Building a Business When There Are No Easy Answers

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The Hard Thing About Hard Things summary PDF

1-Sentence Summary of The Hard Thing About Hard Things

Discover the brutal truth about entrepreneurship with ‘The Hard Things About Hard Things.’ Get ready for a no-nonsense guide to overcoming obstacles and achieving success.

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Introduction

Ever considered failing on purpose? Or do you ever make a mistake that you have no idea how to resolve? Few management books explain how to confront the most difficult scenarios, or how to correct something that has gone wrong.

In The Hard Thing About Hard Things, Horowitz shares his experience of being a founder-CEO and the hard decisions he has had to make. He offers advice on managing tough problems as a leader, much of which business courses do not cover.

While most management books focus on doing things correctly, Ben offers insights into what to do after you have screwed up. This period following errors offers the perfect environment for you to grow.

About Ben Horowitz

Ben Horowitz, cofounder of Andreessen Horowitz, is one of Silicon Valley’s most respected entrepreneurs. He has held senior positions at Netscape, AOL, and Hewlett-Packard.

Horowitz was exposed to diverse perspectives of the world from an early age. This was not least because his parents and grandparents were card-carrying Communists. Looking at the world through different lenses helped him learn how to separate facts from perceptions. This ability proved invaluable when he became an entrepreneur. Despite the challenges, Horowitz believed in fair treatment of his employees and always telling them the truth. He understood that the innovator’s job is to figure out the right product.

Today, Horowitz is well known for his management expertise, which he shares through books and presentations. The Hard Thing About Hard Things is his most notable book.

StoryShot #1: Alternative Explanations Offer a Fresh Perspective

Until you make an effort to get to know someone or something, you don’t know anything.

There are no shortcuts to knowledge, and most knowledge is gained through personal experience. Following conventional wisdom and relying on shortcuts can be worse than knowing nothing.

We must learn to separate facts from perception. One way of doing this is by seeking alternative narratives and explanations coming from radically different perspectives. Searching for these contrasting perspectives has the potential to breathe life back into you and your workforce.

This is the same approach Horowitz adopted after being brought up in a communist family. Instead of accepting this worldview, Horowitz searched for a radically different perspective. This was the start of his journey towards becoming a venture capitalist.

“Note to self: It’s a good idea to ask, “What am I not doing?” — Ben Horowitz Click to Tweet

StoryShot #2: The Right Friends Will See You Through

The most important rule for privately raising money is to look into the market. You only need one investor to say yes. Don’t worry if 30 others have said no.

Running a startup involves two emotions: euphoria and terror. You need friends in your life who can help you through both of these extreme emotions. Two types of friends to have are:

One you can call when something good happens, and they’ll be excited for you.
One you can call when things go horribly wrong.

If you want to keep these friends, you have to treat them well. Even if your friends leave you, you must still treat them well. If you don’t treat the people who leave fairly, those who stay will never trust you again.

StoryShot #3: Failure and Innovation are the Keys to Progress

There are two ways to ensure your company progresses: learn from your failures and innovate to give your customers what they want.

Learn by Failing

Sometimes the only way to survive is to go out and fall on your face on purpose. This will help you learn fast and know what you must do to succeed.

Instill this approach in all your employees to avoid delays. Project delays in large organizations almost always come down to a single person, so this rapid learning approach must be implemented throughout your organization.

Create What the Customer Needs

Customers have a limited understanding of what they want from a product. Their current wants are based on their experience with existing products. Creating the right product for your customers is the job of your innovators. Don’t place this responsibility on your customers.

Innovators, with their broader view, can consider all possibilities, including those beyond the current market trends or customer feedback. They can imagine and create products that customers might need but haven’t yet articulated. For innovators to be successful, they need a blend of knowledge (understanding of the market, technology, and customer behavior), skill (ability to design and develop new products), and courage (willingness to take risks and try something new). Sometimes the most significant opportunities lie in areas that are currently being ignored or unexplored. Innovators should focus not only on what they are currently doing but also on what they are not doing, as this could be where significant innovations lie.

StoryShot #4: A CEO Should Not Play the Odds

“Sometimes an organization doesn’t need a solution; it just needs clarity.” — Ben Horowitz Click to Tweet

Horowitz offers a personal example of how to react when things fall apart by talking about his business, LoudCloud. When the odds of LoudCloud’s survival were low, a LoudCloud board member advised him to create a contingency plan in case of bankruptcy. Horowitz never made that plan. He realized that if he did, the company would go bankrupt because the odds were in favor of that happening. Horowitz found an answer and the company survived.

CEOs should not play the odds. When you are building a company, you must believe there is an answer to the problem facing you. Don’t pay attention to the odds of finding that answer, just find it. There won’t be a perfect formula for dealing with the unique challenges you will face.

Focusing and making the best move when there seem to be no good moves is crucial to being a successful CEO. When things get unbearably complex and the struggle begins, there are a few things you can try.

Don’t put all the organization’s struggles on your shoulders. Share every burden with the maximum number of brains.
Tell it like it is. Ensure informal information and ideas are flowing freely. Avoid adopting the old management standard: “Don’t bring me a problem without bringing me a solution.”
You will have to lay people off at some point. Get your head right by focusing on the future of the company rather than its past. Do not delay. If word leaks out before you execute the decision, a whole new set of issues will arise. Be clear about why you need to lay people off. If it is because the company failed to hit its plan, admit that failure. Be visible and present to boost the confidence of those who are still on board.

Birds-eye view of two men and one woman in business wear around a table covered in papers

Peacetime CEOs vs. Wartime CEOs

To be a good CEO, you need to be capable of embodying both a peacetime and a wartime approach and know when to play which role. Which type you adopt will depend on context.

When a company is in peacetime, it is ahead of the competition, and its market is growing. In wartime, a business is threatened in some way, whether by competition, market change, supply issues, or other major challenges.

There are major differences between a Peacetime CEO and a Wartime CEO. Some of these include:

A Peacetime CEO knows following protocol is the path to success. A Wartime CEO violates protocol to win.
A Peacetime CEO focuses on the bigger picture, empowering people to make micro decisions. A Wartime CEO concerns themselves with the smallest detail if it interferes with the main goal.
A Peacetime CEO always plans for contingency. A Wartime CEO knows sometimes you have to risk everything.
A Peacetime CEO aims to avoid profanity. A Wartime CEO sometimes uses profanity on purpose.
A Peacetime CEO looks to expand the market. A Wartime CEO wants to win the market.
A Peacetime CEO tolerates deviations from the plan if coupled with effort and creativity. A Wartime CEO is completely intolerant of any changes from the planned direction.
A Peacetime CEO does not raise their voice. A Wartime CEO rarely speaks at a normal volume.
A Peacetime CEO works to minimize conflict. A Wartime CEO heightens it.
A Peacetime CEO sets bold goals. A Wartime CEO is too busy fighting the enemy to read books about management best practice.
A Peacetime CEO trains their employees to ensure satisfaction and career development. A Wartime CEO trains their employees, so they don’t fail when encountering difficulties.

StoryShot #5: Take Care of the People, The Products, and the Profits — in That Order

It is crucial to create a positive work environment. People spend most of their waking life at work, so work environments are important. Offering benefits to your employees will help you further down the line.

When things are going well, being a good company doesn’t matter. But, it can be the difference between life and death when things go wrong.

When things are going well, a healthy working environment means

Your employees will experience career growth as the company grows. More attractive job positions will become available.
They will impress their friends and family.
Their résumé gets stronger as they are working at a blue-chip company in its heyday.
They will become rich.

When things go poorly, all those elements evaporate and become reasons for them to leave. The only thing that keeps an employee at a company when things go wrong is liking their job. Despite the hardships, they still enjoy where they work and what they do.

Horowitz offers the following advice when expanding your team:

Hire for strength rather than lack of weakness.
Have clear expectations of whom you are hiring to realize there is something wrong with every employee in your company (including you). Nobody is perfect.
Involve multiple people in brainstorming but make the final decision alone. Consensus-based decisions tend to sway the process away from strength and towards weakness.

“Former secretary of state Colin Powell says that leadership is the ability to get someone to follow you even if only out of curiosity.” — Ben Horowitz

StoryShot #6: Leaders Must Minimize Politics in Their Company

As organizations grow larger, important work can go unnoticed. The hardest workers can be forgotten in favor of the best office politicians. Bureaucratic processes can choke out creativity and true productivity.

As a company grows, it is crucial to minimize politics within your organization. Politics encourages people to advance their personal agendas instead of growing through merit.

Adopt Horowitz’s four tips for minimizing politics in a company:

Hire people with the right type of ambition. The right type is an ambition for the company’s success. The executive’s own success should be a by-product.
Maintain strict policies and processes on organizational design, performance evaluations, promotions, and compensation.
Promote experienced employees. Measure results against objectives, management skills, innovation, and how they work with others.
Ensure one-to-one meetings between employees and managers. These provide an ideal platform for employees to discuss ideas, pressing issues, and chronic frustrations.

StoryShot #7: Lead Even When You Don’t Know Where You Are

Every startup CEO should focus on what needs to be right rather than worrying about what is wrong. One of the most difficult challenges is keeping your mind in check. Move aggressively and decisively without appearing out of control.

To calm your nerves, find someone you can talk to who understands what you’re going through. Put your ideas, challenges, and fears on paper to better focus on where you are going.

When the business is struggling, avoid lying to your employees and pretending everything is fine. Employees are not stupid. By being truthful, you can create honest conversations that will help your team overcome these hard things.

StoryShot #8: The First Rule of Entrepreneurship Is That There Are No Rules in Business

This theme crops up repeatedly throughout The Hard Thing About Hard Things – there are no rules in business. Things may seem to be going well, but they can change in an instant. You must be willing to change your approach and avoid staying devoted to certain rules.

Spend your time improving accountability and creativity within your organization. These two features are the key to a successful business. There are no universal answers except for, “It depends…”

StoryShot #9: Technical Founders Should Run Technical Companies

“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.” — Ben Horowitz

After selling Opsware, Horowitz went to work for Hewlett-Packard. This experience reinforced his belief that he needed to do something else. He decided to set up a firm designed to help technical founders run their companies.

Technical founders are the best people to run technology companies. All long-lasting technologies thrived when led by their innovator, e.g., Intel, Amazon, Apple, Google, and Facebook.

With this new company, Horowitz wanted to teach the founders that things are hard because there are no easy answers. They are hard because your emotions are at odds with your logic. They are hard because you don’t know the answer and cannot ask for help without showing weakness.

While Horowitz’s firm cannot provide a founder CEO with every skill, it can provide mentorship based on his experience and knowledge. It teaches leaders the hard thing about hard things.

Final Summary and Review

“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.”
— Ben Horowitz

The Hard Thing About Hard Things offers actionable life and leadership lessons. Being successful in life and business is all about how you prepare for the hard things in life.

Set up teams and workspaces that ready your organization for the hard things. Hire based on strengths rather than weaknesses, as these strengths will be crucial when things get tough. Set expectations and trust your employees.

That said, you must also create a work environment that all your employees enjoy. If you do this, they will help you make the good times better and help you fight through the hard times.

Let’s review the main takeaways from The Hard Thing About Hard Things:

We learn by failure. Don’t be afraid to fail, but learn from your mistakes.
Ignore the odds when faced with a difficult decision. Believe in the outcome you want and work toward it.
Employ a mix of peacetime and wartime CEO strategies, and know when to use them.
Take care of your people. This will stand you in good stead in the long run.
The best people to run technical companies are the technical founders.

Have you had to face difficult situations in your role as CEO? Tag us on social media and let us know how you resolved them.

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Editor’s Note

This piece was first published on 1 April 2021.

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