The Hard Thing About Hard Things - Ben Horowitz

The Hard Thing About Hard Things - Ben Horowitz

Learn from this summary why you should give more importance to your employees than to profits and what qualities a leader needs to have.

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We all go through difficult times, don't we? The book "The Hard Thing About Hard Things", by Ben Horowitz, shows us that these moments exist and how we must face them.

Whether in personal or professional life, it doesn't matter, we all face challenges that have already made us think about giving up.

However, the big difference between those who succeed and those who fail is to not give up.

Inevitably obstacles will come your way, because it is not only internal issues that interfere in business, but also external factors, such as the economy in the country and the world.

How you handle difficult things depends on you. Keep reading this summary to know more about the author's experience with that!

About the book "The Hard Thing About Hard Things"

The book "The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers", written by Ben Horowitz, was released in 2014 by Harper Business.

It presents the author's own experiences on how to overcome difficult times when you are the leader of a company.

Also, he explains why being a CEO is considered one of the most difficult and lonely tasks that exist and gives tips on how to perform this function.

About the author Ben Horowitz

Ben Horowitz is an entrepreneur, blogger, investor, and author, as well as founding partner of the venture capital firm Andreessen Horowitz.

Previously, he was co-founder and CEO of the software company Opsware, which was sold for about $1.65 billion.

To whom is this book indicated?

If you are CEO, founder of a business, have the desire to be an entrepreneur, or are interested in understanding how companies achieve success, this work will help you on your journey.

The book "The Hard Thing About Hard Things" deals with the challenges of being an entrepreneur, going through difficult times, without giving up, and always focusing on developing the business despite the adversities.

Main ideas of the book "The Hard Thing About Hard Things"

The highlights of Ben Horowitz's book are:

  • You can start a company with high hopes, but have no doubts, you will encounter challenges;
  • Horowitz didn't fight alone, he enlisted the best minds to solve the problems of his company;
  • Put your people first, then your products, and, finally, your profits;
  • People with the right kind of ambition care about team success;
  • Don't just convey optimism, be honest about threats to the company;
  • Managers must deliver news of layoffs to their employees in person, never outsource this task to HR;
  • The founders of successful startups, such as Loudcloud, share a quality: they don't give up.

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[Book Summary] The Hard Thing About Hard Things - Ben Horowitz

Overview: Obstacles

Every startup encounters drawbacks. These obstacles can be: flaws in your products, limited resources, the loss of a collaborator... the list is extensive.

The author begins by talking about the obstacles he faced with his company.

Netscape veterans Ben Horowitz and Marc Andreessen founded Loudcloud, a cloud service provider, in 1999, and soon had difficulties.

Seven months after the start of the business, the company registered $10 million in contracts. They were hiring so fast that workers had to sit in the halls.

Then came the rupture of the "Internet Bubble" in 2000. Loudcloud needed capital, but it faced great hardships.

After Horowitz introduced a group of possible sponsors, a colleague told him that skeptical investors thought he was going crazy.

Loudcloud raised a total of $120 million, but with so many startups collapsing, the company's reserves fell far short of forecasts.

As the author Ben Horowitz shares in the book "The Hard Thing About Hard Things", he designed an agreement to sell the cloud business to EDS for $63.5 million and remake Loudcloud as a software company built around its intellectual property, Opsware. Investors refused: the price of their shares plummeted to 35 cents before slowly recovering.

After the Herculean labors, Opsware 's software business approached a revenue rate of $150 million, and its shares were sometimes traded at a market capitalization of more than $800 million.

Horowitz decided to offer Opsware, but only for $14 million or more per share, and managed to sell for $14.25 million per share, which gave a total of $1.65 billion.

The sale of the company was painful, but the author Ben Horowitz came to consider it the most intelligent movement of his career. As he emphasizes, it was built out of nothing, went back to nothing and still they managed to rebuild it to become a valuable franchise.

Overview: Going through difficult times

While he was driving Loudcloud and then Opsware on difficult days, the author Ben Horowitz took strength from the lessons he learned. See more about it in this overview.

Don't put everything on your shoulders

As CEO, you can't share everything, but remember that you don't have to bear all the burdens yourself.

Use as many people as possible to attack a problem.

Remember that there is always a movement

As it is highlighted in the book "The Hard Thing About Hard Things", managing a company is like playing chess: when you think you are without moves, think again. You always have a way out.

Play enough and you might be lucky

Things change so fast that you can find the answer you are looking for another day if you can just hang in there.

Overview: Dealing with layoffs

In this overview of the book "The Hard Thing About Hard Things", we are going to deal with an extremely delicate subject: layoffs.

Ben Horowitz's company has seen three mass layoffs involving 400 employees. Few startups recover from layoffs of this magnitude, because they break the trust of those who stay.

The author believes that Loudcloud was able to keep its best employees after several layoffs because they dismissed people in the right way.

So if you need to cut staff, start layoffs as soon as possible after you decide to do them, as news of a layoff leak can cause additional and even bigger problems.

Get managers to deliver the news to their own people, never outsource it to human resources.

Managers should explain that layoffs result from company failures, not personal failures of employees.

Jim Barksdale of Three P, Horowitz's former boss at Netscape, once said that he takes care of people, products, and profits - in that order. If people enjoy working for your company and you take care of them, they will reward you with loyalty and hard work.

If you don't take care of your employees, the product and profits don't matter.

Overview: Managing your growing business

With the growth, new challenges will arise for the management of your company. This overview will address them.

Minimizing Company Policy

Political behavior can infiltrate a variety of corporate activities, including performance appraisals, compensation, organizational structure, territory, and promotions.

You must reduce political behavior by designing rigorous processes and following them relentlessly.

Make sure everyone understands the process, advises the author Ben Horowitz in the book "The Hard Thing About Hard Things".

Hiring employees with the right kind of ambition

You should choose employees whose ambition is to be part of a winning company.

Promoting a strong culture

Some startups pride themselves on allowing employees to bring pets to work or to offer yoga classes. These are advantages, not culture. True culture drives behavior.

Overview: What makes a leader?

The author Ben Horowitz discusses the features and attitudes that a CEO must possess when it comes to running his business and making decisions:

  • The ability to articulate the vision: Steve Jobs persuaded Apple employees to believe in his vision even when the company was close to bankruptcy;
  • The right kind of ambition: a leader creates an atmosphere of shared ambition and trust, a quality that Bill Campbell exemplified at Intuit and other organizations;
  • The ability to achieve the vision: this quality helped Andy Grove gain the confidence of Intel employees by leading them through a brilliant change: moving from the memory business to the microprocessor business.

As CEO, work on all three qualities, even if you are stronger in one or two.

Also, ask three questions to evaluate a CEO's performance:

  1. "Does the CEO know what to do?";
  2. "Can the CEO make the company do what it knows?";
  3. "Has the CEO achieved the results considering an appropriate set of objectives?".

According to the book "The Hard Thing About Hard Things", knowing what to do involves using strategies and making accurate decisions.

Acting strategically requires courage because you will never have enough time to gather all the information you really need.

That is why you must continue to acquire knowledge, day by day, of small interactions with customers and employees.

When you need to make a decision, you will be better prepared to answer questions such as: "How can our competitors react? What is the financial risk?".

One of your most difficult decisions is knowing when to sell your company. Consider two questions:

  1. "Are you very new to a potentially large market?";
  2. "Do you have a good chance of being number 1 in this market?".

If the answer to one of these questions is no, you should consider selling.

In the early years of Google, the company received several purchase offers for more than $1 billion. But it was not sold. The answer to both questions would have been yes. Google was very new in a market in which it would be number 1.

Today, the company is worth over $132.1 billion.

Overview: Andreessen Horowitz

To conclude the book "The Hard Thing About Hard Things", the author Ben Horowitz tells the outcome of his trajectory and leaves some advice on business administration.

Going back to his example, after selling Opsware, Horowitz joined Andreessen to form a venture capital company that would help technology entrepreneurs.

Besides investing in companies, Andreessen Horowitz advises CEOs on the skills of designing sales organization and management.

The most important lesson Horowitz tries to convey to entrepreneurs is that running a company is difficult, it is a process with no easy answers:

"The only thing that prepares you to run a company is running a company."

The solutions are in the executive's instinct, in trust, and this comes from the experience and performance of this vital duty: embrace the fight.

What do other authors say about it?

The author of "Traction", Gino Wickman, explores how successful entrepreneurs have an attractive and well-defined vision for their business. Also, they know how to communicate this message to employees. From this, a guideline is created to be followed by everyone within the organization, always used to develop solutions and guide strategic actions.

For John C. Maxwell, author of the book "Leadership Gold", the best leaders are those who know how to listen. Listeners know what's going on because they are attentive. They learn better than others because they absorb from different places. And good listeners can see other people's strengths and weaknesses better.

In the book "The Leadership Pipeline", the authors emphasize that functional leaders need to manage certain areas that are outside their specialty. Therefore, they need to not only try to understand this different work, but also learn to value it.

Okay, but how can I apply this to my life?

We have separated some tips for you to start putting all the teachings of the book "The Hard Thing About Hard Things" into practice:

  • Be honest about the problems and bad news in your company as this will help you in solving problems;
  • Nobody wants to fire people, but, if necessary, do it quickly and fairly;
  • Take care of the people in your company, train them well and build a good human resources structure;
  • Hire people based on their strengths and not their weaknesses;
  • Build a good company where people want to work.

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Book “The Hard Thing About Hard Things”