Most business books focus on strategy, culture, and goal-setting. But Ben Horowitz knows those aren’t the hard parts. The hard parts are the brutal decisions that keep you up at night\u2014such as firing friends who no longer fit or betting everything on one last desperate move to save your dying company.<\/p>\n\n\n\n
The Hard Thing About Hard Things<\/a><\/em> is Horowitz’s battle-tested guide for navigating those impossible moments. Drawing from his years leading companies through near-disasters (and eventual success), he shares in his book what it really takes to survive “the Struggle” and come out stronger.<\/p>\n\n\n\n\n\n\n\n Ben Horowitz isn\u2019t impressed with most business books. Most of what they discuss\u2014setting audacious goals, constructing a winning strategy, building a cheerful culture\u2014isn\u2019t the hard part of building a company. The hard part is firing your friends when they no longer fit your company\u2019s goals, it\u2019s staring at impending bankruptcy and throwing your Hail Mary to save the company.<\/p>\n\n\n\n Most business books try to give a recipe for success, but \u201cthe hard thing about hard things\u201d is that there is no recipe for those hard situations<\/strong>. This book is a collection of advice and first-hand experiences to help company operators deal with the hard times.<\/p>\n\n\n\n Horowitz began his career at the dawn of the Internet, working at browser and server company Netscape before it sold to America Online. He then co-founded Loudcloud, a cloud computing company, at the height of the bubble in 1999. As the bubble crashed, the company faced an endless series of existential crises, from running out of money to having their largest customers go bankrupt to facing tough competition. Ultimately, he pulled the business around (which had rebranded as Opsware) and sold to HP for $1.6 billion in 2007.<\/p>\n\n\n\n This grueling experiences led him to do two things:<\/p>\n\n\n\n Horowitz’s book The Hard Thing About Hard Things<\/em> covers a wide span of topics, including handling the psychology of a failing company, building a good place to work, scaling a company<\/a>, and being a good CEO<\/a>. Let’s get into the details.<\/p>\n\n\n\n Most people start their companies with boundless enthusiasm. The sky is open, the possibilities are endless, and success is inevitable.<\/p>\n\n\n\n Then reality hits. Your plans have not lived up to their promise. You don\u2019t 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.<\/p>\n\n\n\n This is the Struggle<\/em>. <\/strong>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\u2019ve failed everyone who was dumb enough to believe in you.<\/p>\n\n\n\n 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.<\/p>\n\n\n\n Here are suggestions on how to cope with the Struggle and find a way out of it:<\/strong><\/p>\n\n\n\n Take care of the people, and the products and profits will follow.<\/strong> If you reverse the priorities, you\u2019ll end up with a miserable workplace and possibly sabotage your success.<\/p>\n\n\n\n You can best take care of your people by making your company a good place to work<\/strong>, which has the following attributes:<\/p>\n\n\n\n A poor place to work inverts all of these. People aren\u2019t clear what their jobs are; they don\u2019t know if their work means anything; their work gets stymied by dumb obstacles; and people despise whom they work with.<\/p>\n\n\n\n Every company wants to hire the best people they can find. Horowitz\u2019s general advice:<\/p>\n\n\n\n When you\u2019re a startup, you may prefer to promote people from within. But hiring executives<\/a> from outside will help you move faster. They know how to do things that your company doesn\u2019t know right now. <\/p>\n\n\n\n The problem: if you\u2019ve never done the executive\u2019s job before, you might not know how to hire<\/a> for it. Here are pointers:<\/p>\n\n\n\n Training new people is one of the most valuable activities a company can do. <\/strong>It is wonderfully high-leverage\u2014each person spends 2,000 hours per year working for your company. Say you spend ten hours to train a group of ten people, who collectively work 20,000 hours in their first year. If you improve their performance by 1%, you have converted 10 hours of your time into 200 hours of extra team productivity<\/a>.<\/p>\n\n\n\n There are two types of training in a company: functional training, which provides the knowledge and skills to do the job, and management training, which trains managers to manage their teams.<\/p>\n\n\n\n In general, functional training should do the following:<\/p>\n\n\n\n Beyond these generalities, functional training should be customized to the job that needs to be done. <\/p>\n\n\n\n Management training prepares managers to lead their teams. It should do the following:<\/p>\n\n\n\n Once you hire the right people<\/a> and train them, you\u2019ll need systems in place to keep them productive and happy. Maintaining a strong work culture, facilitating communication, and providing frequent feedback are all important.<\/p>\n\n\n\n Culture consists of key values that define what your company does and how it does it.<\/strong> Examples of key values include frugality, customer obsession, and beauty of design. Good key values meaningfully distinguish you from your competitors<\/strong>.<\/p>\n\n\n\n A strong culture is practically useful\u2014it helps you filter for hires who will fit<\/strong>, and it shapes the behavior of people<\/strong> at the company.<\/p>\n\n\n\n Beyond just articulating vague cultural values, implement a simple, scalable<\/a> behavior that reinforces the key value<\/strong>. For example, Amazon emphasizes frugality with its famous door desks. Jeff Bezos knew that competing in the cutthroat online retail industry would require the lowest pricing, which required the company to save as much money on overhead as it could. He built the company\u2019s first desks by buying a door and screwing legs into them. This reinforced the cultural value of frugality and how the employees are saving money to save the customers money. These small actions<\/a> reinforced the key cultural value across the company in a highly scalable way. <\/p>\n\n\n\n One-on-one meetings are private meetings between a manager and her direct report. Compared to email or group meetings, they\u2019re relatively informal and intimate, and thus provide a good avenue for discovering issues and ideas that aren\u2019t fully formed.<\/p>\n\n\n\n Here\u2019s how to run a one-on-one:<\/p>\n\n\n\n As a manager, you should constantly be evaluating people and giving feedback. This gives people ways to improve. In turn, this makes them more productive and makes them feel you care about their development. <\/p>\n\n\n\n You should develop a personal style around giving feedback based on your own personality. However, here are general pointers that apply to everyone:<\/p>\n\n\n\n When you\u2019re at five people, you don\u2019t need processes. Everyone communicates with each other by talking across a table, and decisions are made quickly. There is no politics because everyone can hear each other.<\/p>\n\n\n\n When your company grows, these problems become exponentially more difficult. You will need to build processes to keep people communicating, making good decisions<\/a>, and sharing knowledge. <\/p>\n\n\n\n In general, here are the main principles of designing a good process:<\/p>\n\n\n\n Processes help deal with the touchiest issues of compensation, promotions, and complaints. If you don\u2019t handle these well, politics will set in, and people will get ahead by means other than merit. The full summary has more detailed advice around this, but the general premise is to create a well-defined process, then stick to it regardless of what politics people try to play.<\/p>\n\n\n\n The most important responsibility of a CEO is leadership. You can measure a leader by the quantity and quality of people who want to follow her.<\/p>\n\n\n\n In practice, people want to follow leaders who do three things well<\/strong>:<\/p>\n\n\n\n Knowing what to do consists of two activities: articulating the vision and making decisions to achieve the vision.<\/p>\n\n\n\n Articulating the vision:<\/strong> The vision is the story for what the company is capable of doing and why it\u2019s exciting to work on. It\u2019s also the strategy behind how the company can achieve this vision. It answers the deepest questions of why: \u201cWhy is this important to build? Why is the world better off because of our work? Why should I work here instead of anywhere else?\u201d<\/p>\n\n\n\n A compelling vision gets talented people to work for you when they have the option of working anywhere. It also retains people when your company struggles. It aligns the entire team to make decisions that support each other.<\/p>\n\n\n\n Making decisions:<\/strong> Just as engineers output code and marketers output advertisements, the CEO outputs decisions. A good CEO makes high-quality decisions quickly. <\/strong>As CEO, you should be gathering information<\/a> in every interaction you have with employees, customers, competitors, and outsiders.<\/p>\n\n\n\nOverview of the Book The Hard Thing About Hard Things<\/em><\/h2>\n\n\n\n
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The Struggle<\/strong><\/h3>\n\n\n\n
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Building a Good Place to Work<\/strong><\/h3>\n\n\n\n
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Hiring Good People<\/strong><\/h3>\n\n\n\n
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Hiring Executives<\/strong><\/h4>\n\n\n\n
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Training<\/strong><\/h3>\n\n\n\n
Functional Training<\/strong><\/h4>\n\n\n\n
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Management Training<\/strong><\/h4>\n\n\n\n
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Managing People<\/strong><\/h3>\n\n\n\n
Culture<\/strong><\/h4>\n\n\n\n
One-on-One Meetings<\/strong><\/h4>\n\n\n\n
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Delivering Feedback<\/strong><\/h4>\n\n\n\n
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Scaling Your Company With Process<\/strong><\/h3>\n\n\n\n
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How to Be a Good CEO<\/strong><\/h3>\n\n\n\n
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Know What to Do<\/strong><\/h4>\n\n\n\n