Business Book Review
I read a fair number of reviews about The Hard Thing About Hard Things and many of them complained about the self aggrandizing nature of the book. In the first couple of chapters when Horowitz is establishing his own background/credibility there is a bit of this but it’s not truly self aggrandizement. He does go on a bit too long and if you are the type of person that judges a book by the first couple of chapters then sets it down, you are going to set this one down. While it may go on for a bit too long, it is very honest about Horowitz’s experience and this is an underlying theme throughout the book: be honest with your investors, your employees but most importantly yourself. Anything you put sugar on will eventually gather flies and whatever gathers flies will eventually gather maggots as it starts to slowly rot. I took a lot of notes while reading this book as the minute you get out of the background introduction, Horowitz has a lot to teach.
A good amount of the book does focus on how lonely it is to be at the top. This conversation starts early on when Horowitz writes about partnership and business relationships, “Most business relationships either become too tense to tolerate or not tense enough to be productive after a while. Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship,” he writes. This quote is about truth as well and one of the main reasons why friends really struggle when creating a company together. That constant challenging is productive internal competition. Just as when companies compete, the consumer ends up winning, when employees have strong feelings about how to succeed and are not afraid to share them, the company ends up winning. He spends a good amount of time talking about how painful it is to manage your own psychology when running a company. Part of this is because one of the rookie mistakes all CEOs make early is putting it all on their shoulders. Many CEOs are afraid that sharing bad news with employees will upset their people more but in fact it is critical that employees know both the good and the bad. Bad news travels fast anyway so telling it like it is will always set precedent for truth and will at the very least never make a CEO look uninformed.
One of the business imperatives that he lays down early comes from one of his previous bosses that was fond of saying, “We take care of the people, the products, and the profits-in that order.” This segues nicely into him talking about how you take care of your people starting with taking the time to talk about the value of training. In one section he even does the math on training: “Let’s count on three hours preparation for each hour of course time – twelve hours of work in total. Say that you have ten students in your class. Next year they will work a total of about twenty thousand hours for your organization. If training efforts result in a 1% improvement in your subordinates’ performance, your company will gain the equivalent of two hundred hours of work as result of the expenditure of your twelve hours.” If you ever find yourself in a situation where you need to justify training, I highly recommend falling back to this argument. Even throw some dollar signs in there to make your point. I guarantee you will get the budget to train.
As part of this training, he also emphasizes how important it is that each employee understands what they are accountable for and they are getting the investment in “the knowledge and skills that they need to do their job.” This advice almost sounds Dilbert-esque but it is amazing how many manager have absolutely no idea how important this is. How the hell can an employee do a good job if they don’t know what a good job looks like? This isn’t necessarily the fault of the manager, though they certainly share in the blame, but more the fault of the organization. If the organization is not training their managers in setting clear expectations, shame on them.
He then goes into a rant on the importance of a good product manager. This section of the review will be quote heavy because there is a lot of gold in this section of the book. If you have ever worked with a poor product manager, and I’m sure you have because there are a shitload of them out there, this should resonate. Horowitz states, “A good product manager knows the context going in (the company, our revenue funding, competition, etc…) and they take responsibility for devising and executing a winning plan (no excuses). Bad product managers have lots of excuses.” He goes on, “Good product managers crisply define the target, the ‘what’ (as opposed to the ‘how’), and manage the delivery of the ‘what’. Bad product managers feel best about themselves when they figure out ‘how’. Good product managers communicate crisply to engineering in writing as well as verbally. Good product manager don’t give direction informally. Good product managers gather information informally.” I’m not stopping until all these gems are on the page, “Good product managers create collateral, FAQs, presentations, and white papers that can be leveraged by salespeople, marketing people, and executives. Bad product managers complain that they spend all day answering questions for the sales force and are swamped. Good product managers anticipate the serious product flaws and build real solutions. Bad product managers put out fires all day. Good product managers take written positions on important issues (competitive silver bullets, tough architectural choices, tough product decisions, and markets to attack or yield). Bad product managers voice their opinions verbally and lament that the ‘powers that be’ won’t let it happen. Once bad product manager fail, they point out that they predicted they would fail. Good product managers err on the side of clarity. Bad product managers never explain the obvious. Good product managers define their job and their success. Bad product managers constantly want to be told what to do. Good product managers send their status reports in on time every week, because they are disciplined. Bad product managers forget to send in their status reports on time, because they don’t value discipline.” If you’ve ever worked with a shit product manager, you should recognize all of the BAD sections above.
He then talks about scaling a company and the pain of bringing in big executives into start-ups. This causes what Horowitz calls a rhythm mismatch. Big company executives are “conditioned to wait for the emails to come in, wait for the phone to ring, and wait for the meetings to get scheduled. In your company, he will be waiting a long time.” This is dangerous because a big company exec will have no idea how to truly manage a start-up and everyone will be looking at them as if they are nothing more than a pimple on your CEO’s ass as he/she sits and waits for things to happen. He’s got other valuable insights on hiring the right people but none of this is new. Personally, I think Simon Sinek’s book on teams, Leaders always eat last, is far stronger in this area.
One area of the book I did love was his advice on one-on-one meetings. If you have ever sat through painful versions of these meetings, it’s worth a look. Here were some of the best quotes, “The key to a one-on-one meeting is the understanding that it is the employee’s meeting rather than the manager’s meeting. This is the free-form meeting for all pressing issues, brilliant ideas, and chronic frustrations that do not fit neatly into status reports, email, and other less personal and intimate mechanisms.” If the employee struggles in setting the agenda, Horowitz goes on to write, “Some questions that I’ve found to be very effective in one-on-ones: if we could improve in any way, how would we do it? What’s the number-one problem with our organization? Why? What’s not fun about working here? Who is really kicking ass in the company? Whom do you admire? If you were me, what changes would you make? What don’t you like about the product? What’s the biggest opportunity that we’re missing out on? What are we not doing that we should be doing? Are you happy working here?”
Horowitz closes the book by stating what his VC company looks for when investing. “We look for three key traits: The ability to articulate the vision, The right kind of ambition, The ability to achieve the vision.” He certainly holds a bias for technical founders as they are typically the innovators and no one but the innovator can truly preach the idea. He then lists all the big companies that really made it that were built by the technical founder: HP, Intel, Amazon, Google, Facebook, etc… He closes the book with, “the most important lesson in entrepreneurship: Embrace the struggle.” Let’s be honest, starting a company is hard and this is a book about The Hard things about Hard things.