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Kindle Notes & Highlights
by
Ben Horowitz
Read between
October 10 - December 20, 2017
The first problem is that everybody learns to be a CEO by being a CEO.
Even if you know what you are doing, things go wrong. Things go wrong because building a multifaceted human organization to compete and win in a dynamic, highly competitive market turns out to be really hard.
Seeing people fritter away money, waste each other’s time, and do sloppy work can make you feel bad. If you are the CEO, it may well make you sick.
If someone was promoted for all the wrong reasons, that was my fault. If we missed the quarterly earnings target, that was my fault. If a great engineer quit, that was my fault. If the sales team made unreasonable demands on the product organization, that was my fault. If the product had too many bugs, that was my fault. It kind of sucked to be me.
two mistakes: 1. They take things too personally. 2. They do not take things personally enough.
The problem with psychology is that everybody’s is different. With that as a caveat, over the years I developed a few techniques for dealing with myself. I hope you find them useful, too. Make some friends. Although it’s nearly impossible to get high-quality advice on the tough decisions that you make, it is extremely useful from a psychological perspective to talk to people who have been through similarly challenging decisions. Get it out of your head and onto paper. When I had to explain to my board that, since we were a public company, I thought that it would be best if we sold all of our
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Focus on the road, not the wall. When someone learns to drive a race car, one of the first lessons taught is that when you are going around a curve at 200 mph, do not focus on the wall; focus on the road. If you focus on the wall, you will drive right into it. If you focus on the road, you will follow the road. Running a company is like that. There are always a thousand things that can go wrong and sink the ship. If you focus too much on them, you will drive yourself nuts and likely crash your company. Focus on where you are going rather than on what you hope to avoid.
DON’T PUNK OUT AND DON’T QUIT As CEO, there will be many times when you feel like quitting. I have seen CEOs try to cope with the stress by drinking heavily, checking out, and even quitting. In each case, the CEO has a marvelous rationalization about why it was okay for him to punk out or quit, but none of them will ever be great CEOs. Great CEOs face the pain. They deal with the sleepless nights, the cold sweats, and what my friend the great Alfred Chuang (legendary
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Whenever I meet a successful CEO, I ask them how they did it. Mediocre CEOs point to their brilliant strategic moves or their intuitive business sense or a variety of other self-congratulatory explanations. The great CEOs tend to be remarkably consistent in their answers. They all say, “I didn’t quit.”
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“I tell my kids, what is the difference between a hero and a coward? What is the difference between being yellow and being brave? No difference. Only what you do. They both feel the same. They both fear dying and getting hurt. The man who is yellow refuses to face up to what he’s got to face. The hero is more disciplined and he fights those feelings off and he does what he has to do. But they both feel the same, the hero and the coward. People who watch you judge you on what you do, not how you feel.” —CUS D’AMATO, LEGENDARY BOXING TRAINER
COURAGE, LIKE CHARACTER, CAN BE DEVELOPED
In life, everybody faces choices between doing what’s popular, easy, and wrong versus doing what’s lonely, difficult, and right. These decisions intensify when you run a company, because the consequences get magnified a thousandfold.
Every time you make the hard, correct decision you become a bit more courageous and every time you make the easy, wrong decision you become a bit more cowardly. If
Over the past ten years, technological advances have dramatically lowered the financial bar for starting a new company, but the courage bar for building a great company remains as high as it has ever been.
WHAT ONES LIKE AND DON’T LIKE
As a result, many great One CEOs employ primarily Twos and Functional Ones on their staff.
Paul Maritz
Most people define leadership in the same way that Supreme Court justice Potter Stewart famously defined pornography when he said, “I know it when I see it.” For our purposes, we can generalize this to be the measure of the quality of a leader: the quantity, quality, and diversity of people who want to follow her.
The ability to articulate the vision The right kind of ambition The ability to achieve the vision
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The first thing that any successful CEO must do is get really great people to work for her.
employees. When you talk to Bill, you get the feeling that he cares deeply about you and what you have to say, because he does. And all of that shows up in his actions and follow-through.
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(High Output Management),
All CEOs should work on the vision component of leadership.
CEO should never be so confident that she stops improving her skills.
The great wartime CEO Andy Grove marvelously describes the forces that can take a company from peacetime to wartime in his book Only the Paranoid Survive.
Andy Grove once said to an employee who entered the meeting late, “All I have in this world is time, and you are wasting my time.”
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Peacetime CEO sets big, hairy, audacious goals. Wartime CEO is too busy fighting the enemy to read management books written by consultants who have never managed a fruit stand.
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Even the most basic CEO building blocks will feel unnatural at first. If your buddy tells you a funny story, it would feel quite weird to evaluate her performance. It would be totally unnatural to say, “Gee, I thought that story really sucked. It had potential, but you were underwhelming on the buildup and then you totally flubbed the punch line. I suggest that you go back, rework it, and present it to me again tomorrow.” Doing so would be quite bizarre, but evaluating people’s performances and constantly giving feedback is precisely what a CEO must do. If she doesn’t, the more complex motions
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THE SHIT SANDWICH A popular and sometimes effective technique for feedback beginners is something that experienced managers call the Shit Sandwich. The technique is marvelously described in the classic management text The One Minute Manager. The basic idea is that people open up to feedback far more if you start by complimenting them (slice of bread number one), then you give them the difficult message (the shit), then wrap up by reminding them how much you value their strengths (slice of bread number two). The shit sandwich also has the positive side effect of focusing the feedback on the
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Early in my career, I attempted to deliver a carefully crafted shit sandwich to a senior employee and she looked at me like I was a little kid and said, “Spare me the compliment, Ben, and just tell me what I did wrong.” At that point, I thought that I was definitely not born to be a CEO.
Jeff Bezos’s three-page letter
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At the time of any given decision, the CEO will generally have less than 10 percent of the information typically present in the post hoc Harvard Business School case study.
Reference Guide on Our Freedom and Responsibility Culture.
CEO evaluation need not be a byzantine, unarticulated art. All people, including CEOs, will perform better on a test if they know the questions ahead of time.
Our motto for general partners would be ‘some experience required’ as in some experience in founding and running companies is required to advise people who are founding and running companies.” To my surprise, he replied, “I was thinking the same thing.”
I understood the importance of hiring for strength rather than for lack of weakness, and I understood the meaning of “fit.”
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