Saturday, April 12, 2014

The Easy Thing About “The Hard Thing About Hard Things”


 The easy thing about “The Hard Thing About Hard Things,” Andreessen Horowitz co-founder Ben Horowitz’s book about “Building a business when there are no easy answers,” is reading it. 
 That’s because it’s funny, to-the-point, and way more well-informed by real-world experience than most books that give advice ever are.  
 Like 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.”
 And, “Managers must lay off their own people.   They cannot pass the task to HR or to a more sadistic peer.”
 And, “The job of a big company executive is very different from the job of a small company executive…big company executives tend to be interrupt-driven.   In contrast, when you are a startup, nothing happens unless you make it happen.”

 But it’s not just catchy phrases and aphorisms that make the book something pretty much anybody who wants to build a company should read, it’s the experience that created them: Horowitz provides in brutal (and, for aspiring entrepreneurs, invaluable) detail the excruciating real-life experiences behind the advice, from his years as a Silicon Valley engineer and then as the CEO of a start-up with more near-death experiences than Keith Richards before its successful sale to HP.
 Like how to fire people.   What to say at the  “all-hands” when you just had your first layoffs.   What to tell an employee who asks if the company is being sold when it is being sold, but not yet.  Why every company needs a “story,” and what makes a great company story (hint: see the letter Jeff Bezos wrote to Amazon shareholders in 1997.)  When not to listen to your board.  Even, literally, what questions a CEO should ask a prospect being considered for the key, all-important job in any start-up: head of sales.
 We here at NotMakingThisUp are not generally fans of “how-to” books, particularly those concerned with managing people, and we’ve never coded anything more complex than a bicycle lock, but the light-bulb went on reading the chapter emphatically titled “WHY YOU SHOULD TRAIN YOUR PEOPLE,” in which the author bemoans the fact that “too often the investment in people stops” with the recruitment process.
 The reason the lightbulb went is that the son of a friend of ours happens to be a software engineer for a start-up that was acquired by a large, fast-growing Silicon Valley company we won’t identify but whose name rhymes with “Shalesforce.com.”
 Anyway, this engineer is smart as hell, highly motivated, eager to learn, and miserable at his job for precisely the reason Horowitz spells out as follows in “WHY YOU SHOULD TRAIN YOUR PEOPLE”:
 “Often founders start companies with visions of elegant, beautiful product architectures that will solve so many of the nasty issues that they were forced to deal with in their previous jobs.  Then, as their company becomes successful, they find that their beautiful product architecture has turned into a Frankenstein.  How does this happen?  As success drives the need to hire new engineers at a rapid rate, companies neglect to train the new engineers properly.  As the engineers are assigned tasks, they figure out how to complete them as best they can.   Often this means replicating existing facilities in the architecture, which leads to inconsistencies in the user experience, performance problems, and a general mess.   And you thought training was expensive.”
 That line is the exact truth.   Just ask our friend’s son at Shalesforce.com.   His managers—if they exist—ought to read this book.
 In fact, anybody who wants to start a company, or work for a company, or build a company, or invest in a company, ought to read this book, because that’s not the only hard-learned truth in here.
 Some others include:
 “In high-tech companies, fraud generally starts in sales due to managers attempting to perfect the ultimate local optimization [i.e. optimize their own incentive pay].”
 “The Law of Crappy People states: For any title level in a large organization, the talent on that level will eventually converge to the crappiest person with the title.”
 “The world is full of bankrupt companies with world-class cultures.   Culture does not make a company…. Perks are good, but they are not culture.”
 “Nobody comes out of the womb knowing how to manage a thousand people.   Everybody learns at some point.”
 “The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown.”
 And maybe the best of all, because it encapsulates so much of what the book is about: “Tip to aspiring entrepreneurs: If you don’t like choosing between horrible and cataclysmic, don’t become CEO.”

 This book, on the other hand, is a choice between good and great, so read it.


Jeff Matthews
Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett”
(eBooks on Investing, 2013)    $4.99 Kindle Version at Amazon.com

© 2014 NotMakingThisUp, LLC              
The content contained in this blog represents only the opinions of Mr. Matthews.   Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.  This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever.  Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored.  And if you think Mr. Matthews is kidding about that, he is not.  The content herein is intended solely for the entertainment of the reader, and the author.

2 comments:

Unknown said...

Team Lead: We need to increase our spend on employee training.
CEO: But what if after we spend money to train them, they leave?
Team Lead: What if we don't train them and they stay?

Colin P said...

The best story in the book is the hiring of Mark Cranney as sales director. Everything superficial, screamed don't hire the guy. However, he was transcendantally better than anyone Horowitz had hired previously. There should be a chapter about sticking to your guns when hiring people, it can only inspire confidence and drive in the new hire.

Horowitz makes one comment that sales director are usually tall. For what reason? So that they can pull things off shelves? Look down on sales people?

But yeah, it's a great quick read and unlike anything I have read in a while, it's excruciatingly honest. Different from the many books written by executives promoting their many successes, but failing to mention the many more errors that had to happen in order to find the right answer, or omitting how painfully close they were to failure.