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

by Ben Horowitz

There are no shortcuts to knowledge, especially knowledge gained from personal experience. Following conventional wisdom and relying on shortcuts can be worse than knowing nothing at all.

“What would you do if capital were free?” is a dangerous question to ask an entrepreneur. It’s kind of like asking a fat person, “What would you do if ice cream had the exact same nutritional value as broccoli?”

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.”

No matter who you are, you need two kinds of friends in your life. The first kind is one you can call when something good happens, and you need someone who will be excited for you. Not a fake excitement veiling envy, but a real excitement. You need someone who will actually be more excited for you than he would be if it had happened to him. The second kind of friend is somebody you can call when things go horribly wrong—when your life is on the line and you only have one phone call. Who is it going to be?

An early lesson I learned in my career was that whenever a large organization attempts to do anything, it always comes down to a single person who can delay the entire project. An engineer might get stuck waiting for a decision or a manager may think she doesn’t have authority to make a critical purchase. These small, seemingly minor hesitations can cause fatal delays.

It turns out that is exactly what product strategy is all about—figuring out the right product is the innovator’s job, not the customer’s job.

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

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.

Get the maximum number of brains on the problems even if the problems represent existential threats.

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.

often candidates who do well in interviews turn out to be bad employees.

As defined by Andy Grove, the right kind of ambition is ambition for the company’s success with the executive’s own success only coming as a by-product of the company’s victory. The wrong kind of ambition is ambition for the executive’s personal success regardless of the company’s outcome.

It is particularly important that managers have the right kind of ambition, because anything else will be exceptionally demotivating for their employees. As an employee, why would I want to work long hours to advance the career of my manager? If the manager cares more about his career than the company, then that’s what I’d be doing. Nothing motivates a great employee more than a mission that’s so important that it supersedes everyone’s personal ambition.

In high-tech companies, fraud generally starts in sales due to managers attempting to perfect the ultimate local optimization.

Perhaps the CEO’s most important operational responsibility is designing and implementing the communication architecture for her company. The architecture might include the organizational design, meetings, processes, email, yammer, and even one-on-one meetings with managers and employees. Absent a well-designed communication architecture, information and ideas will stagnate, and your company will degenerate into a bad place to work.

Most large mistakes in organizational design come from putting the individual ambitions of the people at the top of the organization ahead of the communication paths for the people at the bottom of the organization.

There is no such thing as a great executive. There is only a great executive for a specific company at a specific point in time.

Tip to aspiring entrepreneurs: If you don’t like choosing between horrible and cataclysmic, don’t become CEO.

If you focus on the wall, you will drive right into it. If you focus on the road, you will follow the road.

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.

The primary purpose of the organizational hierarchy in a company is decision-making efficiency.

In peacetime, leaders must maximize and broaden the current opportunity. As a result, peacetime leaders employ techniques to encourage broad-based creativity and contribution across a diverse set of possible objectives. In wartime, by contrast, the company typically has a single bullet in the chamber and must, at all costs, hit the target. The company’s survival in wartime depends upon strict adherence and alignment to the mission.

Watered-down feedback can be worse than no feedback at all because it’s deceptive and confusing to the recipient.

The CEO doesn’t have to be the creator of the vision. Nor does she have to be the creator of the story. But she must be the keeper of the vision and the story. As such, the CEO ensures that the company story is clear and compelling.

Great decisions come from CEOs who display an elite mixture of intelligence, logic, and courage.

just because somebody interviewed well and reference-checked great, that does not mean she will perform superbly in your company.

hiring for strength rather than for lack of weakness,

Embrace the struggle.

There is a big difference between people who can write a game plan and people who can follow a game plan.