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

by Ben Horowitz

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.

The Struggle is when you know that you are in over your head and you know that you cannot be replaced.

The Struggle is when you are surrounded by people and you are all alone.

The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are weak. Most people are not strong enough. Every great entrepreneur from Steve Jobs to Mark Zuckerberg went through the Struggle and struggle they did, so you are not alone. But that does not mean that you will make it. You may not make it. That is why it is the Struggle.

Nobody takes the losses harder than the person most responsible. Nobody feels it more than you.

There is always a move.

If you survive long enough to see tomorrow, it may bring you the answer that seems so impossible today.

Don’t take it personally. The predicament that you are in is probably all your fault. You hired the people. You made the decisions. But you knew the job was dangerous when you took it.

Every CEO makes thousands of mistakes. Evaluating yourself and giving your...

Remember that this is what separates the women from the girls. If you want to be great, this is the challenge. If you don’t want to be great, then you never should have started a company.

You hired for lack of weakness rather than for strengths. This is especially common when you run a consensus-based hiring process. The group will often find the candidate’s weaknesses, but they won’t place a high enough value on the areas where you need the executive to be a world-class performer. As a result, you hire an executive with no sharp weaknesses, but who is mediocre where you need her to be great.

A fairly common reason for firing an executive is that when the company quadruples in size, the executive no longer does the job effectively at the new size. The reason is that when a company multiplies in size, the management jobs become brand-new jobs. As a result, everybody needs to requalify for the new job, because the new job and the old job are not the same.

If you get lucky, the person you hired to run the twenty-five-person team will have learned how to run the two-hundred-person team. If not, you need to hire the right person for the new job. This is neither an executive failure nor a system failure; it is life in the big city.

When things go wrong in your company, nobody cares. The media don’t care, your investors don’t care, your board doesn’t care, your employees don’t care, and even your mama doesn’t care.

A great reason for failing won’t preserve one dollar for your investors, won’t save one employee’s job, or get you one new customer.

All the mental energy you use to elaborate your misery would be far better used trying to find the one seemingly impossible way out of your current mess. 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.

I’d learned the hard way that when hiring executives, one should follow Colin Powell’s instructions and hire for strength rather than lack of weakness.

Ordinarily, that vibe would rule out a candidate for me, but the strengths that I needed were so critical to the business that I was willing to overlook every weakness.

While I knew to “expect what I inspect,” I did not expect this.

In good organizations, people can focus on their work and have confidence that if they get their work done, good things will happen for both the company and them personally. It is a true pleasure to work in an organization such as this. Every person can wake up knowing that the work they do will be efficient, effective, and make a difference for the organization and themselves. These things make their jobs both motivating and fulfilling.

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 fact, the only thing that keeps an employee at a company when things go horribly wrong—other than needing a job—is that she likes her job.

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

Ironically, the biggest obstacle to putting a training program in place is the perception that it will take too much time.

In contrast, when you are a startup executive, nothing happens unless you make it happen. In the early days of a company, you have to take eight to ten new initiatives a day or the company will stand still. There is no inertia that’s putting the company in motion. Without massive input from you, the company will stay at rest.

On the other hand, you have to be very adept at running a high-quality hiring process, have terrific domain expertise (you are personally responsible for quality control), know how to create process from scratch, and be extremely creative about initiating new directions and tasks.

What will you do in your first month on the job? Beware of answers that overemphasize learning. This may indicate that the candidate thinks there is more to learn about your organization than there actually is.

Look for candidates who come in with more new initiatives than you think are possible. This is a good sign.

Why do you want to join a small company?

It’s much better if they want to be more creative. The most important difference between big and small companies is the amount of time running versus creating.

Force them to create. Give them monthly, weekly, and even daily objectives to make sure that they produce immediately. The rest of the company will be watching and this will be critical to their assimilation.

Make sure that they “get it.” Content-free executives have no value in startups. Every executive must understand the product, the technology, the customers, and the market.

Require them to bring a comprehensive set of questions about everything they heard that day but did not completely understand. Answer those questions in depth; start with first principles.

Put them in the mix. Make sure that they initiate contact and interaction with their peers and other key people in the organization. Give them a list of people they need to know and learn from. Once they’ve done that, require a report from them on what they learned from each person.

So, with no experience, how do you

Valuing lack of weakness rather than strength The more experience you have, the more you realize that there is something seriously wrong with every employee in your company (including you). Nobody is perfect.

The very best way to know what you want is to act in the role. Not just in title, but in real action. In my career, I’ve been acting VP of HR, CFO, and VP of sales. Often CEOs resist acting in functional roles, because they worry that they lack the appropriate knowledge. This worry is precisely why you should act—to get the appropriate knowledge.

What will this person do in the first thirty days? What do you expect their motivation to be for joining?

While they clearly have committed to giving a positive reference (or they wouldn’t be on the list), you are not looking for positive or negative with them. You are looking for fit with your criteria. Often, the front-door references will know the candidate best and will be quite helpful in this respect.

When I ran a large engineering group at Netscape, I measured one of our engineering products on schedule, quality, and features.

The team shipped a product with all the required features, on time and with very few bugs. Unfortunately, the product was mediocre, because none of the features were that great.

In all three cases, managers got what we asked for, but not what we wanted.

Sun Tzu, in his classic work The Art of War, warns that giving the team a task that it cannot possibly perform is called crippling the army.

In the second example, I managed the team to a set of numbers that did not fully capture what I wanted. I wanted a great product that customers would love with high quality and on time—in that order.

At a basic level, metrics are incentives.

The metrics did not describe the real goals and I distracted the team as a result.

It’s important to supplement a great product vision with a strong discipline around the metrics, but if you substitute metrics for product vision, you will not get what you want.

If you report on the quantitative goals and ignore the qualitative ones, you won’t get the qualitative goals, which may be the most important ones. Management purely by numbers is sort of like painting by numbers—it’s strictly for amateurs.

To get things right, you must recognize that anything you measure automatically creates a set of employee behaviors. Once you determine the result you want, you need to test the description of the result against the employee behaviors that the description will likely create. Otherwise, the side-effect behaviors may be worse than the situation you were trying to fix.

You probably think that your counteroffer was confidential because you’d sworn her to secrecy.