The Hard Thing about Hard Things by Ben Horowitz Book Summary

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The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers

  •         Don’t judge by their surface
  •         Colin Powell: Leadership is to get someone to follow you even just out of curiosity
  •         Diverse perspective
    • Football and Math
  •         Facts vs. alternative narrative explanations
  •         2 types of friends
    • Excited for you
    • Go to with big problems
  •         Stanford Business Schools grads gave presentation and he asked, “Did I ask for this?” = War Time CEO
  •         He took responsibility for success of company
  •         Michael Orvitz
    • “I believe in artificial deadlines.”
    • “I believe in playing 1 against another.”
  •         To get shit done, Ben called a daily meeting to remove obstacles
  •        Figuring out the right product is the innovator’s job – not the customer’s
  •        Sometimes, only the founder has the courage to ignore the data
  •        All decisions are objective until 1st line of code….Then all decisions are emotional
  •        Conventional wisdom DOES NOT equal truth
  •        Efficient market hypothesis is deceptive
  •        Market efficiently converge on solution – often the wrong one
  •        Bushido Warrior keeps death in mind and lives each day like it is his last
  •        CEO should tell it like it is –
    • Ben’s biggest improvement – stopped being so positive
  •        1) Trust
  •        2) More brains working on problem
  •        Once deciding to lay off
    • Execute quickly
  •        Bad advice…hire someone “bigger” than required. Hire the right person for your company context over next 12-18 months.
  •        Q: How to demote a friend?
    • A: Move to another part of company
    • Use appropriate language, “I decided”
    • Acknowledge contributions
    • Admit reality
    • You could couple demotion with salary increase…
  •        Best way to deal with emotions is to leave emotion out of ity
  •        Take care of:
    • People
    • Product
    • Profits (in that order)
  •        2 most important positions in software
    • VP of Engineering
    • VP of Sales
  •        Training is the manager’s job
    • Andy Grove – high output management
    • Training is highest leverage work a manager can do
  •        P. 132 – measuring cost acquisition – OK … cust retention – not good
  •        Companies execute well when
    • Everyone is on same page
    • Everyone is constantly improving
  •        If an executive is complaining about performance of another executive, the situation has gone too far
  •        Tech startups are in furious race against time
  •        Q: outside vs. internal promotion?
    • What do you value more?
    • Outside knowledge or inside knowledge?
  •        One way to raise your standard is interview experts in field and ask, “What do yo look for?”
  •        P. 176-177 – one on one meetings – employee meetings
    • Stuff that doesn’t fit in status report
  •        Primary thing a startup must do is build something 10x better than what is out there
  •        #2 take the market
    • Cultures do not make the company
  •        Culture
    • Distinguish from competition
    • Ensure operating values
  •  Delight customers
  •  Make beautiful products
    • Identify employees that fit mission
    • P. 182 – $10 / minute
  •        CEO Job
    • Knowing what to do
    • Getting the company to do it
  •        Things cause no problems when small become big problems when you grow
    • Communication
    • Common knowledge
    • Decision making
  •        Scale techniques
    • Specialization (build, test, ops)
    • Org design
  •        Rule of org design
    • All are bad tradeoffs in communication
  •        Org design
    • Communication architecture of company
  •        Further away in org  = less communication
  •        Steps
    • 1. Figure what to communicate
    • 2. What decision
    • 3. Communication and decision paths – do we want engineers thinking of customers?
    • 4. Who runs group?
    • 5. Identify paths not optimized
    • 6. Build plan to mitigate
  •        Process
    • Purpose is communication
    • When communication spans boundaries – process
  •        Q: Process design?
    • What are process outcomes/goals? (eg. Interview process = great employees)
    • How do you know if you are success of each step?
  •  Enough candidates?
  •  Right candidates?
  •  Right …?
  •  Accept
  •  Product
  •  Retain?
    • Accountability
  •        Good to anticipate growth … bad to over-anticipate growth
  •        No such thing as great executive – only great exec for specific company at a specific time
  •        Make judgment of executive relative (eg. For this company at this point in time, is there better executive I can hire?)
  •        Predicting if executive can scale corrupts ability to manage
  •        Herb Allen invested in:
    • Courage
    • Determination
  •        2 CEO mistakes
    • Taking things personally
    • Not personal enough
  •        Ideal:
    • Urgent, but not insane
  •        2 key characteristics
    • Brilliance
    • Courage – much harder
  •        CEOs possess different data, knowledge, and perspective
  •        If smart people take other side, on 54-46% decision, very hard tst of CEO courage
  •        P. 212 – expected social reward for crowd-influenced decision si high
  •        Hard, correct decisions = courage
  •        Wrong, easy decisions= not
  •        Succession planning – internal candidates > external because of knowledge
  •        Ones – set direction
  •        Twos – get company to perform at highest level
  •        CEOs must be Ones and Twos
  •        Twos act as Ones for their function
  •        Most oerganizations run by Ones with functional Twos
  •        Define leader
    • Quantity, quality, and diversity of people who want to follow
  •        1) Activate vision
  •        2) Right ambition
  •        3) Achieve vision
  •        Truly great leaders create environment where employees feel leader cares mor about employees than herself
  •        Peacetime CEO – steadily growing market – building on strength
  •        Wartime CEO – facing an existential threat
  •        Most management books describe peacetime, not wartime
  •        Classic peacetime – never publicly humiliate employees
  •        P. 230 – Feedback
    • Constantly giving feedback is precisely what a CEO must do
    • As CEO, have an opinion on everything
  •        Does CEO know what to do?
  •        Can CEO get company to do what she knows?
  •        Did CEO achieve results against appropriate objectives?
  •        Personal, financing, product strategy goals, selling, marketing – In good companies….Story = strategy
  •        CEO creates context – why work here? Why buy?
  •        Clear story = clear context
  •        CEO doesn’t have to create story or vision – but keep it
  •        2) Decisionmaking
    • Speed and quality of decisions
    • Elite mix of intelligence, logic, and courage
  •        Most difficult decisions are often not popular with constituencies – employees, board, customers
  •        Never enough time to gather all information
  •        Must systematically gather information on ongoing basis
    • Competitors
    • Technically possible in what time frame
    • True organizational capability
    • Financial
    • Product architecture
    • Employee sentiment
  •        To executive braod set of decisions
    • 1) Capacity (right people)
    • 2) employees have context, motivation to accomplish them
  •        Great CEOs constantly assess whether they are building the best team
  •        How easy is it for contributor to get job done?
  •        The first task in measuring results is setting objectives correctly
  •        CEO shold be evaluated on company opportunity
  •        Accountability vs. creativity paradox
    • Accountability for effort – check
    • Accountability for results
    • Reply to e-mail = easy
  •        Engineering schedule depending on solving hard CS problem = harder
  •        1) Sr. People should forecast more accurately
  •        2) Degree of difficulty
    • Sales #s with inferior product = hard
  •        3) amount of stupid risk
  •        Difference between mediocre + magic is difference between taking creative risk and holding team too tightly accountable
  •        Accountability = important, but not only thing
  •        Freaky Friday management – 2 warring roles – change functions
  •        As CEO, you do little employee development that happens at functions below you
  •        #1 reason executives fail – continuing to do old job instead of new one
  •        Loyalty must go to employees
  •        If you are early in a large market, that has a chance to be #1 , then remain standalone
  •        Andreeson Horowitz
    • Tech founders or innovator running the business
    • Skill gap between tech and professional CEO
  •  CEO skillset
  •  Network
    • Network
  •  Large companies
  •  Executives
  •  Engineers
  •  Press and analysts
  •  Investors and acquirers
    • Marx quote: “life is struggle.” … embrace the struggle
    • Embrace your weirdness, background, and instinct

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