Over the summer, I had the pleasure of reading The Hard Thing About Hard Things by the very successful entrepreneur and venture capitalist Ben Horowitz. I was initially attracted to the book by by the review Larry Page, co-founder and CEO of Google, left; he wrote, “Ben’s book is a great read–with the uncomfortable truths about entrepreneurship and how to lead to a company. It’s also an inspiring story of a business rebirth through sheer willpower.” By the end of the novel, I certainly agreed with Page’s description and learned the difficulties of building a company and managing a team.
Before I dive into the details of the book, I would like to share a little about the author’s path to success. In 1999, Ben Horowitz cofounded Loudcloud, an early cloud based service provider, which catered to companies such as Ford and Nike. After the burst of the dot-com bubble in 2000, Horowitz decided to sell Loudcloud to Electronic Data Systems, while simultaneously creating Opsware, a software company that supported Loudcloud. Over five years, he built Opsware into an extremely successful business and sold it to Hewlett-Packard for $1.6 billion. In 2009, Horowitz entered the venture capital world with close friend and business partner Marc Andreessen. They founded Andreessen Horowitz (also known as a16z), which invests in entrepreneurs building the next generation of leading technology companies.
Horowitz explains these various stages of his career in the beginning of the book; however, the remaining portion focuses on the complex problems in the early stages of a company and provides guidance in how to overcome these obstacles. Horowitz weaves in anecdotes from the many times when his companies were failing and, most importantly, shares his authentic experience of building a technology business. Although this book is primarily geared towards executives and managers, I enjoyed learning about the behind-the-scenes decisions a CEO must make and came across many management lessons that have not come up in business school thus far. I will share some of Horowitz’s most applicable lessons to undergraduate business students below.
Lead with Lead Bullets
Early in his career, Horowitz worked as a product vice president at Netscape, a computer services company. At the time, Netscape’s web server was five times slower than Microsoft’s latest release, and Netscape was beginning to lose clients to its competitors. Therefore, Horowitz began to brainstorm ways to pivot the product line. When he brought these ideas to the head engineer, he told Horowitz that these ideas were silver bullets. If they wanted to win this battle and remain competitive in the marketplace, they would have to lead with lead bullets. Pivoting works in the time of a market problem, not a performance problem. In response, Netscape focused on the software performance issues and eventually beat Microsoft’s product.
Success then Culture
Horowitz states that the primary objective of a tech startup is “to build a product at least ten times better at doing something than the current prevailing way of doing that thing.” The next step for the company is to take the market. Without doing these two things, culture will not matter. Although culture does not make the company, it still does matter for three chief reasons. Company culture distinguishes you from your competitors; it ensures that critical operating values persist; and it helps you identify who fits your mission. Furthermore, culture should influence behavior to match the mission over time. For instance, Jeff Bezos wanted Amazon to focus on delivering value to customers, rather than taking value from its customers. He set out to be both the price leader and customer service leader for the long run, but quickly realized there was no room to waste money. Therefore, he built frugality into his culture by assembling all the desks at Amazon from cheap Home Depot doors.
Death Visits Every Company
From the very beginning to the very end of the book, Horowitz emphasizes that every company, even the most successful, goes through life-threatening moments. He even mentions the acronym for it, WFIO, which stands for “We’re F***ed, It’s Over”. He recounts conversations with CEOs around the time of the dot-com crash in which they claimed business was great. Horowitz had many sleepless weeks, terrified of his failing business and unaware that the majority of technology CEOs were in the same boat. However, Horowitz quickly realized this trend when he came across his friends’ bankrupt businesses on the front page of the paper. Some of his tips to get through the WFIOs are to seek advice from those who have been through similar situations, to write down your logic on paper, and to focus on the path ahead rather than potential fails.
The Necessity of Courage
Horowitz explains that money and courage build great companies, but recently money plays a smaller role than ever before due to technological advances. The importance of courage, on the other hand, does not waver. Horowitz recalls that while he ran Loudcloud and Opsware, he never felt brave. He made many decisions but was often scared to death over their outcomes, which would impact the entire company. However, over time he learned to ignore these feelings, which he describes as the “courage development process”. In this process, every time you make a correct decision, you create a more courageous and capable company. CEOs must learn to make the best moves when there are no good moves.
Overall, Horowitz’s The Hard Thing About Hard Things shares extremely unique insights on the struggles of building a business and some advice to conquer them. I would certainly recommend this book to any student interested in entrepreneurship because of Horowitz’s openness and raw honesty. Ben Horowitz’s successful but bumpy career is an incredible and inspiring story to any young business student. His final words to his readers, and what he considers to be the most important lesson in entrepreneurship, is to embrace the struggle. Horowitz makes this struggle a little easier to take on with his words of wisdom. I highly recommend this book, and thank you for reading my review!