Imagine your business is down to its last stretch of runway and your investors refuse to put more cash into it. Your friends and your most trusted advisers tell you that it’s probably time to throw in the towel, but as a last-ditch effort to find some capital, you decide to take the company public.
You are half-certain that the company will go completely bankrupt during the actual roadshow, making the entire process superfluous. You put on a brave face for each banker you meet, and keep an eye on your phone for the call that you’re hoping won’t come. And then it does.
But the call isn’t about your company, it’s about your family -- the only thing in the world that’s more important than your company. Your wife has had an allergic reaction to her medicine and stopped breathing. In that moment, you feel a fear that you’ve never felt before. Everything that matters to you is slipping away. This is Ben Horowitz's story, as told in his new book, The Hard Thing About Hard Things: Building A Business When There Are No Easy Answers.
When I first heard that Horowitz was writing a book, I thought of my husband. Because of my job I’ve always known that being a founder is hard, but watching Suneel create and launch Rise made me realize how emotionally taxing the journey can be.
As supportive as I try to be, I know there’s nothing like Suneel hearing empathy from someone who’s been through that and worse. That’s why he, and many other founders, have come to rely on Horowitz's routine writings in the blogosphere.
In the past year or so, a publisher approached Horowitz, attempting to convince him to put his thoughts into book format. He thought that if he did it, it would have to be different from other books that address how to be successful as a CEO. First, he wasn't doing it for the money. He's donating the book's earnings to the American Jewish World Service in order to support its efforts to help women fight for their basic rights throughout the world.
Second, there was something missing in the management advice book world. As Horowitz explained to me in an interview, he drew a lot of inspiration from a book by former Intel CEO and president Andy Grove, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company. Horowitz saw a way that he could expand on what Grove tackled in his book by talking about the real problems and issues entrepreneurs face in the context of his own experiences.
He told me in an interview, "I would have never wanted to write another management book. There are so many of them and everybody says the same thing about them, and they are all the same — they give the exact same advice. It’s like a diet book, they all say eat less calories, exercise more, and every single book has the same conclusion. So I didn’t want to write another one of those. But having been on the other side I really felt like there was a missing book, which was what happens when everything goes wrong, and you have set it all up right."
The first thing that struck me as compelling about Horowitz's book is his brutal honesty around his own missteps when it came to being an engineer, founder, husband and more. Of course, many would say it is easy to be honest about struggle and startups when you've had a $1 billion-plus exit to HP and now lead a successful venture capital firm. But when you read Horowitz's account, his honesty comes across as genuine. And my sense is that his honesty is part self-reflecting and part inherent, and translates into the book because it is a trait he has had for some time -- for better or worse.
Horowitz spends the first few chapters establishing his own story, from growing up in Berkeley (his father is conservative writer and policy advocate David Horowitz), to meeting his wife Felicia in LA, and then the unfolding of his career. He gives the reader an inside view into his humble start as an engineer at NetLabs, and his beginnings working for his future venture and business partner Marc Andreessen.
Horowitz really delves into the story behind Loudcloud, and then Opsware, which was born of Loudcloud. It's in this moment in time Horowitz appears to have had the bulk of his education as a CEO, manager, and founder. Loudcloud, and Opsware, and this by no means was an easy road. In fact, the way Horowitz describes the journey, it was an epic disaster at some points. He recalls in the book that Loudcloud was running out of money and the company decided to IPO because private investors wouldn't invest any more cash.
On the roadshow, Horowitz says he was sure the company would go bankrupt. And in the midst of all this and his travel, his wife Felicia had a serious health scare, as outlined above. These sorts of hardships are the reason why he spends so much time on the actual journey versus the outcome, which was that HP acquired Opsware for over $1 billion in 2007.
With this background set up, Horowitz spends much of the rest of the book around advice, and shares anecdotes from these times at various points. He also inserts quotes from rappers like Nas, The Game and others within chapters. Clearly, this isn't your traditional, how-to founder advice. He tackles the real problems and challenges entrepreneurs face, because these are the questions he asked his mentors and problems he tackled along his journey.
For example, he spends an entire chapter on how to lay employees off. Another chapter addresses when it's okay to poach from a friend's company. Horowitz also devotes time to advising on how to minimize office politics, how to establish titles and measure performance, and how to train employees and tell a good product manager from a bad product manager.
But where Horowitz separates himself is in his advice around how to control your own psychology and demons as a CEO and founder. These are real problems that every CEO and leader faces, as sometimes they are their own worst enemy. As Horowitz writes in one passage:
By far the most difficult skill I learned as a 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. Over the years I've spoken to hundreds of CEOs, all with the same experience. Nonetheless, very few people talk about it and I have never read anything on the topic. It's like the fight club of management: the first rule of the CEO psychological meltdown is don't talk about the psychological meltdown. At risk of violating the sacred rule, I will attempt to describe the condition and prescribe some techniques that helped me. In the end, this is the most personal and important battle that any CEO will face.
Horowitz also delves into the next chapter of his professional life as a venture capitalist. Here he covers the history of founding A16Z with Andreessen, the reason behind the firm's focus on hiring former founders as VCs and its replication of the CAA agency model in the VC world. He goes into detail around how he and Andreessen have segmented the firm into networks, which include large companies, executives, engineers, press and analysts, and investors and acquirers.
So what makes this different from the scores of business advice books out there? Horowitz has essentially taken much of the advice that a mentor like Bill Campbell (a.k.a. the startup whisperer to some household names in technology) has bestowed upon him and Andreessen, as well as many of the other top CEOs in Silicon Valley, and made it accessible for entrepreneurs around the world.
It's fair to point out that Horowitz’s ways of approaching problems may not necessarily be the right way for everyone. He's speaking from his specific experience running an enterprise tech company and if you don't want to be a founder, CEO, or senior leader in an organization, this book may not be helpful to you.
While there are some drier 'how-to' parts of the book, there's also anecdotes from Horowitz peppered in. You won't find many many similarities between Horowitz's outlook and advice and the perspective you might find on Wall Street.
One of the chapters of the book is titled “The Struggle,” and offers founders a level of empathy that is almost too real (this was part of a post he wrote on TechCrunch in 2012). He deliberately doesn't sugar coat anything, because he knows better than most that the world of a founder, is paved with hardship and can be very bitter. My bet is that Horowitz’s book becomes gospel for startups. His stories already have.
Be sure to check in tomorrow, as we’ll be posting a Q&A with Horowitz about the book, his inspiration, and more.