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

by Ben Horowitz

2. The more brains working on the hard problems, the better. In order to build a great technology company, you have to hire lots of incredibly smart people. It’s a total waste to have lots of big brains but not let them work on your biggest problems.

A healthy company culture encourages people to share bad news.

A company that covers up its problems frustrates everyone involved. The resulting action item for CEOs: 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.

If you send managers into this super-uncomfortable situation with no training, most of them will fail.

Managers must lay off their own people.

Because 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. The people who stay will care deeply about how you treat their colleagues. Many of the people whom you lay off will have closer relationships with the people who stay than you do, so treat them with the appropriate level of respect.

present. Be visible. Be engaging. People want to see you. They want to see whether you care. The people whom you laid off will want to know if they still have a relationship with you and the company.

If you walk into a demotion discussion with an open decision, you will walk out with a mess: a mess of a situation and a mess of a relationship.

When a company starts to lose its major battles, the truth often becomes the first casualty. CEOs and employees work tirelessly to develop creative narratives that help them avoid dealing with the obvious facts. Despite their intense creativity, many companies often end up with the same false explanations.

In engineering meetings where there is great pressure to ship on time—a customer commitment, a quarter that depends on it, or a competitive imperative—everybody hopes for good news. 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.

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.

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.

hire for strength rather than lack of weakness.

The world looks one way in peacetime but very different when you must fight for your life every day. In times of peace, one has time to care about things like appropriateness, long-term cultural consequences, and people’s feelings. In times of war, killing the enemy and getting the troops safely home is all that counts.

“Taking care of the people” is the most difficult of the three by far and if you don’t do it, the other two won’t matter. Taking care of the people means that your company is a good place to work. Most workplaces are far from good. As organizations grow large, important work can go unnoticed, the hardest workers can get passed over by the best politicians, and bureaucratic processes can choke out the creativity and remove all the joy.

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.

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.

In bad companies, when the economics disappear, so do the employees. In technology companies, when the employees disappear, the spiral begins: The company declines in value, the best employees leave, the company declines in value, the best employees leave. Spirals are extremely difficult to reverse.

chapter 16 of Andy Grove’s management classic, High Output Management, titled “Why Training Is the Boss’s Job,” and it changed my career. Grove wrote, “Most managers seem to feel that training employees is a job that should be left to others. I, on the other hand, strongly believe that the manager should do it himself.”

I used to train the team on my basic expectations. I was shocked by what happened next. The performance of my team instantly improved.

How many fully productive employees have they added? By failing to measure progress toward the actual goal, they lose sight of the value of training.

but often the right question is the one that isn’t asked: 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?

As the engineers are assigned tasks, they figure out how to complete them as best they can. Often this means replicating existing facilities in the architecture, which leads to inconsistencies in the user experience, performance problems, and a general mess. And you thought training was expensive.

there were two primary reasons why people quit: They hated their manager; generally the employees were appalled by the lack of guidance, career development, and feedback they were receiving. They weren’t learning anything: The company wasn’t investing resources in helping employees develop new skills.

The best place to start is with the topic that is most relevant to your employees: the knowledge and skill that they need to do their job. I call this functional training. Functional training can be as simple as training a new employee on your expectations for them

Management training is the best place to start setting expectations for your management team.

(how to write a performance review or how to conduct a one-on-one).

One of the great things about building a tech company is the amazing people that you can hire.

Training in such topics as negotiating, interviewing, and finance will enhance your company’s competency in those areas as well as improve employee morale. Teaching can also become a badge of honor for employees who achieve an elite level of competence.

only two ways for a manager to improve the output of an employee: motivation and training.

Good product managers know the market, the product, the product line, and the competition extremely well and operate from a strong basis of knowledge and confidence. A good product manager is the CEO of the product.

They are responsible for right product/right time and all that entails. A good product manager knows the context going in (the company, our revenue funding, competition, etc.), and they take responsibility for devising and executing a winning plan (no excuses).

Good product managers crisply define the target, the “what” (as opposed to the “how”), and manage the delivery of the “what.”

Good product managers communicate crisply to engineering in writing as well as verbally. Good product managers don’t give direction informally. Good product managers gather information informally.

Good product managers anticipate the serious product flaws and build real solutions.

Good product managers take written positions on important issues (competitive silver bullets, tough architectural choices, tough product decisions, and markets to attack or yield).

Good product managers focus the team on revenue and customers.

Good product managers think in terms of delivering superior value to the marketplace during product planning and achieving market share and revenue goals during the go-to-market phase.

Good product managers decompose problems.

Good product managers think about the story they want written by the press.

Good product managers define their job and their success.

Good product managers send their status reports in on time every week, because they are disciplined.

most skilled big company executives will tell you that if you have more than three new initiatives in a quarter, you are trying to do too much. As a result, big company executives tend to be interrupt-driven.

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.

Screen for devastating mismatches in the interview process.

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