Actionable Book Summary: The Hard Thing About Hard Things by Ben Horowitz
The Book In Three Or More Sentences:
Unlike the other business books, where the authors talk mostly about how cool it is to start a business, how to raise capital, and how important it is to carefully plan your next 5 years, in The Hard Things About The Hard Things you’ll find what to do when things go south. Ben Horowitz is brutally honest about the complications coming from running a business, especially in the tech industry, and paints a pretty grim picture of what might go wrong and how to act in these shitty situations.
The Core Idea:
In essence, this book is about the story of Ben Horowitz. We get a first-person view of his life as a CEO, founder, and manager. In The Hard Things About The Hard Things, he gives us a detailed description of the lessons he learned from running a company, saving it from bankruptcy – a couple of times – and later selling it. But the main thing here is actually something else. It’s warning us, and also preparing us, for all the pitfalls that are an integral part of running a company – things you won’t find in the other business books.
Building a company inevitably leads to tough times and unexpected difficulties.
If you’re a CEO, and you’re looking to hire people in higher roles – think HR director, CFO, VP of sales – make sure you’ve done the job yourself. Only by acting on the position, you’ll know what type of person you need.
In wartime, a CEO must clearly communicate to all of the personal that there is no room for personal creativity and solo-stunts. Everyone should execute on the plan conveyed by the CEO.
6 Key Lessons from The Hard Thing About Hard Things:
Lesson #1: There’s No Secret Sauce To Becoming A Good CEO
Despite your commitment. Your skillset. The people that work for your company. The cash you have. You can still fail. You can still fail your company and fail in the eyes of the people that trusted you.
There is no easy way to run a company and no secret sauce to being a successful CEO. You can read a ton of business books and still lack the discipline to put your company on the top.
Still, there is one skill that might give you a competitive advantage when things are hard. It’s the ability to stay focused and make a move even when it seems like there are no good moves left to be made.
The author suggests following the first principle of the Bushido way – the way of the warrior. That is, to keep death in mind at all times. To remind yourself that each day might be your last. This harsh realization will help you maintain focus, keep your grounded and help you make the right decisions in desperate times.
Lesson #2: No Matter How Clear Your Vision For Success Is, The Struggle Will Inevitably Come
Ben Horowitz, describes the Struggle as a dark place where only bad things happen. Your worst nightmares to be more precise.
The Struggle is the moment you realize that despite your efforts and your awesome team, product, the abundance of money even, your vision for success is far from reaching.
It usually occurs in the first couple of years of the organization and it makes you question things:
Why the hell did I start this company?
Why am I still doing this?
Why the food that I’m eating no longer tastes good?
Or as the author describes, “The Struggle is where self-doubt becomes self-hatred.”
Of course, the reasonable question here is, “Is there a way out the Struggle?”
And though the answer is positive, the steps to go beyond that wretched place are far from easy. But when, and if you successfully pass the Struggle, greatness awaits. It’s where great companies are born.
So, a couple of things to do that will help you get past the Struggle with fewer casualties:
Involve the whole company into the problem: When things get shitty don’t try to fix them all by yourself. Explain the situation to the whole company and tell your folks that if they want to keep their possitions they need to man up and prepare for a fierce fight.
There is always a move: It might feel like you’ve reached a dead end, that there is no way out, but there’s always a move. In today’s times, there’s always something you can do that will get your ass out the boiling water. You simply need to figure it out.
Survive long enough: In the tech world, if you survive long enough you’ll almost certainly in the game you’re playing. The problem is obvious: How to survive the early setbacks? By keeping things small and frugal and laying strong foundations.
Don’t rely on luck: It’s all up to you. The actions you’re going to take and the orders you’re going to give are what really matters. Luck has nothing to do with your possible future success.
Lesson #3: Nobody Cares About Your Troubles, Just Run Your Company
Regardless of what you’re doing, at some point, things will begin to fall apart. It’s your job to put the pieces together and even resurrect your company from the ashes if the worse happens.
You see, nobody cares about your troubles as a CEO. Not even your mom. That’s why you need to stop complaining when things are not going according to plan.
Because, you know, unexpected things are bound to happen. Always. No matter the industry you are in or your level of expertise. Customers will leave you. Employees will try to sabotage you. Software will brake. Partners will raise their prices. The market will change when you least expected to change.
But complaining, or hoping and wearing your lucky underwear won’t do you much of a favor. You must get your shit together and go to war if it feels like wartime.
If our company isn’t good enough to win, then do we need to exist at all?” Ben Horowitz
You might think that taking care of the profits should be mainstream but imagine if you’re close to bankruptcy and your team doesn’t give a shit about you and the company. What do you think will happen?
Yep, that’s right, most of them will throw a few not so appropriate words and go work for the competitors – leaving you all alone to figure out how to explain to your investors that they’re about to lose their investments.
In contrast, if you’re always taking care of the people, they’ll follow you even when the shit hits the fan – which always happens whether we like it or not.
The simple saying by Jim Barksdale is true for every organization. Yet, very few executives actually acknowledge this.
People are the backbone of every company, no matter the size. Also, taking care of the people is the most difficult task to execute of the three mentioned above because people, in general, are difficult to please and because without them the other two won’t quite matter.
So, the goal for every CEO or future founder should be to create a good place to work. A place where people are heard and taken care of even when the organization grows.
Lesson #5: Don’t Give People the Shit Sandwich. Talk To Them When Giving Feedback
The Shit Sandwich is a popular technique for giving feedback to your employees. People call it The Shit Sandwich because you wrap up the hard things (the shit) by two slices of bread that are meant to compliment the person.
The problem with this technique? People aren’t stupid and they’ll quickly sense what’s coming.
To become elite at giving feedback, you must go beyond the formal techniques that are easily noticeable. You must make it personal.
Some tips mentioned in the book:
Be authentic: Don’t aim to fool others or fake it. Believe in what you’re saying and always speak from the heart.
Help others succeed: The goal of your feedback shouldn’t be to crush them, it should aim to help them succeed in their careers as well as in their personal lives.
Never accuse people publicly: Embarrassing someone in front of others is a total no-no, even if they’re clearly asking for it.
Make it personal: Since everyone is different, you should tailor your approach depending on the person. You should be soft and gentle when the person sitting next to you is extremely sensitive to feedback. But don’t be afraid to raise your voice if the adjacent person is someone with an inflated ego.
Make it a dialog: Encourage people to talk, don’t sit there and do all the talking. Make it a discussion, not a monolog. Once you explain what’s needed from them, ask for their opinion and their point of view. Strive to create an environment where people freely share what’s bothering them.
Lastly, give feedback constantly:
If the CEO constantly gives feedback, then everyone she interacts with will just get used to it. Nobody will think, “Gee, what did she really mean by that comment? Does she not like me?” Everybody will naturally focus on the issues, not an implicit random performance evaluation.” Ben Horowitz
Lesson #6: There Are Three Key Traits That Will Help You Become a Good CEO
Becoming a good CEO is rarely about mastering a specific task. The head of a company, should be someone that possesses a mixture of qualities and also a person who can articulate a clear vision that will inspire others to follow him, no matter what. And all of this, simply cannot happen by reading business books only. This happens over a long period of time. Still, Ben Horowitz gives us a couple of traits (3) that will help us get started or assist us if we’re already running a company but we feel somehow lost:
The ability to articulate the vision: The first thing a good CEO must do is to deliver a vision worth following. No one will follow you or stay with the company if they can’t really imagine how the future might look like in your company. Especially in tough times, when it seems like all hope is lost. The example of a person able to generate such a compelling vision is, of course, Steve Jobs. Thanks to his ability to express his clear vision of what the computer could be, he saved Apple from bankruptcy.
The right kind of ambition: Big part of a good company is the culture it creates. This is something you can’t really control. Yet, you can at least steer in the right direction. How to do it? Care more about your employees and less about yourself. Your aim here should be to make your company feel like it’s their company. If accomplished, these folks will be the ones transmitting the rules to the fresh recruits and also acting like quality control.
The ability to achieve the vision: This stage is quite simple. Here we’re talking about your ability to execute. People will trust you only if they believe that you can actually do what you said. If you’re bossing around and giving orders without doing anything yourself, people will immediately sense your lack of skills and quickly abandon ship. You must work alongside others, if not more, and on top of that, always be refreshing your skillset. Only by doing the latter you can stay competitive and predict the future steps for both the company and your employees.
Follow the Bushido way: Keep death in mind and live each day as if it’s your last. This simple act will help you focus in hurricane-like situations – when everything seems like it’s falling apart.
Tell things as they are: If you’re running a company, you can pretend that there’s nothing wrong and sugarcoat the information for your investors and staff. However, things, at some point will surely come to light and depending on the news, people can lose trust in you. So, as the author writes in the book, “Telling things as they are is a critical part of building this trust.”
Don’t change direction when you spot a positive signal: Rapid increase in sales can often trigger a chain of events that you might later regret – hiring new personnel, spending time and money working on secondary features, etc. We’re all interconnected and a couple of good days might be just because a couple of people shared your product with friends. That’s why you should be careful and do your homework before making rash decisions in order to avoid pursuing routes with no potential.
Train your staff regularly: Most companies rely on the assumption that the people they’ve hired will learn quickly, know everything or be responsible enough to train themselves. However, this is far from the truth. If you want to see your organization thrive, crush the competition, execute tasks on time, improve the quality of your products, reduce employee turnover, you should invest in training programs.
Create a culture that rewards sharing: Don’t hide behind your desk when there are problems or make people feel bad when they’re being honest about the companies products – embrace honesty. Build a culture that rewards people for getting problems into the open where they can be solved. Most of your employees can share things that might save your company from disaster.
Commentary And My Personal Takeaway
If you are a CEO, you should read this book. If your business is not in good shape, you should read this book. If you’re dreaming about becoming a CEO, you should read this book. This book exists to tells us that things are different, hard, unstable, unpredictable, on the other side. On the side of the CEO.
The Hard Thing About Hard Things by Ben Horowitz is stuffed with examples and tips that aim to help business owners handle critical situations and make a move even when there are seemingly no good moves left to be made.
The book is surely quite different from all the other business books that mostly talk about business plans and meetings. I surely recommend checking it.
As for my personal takeaway from The Hard Thing About Hard Things, it should be about creating an awesome culture in your company. A place where people come to work with joy.
Now that we’d improved our competitive position, we went on the offensive. In my weekly staff meeting, I inserted an agenda item titled “What Are We Not Doing?” Ordinarily in a staff meeting, you spend lots of time reviewing, evaluating, and improving all of the things that you do: build products, sell products, support customers, hire employees, and the like. Sometimes, however, the things you’re not doing are the things you should actually be focused on.” Ben Horowitz
Life is struggle.” I believe that within that quote lies the most important lesson in entrepreneurship: Embrace the struggle.” Ben Horowitz
Spend zero time on what you could have done, and devote all of your time on what you might do. Because in the end, nobody cares; just run your company.” Ben Horowitz