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Book Summary: The Hard Thing About Hard Things, by Ben Horowitz

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Article reading time: 9 min. Book reading time: 4 hours and 8 minutes.

Ben Horowitz is the billionaire co-founder of Andreessen Horowitz (also called a16z), the most famous and respected VC of Silicon Valley.

He was also co-founder and CEO of Loudcloud, then Opsware, a technology firm that was on the verge of bankruptcy but that eventually sold to HP for more than one billion dollars.

His fortune today stands at more than $3.6 billion according to online sources, but it’s likely much more than that in practice.

In 2014, Ben published The Hard Thing About Hard Things, probably the only real book about real company management.

Ben explains what it’s like to be CEO, what his tasks and responsibilities were, how to manage difficult situations, and how to be outstanding at the job.

His book is very good for anyone wishing to become a big tech CEO, or if you want to be hired by a tech CEO since he explains what CEOs look for in people.

While I thought it was an entrepreneurship book, it’s not.

It’s a real, pure, management book.

While interesting and giving great insights, the book tends to be repetitive towards the end.

I give it 8/10.

Find below the summary of The Hard Thing About Hard Things, written by Ben Horowitz.

Book Summary: The Hard Thing About Hard Things, by Ben Horowitz

1. Being scared doesn’t mean you are gutless. What you do matter and determines whether you are a hero or a coward. Both feel the same way but take different actions. This is why they are heroes or cowards.

2. There are no shortcuts to knowledge. Relying on conventional wisdom (we do x because everyone does it) or taking shortcuts can often be worse than knowing nothing at all. If you know nothing, you look at things in a new light that enables you to think critically about that problem. It often works out well.

3. When things go wrong, it may be because of what you are doing as well as about what you are not doing.

4. There is no secret to being a good CEO. The best abilities to develop is to focus on what really matters, and make the best moves when there are no good moves to make (eg: firing staff; get highly-diluting VC investments; selling at a loss).

5. The real struggle in a company is when everything goes to sh*t. Here’s how to survive it.

  • Don’t put it all on your shoulders. You have executives that are supposed to execute and run your company. Use them.
  • Play long enough and you migtht get lucky. Sometimes, it is about surviving instead of living.
  • Don’t take it personally.
  • Surviving this struggle and not quitting is what separates the winners from the losers.

6. Tell the truth. Tell it like it is. There are three reasons why.

  • Trust. If you lie, or don’t tell all that there is and people find it out, they will stop trusting you. Trust is everything in a company.
  • The more people know about a problem and work on it, the more likely one is to find a solution.
  • Bad news travels fast, good news travels slow.

7. How to lay people off the right way.

  • 1. Focus on the future, not the past. Find that new person to replace the underperforming employee.
  • 2. Don’t delay. Fire people as soon as you made the decision.
  • 3. Know why you are firing them.
  • 4. Train your managers to fire their own people. They must be crystal clear about why they are fired and about the support they will get after they were fired.
  • 5. In case of mass layoffs, or the layoff of a very important person, address the entire company. The colleagues will be sad to see their colleagues go. You must not let this impact performance or motivation.
  • 6. When you are firing, people will want to see you and talk to you, they will want support and answers. Be present, be there, face the looks you will get.

8. How to fire executives.

  • Explain they are fired because you made a mistake hiring them. You did not foresee that they would not be suitable for the position. It is your fault, not theirs.
  • Let the board know.

9. Nobody cares. When things go wrong, when things don’t work properly, nobody cares why. It is your job to fix them so they run smoothly.

10. Take care of the people, the product, the profits, in that order. Because great people make great products that make great profits.

11. Hire people for their strength, not for their lack of weaknesses.

12. Build a good company: build a company where people want to come work every morning.

13. Train your people. They won’t become good or know deep inside knowledge by magic. Train them, it is critical.

14. The two reasons why people quit their job is that they hate their manager, or they are not learning anything.

15. If you have the chance to hire an employee from a CEO friend, don’t. Or if you do, make sure to call the CEO first and ask for permission, or at least, see how they’d feel.

16. There are two types of executives. Those that can run things in a very small company (proactive), and those that run things in a big company (reactive). When you work in a tiny company, nothing happens until you make it happen (no sales if you don’t call). Without massive input, the company will stay small, and still. In big companies, it is the opposite. Problems just keep on coming and one must focus on fixing them. This is why big companies exec perform poorly in small structures: they just wait for things to happen instead of making them happen.

17. Don’t tell them what to do. Tell them the goal of what you expect them to do. Eg: don’t say “call the customer”; say “sell the product”.

18. One way to create behaviors in employees is to measure performances. Anything measurable will force people to adopt practices to make these things happen. Be clear about the goals of everyone in the company, and the criteria by which you will measure their success at achieving these goals.

19. The management debt: management debt is a concept saying that any management shortcuts you take will eventually create a debt you’ll have to pay in the long run. Find three practices creating management debt.

  • Putting two in the box: sometimes, you need someone who is great at sales and great at marketing. You happen to find one person great at sales, and another great at marketing. As such, you decide to put them together for the same role. It’s a bad idea as it will confuse everyone as to who has authority over who and for what. When communication becomes unclear, the whole company suffers.
  • Overcompensating employees that threaten to quit: this will create political behavior. Employees will learn that the way to get a promotion is to quit, and that will kill the whole atmosphere in the company. This is why you need to implement crystal-clear processes for things like raises and promotions.
  • Not having formal measure processes: when you will find out that someone has been underperforming, you won’t have any ways or tools to let them know because you didn’t establish any in the first place.

20. Good CEOs make difficult decisions NOW that pay off LATER. Not the other way around.

21. Politics is defined as using tricks to advance one’s ambition and career at the expense of the company. Politics often happen as a by-product of certain behaviors (eg: increasing the salary of someone that wants to quit). To avoid that, hire the people with the right ambitions, aka that want to help your company succeed, that have aligned purposes with your business.

22. Build crystal clear processes for raise and promotion to avoid jealousy and political behavior.

23. If one employee complains of another employee, do not address the problem without both of them in the room. Sometimes, the problem can be fixed by simply swapping the employees for a week. Head of sales will be head of marketing for a week while head of marketing will be head of sales. This will strengthen understanding and empathy and will enable the teams to better work together.

24. The Peter Principle: this principle states that all organizations eventually become crippled due to the promotion process. People good at their current jobs get promoted to other jobs. When they stop being good, they stop being promoted and get stuck at the job they suck at, which cripples the entire organization. This is why you should fire (or at least, move) employees that don’t perform adequately.

25. The Law of Crappy People: this law says that everyone in your company will measure their performance against the crappiest employee. As a result, your company is as strong as your weakest employee. This is why you should only hire the best people.

26. How to scale your company.

  • The easy things, like communication, common knowledge, and decision making will become hard because you’ll have many more people to deal with.
  • The way to deal with specialization is to create clear management structures and processes that ensure everyone is doing what they are supposed to do.
  • As the organization grows, people will have to specialize more and more.

27. About organization design: all of them are bad, because they always emphasize x at the expense of y. This is why you want to adopt a design that emphasizes what matters more to your company while regularly checking what you are sacrificing so that it doesn’t come back to bite you later on. Here’s how to build an efficient organizational design.

  • Make small teams that communicate well and work fast
  • Figure out what needs to be communicated
  • Figure out what needs to be decided and restrain the number of people that make the decisions.
  • Prioritize the most important communication and decision path
  • Decide who is going to run each group
  • Identify the path you deprioritize. Do not leave them unattended.
  • Mitigate as much as you can the issues that will resort out of your organizational design.

28. How to design processes.

  • Focus on output first: what are you producing? What is the best process to produce the best/highest quality/fastest outputs?
  • Figure out a way to know whether you are getting what you want (through feedback loops).
  • Engineer accountability: make it crystal clear who is responsible for what.

29. The scale anticipation fallacy: this is a fallacy whereas a CEO wonders if his executives will be great 24 months from now. DON’T DO THAT, because we don’t care. What matters is whether the exec is good at his job right now. You can hire someone else later if performances become inadequate.

30. How to lead when you don’t know where you are going.

  • Focus on what you need to get absolutely right.
  • The most difficult skill to develop is to manage your own psychology.
  • CEOs make two types of mistakes: they take things too personally, or not enough.
  • Marry neither the positive nor the negative.
  • Every company goes through a WFIO moment: We’re F*cked, It’s Over. These moments often feel much worse than they are in practice.
  • To soothe pain, get some friends to talk to. Write your problems on paper.
  • Focus on the road ahead and the objective, not the wall you may hit.
  • Brilliance and courage make great CEOs. Not intelligence. Be courageous.

31. Great leaders

  • can articulate a great vision for the company.
  • have the right type of ambition for their employees and company
  • are capable of achieving their vision.
  • create environments where employees feel the CEO cares more about them than he cares about himself.
  • CEOs are made, not born. That’s because being a CEO is mostly about doing unnatural and non-instinctive things.

32. How to give feedback

  • Don’t start with praise to end up with remarks. People aren’t children.
  • Be authentic.
  • Come from the right place. You want to help your employee, not hurt him.
  • Don’t get personal. It’s not about the employee. It’s about his job.
  • Don’t make fun of people in front of people.
  • There is no one size fits all. Your feedback style must be adapted to different people.
  • Be direct. Not mean.
  • Give feedback on everything all the time in order to normalize it. People then expect it and it becomes less of a burden.

33. What do CEOs do and how to evaluate them.

  • Does the CEO know what to do → good CEOs take the right course of action.
  • Does the CEO have the right strategy (story, vision) and make fast and right decisions → good CEOs have a good vision that everyone adheres to and make decisions that end up being the right ones for the company.
  • Does the CEO get the company to do what he wants → good CEOs get employees to achieve the company vision.

34. Should you sell your company? The question is in fact, when should you not sell the company?

  • If you are in a big new market, very early, and has the possibility to dominate, don’t sell. Eg: Google didn’t sell.
  • If not, it may be good to sell.
  • This situation will always depend on different goals, purposes, criteria, and contexts that need to be studied individually and contextualized.

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