Hard Earned Lessons From Ben Horowitz
Entrepreneur and venture capitalist Ben Horowitz gets real in his recently released book The Hard Thing About The Hard Things. While most start-up stories read like a romance novel, Ben’s book is more like watching the film Fight Club.
He wants to dispel the myth that being an entrepreneur is always exciting. He says,”The biggest myth is that it’s fun. The reality is that creating and running a business is an incredibly tough grind, and its emotionally debilitating. It can be euphoric, but more often than not, it’s terrifying.”
Ben cut his teeth in the tech sector and now he is a cornerstone of Silicon Valley’s venture capital community. His firm funded ventures like Airbnb, Skype, Facebook and Twitter. Here are four lessons he shares in his book.
The Four Lessons
Ben is upfront in his book. There is no one size fits all formula for working through tough times. Instead he shares principles in his book that he hopes are helpful for all those who have the courage to go and start-up a company and run it through the good, the bad and the ugly times.
1. When Things Fall Apart: Get Real
Victories are fun. Things falling apart, now that is terrifying. Stock markets crash, anchor clients leave,new competitors enter the battle and investors bail on you. When your venture is fighting for its life, no amount of positive messaging will save the day. Ben says that when things go wrong in your company, nobody cares. No one is going to step in and rescue you. Ben’s message is that you need to get real. He says spend zero time on what you could have done and to concentrate all of your efforts on finding that one seemingly impossible way out of your current mess.
2. Cascade Effect
Jim Barksdale,Ben’s old boss, said “We take care of the people, the products and the profits…in that order.” Ben says that many ventures pick the wrong people for the wrong positions for the wrong reasons. The impact of having the wrong people directly impacts your ability to create and deliver a product. And without a winning product,you will not generate profits. Game over. He says there are three lessons you can learn. First, hire for strengths versus lack of weakness. Secondly, at every single point of your venture’s life, invest in training your team. Thirdly, make sure you are a great place to work. When times are tough, you will have to lay-off people. By being a great place to work, those who remain will understand the situation and stick by the CEOs side to forge ahead.
3. Growing Pains: Right People at the Right Time
Go big or go home is the prevailing culture in Silicon Valley. This means that entrepreneurs need to figure out how to scale. This is a major challenge since most entrepreneurs have zero experience with scaling something. Ben notes that one of the hardest things to do is get the right people at the right time for your scale. Most of the time people are lured into what he calls the scale anticipation fallacy. CEOs start picking up big name talent in the hopes that they will help the organization rise to the next level. The problem is that these big names are often over-sized for the venture and end up squashing its potential as frustration sets in and eats up precious management energy.
What you want to do is hire the right person for the right job at the right time. And as the venture scales, you can adjust, adapt and rework your teams.
4. Mental Strength
CEOs face tremendous pressure. When times are tough they have to deal with unhappy investors, employees and clients. It can be a lonely job. Ben says it’s like the fight club of management. “The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown.”
Ben says three tools help beat back the pressure. The first is to build a trusted circle of friends where you can be open about your thoughts. They will help you think through challenging situations and provide strength. The second is to clear your mind. He is all about getting your thoughts out of your head and onto paper. That way you can see it and get some perspective on the situation. It lightens your mental load. Finally, Ben encourages entrepreneurs to free up their emotional bandwidth. He says dwelling on the past and worrying about the future eat up your emotional resources. For him the key is to focus on where you are going rather than on what you hope to avoid.
Ben Horowitz is the co-founder of the venture capital firm Andreessen Horowitz. He was the co-founder and CEO of Opsware, which was sold to Hewlett-Packard for $1.6 billion in 2007. His book The Hard Thing About Hard Things shares more lessons learned during that epic journey. He can be followed on twitter @bhorowitz
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