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

by Ben Horowitz

You must develop a style that matches your own personality and values.

Be authentic. It’s extremely important that you believe in the feedback that you give and not say anything to manipulate the recipient’s feelings.

Come from the right place. It’s important that you give people feedback because you want them to succeed and not because you want them to fail.

Don’t get personal. If you decide to fire somebody, fire her. Don’t prepare her to get fired. Prepare her to succeed. If she doesn’t take the feedback, that’s a different conversation.

should strive never to embarrass someone in front of their peers.

your tone should match the employee’s personality, not your mood.

Be direct, but not mean.

it’s much better to say, “I couldn’t follow it and I didn’t understand your point and here are the reasons why.” Watered-down feedback can be worse than no feedback at all because it’s deceptive and confusing to the recipient.

feedback is a dialogue, not a monologue.

your goal should be for your feedback to open up rather than close down discussion. Encourage people to challenge your judgment and argue the point to conclusion. Culturally, you want high standards thoroughly discussed. You want to apply tremendous pressure to get the highest-quality thinking yet be open enough to find out when you are wrong.

Feedback won’t be personal in your company.

People will become comfortable discussing bad news.

If you are a founder CEO and you feel awkward or incompetent when doing some of these things and believe there is no way that you’ll be able to do it when your company is one hundred or one thousand people,

the proper output of all the strategic work is the story.

the output of knowing what to do is the speed and quality of the CEO’s decisions.

the keeper of the vision and the story. As such, the CEO ensures that the company story is clear and compelling.

A company without a story is usually a company without a strategy.

a CEO can most accurately be measured by the speed and quality of those decisions. Great decisions come from CEOs who display an elite mixture of intelligence, logic, and courage.

As CEO, there is never enough time to gather all information needed to make a decision.

Great CEOs build exceptional strategies for gathering the required information continuously.

the company must contain the necessary talent in the right positions to execute the strategy.

The employees must be motivated, communication must be strong, the amount of common knowledge must be vast, and the context must be clear.

Ensuring the quality of the team is a core part of running the company.

The output of this capability is the quality of the team.

In well-run organizations, people can focus on their work (as opposed to politics and bureaucratic procedures) and have confidence that if they get their work done, good things will happen both for the company and for them personally.

Reference Guide on Our Freedom and Responsibility Culture.

The white-box CEO evaluation criteria—“Does the CEO know what to do?” and “Can the CEO get the company to do it?”—will do a much better job of predicting the future.

A software engineer identifies a weakness in your current product architecture that will significantly impair its ability to scale down the road. She figures out that she’ll have to slip the product schedule three months to fix it. Everybody agrees that three months is an acceptable slip to correct the problem. The schedule actually slips nine months, but she was right about the problem. Do you reward her for her creativity and courage or hold her accountable for the slip?

Accountability vs. Creativity Paradox.

To be a world-class company, you need world-class effort. If somebody isn’t giving it to you, they must be checked.

Holding people accountable for their promises is a critical factor in getting things done.

Promising to complete a piece of marketing collateral or send an email is different from promising to meet an engineering schedule that involves solving some fundamentally hard computer science problem. You must hold people accountable for the former; the latter is more complicated and relates to results.

Some things are just plain hard.

Building a platform that automatically and efficiently takes serial programs and parallelizes them, so that they can scale out, is hard.

While there is no reward without risk, there is certainly risk with little or no chance of corresponding reward.

In the technology business, you rarely know everything up front. The difference between being mediocre and magical is often the difference between letting people take creative risk and holding them too tightly accountable.

you cannot build a world-class company unless you maintain a world-class team.

There are two kinds of cultures in this world: cultures where what you do matters and cultures where all that matters is who you are.

It is possible to take the standard setting too far.

selling your company is always emotional and deeply personal.

Product, when a company is acquired for its product, but not its business. The acquirer plans to sell the product roughly as it is, but will do so primarily with its own sales and marketing capability. These kinds of deals typically range between $25 million and $250 million.

When analyzing whether you should sell your company, a good basic rule of thumb is if (a) you are very early on in a very large market and (b) you have a good chance of being number one in that market, then you should remain stand-alone.

the judgment that you have to make is (a) is this market really much bigger (more than an order of magnitude) than has been exploited to date? and (b) are we going to be number one? If the answer to either (a) or (b) is no, then you should consider selling.

If the company achieves product-market fit in a very large market and has an excellent chance to be number one, then the company will likely remain independent. If not, it will likely be sold.

“We walk the same path, but got on different shoes Live in the same building, but we got different views.” —DRAKE, “RIGHT ABOVE IT”

all the returns in venture capital had been concentrated in a tiny number of firms and consistently by a small number of the same firms.

technical founders are the best people to run technology companies.

All of the long-lasting technology companies that we admired—Hewlett-Packard, Intel, Amazon, Apple, Google, Facebook—had been run by their founders.

Second, it was incredibly difficult for technical founders to learn to become CEOs while...

The CEO skill set Managing executives, organizational design, running sales organizations