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

by Ben Horowitz

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

I learned to look for alternative narratives and explanations coming from radically different perspectives to inform my outlook. The simple

Our ninth hire was a recruiter, and we hired a human resources person when we had a dozen employees.

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.”

IF YOU ARE GOING TO EAT SHIT, DON’T NIBBLE

Then one day I asked myself a different question: “What would I do if we went bankrupt?”

private investment in public equity (PIPE).

Needs always trump wants in mergers and acquisitions.

John and I worked hard to create urgency with both IBM and EDS, because time was against us. We hosted both companies in our facilities, sometimes with them passing each other in the hallway as part of John’s well-orchestrated sales technique.

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

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

The key to answering the ultimate question was knowing the state of the team. Were they up for yet another giant challenge or were they at the end of a very long road?

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.

Play long enough and you might get lucky.

Don’t take it personally.

Managers must lay off their own people.

Prior to executing the layoff, the CEO must address the company.

The message is for the people who are staying.

Still, the company must move forward, so be careful not to apologize too much.

Be present. Be visible. Be engaging. People want to see you.

Talk to people. Help them carry their things to their cars. Let them know that you appreciate their efforts.

Yes, the reason that you have to fire your head of marketing is not because he sucks; it’s because you suck.

the correct way to view an executive firing is as an interview/integration process system failure.

Therefore, the first step to properly firing an executive is figuring out why you hired the wrong person for your company.

You did a poor job defining the position in the first place.

You hired for lack of weakness rather than for strengths.

You hired for scale too soon. The most consistently wrong advice that venture capitalists and executive recruiters give CEOs is to hire someone “bigger” than required.

Leaving a failing leader in place will cause an entire department in your company to slowly rot.

When the facts don’t align with the good news, a clever manager will find the narrative to make everybody feel better—until the next meeting.

He said they were not lying to investors, but rather, they were lying to themselves.

humans, particularly those who build things, only listen to leading indicators of good news.

Both leading indicators may have been wrong, or both may have been right, but our hypothetical CEO—like almost every other CEO—only took action on the positive indicator and only looked for alternative explanations on the negative leading indicator.

If this advice sounds too familiar. and you find yourself wondering why your honest employees are lying to you, the answer is they are not. They are lying to themselves. And if you believe them, you are lying to yourself.

There may be nothing scarier in business than facing an existential threat. So scary that many in the organization will do anything to avoid facing it. They will look for any alternative, any way out, any excuse not to live or die in a single battle.

There comes a time in every company’s life where it must fight for its life. If you find yourself running when you should be fighting, you need to ask yourself, “If our company isn’t good enough to win, then do we need to exist at all?”

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.

“We take care of the people, the products, and the profits—in that order.”

The more I thought about it, the more I realized that while I had told the team “what” to do, I had not been clear about “why” I wanted them to do it.

Being a good company doesn’t matter when things go well, but it can be the difference between life and death when things go wrong.

Things always go wrong. Being a good company is an end in itself.

In bad companies, when the economics disappear, so do the employees. In technology companies, when the

If you do nothing else, be like Bill and build a good company.

When you fired the person, how did you know with certainty that the employee both understood the expectations of the job and was still missing them?

The first thing to recognize is that no startup has time to do optional things. Therefore, training must be mandatory.

Every good technology company needs great people. The best companies invest time, money, and sweat equity into becoming world-class recruiting machines.

A good rule of thumb is my Reflexive Principle of Employee Raiding, which states, “If you would be shocked and horrified if Company X hired several of your employees, then you should not hire any of theirs.” The number of such companies should be small and may very well be zero.

What will you do in your first month on the job?

Beware of answers that overemphasize learning.