tight-knit teams that gel well together. Your management priority should be to
network and form these connections from an early stage (definitely before you found your own VC-
backed fast growth startup). If you don't have this focus, you have to develop it at a late stage in the
game, and for that you _really_ need top VCs, otherwise you will not be plugged in at all and have no
access to these folk.

Horowitz is the most prominent VC firm in the valley. This book depicts great stories about the struggle
from Horowitz. Initial few chapters are good and the reader gets more curious especially how his
business was transformed from selling cloud solutions to pure software based. How they pivot on initial
phase. However, after 2-3 chapters, I got lost since this book turned into management/leadership
lessons. That's the point I got lost. I was hoping that Horowitz will talk more about personal journies, his
investment journies and the struggle that the funded startups faced.

This book was a game changer for me. I started reading it in the middle of my biggest struggle as a
founder and CEO of Neoteric (#32 on Deloitte Technology Fast 50 CE). It was recommended by my co-
founder, Mateusz Paprocki.
Ben shares tough stories here. He says what he fucked up and how did he manage to make it up. It
helped me to trust my instincts and bet my decisions during company transformation on the values I live
by. It's only 1 month since I started implementing the changes and I already see a huge improvement of
both business and personal life.
I wish I had read this book 2 years earlier. I recommend it to anyone who has entered fast growth. I hit
the glass roof before adopting - you don't have to and this book can help you prepare.

Horowitz has assembled a great collection of hard fought knowledge for future founding CEOs. I took
away a lot from this book, despite neither being a CEO nor planning to be one. Anyone who intends to
take a leadership role in a company, especially in high tech, should read it. The advice on hiring and
firing is clear, succinct and valuable. I also got a lot of great insights on what to look for in product
managers. While not entirely discouraging to would be entrepreneurs, Horowitz's vividly retold
experiences make it clear that running a startup consists a lot more of stomach churning decisions and
shit sandwiches than unicorns and ponies

Ben Horowitz these days is known best as co-founder of Venture Capital firm A16Z or Andreessen &
Horowitz. He is also famous for being an early employee of Netscape and founder of a company called
Loudcloud and then Opsware which he sold to HP for 1.6 bn USD.

The book itself is partly his memoir of running Laudclud/Opsware but also a general management guide
targeted at people running a (fast growing) tech company.

Hi tenure at Opsware included many existential crisis situations:

 the company did an IPO to avoid bankruptcy

 they did a complete “pivot” by selling most of their business to EDS and refocusing on software

 their stock price went down to 30 cents which equaled half of their net cash

 A shareholder activist tried to get him fired

 during the final sales process an auditor required them to change the revenue recognition
process which almost killed the sale

Compared to other management books I have read and written about, “The hard things about hard
things” is maybe less structured but does have on the other hand a lot more practical advice.

There is a lot of advice in the book on how to quickly grow a company and especially how to hire people.
It even includes an interview guide for different management positions. Interestingly it also includes a
lot of advise when and who to fire. In his opinion, even co-founders should be fired if they can not adapt
to rapidly increasing scale of a company.

The most interesting parts in my opinion was his view on the different types of CEOs.  For instance he
distinguishes between “peacetime CEOs” and “Wartime” CEOs. Peacetime CEOs are great running a
company when everything goes well, Wartime CEOs are the ones who are able to completely change the
course when things run really bad. In his opinion, very few CEOs can both.

Another distinction is between “Ones”” who are CEOs how are strong on strategy but less keen on
details and “”Twos” who are managers who enjoy details but have less vision or strategy. Usually in a
management board, there can only be one “One” which means internal succession is not easy. Good
CEOs have “mixed” characteristics.

According to Horowitz a good (tech) CEO in general should:

 train his direct reports herself

 must be the keeper of the “Company story”

 gather information continuously and then make quick and good decisions

 actively build the management team

Interestingly he also mentions that he himself was never considered to be a good CEO while he was
running the company.

In the final chapter, he then explains on what principles the founded their VC firm. Their most distinctive
feature that they specialize on technical founders which they try to develop to “great CEOs”.

The only negatives in the book I found was the fact that some things (like the sale to HP) are repeated
very often, but I guess that is due to the fact that the book to a certain extent is more or less a summary
of his blog posts over the years.

Is it relevant for a value investor ? I think yes, especially if you want to be able to better judge the
quality of management in a company, this book offers some very interesting aspects.

Summary:

All in all I really liked the book. It is easy to read and contains a lot of interesting aspects on how to run a
tech company. It is less structured and polished than typical management books from famous professors
or gurus. On the other hand there is so much “unfiltered” wisdom which you rarely find in other books
so that I can highly recommend it.

The hard thing about hard things

Ben Horowitz from A16Z and previously Loudcloud, which sold to HP for 1.8B$ narrates his experiences
in being a CEO and the hard decisions he had to make.

“But the indeterminate future is somehow one in which probability and statistics are the dominant
modality for making sense of the world. Bell curves and random walks define what the future is going to
look like. The standard pedagogical argument is that high schools should get rid of calculus and replace
it with statistics, which is really important and actually useful. There has been a powerful shift toward
the idea that statistical ways of thinking are going to drive the future.” —Peter Thiel

In three sentences
There’s no recipe for building a high-tech company; there’s no recipe for leading a group of people out
of trouble; 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 turned to crap. That’s the hard thing about hard things—there is no formula for
dealing with them. Nonetheless, there are many bits of advice and experience that can help with the
hard things.

Being scared

Being scared doesn’t mean you are gutless.

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.

People often ask me how we’ve managed to work effectively 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 in my thinking, and I do the same for him. It works.

“You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances
them both.” Marc A on what the best thing about startups is.

Raising Money

During this time( during and after the dot com bust) I learned the most important rule of 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 thirty who say “no.” We eventually found investors for a series C round (meaning our third round
of funding) at an amazing $700 million pre-money valuation and raised $120 million. The sales forecast
for the quarter came in at $100 million, and things seemed like they might be okay. I felt confident that
our sales forecasts would hold up given that previous forecasts had underestimated actual performance.
And perhaps, I speculated, we could seamlessly migrate our customer base away from dot-com bombs
to more stable, traditional customers such as Nike, our largest customer at the time.

Personal Learnings

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?
“What’s the worst thing that could happen?” The answer always came back the same: “We’ll(Loudcloud)
go bankrupt, I’ll lose everybody’s money including my mother’s, I’ll have to lay off all the people who
have been working so hard in a very bad economy, all of the customers who trusted me will be screwed,
and my reputation will be ruined.” Funny, asking that question never made me feel any better.

Then one day I asked myself a different question: “What would I do if we went bankrupt?” The answer
that I came up with surprised me: “I’d buy our software, Opsware, which runs in Loudcloud, out of
bankruptcy and start a software company.” Opsware was the software that we’d written to automate all
the tasks of running the cloud: provisioning servers and networking equipment, deploying applications,
recovering the environment in case of disaster, and so forth. Then I asked myself another question: “Is
there a way to do that without going bankrupt?”

Rephrasing the worst case scenario to actions plans is a much better alternative than just accepting your
worst case scenario. The simple existence of an alternative, plausible scenario is often all that is needed
to keep hope and your company alive.

“Gentlemen, I’ve done many deals in my lifetime and through that process, I’ve developed a
methodology, a way of doing things, a philosophy if you will. Within that philosophy, I have certain
beliefs. I believe in artificial deadlines. I believe in playing one against the other. I believe in doing
everything and anything short of illegal or immoral to get the damned deal done.” Michael Ovitz, who
had a way of making things extremely clear.

An early lesson I learned in my career was that whenever a large organisation attempts to do anything, it
always comes down to a single person who can delay the entire project. An engineer might get stuck
waiting for a decision or a manager may think she doesn’t have authority to make a critical purchase.
These small, seemingly minor hesitations can cause fatal delays ( for the deal to sell Loudcloud to EDS)
The purpose was to remove all roadblocks. If anyone was stuck on anything for any reason, it could not
last more than twenty-four hours—the time between meetings.

Product Strategy

“How can we walk away from requirements that we know to be true to pursue something that we think
will help?

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. Sometimes only the founder has the courage to ignore the data.
Early in my career as an engineer, I’d learned that all decisions were objective until the first line of code
was written. After that, all decisions were emotional. In addition, I had John O’Farrell, the industry’s
greatest M&A negotiator, on my team so I decided to investigate the other companies before sizing the
internal effort.

When it finally ended—the long road from Loudcloud to Opsware—I couldn’t believe that I’d sold what
it took eight years and all of my life force to build. How could I have done that? I was sick. I couldn’t
sleep, I had cold sweats, I threw up, and I cried. And then I realized that it was the smartest thing that I’d
ever done in my career. We’d built something from nothing, saw it go back to nothing again, and then
rebuilt it into a $1.65 billion franchise. At that point, it felt like my business life was kind of over. I had
hired all the best people that I knew or could find, and I had gone through every step from founding to
going public to sale. I definitely did not feel like doing any of that again. But I had learned so much. It
seemed like such a waste to do something completely different. And then I got an idea to build a new
kind of venture capital firm.

Learnings as a CEO

It’s the moments where you feel most like hiding or dying that you can make the biggest difference as a
CEO.

Startup CEOs should not play the odds. When you are building a company, you must believe there is an
answer and you cannot pay attention to your odds of finding it. You just have to find it. It matters not
whether your chances are nine in ten or one in a thousand; your task is the same. In the end, I did find
the answer, we completed the deal with EDS, and the company did not go bankrupt. I was not mad at
Bill. To this day, I sincerely appreciate his telling me the truth about the odds. But I don’t believe in
statistics. I believe in calculus.

Bushido—the way of the warrior: keep death in mind at all times. If a warrior keeps death in mind at all
times and lives as though each day might be his last, he will conduct himself properly in all his actions.

Tell things like it is

If you run a company, you will experience overwhelming psychological pressure to be overly positive.
Stand up to the pressures, face your fear, and say things like they are. Breed trust worthyness and the
more people working on the problems, the better.

A healthy company culture encourages people to share bad news. A company that discusses its
problems freely and openly can quickly solve them. A company that covers up its problems frustrates
everyone involved.

Peacetime vs Wartime CEOs
Peacetime CEO knows that proper protocol leads to winning. Wartime CEO violates protocol in order to
win.
Peacetime CEO focuses on the big picture and empowers her people to make detailed decisions.
Wartime CEO cares about a speck of dust on a gnat’s ass if it interferes with the prime directive.
Peacetime CEO builds scalable, high-volume recruiting machines. Wartime CEO does that, but also builds
HR organizations that can execute layoffs.
Peacetime CEO spends time defining the culture. Wartime CEO lets the war define the culture.
Peacetime CEO always has a contingency plan. Wartime CEO knows that sometimes you gotta roll a hard
six.
Peacetime CEO knows what to do with a big advantage. Wartime CEO is paranoid.
Peacetime CEO strives not to use profanity. Wartime CEO sometimes uses profanity purposefully.
Peacetime CEO thinks of the competition as other ships in a big ocean that may never engage. Wartime
CEO thinks the competition is sneaking into her house and trying to kidnap her children.
Peacetime CEO aims to expand the market. Wartime CEO aims to win the market.
Peacetime CEO strives to tolerate deviations from the plan when coupled with effort and creativity.
Wartime CEO is completely intolerant.
Peacetime CEO does not raise her voice. Wartime CEO rarely speaks in a normal tone.
Peacetime CEO works to minimize conflict. Wartime CEO heightens the contradictions.
Peacetime CEO strives for broad-based buy-in. Wartime CEO neither indulges consensus building nor
tolerates disagreements.
Peacetime CEO sets big, hairy, audacious goals. Wartime CEO is too busy fighting the enemy to read
management books written by consultants who have never managed a fruit stand. Peacetime CEO trains
her employees to ensure satisfaction and career development. Wartime CEO trains her employees so
they don’t get their asses shot off in the battle. Peacetime CEO has rules like “We’re going to exit all
businesses where we’re not number one or two.” Wartime CEO often has no businesses that are
number one or two and therefore does not have the luxury of following that rule.

The Struggle

1. The Struggle is when you wonder why you started the company in the first place.

2. The Struggle is when people ask you why you don’t quit and you don’t know the answer.

3. The Struggle is when your employees think you are lying and you think they may be right.

4. The Struggle is when food loses its taste.

5. The Struggle is when you don’t believe you should be CEO of your company. The Struggle is
when you know that you are in over your head and you know that you cannot be replaced. The
Struggle is when everybody thinks you are an idiot, but nobody will fire you. The Struggle is
where self-doubt becomes self-hatred.

6. The Struggle is when you are having a conversation with someone and you can’t hear a word
that they are saying because all you can hear is the Struggle.

7. The Struggle is when you want the pain to stop. The Struggle is unhappiness.

8. The Struggle is when you go on vacation to feel better and you feel worse.
 9. The Struggle is when you are surrounded by people and you are all alone. The Struggle has no
mercy.

10. The Struggle is the land of broken promises and crushed dreams. The Struggle is a cold sweat.
The Struggle is where your guts boil so much that you feel like you are going to spit blood.

11. The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are
weak.

12. The Struggle is where greatness comes from.

Lead Bullets vs Silver Bullets

There are no silver bullets, a magic deal or a partnership that will make your company. You have to build
your product, or your company the hard way. There is no other way out. No window, no hole, no escape
hatch, no back door. You have shoot as many lead bullets as you can.

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?”

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

Mark Cranney walks up to the podium, looks at the crowd of fresh new recruits, and says, ‘I don’t give a
fuck how well trained you are. If you don’t bring me five hundred thousand dollars a quarter, I’m putting
a bullet in your head.’ ”

“We take care of the people, the products, and the profits—in that order.” It’s a simple saying, but it’s
deep. “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.

In good organisations, people can focus on their work and have confidence that if they get their work
done, good things will happen for both the company and them personally. It is a true pleasure to work in
an organization such as this. Every person can wake up knowing that the work they do will be efficient,
effective, and make a difference for the organization and themselves. These things make their jobs both
motivating and fulfilling.

1. Being a good company doesn’t matter when things go well, but it can be the difference between
life and death when things go wrong.

2. Things always go wrong.

3. Being a good company is an end in itself.

Every really good, really experienced CEO I know shares one important characteristic: They tend to opt
for the hard answer to organizational issues. If faced with giving everyone the same bonus to make
things easy or with sharply rewarding performance and ruffling many feathers, they’ll ruffle the feathers.
If given the choice of cutting a popular project today, because it’s not in the long-term plans or you’re
keeping it around for morale purposes and to appear consistent, they’ll cut it today. Why? Because
they’ve paid the price of management debt, and they would rather not do that again.

Like technical debt, management debt comes in too many different forms to elaborate entirely, but a
few salient examples will help explain the concept. Here are three of the more popular types among
startups: 1. Putting two in the box 2. Overcompensating a key employee, because she gets another job
offer 3. No performance management or employee feedback process

Peter Principle holds that in a hierarchy, members are promoted so long as they work competently.
Sooner or later they are promoted to a position at which they are no longer competent (their “level of
incompetence”), and there they remain being unable to earn further promotions.

The most important value in hiring

Valuing lack of weakness rather than strength The more experience you have, the more you realize that
there is something seriously wrong with every employee in your company (including you). Nobody is
perfect.

A16Z

We invest in companies that have CEOs. The burden of unrelenting confidence lies with them. I can now
share my weaknesses, my fears, and my shortcomings. I can say what I want without worrying about
offending the wrong people in the power structure. And it’s those fears and controversial opinions that
hold the clues to dealing with hard things. 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.

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. I was a testament to that.
But, most venture capital firms were better designed to replace the founder than to help the founder
grow and succeed.

Conclusion

On my grandfather’s tombstone, you will find his favorite Marx quote: “Life is struggle.” I believe that
within that quote lies the most important lesson in entrepreneurship: Embrace the struggle. When I
work with entrepreneurs today, this is the main thing that I try to convey. Embrace your weirdness, your
background, your instinct. If the keys are not in there, they do not exist. I can relate to what they’re
going through, but I cannot tell them what to do. I can only help them find it in themselves. And
sometimes they can find peace where I could not. Of course, even with all the advice and hindsight in
the world, hard things will continue to be hard things. So, in closing, I just say peace to all those engaged
in the struggle to fulfil their dreams.

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.

If the price of books was determined by the amount of valuable advice they contained, Ben
Horowitz’s  The Hard Thing About Hard Things: Building a Business When There Are No Easy
Answers would be very expensive.

Funny, straight talking, and brutally honest, The Hard Thing About Hard Things is full of wisdom for
anyone working in a startup, founding a startup, or running a startup. Oh and it’s also got swear words
and rap lyrics.

The Hard Thing About Hard Things tells many real tales from the battlefield Horowitz’s experiences at
LoudCloud, Opsware, and more recently Andreessen Horowitz. He is admirably honest about the
mistakes he made, the hard things he’s had to do, and the failures and close calls that he encountered
along the way.

The person who will get the most out of this book is the current (or aspiring) CEO. The second half of the
book gives CEOs and leaders advice on how to recruit, motivate, train, and even fire employees.

It also gives a lot of advice on how to make decisions, including the necessity for the startup CEO to have
an unshakeable belief in their ability to find the answers:

Startup CEOs should not play the odds. When you are building a company, you must believe there is an
answer and you cannot pay attention to your odds of finding it. You just have to find it.

One of my favorite chapters gives advice on hiring the right people. Horowitz notes that the prism
through which a person views the world is very important for how well they will fit into your
organization:

  When interviewing candidates, it’s helpful to watch for small distinctions that indicate whether they
view the world through the “me” prism or the “team” prism.

People who view the world through the “me” prism will optimize for their own personal career (he
refers to this as local optimization). On the other hand, people who look at the world through a “team”
prism will optimize for the success of the company (global optimization).
Another great section of the book discusses the courage required to to make the tough calls. Horowitz
argues that the cowardice or courage that lies behind the decisions of the CEO will flow through the
organization as a whole.

Every time you make the hard, correct decision you become a bit more courageous and every time you
make the easy, wrong decision you become a bit more cowardly. If you are CEO, these choices will lead
to a courageous or cowardly company.

The Hard Thing About Hard Things is a great blueprint for anyone involved in building a startup from the
ground up. It’ll also leave you feeling full of empathy for your CEO. (We <3 you Heather!)

We’re giving away a copy of The Hard Thing About Hard Things! Simply leave a comment in the section
below to go into the draw. Comments must be made by midnight on Wednesday May 14th and we’ll
draw the winner the following day.

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.
If the price of books was determined by the amount of valuable advice they contained,
Ben Horowitz’s The Hard Thing About Hard Things: Building a Business When There
Are No Easy Answers would be very expensive.

Funny, straight talking, and brutally honest, The Hard Thing About Hard Things is full of
wisdom for anyone working in a startup, founding a startup, or running a startup. Oh and
it’s also got swear words and rap lyrics.

The Hard Thing About Hard Things tells many real tales from the battlefield Horowitz’s
experiences at LoudCloud, Opsware, and more recently Andreessen Horowitz. He is
admirably honest about the mistakes he made, the hard things he’s had to do, and the
failures and close calls that he encountered along the way.

The person who will get the most out of this book is the current (or aspiring) CEO. The
second half of the book gives CEOs and leaders advice on how to recruit, motivate,
train, and even fire employees.
It also gives a lot of advice on how to make decisions, including the necessity for the
startup CEO to have an unshakeable belief in their ability to find the answers:

Startup CEOs should not play the odds. When you are building a
company, you must believe there is an answer and you cannot pay
attention to your odds of finding it. You just have to find it.
One of my favorite chapters gives advice on hiring the right people. Horowitz notes that
the prism through which a person views the world is very important for how well they will
fit into your organization:

 When interviewing candidates, it’s helpful to watch for small

distinctions that indicate whether they view the world through the “me”
prism or the “team” prism.
People who view the world through the “me” prism will optimize for their own personal
career (he refers to this as local optimization). On the other hand, people who look at
the world through a “team” prism will optimize for the success of the company (global
optimization).

Another great section of the book discusses the courage required to to make the tough
calls. Horowitz argues that the cowardice or courage that lies behind the decisions of
the CEO will flow through the organization as a whole.

Every time you make the hard, correct decision you become a bit
more courageous and every time you make the easy, wrong decision
you become a bit more cowardly. If you are CEO, these choices will
lead to a courageous or cowardly company.
The Hard Thing About Hard Things is a great blueprint for anyone involved in building a
startup from the ground up. It’ll also leave you feeling full of empathy for your CEO. (We
<3 you Heather!)

We’re giving away a copy of The Hard Thing About Hard Things! Simply leave a
comment in the section below to go into the draw. Comments must be made by
midnight on Wednesday May 14th and we’ll draw the winner the following day.

One version of a business book – the kind I don’t recommend – consists of a series of
Powerpoint-ready bromides matched to business anecdotes and sports analogies about
 achieving success, explaining the keys to the author’s path. The author did well, here’s
the path, so you should try it as well.

A better version of a business book[1] – and Ben Horowitz writes The Hard Thing About
Hard Things in this mold – is to describe all of the mistakes, sleepless nights, and
layoffs endured on the way to success. This has the virtue of being a truer version of
events, and a more realistic guide to the entrepreneur on the difficult journey.

I do recommend this book.

The first one quarter of the book – his origin story – is the most exciting and best
written. After an early career of moderate success as an engineer at Silicon Graphics,
NetLabs, and Lotus Development, he applied in 1995 for a job at Marc Andreessen’s
startup Netscape. Following that extraordinary success and crashing failure, Horowitz
went on to lead a company called Loudcloud.

He tells exciting stories about that painful experience, which flamed out, only to rise
from the ashes as Opsware, which sold to Hewlett Packard for $1.6 billion. After that,
Horowitz joined again with Andreessen to lead the venture capital firm Horowitz-
Andreessen.

I have my own origin story about flaming out

in a painful way, and seeking redemption. Unlike Horowitz, I did not then go on to lead
my lost-for-dead company to a billion-plus valuation and parachute into being a leading
venture capitalist.[2]

Horowitz never sugarcoats the role of leading a company as CEO. The remaining three-
quarters of the book – which appear to be a compilation of blog-post advice on business
leadership – continue the theme of difficult times.

Some highlights:

 Expect multiple incidents of declaring WFIO (We’re Fucked, It’s Over)

 Leading sometimes means “choosing between horrible and cataclysmic.”
 The decisions that lead to inadvertent politicization of the office
 On firing employees the right way
 Shortcuts in management that lead to huge problems later

Horowitz is funny. He’s willing to tell stories about his failures, which is endearing.

He insists on headlining chapters with hip-hop epigraphs, which is either a terrible

affectation or honestly come by. I don’t know him, so I can’t judge.

He lapses into more clichés and business

bromides in the latter part of the book. When confronting problems, Horowitz notes,
“focus on the road, not the wall.”

“When someone learns to drive a race car, one of the first lessons taught is that when
you are going around a curve at 200 mph, do not focus on the wall; focus on the road. If
you focus on the wall, you will drive right into it. If you focus on the road, you will follow
the road. Running a company is like that.”

Ok, whatever. That is typical business book/sports analogy bullshit, even though we
know what he’s trying to get at. I’m so tempted to write a Jack Handey version of that.

Anyway, just focus on the first quarter of the book. It’s exciting. You could read this as a
“how to be a CEO” book, and as such it’s a great series of warnings about how difficult it
will be, how often you will screw it up, how many sleepless nights you’ll endure, how
frequently you’ll be winging it and hoping for the best. Horowitz has deep credibility and
good stories.

[1] The best version of a business book – which I would like to write some day – is from
the businessperson who simply writes about his failures as a kind of counter-guide. A
“How Not To Invest” or “How Not To Start A Business” guide. I don’t know if I could ever
get this sold to an editor, but if you know someone who wants that, hit me up with a DM.
I’ll send you an outline of the book.
 I founded Bankers Anonymous because, as a recovering banker, I believe that the gap
between the financial world as I know it and the public discourse about finance is more than just
a problem for a family trying to balance their checkbook, or politicians trying to score points over
next year’s budget – it is a weakness of our civil society. For reals. It’s also really fun for me. 

Imagine your business is down to its last stretch of runway and your investors
refuse to put more cash into it. Your friends and your most trusted advisers tell
you that it’s probably time to throw in the towel, but as a last-ditch effort to find
some capital, you decide to take the company public.
You are half-certain that the company will go completely bankrupt during the
actual roadshow, making the entire process superfluous. You put on a brave
face for each banker you meet, and keep an eye on your phone for the call that
you’re hoping won’t come. And then it does.
But the call isn’t about your company, it’s about your family — the only thing in
the world that’s more important than your company. Your wife has had an
allergic reaction to her medicine and stopped breathing. In that moment, you
feel a fear that you’ve never felt before. Everything that matters to you is
slipping away. This is Ben Horowitz’s story, as told in his new book, The Hard
Thing About Hard Things: Building A Business When There Are No Easy
Answers.
When I first heard that Horowitz was writing a book, I thought of my husband.
Because of my job I’ve always known that being a founder is hard, but watching
Suneel create and launch Rise made me realize how emotionally taxing the
journey can be.
As supportive as I try to be, I know there’s nothing like Suneel hearing empathy
from someone who’s been through that and worse. That’s why he, and many
other founders, have come to rely on Horowitz’s routine writings in the
blogosphere.
In the past year or so, a publisher approached Horowitz, attempting to convince
him to put his thoughts into book format.  He thought that if he did it, it would
have to be different from other books that address how to be successful as a
CEO. First, he wasn’t doing it for the money. He’s donating the book’s earnings
to the American Jewish World Service in order to support its efforts to help
women fight for their basic rights throughout the world.
Second, there was something missing in the management advice book world.
As Horowitz explained to me in an interview, he drew a lot of inspiration from a
book by former Intel CEO and president Andy Grove, Only the Paranoid
Survive: How to Exploit the Crisis Points That Challenge Every
Company. Horowitz saw a way that he could expand on what Grove tackled in
his book by talking about the real problems and issues entrepreneurs face in
the context of his own experiences.
He told me in an interview, “I would have never wanted to write another
management book. There are so many of them and everybody says the same
thing about them, and they are all the same — they give the exact same
advice. It’s like a diet book, they all say eat less calories, exercise more, and
every single book has the same conclusion. So I didn’t want to write another
one of those. But having been on the other side I really felt like there was a
missing book, which was what happens when everything goes wrong, and you
have set it all up right.”
The first thing that struck me as compelling about Horowitz’s book is his brutal
honesty around his own missteps when it came to being an engineer, founder,
husband and more. Of course, many would say it is easy to be honest about
struggle and startups when you’ve had a $1 billion-plus exit to HP and now lead
a successful venture capital firm. But when you read Horowitz’s account, his
honesty comes across as genuine. And my sense is that his honesty is part
self-reflecting and part inherent, and translates into the book because it is a trait
he has had for some time — for better or worse.
Horowitz spends the first few chapters establishing his own story, from growing
up in Berkeley (his father is conservative writer and policy advocate David
Horowitz), to meeting his wife Felicia in LA, and then the unfolding of his
career. He gives the reader an inside view into his humble start as an engineer
at NetLabs, and his beginnings working for his future venture and business
partner Marc Andreessen.
Horowitz really delves into the story behind Loudcloud, and then Opsware,
which was born of Loudcloud. It’s in this moment in time Horowitz appears to
have had the bulk of his education as a CEO, manager, and founder.
Loudcloud, and Opsware, and this by no means was an easy road. In fact, the
way Horowitz describes the journey, it was an epic disaster at some points. He
recalls in the book that Loudcloud was running out of money and the company
decided to IPO because private investors wouldn’t invest any more cash.
On the roadshow, Horowitz says he was sure the company would go bankrupt.
And in the midst of all this and his travel, his wife Felicia had a serious health
scare, as outlined above. These sorts of hardships are the reason why he
spends so much time on the actual journey versus the outcome, which was that
HP acquired Opsware for over $1 billion in 2007.
With this background set up, Horowitz spends much of the rest of the book
around advice, and shares anecdotes from these times at various points. He
also inserts quotes from rappers like Nas, The Game and others within
chapters. Clearly, this isn’t your traditional, how-to founder advice. He tackles
the real problems and challenges entrepreneurs face, because these are the
questions he asked his mentors and problems he tackled along his journey.
For example, he spends an entire chapter on  how to lay employees off.
Another chapter addresses when it’s okay to poach from a friend’s company.
Horowitz also devotes time to advising on how to minimize office politics, how
to establish titles and measure performance, and how to train employees and
tell a good product manager from a bad product manager.
But where Horowitz separates himself is in his advice around how to control
your own psychology and demons as a CEO and founder. These are real
problems that every CEO and leader faces, as sometimes they are their own
worst enemy. As Horowitz writes in one passage:
By far the most difficult skill I learned as a CEO was the ability to manage my own
psychology. Organizational design, process design, metrics, hiring and firing were all
relatively straightforward skills to master compared with keeping my mind in check. I
thought I was tough going into it, but I wasn’t tough. I was soft. Over the years I’ve spoken
to hundreds of CEOs, all with the same experience. Nonetheless, very few people talk
about it and I have never read anything on the topic. It’s like the fight club of
management: the first rule of the CEO psychological meltdown is don’t talk about the
psychological meltdown. At risk of violating the sacred rule, I will attempt to describe the
condition and prescribe some techniques that helped me. In the end, this is the most
personal and important battle that any CEO will face.

Horowitz also delves into the next chapter of his professional life as a venture
capitalist. Here he covers the history of founding A16Z with Andreessen, the
reason behind the firm’s focus on hiring former founders as VCs and its
replication of the CAA agency model in the VC world. He goes into detail
around how he and Andreessen have segmented the firm into networks, which
include large companies, executives, engineers, press and analysts, and
investors and acquirers.
So what makes this different from the scores of business advice books out
there? Horowitz has essentially taken much of the advice that a mentor like Bill
Campbell (a.k.a. the startup whisperer to some household names in
technology) has bestowed upon him and Andreessen, as well as many of the
other top CEOs in Silicon Valley, and made it accessible for entrepreneurs
around the world.
It’s fair to point out that Horowitz’s ways of approaching problems may not
necessarily be the right way for everyone. He’s speaking from his specific
experience running an enterprise tech company and if you don’t want to be a
founder, CEO, or senior leader in an organization, this book may not be helpful
to you.
While there are some drier ‘how-to’ parts of the book, there’s also anecdotes
from Horowitz peppered in. You won’t find many many similarities between
Horowitz’s outlook and advice and the perspective you might find on Wall
Street.
One of the chapters of the book is titled “The Struggle,” and offers founders a
level of empathy that is almost too real (this was part of a post he wrote on
TechCrunch in 2012). He deliberately doesn’t sugar coat anything, because he
knows better than most that the world of a founder, is paved with hardship and
can be very bitter. My bet is that Horowitz’s book becomes gospel for startups.
His stories already have.
Be sure to check in tomorrow, as we’ll be posting a Q&A with Horowitz about
the book, his inspiration, and more.