The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers―Straight Talk on the Challenges of Entrepreneurship Hardcover – March 4, 2014

Given the author's love of rap - and willingness to include rap lyrics as chapter intros - my only quibble with "The Hard Thing About Hard Things" was not referencing the most motivational rap song of all time: "Till I Collapse" by Eminem featuring Nate Dogg.As the song begins, with Eminem talking over an army drill cadence: "Cause sometimes you just feel tired, feel weak... and when you feel weak, you feel like you wanna just give up... but you got to search within you, and try to find the inner strength... and just pull that s-- out of you... and get that motivation to not give up, and not be a quitter... no matter how bad you wanna just fall flat on your face, and collapse..."It's the ultimate theme song (if you like rap) for Horowitz' time as CEO of Loudcloud and later Opsware, going through hell - and being forged into steel via incredible trials by fire - along the hard, bloody road to success (seeing Opsware acquired for $1.6 billion). Pulling out the incredibly important lessons from that experience is the purpose of the book.In another section, Horowitz distinguishes between okay CEOs and great CEOs by pointing out a difference in perspective on how they made it through killer trials. When Horowitz would ask fellow CEOs "how did you do it," as in "How did you survive that brutal gauntlet," okay CEOs would point to something specific. Whereas the great CEOs would simply boil it down to a simple hardcore essence: "I never quit."They simply refused to give in or give out, as the "Till I Collapse" chorus puts it:Til the roof comes off, til the lights go outTil my legs give out, can't shut my mouthTil the smoke clears out, am I high perhapsI'm a rip this s--, til my bone collapse...You must know what this means, on a deep level, to be a great CEO. And the same goes for traders. Nearly all traders, like nearly all CEOs, face their "time in the wilderness" - when nothing feels easy, everything feels impossible, and killer challenges press on every side.I devoured "The Hard Thing About Hard Things" in less than 24 hours, having heard about it via youtube interview of Horowitz at a tech startup conference. The sense of realness - of someone who has been down in the mud and the blood and fought their way through - was absolutely compelling.This book - basically a series of guidelines for CEOs and building a business - is not some fluffy management tome written by a theoretical management consultant with no personal concept of what brutally hard decisions are like. This is front-line reporting from a CEO who has gone to war... taken severe casualties... made series after series of life-or-death decisions... motivated troops in the trenches... and ultimately won. (As such, the book will almost certainly offend or turn off those with a more 'civilized', and less emotionally raw, perspective on what company leadership.)The book had triple resonance for me on three fronts: Entrepreneur, CEO, and Trader. The "building a business" aspect spoke directly to our plans: Mercenary Trader, our financial publishing and trading education startup built on founder sweat equity, is on the cusp of critical mass after four-plus years of blood, sweat and tears. Our model is built around cultivating a true community of traders - monetizing the research we use to trade and invest our own funds (and those of clients), while educating members in our community (in a way that no one else does) that they might join us, share trading and investing ideas, and take their own trading to greater than ever heights.In terms of hardcore challenges, we have already had to deal with questions like whether to sell a major piece of the business... how to handle joint venture projects (including a major software initiative) gone south... the bloody business of firing people (of course)... and lots of other things, all while managing capital simultaneously.Ultimately we want to provide seed capital to the breakthrough star traders in our community, having trained them and equipped them with shared community resources - our own version of Julian Robertson's "Tiger Cubs" - and use flowback from publishing profits to further deepen and expand our research capabilities, even while creating a shared idea environment that fosters partnerships and even life-long friendships. Think hedge fund incubator crossed with "trader greatness training" and deep community value-add.Not unlike what a great Silicon Valley firm cultivates for tech founders (and hence the tie-in to this review)... the VC model of A16Z (Horowitz' and Andreessen's firm) was compelling in this regard too, in the way they took a bunch of long-standing VC industry conventions and simply decided to blow them up.(I found it hilarious, as an aside, that the historical reason VCs are extremely private, and totally disdainful of publicity, is because this is how the original banking houses did it, like the Rothschilds and whatnot - those guys were publicity-shy because they so often funded both sides of a war.)For the longest time, as Horowitz makes clear, VCs assumed that tech founders needed "adult supervision." Even worse, they would sometimes try to eyeball a founder to decide if they were "CEO material" based on appearance and superficial impressions, not unlike the worst practices of the redneck talent scouts in "Moneyball" pre-Billy Beane. One almost imagines choosing a candidate to lead an organization simply because he (or she) looks a little better in a tailored suit - which is apparently what actually happens, given an utter lack of substantive process.Horowitz and Andreessen, in contrast, realized that great tech CEOs are MADE, not born - shaped and created via community experience and support - and that all the truly great tech companies were led to greatness by the passionate founders who created them in the first place (Jobs, Gates, Hewlett and Packard etc).They thought tech founders would likely be in synch with a vision of empowering founders, rather than expecting to hand their passionate idea over to an empty suit... and they were right. So they set up A16Z, a different kind of VC firm, to facilitate that transition: "Making" the CEO out of the founder, or rather helping the founder to come into his own as CEO, through guidance and support.This view had deep parallels with a great point of frustration, for yours truly, in respect to the trading industry: There are so many books, so much literature, talking about what makes for a "great trader," or what makes someone "trader material," not unlike someone being "CEO material."But great traders, like great CEOs, are also MADE - it is at least partly an unnatural thing, as Horowitz says - and there is a huge amount of psychological and emotional development along the way. There is training needed for this stuff. And not the same old "cut losses and let profits run" stuff either, but real, deep, meaningful training. Having potential is not the same thing as being developed - not by a long shot.If you are serious about building a business, becoming a CEO, or stepping up your game as a trader via leadership lessons with strong cross-application to trading, buy this book.If brutal honesty turns you off and you prefer a rose-colored-glasses view of reality, however, don't buy this book. It pulls no punches, which is fantastic for those with the clear-eyed courage of Thucydides: "The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding, go out to meet it."

As someone leading initiatives in law, coaching, and systems transformation, The Hard Thing About Hard Things hit me in a way few books do. Ben Horowitz doesn’t offer sugar-coated advice—he delivers hard-earned wisdom from the trenches of real leadership, where the stakes are high and the answers aren’t obvious.What stood out most to me was his honesty. Horowitz doesn’t shy away from the emotional toll of leadership—the fear, the second-guessing, the sheer exhaustion of making decisions when none of the options feel good. And yet, he writes with clarity, courage, and just enough humor to keep you going.I found myself applying these lessons well outside the tech world. Whether you’re managing a company, leading a nonprofit, navigating co-parenting conflict, or building a mission-driven movement—this book will make you braver, sharper, and more grounded.This isn’t a book full of tidy solutions. It’s a companion for doing the hard things, when they matter most.

Before I start reviewing “The Hard thing about Hard Things” by Ben Horowitz, allow me to briefly explain what entrepreneurial thinking means to me. When asked to define entrepreneurial thinking, I answered by saying, “it is a mindset that embraces self-evaluation and creativity, and always tends to action.” In other words, an effective entrepreneur is always assessing himself to understand who he is, what he can (and cannot) do, and whom he knows (and counts on) so that he may creatively and rigorously devise a plan of action. Of course, there is much more to entrepreneurial thinking than my definition encompasses. Here is a couple of key criteria that I will also use to review the book: (1) effectual reasoning, and the (2) stewardship principle.Entrepreneurial Thinking DefinitionBen Horowitz is a great entrepreneur according to my definition. Throughout his book his demonstrates (1) self-awareness and (2) creativity, and (3) how he put these into action.Firstly, self-awareness. In the first chapter, “From Communist to Venture Capitalist” he explains who he is, where he comes from, and what he knows. He explains that “being scared doesn’t mean [being] gutless.” Having enough confidence in yourself to be bold is a key aspect of entrepreneurship; he displayed a great deal of boldness when he bought tangram to secure business with EDS. Then, Ben continues to tell us about his communist background, and how that is an advantage: “I realized that embracing the unusual parts of my background would be the key to making it through. It would be those things that I would bring to the table that nobody else had.” Lastly, he explains his mindset in terms of the following four criteria, which helped him immensely throughout his career: (1) to separate facts from perspective, (2) to “turn your s*** in” which means to be responsible for yourself and your work, (3) to not rely on first impressions, especially those based on appearances, and (4) to “look at the world through priorities.” It is therefore clear from chapter 1 that Ben Horowitz knows himself very well, and because he does, he is both confident and prepared to push himself to the limit.Secondly, creativity. There are many examples of creativity in the book, but I’ll point to one in particular that shows rigorous creativity. After LoudCloud achieved a period of stability, most CEOs would try to remain in that state, but Ben thought differently. He asked himself, “What are we [LoudCloud] not doing?” The answer was well fought, but it eventually came out: they are not being a software company. And so, Ben rigorously devised a plan to save his and his employee’s careers. After selling LoudCloud, he would start a software company called Opsware and focus on systems automatization. To come up with this decision shows how creativity may be the answer to a struggle. Sometimes it is better to think of alternative solutions than just going forward or backwards, and this is exactly what Ben demonstrates time after time in his book – of course, assuming that everything he says he did is true.Lastly, action. At this point I am sure that you have noticed that Ben is a man of action – whenever he says something he immediate acts upon it – but I’ll elaborate to further prove this. To save LoudCloud from going bankrupt, he only had two months to resolve his company’s problems in order to save business with his biggest client, EDS. He did, and on top of that was also able to start a group of ten engineers on a project named “Oxide,” whose goal was to separate the opsware software from LoudCloud. Ben did all of this in the 2 months period he was given, meaning that he – and his company – did not wasting any time. Ben asked his employees to come at 8am and leave at 10pm everyday (of course he also stayed those hours). He made sure that everyone worked diligently when they had to “turn their s*** in.” They accumulated enough momentum during the beginning of the 2-month rally to carry them throughout. So when the time ran out, Ben had successfully saved his company and business with EDS. That is why action – and traction – should always be the result of self-awareness and creativity.Effectual ReasoningEffectual reasoning has three main principles: the (1) bird in the hand, which means understanding the resources that you have at your disposal, (2) crazy quilt, which means building from the bottom up with an end goal in mind, and (3) pilot in the plane, which means that you want to be in control but not always have all the information. In his book, Ben doesn’t talk explicitly about these principles, but he definitely demonstrates them.(1) Bird in the Hand. Ben went to college during the computer boom in Silicon Valley. When and where he studied (the resources) provided him a key advantage over other competitors because he had the knowledge to tap into a market that was underdeveloped and growing exponentially. Moreover, he understood that that point in time would also produce people of likeminded prospective. And so, Ben was able to team up with exceptional individuals such as Marc Andreessen (smartest person, according to Ben), Scott Kupor (director of finance), Mark Cranney (head of sales), Shannon Callahan (head of recruiting and HR), Margit Wennmachers (sultan of networking), and Frank Chen (head of product management) to name a few. This is how Ben demonstrates using the resources available to him.(2) Crazy quilt. Ben’s end goal was to become a successful CEO, but he didn’t know how to get there. And so, he did what any other person would do in his situation: take a step forward and see where that leads him. His first step was to quit his old job and work for Marc Andreessen at Netscape. Circumstances and other people’s involvement lead him to take another step: build Loudcloud with Marc Andreessen. Interesting to note here is that if Ben had not quit his first job, he would not have met Marc Andreeseen and therefore not been able to build LoudCloud. Also, had Marc Andresseen not employed Ben, he would not have recognized Ben’s potential. Again, involvement from other people and circumstances then lead to Ben’s third step: selling LoudCloud and creating Opsware. As you probably guessed, other involvement from other people and circumstances lead to the next step: selling Opsware to HP and creating a venture capital firm with Marc Andreessen. And so, understanding that there are infinite ways of reaching your end goal is important, because it enables you to be flexible with ideas that come along the way. Flexibility to allow other people’s input, and to take advantage of opportunities that you hadn't foreseen. Ben demonstrates this in his journey to become a CEO, and to be honest, he became quite proficient at it.(3) Pilot in the plane. Suffice it to say that Ben delegated work to the executives of his companies, but he always partnered with Marc Andreessen because he knew that Marc Andreessen set of skills complemented his: Marc Andreessen was the public face of the company because he thrived in that environment; Ben stayed in the background managing the company. He then goes to explain that the most important asset of a company is its employees. In light of the-pilot-in-the-plane principle, it makes a lot of sense that you keep your employees motivated because you will distribute the workload to them. Specifically in chapters 5 and 6, Ben explains the importance of taking care of the people, and creating the right in of culture in your company. The reason why the first priority of a company should be to take care of its people according to him is because they are the most knowledgeable individuals of your company. They know what the problems and strengths are because they do the work; managers, executives and CEOs orchestrate from above and may lack on smaller details. In order to have awareness of those smaller details migrate from the employees to the managers and then executive a great company culture has to be created. A great company culture is one in which workers are encouraged to talk about problems and strengths equally. Where they are awarded and recognized based on merit and not on lobbying skills. Where workers are encouraged to “move fast and break things,” meaning that workers should innovate and strive to cause breakthroughs. In this environment, workers like to go to work because it is interesting and genuinely fun. And when a worker wants to work, he/she is the most valuable asset of a company. That is why Ben knows how to delegate work and responsibility among the different hierarchical levels of his company. In analogy, a plane not only needs a pilot to operate satisfactorily. It also needs a co-pilot, stewardesses, a control tower, engineers, an air marshal, and passengers or else flying a plane is: not possible, not profitable and not safe. Ben knows this.Stewardess PrincipleThis principle states that workers are individuals and for that reasons they must be encouraged to use their skills for the better of the company. Just like effectual reasoning has several components to it, so does the Stewardess Principle. Several of the key dimensions of the Stewardess Principle that I wish to discuss are: (1) culture, (2) motivation, and (3) power distance. Ben applies these dimensions to his company, and the result is obvious.(1) Culture. Suffice it to say that Ben dedicates an entire chapter of his book to discuss how important it is to create the right culture in your company. Specifically, one has to minimize politics, encourage the right kind of ambition, and continuously have one-on-ones. By doing this, a company encourages and ensures that its workers have the right work ethics.By minimizing politics (which means lobbying in order to achieve promotions or benefits) one reinforces the notion that if an employee works hard he/she will be rewarded accordingly. But most importantly, working hard becomes the only way to move up the ladder. No slacker will be able to lobby his/her way to the top. As a result, workers will not feel treated unjustly.By encouraging the right kind of ambition, one avoids individual agendas or people trying to gain success at the expense of the company. The right kind of ambition is when a worker genuinely wants the company to succeed, and if the company succeeds he/she succeeds with it. The wrong kind of ambition, by contrast, is when a worker wants to succeed regardless of the company’s success. The way to encourage the right kind of ambition, according to Ben, is to seek out those employees with the wrong kind of ambition and fire them before they can rot others, and to screen possible employers while interviewing.By establishing one-on-ones workers are able to voice any issues to their managers. According to Ben, during one-on-ones managers should do 10% talking and 90% listening. The main point of a one-on-one is for the worker to voice his thoughts and his concerns. This way if there are any problems in the company, the managers become aware of them and may pass the information along to executives and ultimately the CEO.(2) Motivation. Motivation follows a well-established culture. If Ben had not established an excellent culture in his company he would not haven been able to ask his workers to come to work from 8am to 10pm for months at a time. As if that was not enough, Ben asked this of his workers on three consecutive occasions. This is evidence of what well-motivated stewards are capable of doing.(3) Power distance. This dimension explains that because companies are hierarchical systems there is a potential for people to use power to abuse their subordinates. To prevent this from happening in his company, Ben placed top priority on one-on-ones. He almost fired one of his executives because he didn't do his one-on-ones. The point of one-on-ones is mentioned above, but they also an additional psychological effect. When managers listen to works, it shifts the power balance for the duration of the one-on-one. As a result, workers feel that the power distance is bridged, allowing them to work more closely with managers. And that is highly desirable.And so, this is how Ben Horowitz exemplifies what a successful entrepreneur and CEO is. His self-awareness and creativity (and a few other personal traits) took him all the way to where he stands: co-founder of the Andreessen Horowitez venture capital firm valued at $4 billion.