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

by Ben Horowitz

There are no shortcuts to knowledge, especially knowledge gained from personal experience. Following conventional wisdom and relying on shortcuts can be worse than knowing nothing at all.

Former secretary of state Colin Powell says that leadership is the ability to get someone to follow you even if only out of curiosity.

Most business relationships either become too tense to tolerate or not tense enough to be productive after a while. Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship.

During this time I learned the most important rule of raising money privately: Look for a market of one. You only need one investor to say yes, so it’s best to ignore the other thirty who say “no.”

Marc Andreessen attempted to cheer me up with a not-so-funny-at-the-time joke: Marc: “Do you know the best thing about startups?” Ben: “What?” Marc: “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”

No matter who you are, you need two kinds of friends in your life. The first kind is one you can call when something good happens, and you need someone who will be excited for you. Not a fake excitement veiling envy, but a real excitement. You need someone who will actually be more excited for you than he would be if it had happened to him. The second kind of friend is somebody you can call when things go horribly wrong—when your life is on the line and you only have one phone call. Who is it going to be? Bill Campbell is both of those friends.

When they finished I said, “Did I ask for this presentation?” Those were the first words I spoke as I made the transition from a peacetime CEO to a wartime CEO.

“You need to stay home and make sure everybody knows where they stand. You can’t wait a day. In fact, you can’t wait a minute. They need to know whether they are working for you, EDS, or looking for a fucking job.”

If we hadn’t treated the people who were leaving fairly, the people who stayed would never have trusted me again.

An early lesson I learned in my career was that whenever a large organization attempts to do anything, it always comes down to a single person who can delay the entire project.

I guess I did it because I knew what desperation felt like.

It turns out that is exactly what product strategy is all about—figuring out the right product is the innovator’s job, not the customer’s job.

Sometimes, however, the things you’re not doing are the things you should actually be focused on.

However, if I’d learned anything it was that conventional wisdom had nothing to do with the truth and the efficient market hypothesis was deceptive.

Note to self: It’s a good idea to ask, “What am I not doing?”

“But the indeterminate future is somehow one in which probability and statistics are the dominant modality for making sense of the world.

Bell curves and random walks define what the future is going to look like. The standard pedagogical argument is that high schools should get rid of calculus and replace it with statistics, which is really important and actually useful. There has been a powerful shift toward the idea that statistical ways of thinking are going to drive the future.”

Startup CEOs should not play the odds. When you are building a company, you must believe there is an answer and you cannot pay attention to your odds of finding it. You just have to find it. It matters not whether your chances are nine in ten or one in a thousand; your task is the same.

the ability to focus and make the best move when there are no good moves.

the first principle of the Bushido—the way of the warrior: keep death in mind at all times.

If a warrior keeps death in mind at all times and lives as though each day might be his last, he will conduct himself properly in all his actions.

The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are weak.

There is no answer to the Struggle, but here are some things that helped me:

In any human interaction, the required amount of communication is inversely proportional to the level of trust.

“Given enough eyeballs, all bugs are shallow.”

Build a culture that rewards—not punishes—people for getting problems into the open where they can be solved.

If you run a company, you will experience overwhelming psychological pressure to be overly positive. Stand up to the pressure, face your fear, and tell it like it is.

During a time like this, it is difficult to focus on the future, because the past overwhelms you—but that’s exactly what you must do.

Once you decide that you will have to lay people off, the time elapsed between making that decision and executing that decision should be as short as possible.

Admitting to the failure may not seem like a big deal, but trust me, it is.

A layoff breaks that trust. In order to rebuild trust, you have to come clean.

Managers must lay off their own people.

people won’t remember every day they worked for your company, but they will surely remember the day you laid them off.

The message is for the people who are staying.

In preparation for that meeting, I recommend scripting or rehearsing what you plan to say so that you do not misspeak. The executive will remember the conversation for a very long time, so you need to get it right.

When you update the company, you might worry about employees misinterpreting the news and thinking the company is in trouble.

The good of the individual must be sacrificed for the good of the whole.

In fact, admit that if you were a more experienced CEO, you might be able to develop him into the role, but two people who don’t know what they are doing is a recipe for failure.

“There are no silver bullets for this, only lead bullets.”

“If our company isn’t good enough to win, then do we need to exist at all?”