How to Be a CEO During the Bad Times: The Struggle

This article is an excerpt from the Shortform book guide to "The Hard Thing About Hard Things" by Ben Horowitz. Shortform has the world's best summaries and analyses of books you should be reading.

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When your company isn’t doing well, how can you be a good CEO? How do you get through the hard times without giving up? What is The Struggle?

In his book The Hard Thing About Hard Things, Ben Horowitz talks about the hard parts of starting a business and being a CEO. He discuses The Struggle that almost every CEO will go through and gives advice on how to get through it.

Keep reading for advice on how to be a good CEO and get through The Struggle.

How to Handle the Bad Times as a CEO

Most startup books talk about business strategy in the good times—how to form a competitive advantage, how to set big hairy audacious goals. Ben Horowitz is more interested in sharing advice on how to deal with the bad times in his book The Hard Thing About Hard Things. That’s critical if you want to know how to be a CEO.

The CEO Struggle

Most people start their companies with boundless enthusiasm. The sky is open, the possibilities are endless, and success is inevitable.

Then reality hits. Your plans have not lived up to their promise. You don’t have the traction you hoped for. Things seem to be unraveling. Your key first hires start leaving. Your customers start churning. It seems to point to inevitable failure.

This is the Struggle. The Struggle is when the impending failure of your company swallows every thought and sensation in your waking life. The Struggle is when you question why your idiot self ever started a company. The Struggle is sleepless lonely nights when you feel you’ve failed everyone who was dumb enough to believe in you.

Every entrepreneur has gone through the Struggle, from Steve Jobs to Elon Musk. Greatness is born from the Struggle.

The Struggle is a make or break moment. If you are weak and you succumb to the Struggle, you will fail. If you are strong and you can get through the Struggle, you have a fighting chance. 

Here’s how to cope with the Struggle and find a way out of it.

Realize Failing Is Normal

Being a CEO is unnatural. Humans didn’t evolve in a way that makes running a thousand-person company a natural thing to do. For instance, humans evolved behaviors to get other people to like them; as CEO, you will have to make decisions that will make people dislike you (at least temporarily).

This also means people aren’t born CEOs out of the womb. It is a learned skill. Even worse, it’s a skill that you can only learn by actually doing it. So if you’re a first-time CEO, you have no idea what you’re doing, and you have no idea how well you should be doing.

The good news is, most CEOs have failed repeatedly, and many are currently failing. Horowitz says that if CEOs were graded on a test, the mean score would be 22 out of 100. Many CEOs indeed don’t know what they’re doing; even among those who do, things simply go wrong because building a business is complex, the market is competitive, and the future is unpredictable. Every company goes through existentially threatening moments.

If you don’t know the mean score is 22, then you feel bad because you think you’re the only one underperforming. But now that you know better, you can focus on improving your score.

If You Want to Be a CEO, Don’t Quit

Despite being in the struggle, you must never give up. The only certain way you’ll fail is if you give up. When you see no good moves, you have to keep looking for a move. 

  • When Loudcloud was running out of money in the dotcom bubble, even Ben’s most trusted coach told him to prepare for bankruptcy. Horowitz looked for any solution he could, and he took Loudcloud to an IPO in 2001, after the bubble had already burst, 6 weeks away from running out of cash.

Ben doesn’t like thinking about the statistics of the situation—that there might be a one in a hundred chance of things working and a 99% chance of failure. The odds don’t matter to him—there is an answer to your problems out there, and your job is to find it.

Great CEOs push through the pain. 

Don’t Wallow in Regret and Self-Hate

In the Struggle, you will blame yourself. Every mistake will be your fault. You will turn over past decisions in your mind, and regrets will seep in.

At the same time, you might pity yourself. You were inexperienced—how could you have possibly known the decisions were bad? How could you have predicted the economy would take a sharp downturn? It’s unfair to play against a stacked deck.

This is all wasted energy. You can’t change the past, so regret is pointless. And no one cares why you failed or how difficult it was—they just know that you failed.

Focus on what you can do from today forward. Rather than focusing on what you did wrong in the past, focus on what you need to do right from now on.

Don’t Be in Denial

On the other extreme, when bad news happens, don’t delude yourself into thinking the situation is fine. This makes you feel better but hides the problematic truth.

  • If people quit, don’t think, “that’s fine, we didn’t want them anyway.” You put in the work to hire “rockstar” people—how could they all have turned out bad? Either your company is bad, or your hiring process is bad.
  • If you lose a sale, don’t believe a sales rep when she says, “our competitor gave away their product.” Call the buyer and see if this really holds true. Most likely, your product is not competitive.
  • If you miss your targets, don’t think “it was just a weak quarter” and come up with excuses like temporary dips in marketing. 

This is basic denial, and it will cause you to ignore problems you should fix right away.

People tend to like good news more than bad news. They act on the good news, and they reject bad news. (This might be tied to the psychological bias of loss aversion, where losses feel more painful than gains are rewarding. Accepting bad news would mean a loss in the status of the company, so it’s easier to pretend the loss isn’t real.)

The key is to balance the right level of emotional involvement: Take the problems seriously, but be emotionally detached from them. This will let you work on the problems without getting so obsessed that you micromanage or become emotionally paralyzed.

Write on Paper

If you’re struggling with a problem or a decision, write it down on paper. Articulate what you know and what you plan to do with the best logic you have.

Writing lets you separate the problem from your psychology and view it from a fresh objective lens. It can also be clarifying—a problem that’s an impenetrable knot in your head might simplify once you put it all out on paper. 

Talk to Other People

There are plenty of people who have been through similar difficult situations. Often these people can’t give you great advice about your situation, since they know so much less about your company than you do, but they can offer psychological help.

Talk to Your Team About the Company’s Problems

You think that you’re so brave, you’re shouldering all the world’s problems and that your team wouldn’t be able to handle the bad news. You think that you need to be Mr. Sunshine, beaming positivity to your team to keep their spirits high.

This is arrogant. In reality, no one will take the problems harder than you. You founded this company, and you will sink with the ship. In contrast, your employees can easily find a job elsewhere; your investors have other investments.

Also, your team isn’t dumb. They know that things aren’t great all the time, and bad news spreads faster than you can control. If you become known for hiding bad news, your team will stop trusting anything you say. If you are honest with your team, they will trust and respect you, knowing that you respect them.

You hired all these smart people for a reason. It’s a waste to not have them thinking about your company’s most critical problems. 

  • When Opsware was losing business to competitors, Horowitz called an all-hands meeting and told them the company was going to die if they didn’t improve their product. The team took it well and opted into the grind to revitalize their product.

Talking about problems openly sets an important cultural tone: It’s OK to surface problems. In some companies, bad news is buried, messengers are killed, and managers bark, “don’t bring me a problem without bringing me a solution.” This seems counterproductive. Wouldn’t you rather hear about problems early? Doesn’t it make sense for someone to report a problem even if they don’t know how to fix it. You can set the example by sharing bad news.

How to Be a CEO During the Bad Times: The Struggle

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Like what you just read? Read the rest of the world's best book summary and analysis of Ben Horowitz's "The Hard Thing About Hard Things" at Shortform.

Here's what you'll find in our full The Hard Thing About Hard Things summary:

  • What it was like to head a company through the dotcom bubble and subsequent burst
  • Why failing is normal
  • How to build a good place to work

Hannah Aster

Hannah graduated summa cum laude with a degree in English and double minors in Professional Writing and Creative Writing. She grew up reading books like Harry Potter and His Dark Materials and has always carried a passion for fiction. However, Hannah transitioned to non-fiction writing when she started her travel website in 2018 and now enjoys sharing travel guides and trying to inspire others to see the world.

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