Ben Horowitz is probably best known as one of two founders of Andreessen Horowitz, a $4 billion venture capital firm formed with Marc Andreessen. With this in mind, before I began to read this great book, I was under the impression it would be heavily focussed on investment. It soon became apparent that it was so much more than that. I was blown away by some incredible stories of highs and lows along with countless pieces of high level advice, any aspiring entrepreneur, manager, executive or CEO would be foolish to ignore.
As the title suggests, the focus of this book is on the really hard stuff. It’s the stuff that most self help books don’t really want to talk about as there isn’t always a clear ‘formula’ for dealing with them. Ben doesn’t claim to offer a secret formula either. He does however take you on a journey, using his experience as the driving force to provide some incredible advice that could only be offered up by someone who has seen and lived the things he has.
It would be impossible to cram all the great advice from this book into one single post. Hopefully this covers a handful of great points that stood out for me at the time of reading.
Ben Horowitz was born and raised in Berkley, California and after graduating from college with a degree in Computer Science, he quickly became involved in software. His first break came whilst working at Lotus development when a colleague showed him the worlds first internet browser, Mosaic. Ben immediately knew this was the future so when a job came up at a company called Netscape, he jumped at the chance to work there.
Netscape, co-founded by Ben’s now partner Marc Andreessen was a truly remarkable company. Whilst most people wrote the ‘internet’ off as being too “arcane, slow and insecure” to ever meet real business needs. Andreessen and co thought differently and worked tirelessly, fighting off competition from the rising Microsoft to grow the company from nothing to its eventual sale to AOL for $4.2billion.
It was at this point that Andreessen, Horowitz and a number of other remarkable people would embark on a truly gripping story of investment, recruiting, management, marketing, sales, the dot-com boom and bust and a hell of a lot more. I could write several posts of this adventure alone. This period would see Ben and Co start their company Loudcloud(Later renamed Opsware), see out the dot-com bust and near bankruptcy to eventually sell the company to HP for a staggering $1.6billion. All in a market that had at one point dropped by 80% in value at the bottom of the bust. During this time, Ben experienced more pain than most CEOs experience through their entire careers. This puts him in a great position to provide some timeless advice.
“The struggle is when you wonder why you started the company in the first place. The struggle is when people ask you why you don’t quit and you don’t know the answer. The struggle is when your employees think you are lying and you think they might be right. The struggle is when you don’t believe you should be CEO of your company. The Struggle is when you are in over your head and you know that you cannot be replaced.”
One of the first things I picked up from the book is that success doesn’t come easily. Every great entrepreneur from Steve Jobs to Mark Zuckerberg has experienced a struggle. Success doesn’t happen overnight and you are not the only one that is finding things difficult. If you want to find the path to greatness then you will have to experience the struggle.
There is no solution for this struggle, it is what it is but Ben offers a few pieces of advice to help you through it:
As a manager or CEO you need to share all the problems that you can. Employees need to know when things aren’t going well. Whilst you might feel responsible, increasing the number of brains to solve problems is far better than hiding it all away.
The technology industry changes quickly, very quickly. So when things are looking really bad, if you can hang around just long enough you might find that tomorrow brings a solution that seemed almost impossible today.
Whilst it might be your fault if things don’t go to plan, every CEO, manager, employee makes mistakes, sometimes huge mistakes. Constantly putting yourself down certainly won’t help.
If you started the company and you want it to be great then theres going to be a big mountain to climb. Or in Bens words “If you don’t want to be great, then you never should have started a company.”
Transparency was a recurring theme throughout the book. CEOs are far too quick to sugar coat all the bad stuff and make it look like everything is great all the time. Surely it’s far healthier for your company to be on the same page, especially when things are going really badly. Your employees need to understand why things might be bad and how they can go about fixing them. Transparency will help to gain the following:
When you trust someone, especially your manager or CEO, everything becomes a lot easier. Telling it how it is will build trust within your company. Trusting employees don’t need explanations because they know that you are trying to do the right thing, even when things look really bad. As soon as employees stop trusting you, communication will fall apart.
Similar to the point made earlier, why would you want to hide away complex problems from the very people who might actually be able to fix them? Ben argues that the more brains you have looking at a problem the more likely it is that you’ll find a solution.
If you investigate companies that have failed, you’ll find that lots of employees knew about the issues that destroyed the company long before it ground to a halt. Transparency will help to build a culture that rewards people for sharing problems rather than hiding them. This debunks the old adage “Don’t bring me a problem without bringing me a solution”. It’s a crazy thought, do you really want an employee to hide away a critical issue just because she can’t solve it herself?
“People at McDonalds get trained for their positions, but people with far more complicated jobs don’t. It makes no sense. Would you want to stand on the line of the untrained person at McDonald’s?”
Training is a difficult topic. When done badly it can have a negative effect on it’s employees. I can certainly attest to this having attended a number of incredibly boring training sessions at large organisations in the past. On the other hand though, a great training program can offer many benefits:
Often when technology companies start out their products are seamless and beautiful. As they grow they have to add more people to the team quickly. At this point companies neglect the importance of training these engineers, often because ‘there isn’t enough time.’ The problem is that as these new employees are assigned tasks they have to work out how to complete them the best that they can. This will lead to inconsistencies, duplication and additional complexity. Investing time in training these engineers might be a little time consuming initially but it will save you buckets of time in the long run.
Any driven employee will want to learn new things. This is what will keep them engaged and interested in what you are doing. Smart people won’t hang around that long if they feel like the company they are working for isn’t investing in their career progression.
If you don’t train your people, how can you possibly know if you have clearly set expectations for them.
Fast forward the book a little and we come onto one of my favourite concepts, Management Debt. The concept is an adapted version of Ward Cunninghams “technical debt“, which refers specifically to writing quick and dirty code, to solve a short term problem. Initially this might be ok but if this ‘debt’ isn’t accounted for, it will accumulate ‘interest’ and become incredibly complex to work with at a later date.
Similarly, management debt comes about when you make quick, short sighted management decisions that will have expensive long term consequences for your company. The best way to describe management debt is to talk about the 3 examples that Ben uses in his book:
The first example is something most managers will be able to relate to. You have 2 outstanding employees that you don’t want to lose. You only have one position to fill. What do you do? The logical and easy answer would be to put “two in the box”. The short term benefits are clear. You get to keep two outstanding employees; will bridge any potential gaps in either ones knowledge; and they can help develop one another. The longer term issues aren’t so clear. This decision suddenly makes everyones job working under them a little more complicated. Which one will they go to, to get a final decision? Who would be held accountable? Will meetings require both people to be present? At some point you will have to take the hard decision and turn this two into one.
Another one that I’m sure a lot of managers can relate to. One of your key employees has had an offer from another company, a much better one than they have at yours. The problem is that the offer is much more than you pay any of your other engineers. This employee is working on an important project, you can’t lose them right now. What do you do? You take a little “management debt” and match their offer to retain the employee and keep your project on track. Great. Long term though, everyone in the department now knows that to get a better deal they just need to extract a better offer from another company and raise it with you. As Ben says, “it’s going to take a while to pay off that Debt”.
Startups grow fast and when they do you’re probably well aware of the need for a formal performance management process. The problem is that you don’t want to pay the “price”. You don’t want to rock the boat and risk turning your creative startup into a big corporate company. This seems like a small bit of management debt worth taking. No. The problems start to arise when people start performing below your expectations. If you don’t have a process in place to make these expectations clear then how will anyone know what they are. “The ultimate price you will pay for not giving feedback: systematically crappy company performance…”
“Every really good, really experienced CEO I know shares one important characteristic: They tend to opt for the hard answer to organisational issues”
I love this quote. CEOs, leaders and managers are often too concerned with hurting someones feeling and avoiding the tough decision. The really good ones face up to it and make the decision early and quickly. They don’t build up much “management debt” and so they create far better companies. The moral of the story is that you might have to make an unpopular decision today to protect the long terms plans of your company tomorrow.
“You needn’t think hard about how you can make your company seem bizarre to outsiders. However, you do need to think about how you can be provocative enough to change what people do every day.”
Today creative companies are always comparing themselves to the latest and greatest. We look at companies like Google, Facebook and Dropbox. The slides, sleeping docks and fancy interiors set the bar for examples of great company culture. Whilst theres no doubt these go towards increasing employee satisfaction Ben talks about culture as “designing a way of working that will”:
Ensure that critical operating values persist such as delighting customers or making beautiful products
Help you identify employees who fit with your mission.
Working for a company that has a great culture is always something that I would look for. Achieving it though is a lot harder than it appears. The key, Ben says, is “shock value. ” You introduce something into your company that might be so disturbing that it will change peoples behaviour. The book offers 3 great examples:
Jeff Bezos, founder and CEO of Amazon introduced a fantastic rule that would help shape the culture at Amazon forever. To enforce his vision of delivering the best possible value to their customers, Jeff makes every employee at Amazon work on a desk that is build using a cheap door from Home Depot, with legs nailed onto it. When an agitated employee asked Jeff why he had to work from a makeshift desk, his response was,
“We look for every opportunity to save money so that we can deliver the best products for the lowest cost….if you don’t like sitting at a door, then you wont last long at amazon.”
At the Andreessen Horowtz Venture Capatalist firm, they introduced their very own shock tactic to help enforce the right kind of culture. A common problem in the world of VCs is that they often don’t offer the respect to their clients, entrepreneurs, that they really should. To ensure they do at Andreessen Horowitz they introduced a rule that for every minute an employee is late for a meeting with an entrepreneur, they’ll be charged $100 dollars. I can’t say I totally agree with this but you can’t deny that it’s a shock tactic that will change behaviours.
This is the most widely known of the three. It has been mentioned many times over. Whilst people might know what it means, few including myself, will be aware of the importance it had on creating the right culture at Facebook. Zuckerberg didn’t want people to sit on the fence. It was far more important for people to try and do great things at the risk of breaking something than to not try doing them at all.
One important caveat is that “shock therapy” for one company will be very different from another. It absolutely has to match the values and vision of your company. Amazons “makeshift desks” work because they link employees to the vision of providing maximum value to their customers. This rule wouldn’t work at a company like Square. There office is all about making people feel how seriously they take design.
There is just way too much good stuff in this book to cover in one single post. Whilst I’ve picked out some points/advice that I found to be interesting I have not been able to include so many other great things. A lot of this book might be focussed at the CEO and manager level but there really is something for everyone, specifically those who are passionate about what they do. If you’ve got this far then I really do recommend that you read this book yourself.
I have the utmost respect for anyone who endures even a small percentage of the things that Ben Horowitz has. It’s truly incredible and inspiring reading about everything he has been through and achieved. The reality is that most people have “got it easy”, including myself and reading this book will hopefully highlight that and toughen you up a little. I think the best thing I can take from this book is that sometimes you just have to keep fighting. Often when it looks like there is nowhere else to go, something changes and you can suddenly do something that just wasn’t possible yesterday. Hang in there!
By Jonathan Clift, a UX Desginer based in the UK.