 So Matt, today we're reviewing The Hard Thing About Hard Things by Ben Horowitz. If you haven't heard of Horowitz, he's a founding partner at Andruison Horowitz, one of Silicon Valley's premier venture capital firms. But surprisingly, this book is not really about venture capital. No, it's really the personal story of Ben himself. Ben is a really unlikely character to become a venture capitalist. His grandparents were a valid communist, his grandfather isn't as a Karl Marx quote on his tombstone, and he grew up in an area that he affectionately refers to as the People's Republic of Berkeley. But you see an early rebellious streak in Ben's behavior. He joins the high school football team in a place and an era where you just don't do that. And you know, throughout his career, he kind of goes against the mainstream and you see it in the book itself, which has lots of lovely quotes from Drake, which I'm sure you loved, Adam. Absolutely. As a big Drake fan, it was fantastic to finally be vindicated to my decision by finding out that a brilliant thing like Ben Horowitz also listens to Drake. You see rappers like Trinidad James quoted in the book, too. So you can already tell this is kind of an unlikely business text. It's got a bit of originality to it. And another person who's quoted surprisingly is Peter Fio, who of course we're familiar with from reviewing his book, Zero to One. Now, the two books, Hard Thing About Hard Things and Zero to One, are quite similar in that they both offer advice to kind of the beleaguered startup CEO, you know, you're starting a startup, you don't really know what to do and Fio and Horowitz are here to help you. They actually offer similar advice at stages. So for example, they both say that your product needs to be way better than the competition to get traction. They threw out this number of a product needing to be 10 times better. You can't come in with some incremental improvement expected to do well. But Matt, I was interested in getting your opinion. What do you think of the Fio parallels? Yeah, you know, there are some parallels between the two, but the biggest difference is things always go really badly for Ben Horowitz. You look at his career at Netscape where he's a PM, things are riding high and then all of a sudden Microsoft comes out with Internet Explorer. There's a lot of turbulent times. They end up selling to AOL where he's then the VP. Later on, he goes on to start his own company, which becomes LabCloud. And in his own words, he has about three days of peace in eight years of war. And then Ben kind of comes into his own as this wartime CEO. And he really shows you the struggle of kind of fighting it out and grinding it out on a daily basis. He doesn't really have the, you know, the key technology, like you could say Google's PageRank was, where they were going to win. It was just a matter of time and being able to deploy that technology. He instead was really grinding it out and fighting for every inch. Yeah, the PageRank analogy is a nice one. Horowitz kind of has this concept of lead versus silver bullets in the book, where PageRank could be something like a silver bullet, where it's just this amazing thing that almost guarantees your success. But instead, he just had to basically find lead bullets in this competition. And to do so, this consists of grinding out product improvements day after day, not really having some sort of magical advantage that is going to ensure your success. And I think it's worth digging deeper into LoudCloud to kind of understand why Horowitz is coming from a lot of his advice. So LoudCloud was really a cloud computing software company that was ahead of its time. Eventually they kind of figured out that things weren't really working. They didn't have enough clients, enough revenue. So they spun off a large portion of business and sold the rest to EDS. Now with the rest of the business, they took something they developed internally, which was the server automation software. And they made that their fundamental product rebranded as Opsware. Now, things didn't get much better when they became Opsware. Things were still an absolute struggle. They had a competitor called Blade Logic that was stealing all their clients and they're competing in terms of server automation, which is like sort of the most driest, widget-y form of technology imaginable. There's no glamour here, there's no amazing platform. And for this reason, Horowitz has really cursed with a lot of sleepless nights, a lot of anxiety. He doesn't know how the company is going to succeed or even if it's going to keep running. But he has to kind of keep his employees motivated and get them to commit to these brutal schedules of improving this product piece by piece. Yeah, one thing that's really clear is that being a CEO is absolutely miserable. There's lots of points in the book where he talks about deciding between a bad decision and a terrible decision and you just have to pick the one that causes the least amount of harm. And he tells a really interesting anecdote where somebody asks him, is CEOs, is a great CEO born or is a great CEO made? And he says, well, are Jolly Ranchers born or made? You know, of course they're made. There's nothing natural about being a great CEO. And so this is a skill you have to develop. And he says, you know, really one of the big things is just not quitting. Most of the great CEOs out there just didn't quit. They kept learning on the job, they kept going through the really hard times and eventually they came out on the other side. And that's what separates a lot of the CEOs you see today from the ones that didn't make it. However, he attacks several of your areas in the book, Adam. And I'm going to give you a little chance to defend yourself here. So the first thing he says is that, you know, markets are not great at coming to the truth. They're great at coming to a conclusion. And then he attacks your other field and he says, you know, really everybody cares about statistics, but what he cares about is calculus. That, yeah, the statistics of the market might not be so great, but if you want to be a great entrepreneur, you need calculus and precision to come up with the perfect idea. Yes, I really thought he was speaking directly to me when I read those sections. I think my counter on the efficient markets hypothesis would be to say that there's maybe some survivorship bias with Ben Horowitz being one of the few CEOs who can see their stock price crash because the market doesn't value their company, but still kind of ride the wave of success again, eventually after much hard work. With statistics versus calculus, I think he has a good point. I mean, he sort of repudiates a Peter Field quote in the book where Field says that we've really moved to statistics as being the primary way of thinking. But Horowitz says you can't play the odds. Even if your company has a nine in 10 chance of succeeding or one in a thousand chance of succeeding, your day-to-day actions are still the same. You're still trying to make the best possible decisions you can and you can't focus on sort of the enormity of the task at hand, which I think is really good advice. Although I should say, but Ben warns you that there's no real formula that he can think of for being a CEO. You're gonna basically step into a job where you haven't have a necessary training, you don't really know what the expectations are and everyone is gonna expect you to perform fantastically. So in Horowitz's mind, this is gonna lead to quite a few sleepless nights and you can't really just walk away without taking a massive hit in terms of the amount of time you've invested into your company, the promises you've made to employees, so you really have a lot riding on your shoulders. But if you're watching this and you still think being a CEO is a good idea, Horowitz has some very specific advice for you. One thing he talks about that and I want to get your opinion on was hiring people. So he says that you need to hire people for specific strengths rather than just to avoid weaknesses. Horowitz is a big believer in setting very clear expectations for a job and looking for someone who fulfills those rather than hiring someone for sort of a vague reason like in a startup scenario, we need to bring in adult supervision, we're scaling up a bit. So what are your opinions on this? Adam, I absolutely loved Horowitz's philosophy about hiring. I've seen so many times in hiring decisions where somebody's hired simply because they'll be great in the future or seeing a candidate rejected even because we don't think they'll like this role going forward. You have to hire for the role you have today and if somebody's gonna do well in the next 18 months has been kind of lays out, that's good enough. You can reevaluate then and decide if they're still working. I think all too often managers are scared to fire people. They're not good at the day-to-day workings of actually being a manager and so they avoid these situations. But the reality is this is the right way to approach things. Another point he calls out that I loved was that when you hire by committee you oftentimes minimize weakness but fail to find strength. And so oftentimes when you go to these committees somebody that's truly the strongest will have a lot of weaknesses. And if you only hire the person who gets through these committees you're oftentimes not going to maximize what you could potentially produce. Now obviously this works a lot better in a startup environment than an established company. That's understood because you have a lot more opportunities to work with different groups at a startup than you would an established company. But that said, loved the philosophy and I'm 100% on board. Another thing I thought was interesting was the way Horowitz talks about kind of the ambition of the hires you're bringing into your company. So he basically says that you want team first people rather than me first people. Which you know I think is kind of obvious. But he does talk about ways that you might potentially weed out these characters in the interview process. And he basically says to watch out for people who talk about themselves in terms of their achievements. And they're very kind of me and I in their answers rather than people who are kind of more retrospective and talk about the achievements of the company as a whole and project teams that they've been on. I think the issue with this advice if there is any is that ambitious overachievers who are self-interested can read this book too. So any sort of ambitious me first sociopath who's coming into interview probably knows that he or she shouldn't drop a bunch of anecdotes about how brilliant they are personally. And I think this is a common issue sometimes with tech books. I think we see this with the innovators dilemma by Clayton Christensen for example whereby his disruption theory is so out in the open now everyone in a big company has read it. Everyone is terrified of being disrupted. And so when people say why are big tech companies coming in from upstarts who are overturning them? Well it's because everyone is so aware of disruption theory. It's not really as prominent as it used to be. Adam when you brought up Clayton Christensen I feel like you should have used a trigger warning because you have now sent me into one of my famous rants which is you know when I read this book one of the thoughts I had was you know if Clayton Christensen is Drake to use some of the rap analogies you see then Ben Horowitz is Tupac because this advice is real and it's from the streets and it is useful. As Ben calls out in the book you know if you are a wartime CEO you do not have time to sit around and read management books about what you should do in peacetime. And because of this I really loved this book. I think if you compare it to Clayton Christensen who talks about the theory of why something should work that's all great and fine but in the end if you can't keep your company alive none of it matters. Yes Horowitz really rails against a lot of common tropes. He attacks startups and companies in general but say they don't have time for training you know we're too busy doing those. He basically says that you need to have time for training because the ROI is so positive in terms of the marginal productivity of your workers but if you don't do training you're kind of stupid. So he has this example of a training session that you know even if it takes like 30 to 40 hours to put together you know even a slight improvement your workers productivity is going to be more than enough to justify the time you spent preparing this training session. He also talks about positivity. One of the mistakes Horowitz says that he made as a young CEO was he always tried to put a positive spin on things and he basically tells us that you know that employees aren't stupid your workers aren't stupid. If you keep coming into every meeting with a glowing smile on your face saying that everything's great people aren't going to believe you. And so when a company does badly you need to be honest about that. You know when you fire a bunch of employees if you're unfortunate enough to go for a round of layoffs you need to say that the company has failed the company's missed its goals and that's why these employees are being let go. You can't try and spin it as some sort of you know opportunity to be nimble because employees just aren't going to buy it. To go back to a point from earlier he also rails against the idea of adult supervision. Where startups feel like they need to bring in experienced executives to kind of glide the ship. You saw this in the HBO show Silicon Valley for example when Action Jack Blocker has repeatedly brought in to run companies if his can join triangles of success. And Horitz doesn't think this is a particularly good idea. In fact Horitz was so against it that one of the founding principles of Andreessen Horitz the venture capital firm he's a founding partner of was that technical CEOs need to be empowered to run their own company. So when Horitz was trying to differentiate the firm they really went to startups and said we're going to try and help you remain in control of a company versus bringing in some senior executive to take things away from you. Yeah Andreessen Horitz has really changed the landscape for a technical founder. It used to be before they were oftentimes replaced by these professional CEO times. Now they're staying through the IPO and Andreessen Horitz is the company that you can think for that because of their investment it changed the industry and now we see these founders staying on all the way to the end. Yes if you're a technical founder this is a great book for you. There's all kinds of action role advice on running a startup. But for say 99% of readers sometimes this book might feel less nonfiction and more fantasy. I mean how often are you going to be deciding whether or not to fire a top executive or poach an employee from your own friend's company. These scenarios might not always seem particularly applicable but I do think there's a lot in here in terms of just good management advice things like whether or not someone is a good or a bad product manager that can be applicable to someone who isn't necessarily at the highest levels of a particular company. Yes Adam I agree. Now Ben calls out there's a big difference between the executive advice he gives in the book and hiring a typical manager at a company. For example he says a manager is just like going into a fight with somebody off the street. They're not trained, they don't know what they're doing but an executive is like a prized boxer and you take the wrong step and you're just knocked out and so he kind of goes through these differences but points out that some of these things you can take to a different level. Meaning that if you think about something he lays out in the book, a scenario like I want to identify somebody who is talented in an area I will never be that talented in. Well that applies to all levels of an organization you don't have to hire an executive for that. It's just pointing out you'll deal with them to a different degree. Yes so I think Matt and I both agree that this book is well worth a read no matter where you are in your career. As you're reading it I would encourage you to think about what lyrics would you potentially include in your own business book where you'd write it someday. For me I would definitely include a bunch of country songs simply to confuse any MBA students who have given my book as an assignment. In terms of upcoming reviews Matt you'll be interested to know that we will be reviewing the Innovators Solution by Clayton Christensen. Trigger warning. To get excited for that we will finally be getting an answer to the Innovators Dilemma. In the meantime I hope you've enjoyed watching Radham Talkers make sure to subscribe on YouTube and we'll see you next time.