Disclaimer: As with the other articles in the ‘Notes from the book’ series, the primary reader I had in mind when writing this is me. I use these notes as an online Journal, with the act of writing a way to learn better, and the act of publishing, a driver to be very clearer in my views and to create an easy to access reference source from wherever I am.
You may find some of the quotations longer than a typical book review, and this is by design. The notes are those I highlighted when reading the book using my Amazon Kindle – I outline how I sync these to my publishing workflow in this article.
Introduction
As the title of the book implies, the Hard Thing About Hard Things, is a book about dealing with difficult situations in growing a Company – based on the experience of Ben Horowitz – one of the successful early internet entrepreneurs and now one of the most prominent venture capitalists
Hard things are hard because there are no easy answers or recipes. They are hard because your emotions are at odds with your logic. They are hard because you don’t know the answer and you cannot ask for help without showing weakness.
The book covers a wide span of topics, including handling the psychology of a failing company, building a good place to work, scaling a company, and being a good CEO.
This is my second Ben Horowitz book summary – if you enjoy below you may also like the quotes from ‘What you do is who you are’ here.
At the end is a mind-map which sets out the book summary.
Part 1: Starting and Scaling a Startup
“Building the right team is the foundation of a successful startup. It’s about hiring not just for skills but for mindset, training for excellence, and scaling the culture as you grow. Leadership is the art of navigating through uncertainty, making tough decisions with incomplete information, and inspiring your team to follow you through the highs and lows.”
Building the Right Team
Hiring well and the importance of training
“Hire for strength rather than lack of weakness. Train your team not just to do their jobs, but to understand your business deeply.”
“Recruiting and Hiring
Do you sharply understand the skills and talents required to succeed in every open position?
Are your interviewers well prepared?
Do your managers and employees do an effective job of selling your company to prospective employees?
Do interviewers arrive on time?
Do managers and recruiters follow up with candidates in a timely fashion?
Do you compete effectively for talent against the best companies? Compensation
Do your benefits make sense for your company demographics?
How do your salary and stock option packages compare with the companies that you compete with for talent?
How well do your performance rankings correspond to your compensation practices?
Managing onboarding and maintaining company culture
“Your culture is how your company makes decisions when you’re not there. Onboarding is your first chance to instill that culture in your new hires.”
“Training and Integration
When you hire an employee, how long does it take them to become productive from the perspective of the employee, her peers, and her manager?
Shortly after joining, how well does an employee understand what’s expected of her?
Performance Management
“Do your managers give consistent, clear feedback to their employees?
What is the quality of your company’s written performance reviews?
Did all of your employees receive their reviews on time?
Do you effectively manage out poor performers?
Motivation
Questions to access level of Motivation:
“Are your employees excited to come to work?
Do your employees believe in the mission of the company?
Do they enjoy coming to work every day?
Do you have any employees who are actively disengaged?
Do your employees clearly understand what’s expected of them?
Do employees stay a long time or do they quit faster than normal?
Why do employees quit?”
The challenges of scaling and restructuring
“As your company grows, what worked at five employees will break at fifty and shatter at five hundred. Scaling a company means scaling and sometimes changing your culture, team, and processes.”
Leading a Startup
Setting and maintaining a vision
“Your job as a leader is to be right at the end of the meeting, not at the beginning. It means setting a vision that aligns your team and drives them toward a common goal.”
Being a wartime versus peacetime CEO
“Peacetime CEO aims for expansion and growth, while a wartime CEO is focused on survival. Know which one you need to be and when.”
Decision-making under pressure
“Make decisions not on the fear of what could go wrong, but on the hope of what might go right. Remember, every decision is a bet on the future, and you will not always be right.”
What are we not-doing?
“In my weekly staff meeting, I inserted an agenda item titled “What Are We Not Doing?” Ordinarily in a staff meeting, you spend lots of time reviewing, evaluating, and improving all of the things that you do: build products, sell products, support customers, hire employees, and the like. Sometimes, however, the things you’re not doing are the things you should actually be focused on.”
Understanding Your Own Psychology
Coping with loneliness and stress
“The hard thing isn’t setting a big, hairy, audacious goal. The hard thing is waking up in the middle of the night in a cold sweat when the dream turns into a nightmare.”
Building resilience
“The struggle is where greatness comes from. It’s not just about enduring the struggle, but embracing it, learning from it, and coming out stronger.”
Staying grounded in the face of success and failure
“Success can lead to the greatest failure, which is arrogance and pride. Failure can lead to the greatest success, which is humility and learning. In order to survive, you must find that fine line between confidence and humility.”
Part 2: Enduring and Managing Crisis
“Embrace the struggle, for it is the crucible in which the future of your company is forged. Managing crisis involves facing your fears, making hard choices about your team, and leading with empathy through layoffs. It’s in these moments that true leaders are made, defined not by their successes but by how they handle their hardest decisions.”
Embracing the Struggle
Overcoming personal doubts
“The only thing that prepares you to run a company is running a company. This means you will face doubts and fears, but overcoming them is what makes you a better leader.”
Learning from failures
“Each time you make a mistake, you must be brutally honest about it, and then you must get the lesson. Failure is a prerequisite to learning.”
Persisting through tough times
“The hard thing is not dreaming big dreams, not setting ambitious goals. The hard thing is waking up in the middle of the night in cold sweat from the fear of the unknown and still moving forward the next day.”
Don’t be in denial / Honesty in relationships
“Some CEOs delude themselves into thinking the situation is fine. They give excuses for losing customers, failing to hit targets, and churning through staff. Instead, you need to take the problems seriously, but stay emotionally detached from them so you don’t paralyze yourself.”
“Most business relationships either become too tense to tolerate or not tense enough to be productive after a while. Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship.”
Anecdotal email on being in denial / importance of honesty in relationships.
📩 To: Marc Andreessen Cc: Mike Homer From: Ben Horowitz Subject : Launch I guess we’re not going to wait until the 5th to launch the strategy. — Ben
Within fifteen minutes, I received the following reply.
📩 To: Ben Horowitz Cc: Mike Homer, Jim Barksdale (CEO), Jim Clark (Chairman) From: Marc Andreessen Subject: Re: Launch Apparently you do not understand how serious the situation is. We are getting killed killed killed out there. Our current product is radically worse than the competition. We’ve had nothing to say for months. As a result, we’ve lost over $3B in market capitalization. We are now in danger of losing the entire company and it’s all server product management’s fault. Next time do the fucking interview yourself. Fuck you, Marc
Demotions and Firings
CEO announcement role
“Prior to executing the layoff, the CEO must address the company. The CEO must deliver the overall message that provides the proper context and air cover for the managers. If you do your job right, the managers will have a much easier time doing their jobs. Keep in mind what former Intuit CEO Bill Campbell told me—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. Still, the company must move forward, so be careful not to apologize too much.”
Firing staff
“Demoting or firing someone is hard, but often necessary. Do it with clarity, respect, and as much support as you can provide for their next steps.”
“Training starts with a golden rule: Managers must lay off their own people. They cannot pass the task to HR or to a more sadistic peer. You cannot hire an outsourcing firm like the one in the movie Up in the Air. Every manager must lay off his own people. Why so strict? Why can’t the more confrontational managers just handle this task for everyone? Because people won’t remember every day they worked for your company, but they will surely remember the day you laid them off. They will remember every last detail about that day and the details will matter greatly. The reputations of your company and your managers depend on you standing tall, facing the employees who trusted you and worked hard for you. If you hired me and I busted my ass working for you, I expect you to have the courage to lay me off yourself. Once you make it clear that managers must lay off their own people, be sure to prepare them for the task:
They should explain briefly what happened and that it is a company rather than a personal failure.
Firing executives
“STEP 1: ROOT CAUSE ANALYSIS While it’s possible to fire an executive for bad behavior, incompetence, or laziness, those cases are rare and relatively easy. Unfortunately, unless you have a horribly deficient hiring process, those are probably not the reasons why you got to this point.”
“Yes, the reason that you have to fire your head of marketing is not because he sucks; it’s because you suck. In other words, the wrong way to view an executive firing is as an executive failure; the correct way to view an executive firing is as an interview/integration process system failure. Therefore, the first step to properly firing an executive is figuring out why you hired the wrong person for your company. “
“Three keys to getting it right:
Be clear on the reasons. You have thought about this long and hard; don’t equivocate or sugarcoat it. You owe it to them to be clear about what you think happened.
Use decisive language. Do not leave the discussion open-ended. This is not a performance review; it’s a firing. Use words and phrases like “I have decided” rather than “I think.”
Have the severance package approved and ready. Once the executive hears the news, she will stop caring about the company and its issues; she will be highly focused on herself and her family. Be ready to provide specific details of the severance package. “
“Generally, it’s smart for the CEO to act in the executive role in the meanwhile. If you do act in the role, you must really act—staff meetings, one-on-ones, objective setting, etc. Doing so will provide excellent continuity for the team and greatly inform your thinking on whom to hire next.”
Handling the emotional component
“Remember, when you fire someone, it’s not just their professional life you’re affecting. Approach these conversations with empathy and a clear rationale.”
Legal and ethical considerations
“Ensure every decision you make, especially around demotions and firings, is not just legally compliant, but ethically sound. Your team will watch and learn from how you handle these situations.”
Handling Layoffs
Preparing for and conducting layoffs with empathy
“Layoffs are a failure of management, not the employees being laid off. Prepare with care, conduct with empathy, and support those leaving to the best of your ability.”
The aftermath of reducing your workforce
“After layoffs, your remaining team will feel insecure, scared, and possibly demotivated. It’s your job to rebuild trust, morale, and focus on the path forward.”
Balancing transparency and assurance
“Be as transparent as possible about the reasons for layoffs and what the future holds, but also provide assurance and a clear plan to those who remain. Your goal is to secure not just the survival of your company, but the commitment and morale of your team.”
Part 3: Closing, Selling, and Buying
“The decision to sell, buy, or close your company is as significant as the decision to start it. It requires a deep understanding of your company’s value, strategic foresight, and the emotional intelligence to navigate the transition. Whether integrating another company or concluding your startup’s journey, it’s a time for reflection, learning, and preparing for the next adventure.”
Deciding to Sell
Evaluating the need to sell
“Deciding to sell your company is as complex and emotional as deciding to start it. Evaluate not just the financial implications but the strategic and personal ones too.”
Negotiating terms and outcomes
“In negotiations, your leverage is determined by your alternatives. Know your worth, understand the buyer’s motivations, and be prepared to walk away if the deal doesn’t align with your vision for the company.”
Preparing the company for acquisition
“Prepare your company for acquisition by ensuring clean financials, a strong management team, and a clear value proposition. The goal is to make your company as attractive and easy to integrate as possible.”
Acquisitions
The process of acquiring other companies
“Acquiring a company is like performing surgery; it requires careful planning, precision, and post-operation care. Understand the strategic fit and how the acquisition will propel your company forward.”
Integrating companies successfully
“The success of an acquisition lies in the integration. Preserve what made the acquired company valuable while aligning its culture, systems, and goals with your own.”
Avoiding common pitfalls during mergers
“Common pitfalls in mergers include cultural clashes, loss of key talent, and distraction from core business. Address these proactively by engaging teams early and often, and maintaining focus on your customers.”
End of a Startup Journey
The emotional transition
“The end of a startup journey can feel like losing a part of yourself. It’s important to grieve, but also to recognize the incredible journey, the learning, and the impact you’ve had.”
Learning and growth for future endeavors
“Every end is a new beginning. Reflect on the lessons learned, not just from successes but from failures too. These lessons are invaluable for whatever you choose to do next.”
Reflections on legacy and impact
“Reflect on the legacy of your startup not in terms of financial success, but the impact on your customers, employees, and the industry. The true measure of success is the difference you’ve made.”
Part 4: Building a Sustainable Company
My old boss, Jim Barksdale was fond of saying, “We take care of the people, the products, and the profits—in that order.” It’s a simple saying, but it’s deep. “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
You can best take care of your people by making your company a good place to work, which has the following attributes:
People are clear on what their jobs are and how success is measured.
“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.”
People believe their work makes a difference to the success of the company and, by extension, to their personal success.
“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.”
They have as few barriers to getting work done as possible. A good work environment avoids office politics, infighting, and overly bureaucratic processes, which all get in the way of doing good work.
“In a poor organization, on the other hand, people spend much of their time fighting organizational boundaries, infighting, and broken processes. They are not even clear on what their jobs are, so there is no way to know if they are getting the job done or not. In the miracle case that they work ridiculous hours and get the job done, they have no idea what it means for the company or their careers. To make it all much worse and rub salt in the wound, when they finally work up the courage to tell management how fucked-up their situation is, management denies there is a problem, then defends the status quo, then ignores the problem.”
People enjoy working with the people around them. They don’t always have to like each other personally, but they respect that everyone is pulling their weight.
Creating a Company Culture
Defining company values and ethics
“Your company’s culture is the set of behaviors that you reward and punish. Start by defining your core values and ethics clearly and ensure they are integral to every aspect of your organization.”
Implementing structures to support culture
“Structures, from your hiring practices to your performance review systems, should reinforce your company’s culture. Make sure these structures align with and promote your core values.”
Evolving culture as the company grows
“As your company grows, your culture will be challenged. It must evolve, but keep the core essence of what made you successful. Be deliberate in maintaining and adapting your culture to support your growth.”
Personal attributes
“Intelligence is not the only important quality. Being effective in a company also means working hard, being reliable, and being an excellent member of the team.”
“A company is a team effort and, no matter how high an employee’s potential, you cannot get value from him unless he does his work in a manner in which he can be relied upon.”
Successful CEO attributes
The successful CEO attributes
“Every really good, really experienced CEO I know shares one important characteristic: They tend to opt for the hard answer to organizational issues. If faced with giving everyone the same bonus to make things easy or with sharply rewarding performance and ruffling many feathers, they’ll ruffle the feathers. If given the choice of cutting a popular project today, because it’s not in the long-term plans or you’re keeping it around for morale purposes and to appear consistent, they’ll cut it today. Why? Because they’ve paid the price of management debt, and they would rather not do that again.”
“People always ask me, “What’s the secret to being a successful CEO?” Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves.”
“By far the most difficult skill I learned as CEO was the ability to manage my own psychology. Organizational design, process design, metrics, hiring, and firing were all relatively straightforward skills to master compared with keeping my mind in check. I thought I was tough going into it, but I wasn’t tough. I was soft.”
“Generally, someone doesn’t become a CEO unless she has a high sense of purpose and cares deeply about the work she does. In addition, a CEO must be accomplished enough or smart enough that people will want to work for her.”
Ones and twos
“Two core skills for running an organization: First, knowing what to do. Second, getting the company to do what you know.”
“While being a great CEO requires both skills, most CEOs tend to be more comfortable with one or the other.
“I call managers who are happier setting the direction of the company Ones and those who more enjoy” making the company perform at the highest level Twos.
Ones like spending most of their time gathering information from a broad variety of sources, from employees to customers to competitors. Ones love making decisions. Although they prefer to have comprehensive information when they make a decision, they comfortably make decisions with very little information when necessary. Ones have great strategic minds and enjoy nothing more than a good game of eight-dimensional chess against their best competitors. Ones sometimes get bored with many of the important execution details required to run a company, such as process design, goal setting, structured accountability, training, and performance management. Most founding CEOs tend to be Ones.
Twos, on the other hand, thoroughly enjoy the process of making the company run well. They insist upon super-clear goals and strongly prefer not to change goals or direction unless absolutely necessary. Twos like to participate in strategic discussions but often have difficulty with the strategic thinking process itself. Where a One might be perfectly comfortable spending one day a week reading, studying, and thinking, doing so would make a Two very nervous, because it would not feel like work to them. A Two would get antsy at the thought of all the processes that might be improved, people who might be held accountable to achieving the standard, or sales calls that could be made while he was wasting time just thinking about strategy. Big decisions worry Twos much more than they worry Ones.”
You need both characteristics to be a good CEO
“While people tend to be Ones or Twos, with discipline and hard work natural Twos can be competent at One tasks and Ones can be competent at Two tasks.
“If a CEO ignores the dimension of management she doesn’t like, she generally fails. Ones end up in chaos and Twos fail to pivot when necessary.”
Functional Ones
“Often Two executives act as Ones for their functions, but Twos as members of the executive team.”
“For example, the head of sales might easily make all the decisions that are local to the sales organization but prefer to take direction with respect to the overall company plans. This is the best kind of multilayer leadership possible, because directions are clear and decisions are made rapidly with precision.”
Follow the leader
“Perhaps the most important attribute required to be a successful CEO is leadership. So what is leadership and how do we think about it in the context of the CEO job? We look for three key traits:
The ability to articulate the vision
The right kind of ambition
The ability to achieve the vision
THE ABILITY TO ARTICULATE THE VISION: THE STEVE JOBS ATTRIBUTE
Can the leader articulate a vision that’s interesting, dynamic, and compelling?
THE RIGHT KIND OF AMBITION: THE BILL CAMPBELL ATTRIBUTE
One of the biggest misperceptions in our society is that a prerequisite for becoming a CEO is to be selfish, ruthless, and callous. In fact, the opposite is true and the reason is obvious. The first thing that any successful CEO must do is get really great people to work for her. Smart people do not want to work for people who do not have their interests in mind and in heart. Most of us have experienced this in our careers: a bright, ambitious, hardworking executive whom nobody good wants to work for and who, as a result, delivers performance far worse than one might imagine.
Truly great leaders create an environment where the employees feel that the CEO cares more about the employees than she cares about herself. In this kind of environment, an amazing thing happens: A huge number of employees believe it’s their company and behave accordingly.
A huge part of why he has been so remarkably strong in this dimension of leadership is that he’s completely authentic.
THE ABILITY TO ACHIEVE THE VISION: THE ANDY GROVE ATTRIBUTE
The final leg of our leadership stool is competence, pure and simple. If I buy into the vision and believe that the leader cares about me, do I think she can actually achieve the vision?”
Nurturing Leadership
Identifying and developing leaders internally
“The best leaders often come from within. Identify potential leaders early, invest in their development, and give them opportunities to grow into their roles.”
Strategies for leadership succession
“Plan for leadership succession long before it’s needed. A robust succession plan ensures stability and continuity, preparing your company for the future without missing a beat.”
Building a diverse and effective executive team
“Diversity in your executive team brings diverse perspectives, leading to better decision-making and a more resilient company. Strive for a balance of skills, backgrounds, and ways of thinking.”
Avoid Jerks
“Some people are so belligerent in their communication style that people just stop talking when they are in the room. If every time anyone brings up an issue with the marketing organization, the VP of marketing jumps down their throats, then guess what topic will never come up? This behavior can become so bad that nobody brings up any topic when the jerk is in the room. As a result, communication across the executive staff breaks down and the entire company slowly degenerates.”
Promotions
Promotions need to be levelled across groups
“One key requirement of the process should be that promotions will be leveled across groups. If you let a manager or a single chain of command determine promotions unilaterally, then it’s possible that, for example, HR will have five vice presidents and Engineering only one.”
“One way to level across groups is to hold a regular promotions council that reviews every significant promotion in the company. When a manager wishes to promote an employee, she will submit that employee for review with an explanation of why she believes her employee satisfies the skill criteria required for the level. The committee should then compare the employee with both the level’s skill description and the skills of the other employees at that level to determine whether to approve the promotion. In addition to ensuring fairness and level quality, this process will serve to educate your entire management team on the skills and accomplishments of the employees being submitted for promotion.”
Measuring executives
“Bill Campbell developed an excellent methodology for measuring executives in a balanced way that will help you achieve this. He breaks performance down into four distinct areas:
1. Results against objectives – Once you’ve set a high standard, it will be straightforward to measure your executive against that standard.
2. Management – Even if an executive does a superb job achieving her goals, that doesn’t mean she is building a strong and loyal team. It’s important to understand how well she is managing, even if she is hitting her goals.
3. Innovation: It’s quite possible for an executive to hit her goal for the quarter by ignoring the future. For example, a great way for an engineering manager to hit her goals for features and dates is by building a horrible architecture, which won’t even support the next release. This is why you must look beyond the black-box results and into the sausage factory to see how things get made.
4. Working with peers – This may not be intuitive at first, but executives must be effective at communicating, supporting, and getting what they need from the other people on your staff. Evaluate them along this dimension.
The importance of training
Training must be mandatory
The first thing to recognize is that no startup has time to do optional things. Therefore, training must be mandatory. Keep in mind that there is no investment that you can make that will do more to improve productivity in your company. Therefore, being too busy to train is the moral equivalent of being too hungry to eat.”
Feedback – upwards and downards
The price of not giving feedback
Companies execute well when everybody is on the same page and everybody is constantly improving. In a vacuum of feedback, there is almost no chance that your company will perform optimally across either dimension. Directions with no corrections will seem fuzzy and obtuse. People rarely improve weakness they are unaware of. The ultimate price you will pay for not giving feedback: systematically crappy company performance.
Questions to understand your employees views of the business – for use in one-on-ones
If we could improve in any way, how would we do it?
What’s the number-one problem with our organization? Why?
What’s not fun about working here?
Who is really kicking ass in the company?
Whom do you admire?
If you were me, what changes would you make?
What don’t you like about the product?
What’s the biggest opportunity that we’re missing out on?
What are we not doing that we should be doing?
Are you happy working here?
The key to giving elite feedback
To become elite at giving feedback, you must elevate yourself beyond a basic technique like the shit sandwich. You must develop a style that matches your own personality and values. Here are the keys to being effective:
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. You can’t fake the funk.
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. If you really want someone to succeed, then make her feel it. Make her feel you. If she feels you and you are in her corner, then she will listen to you.
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.
Don’t clown people in front of their peers. While it’s okay to give certain kinds of feedback in a group setting, you should strive never to embarrass someone in front of their peers. If you do so, then your feedback will have little impact other than to cause the employee to be horribly ashamed and to hate your guts.
Feedback is not one-size-fits-all. Everybody is different. Some employees are extremely sensitive to feedback while others have particularly thick skin and often thick skulls. Stylistically, your tone should match the employee’s personality, not your mood.
Be direct, but not mean. Don’t be obtuse. If you think somebody’s presentation sucks, don’t say, “It’s really good, but could use one more pass to tighten up the conclusion.” While it may seem harsh, 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. But don’t beat them up or attempt to show your superiority. Doing so will defeat your purpose because when done properly, feedback is a dialogue, not a monologue.
The Importance of Innovation
Fostering an innovative environment
“Innovation doesn’t happen in a vacuum. Create an environment where taking calculated risks is encouraged, failure is not punished but seen as a learning opportunity, and creative thinking is part of the daily routine.”
Balancing core business with new ventures
“Maintain a delicate balance between focusing on your core business and exploring new ventures. Allocate resources wisely to ensure that innovation drives growth without jeopardizing your core operations.”
Measuring the impact of innovation initiatives
“What gets measured gets managed. Develop metrics to assess the impact of your innovation initiatives, ensuring they contribute to your strategic goals and long-term vision.”
