Ben Horowitz is the cofounder of Andreessen Horowitz VC firm, and previously he was cofounder and CEO of Opsware (sold to HP for 1.6 billion in 2007), formerly Loudcloud. In this book, he tells own stories, experiences, thoughts, struggles or even pains when building a business when there are no easy answers.
The first 3 chapters, Ben talked about his experience from starting a company to selling it. "I will survive" mentality with perseverance drove him all the way to huge success.
Chapter 4: "When things fall apart", Ben talked about struggles.
Struggle
Life is struggle.
Don't put it all on your shoulders.
This is not checkers; this is motherfuckin's chess.
Play long enough and you might get lucky.
Don't take it personally.
Remember that this what separates the women from the girls.
CEOs should tell it like it is
Pressure
Trust
The more brains working on the hard problems, the better.
A good culture is like the old RIP routing protocol: Bad news travels fast; good news travels slow.
The right way to lay people off
Step 1: get your head right
Step 2: Don't delay
Step 3: Be clear in your own mind about why you are laying people off
Step 4: Train your managers
Step 5: Address the entire company
Step 6: Be visible, be present
Preparing to fire an executive
Step 1: Root cause analysis
Step 2: Informing the board
Step 3: Preparing for the conversation
Step 4: Preparing the company communication
Demoting a loyal friend
Use appropriate language
Admit reality
Acknowledge the contributions
Lies that losers tell
Lead bullets - keep fighting
Nobody cares - just win
Chapter 5: "Take care of the people, the products, and the profits - in that order"
A good place to work
Being a good company doesn't matter when things go well, but it can be the difference between life and death when things go wrong.
Things always go wrong.
Being a good company is an end in itself.
Why startups should train their people
Productivity
Performance management
Product quality
Employee retention
Is it okay to hire people from your friend's company?
Speaking with your friend before making the hire, you will be able to better judge the relationship impact of hiring her employees.
Why it's hard to bring big company execs into little companies
Rhythm mismatch
Skill set mismatch
Aggressively integrate the candidate once on board
- Force them to create
- Make sure that they "get it".
- Put them in the mix.
Hiring executives
Step 1: Know what you want
Step 2: Run a process that figures out the right match
- Write down the strengths you want and the weaknesses you can tolerate
- Develop questions that test for the criteria
- Assemble the interview team
- Backdoor and front-door references
Step 3: Make a lonely decision
When employees misinterpret managers
Flattening out the hockey stick: the wrong goal
Focusing too much on the numbers
Managing strictly by numbers is like painting by numbers
Management debt
Putting two in the box
Overcompensating a key employee because she gets another job offer
No performance management or employee feedback process
Management quality assurance
The employee life cycle
- Recruiting and hiring
- Compensation
- Training and integration
- Performance management
- Motivation
Requirements to be great at running HR
- World-class process design skills
- A true diplomat
- Industry knowledge
- Intellectual heft to be the CEO's trusted adviser
- Understanding things unspoken
Chapter 6: Concerning the going concern
How to minimize politics in your company
Hire people with the right kind of ambition
Build strict processes for potentially political issues and do not deviate.
- Performance evaluation and compensation
- Organizational design and territory
- Promotions
- Be careful with "he said, she said"
When smart people are bad employees
She is disempowered
She is fundamentally a rebel
She is immature and naive
You can only hold the bus for her. (There is only room for on on the team)
Old People
They come with their own culture
The will know how to work the system
You don't know the job as well as they do
Results against objectives
Management
Innovation
Working with peers
One-on-one
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?
Programming your culture
Creating a company culture
- Distinguish you from competitors
- Ensure critical operating values persist
- Help you identify employees who fit with your mission
Examples
- Desks made out of doors (Amazon)
- Ten dollars per minute (Andreessen Horowitz)
- Move fast and break things (Facebook)
Taking the mystery out of scaling a company
Communication
Common knowledge
Decision making
How to do it?
- Specialization
- Organizational design
- Figure out what needs to be communicated
- Figure out what needs to be decided
- Prioritize
- Decide who's going to run each group
- Identify the paths that you did not optimize
- Build a plan for mitigating the issues identified in above step
- Process
- Focus on the output first
- Figure out how you'll know if you are getting what you want at each step
- Engineer accountability into the system
The scale anticipation fallacy
Managing at scale is a learned skill rather than a natural ability
It's nearly impossible to make the judgement in advance
The act of judging people in advance will retard their development
Hiring scalable execs too early is a bad mistake
You still have to make the judgement at the actual point in time when you hit the higher level of scale
It is no way to live your life or run an organization
Don't separate scale from the rest of the evaluation
Make the judgement on a relative rather than an absolute scale
Chapter 7: How to lead even when you don't know where you are going
The most difficult CEO skill
If I'm doing a good job, why do I feel so bad?
Nobody to blame
Too much broken stuff
It's a lonely job
Techniques to calm your nerves
- Make some friends
- Get it out of your head and onto paper
- Focus on the road, not the wall
Don't punk out and don't quit
The fine line between fear and courage
When making the right choice requires intelligence and courage
Courage, like character, can be developed
The financial bar for starting a new company has been dramatically lowered, but the courage bar for building a great company remains as high as it has ever been.
Follow the leader
Three key traits for a leader
- The ability to articulate the vision
- The right kind of ambition
- The ability to achieve the vision
Peacetime CEO/Wartime CEO
Making yourself a CEO
The keys to being effective
- Be authentic
- Come from the right place
- Don't get personal
- Don't clown people in front of their peers
- Feedback is not one-size-fits-all
- Be direct, but not mean
Feedback is a dialogue, not a monologue
High-frequency feedback
- Feedback won't be personal in your company
- People will become comfortable discussing bad news
How to evaluate CEOs
The key questions we ask
- Does the CEO know what to do?
- Can the CEO get the company to do what she knows?
- Did the CEO achieve the desired results against an appropriate set of objectives?
Chapter 8: First rule of entrepreneurship: there are no rules
Solving the accountability vs. creativity paradox
Accountability for effort
Accountability for promises
Accountability for results
Revisiting the opening problem
Accountability is important, but it's not the only thing that's important
The freaky Friday management technique
Staying great
Should you sell your company?
- Talent and/or technology
- Product
- Business
Chapter 9: The end of the beginning
Life is struggle
Embrace the struggle
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