Ben Horowitz’s book on building business takes on tough topics
In The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers, Ben Horowitz, an American with apparently boundless energy and one of Silicon Valley’s most venerated entrepreneurs, delivers advice on building and running businesses, especially online start-ups.
“There is more than enough substance in Mr Horowitz’s impressive tome to turn it into a leadership classic,” crows the publisher, quoting The Economist no less. I say it’s no 7 Habits of Highly Successful People or The Art of War, but still has plenty of merit – and a few demerits.
The book claims to offer a familiar old chestnut: wisdom for managing the toughest problems that business school programmes don’t cover. It is based on Horowitz’s blog – which is where the first red flag pops up. Many sections have already been published online and are still accessible for free. A repacked rip-off or shrewd entrepreneurship? There’s no disclosure on the cover, or in the torrent of online publicity accompanying the book – however it has been well received in business circles.
Today, like the late 1990s, yarns of newly minted internet millionaires and of staggeringly high valuations being provided by financiers, crowd the business pages of both print and online media. But nobody writes about the failures, of which there is a multitude for each success story. The author reminds us of a crucial point: successes are hard-fought victories. The entrepreneur’s work is exhausting and always subject to the perils and whims of impatient investors, treacherous co-founders and unpredictable market trends.
Few know this better than Horowitz. One of the US West Coast’s most prominent venture capitalists, he was chief executive of a pioneering cyberspace start-up, and personally experienced what he terms “the Struggle” – the terror that grips young bosses when their fastidiously crafted business plans are eviscerated by merciless competitors or an economic downturn. When ideas, cash and youthful bravado dry up, many capitulate rather than seek more capital. Horowitz asserts that given better advice, more entrepreneurs can bring about a change in their fortunes, and rescue their sinking enterprises.
One obstacle he cites is that too many management books and courses focus on telling people what they should do, but rarely offer counsel on how to respond when things go wrong. From my experience of reviewing books of this genre, too many people are saying the same thing as Horowitz, while trying to stand out from the crowd.
But praise where it’s due. The best part of the book is the story of Horowitz’s rise to the top. The adversity he has overcome includes the 2000 dot-com-bubble implosion and the downturn following 9/11. The story of the indefatigable entrepreneur is a stirring one and well-narrated. Then Horowitz presents the lessons of his struggles.
One is that start-ups should devote more time and funding to staff training. A major reason for staff attrition, in his view, is that workers feel they are not learning anything. Another lesson is for the guy at the top, who needs “the ability to focus and to make the best move when there are no good moves”.
Horowitz is big on creating a company culture, though some of his ideas seem unduly punitive, such as fining staff US$10 a minute for tardiness when meeting visiting clients. “We wanted the firm to respect the fact that in the bacon-and-egg breakfast of a start-up, we were with the chicken and the entrepreneur was the pig: we were involved, but she was committed.” A neat metaphor perhaps, but a fascistic concept. I wasn’t surprised to find a chapter devoted to laying staff off, and even advice on firing a loyal friend.
The author’s an unapologetically ruthless soul. Or a pragmatic and realistic player. Or both. He’s certainly a polarising individual.
One line even had this reviewer wondering if this book was actually a parody of a business-development guide. Horowitz tells a hapless manager: “It’s important to me that the people who spend 12 to 16 hours a day here, which is most of their waking life, have a good life.”
Horowitz’s writing chops saves this straight-talking tome, but he is a weasel. What I really hoped to find was the author addressing the most vexing feature of start-ups: why is the pledge of “jam tomorrow” rarely fulfilled for staff? “Jam today” – timely, decent remuneration – would surely put start-ups on a firmer footing.
You'll either love this book or hate it. But you can't deny Horowitz has cojones.
FIVE WAYS TO RIDE OUT A RECESSION
Suzanne Liu Duddek, proprietor of accountancy firm S Liu & Co, has gained many insights on prevailing in hard times from her SME and start-up clients. She reveals her top five.
Plants seeds “When orders dry up, instead of pitching to companies who temporarily can’t afford your services, offer to meet former and potential clients to talk about their current problems and planning, with no strings attached. When their fortunes turn around, chances are they will get back to you.”
Jump on opportunities “When a competitor goes out of business, immediately target their client-base proactively, by phone and e-mail, explaining that you can provide them with same the excellent products and services that they were previously receiving. But don’t disparage the defunct competitor – that creates an unfavourable impression.”
Add, don’t subtract “When times get tough, one way to stay afloat is to increase and add ‘value’ to your goods and services, rather than offering profit-eroding discounts and price reductions.”
Steer the traffic your way “On the flipside, charge less for particularly popular products and services than a larger rival, thereby both beating them on price and also strategically positioning yourself to reveal other competitive advantages you may enjoy.”
Know your people “Payroll is often the biggest cost a business owner has, so ensuring that this money is well spent is crucial. It’s a good idea to conduct a thorough review of staff – both when a problem arises, as well as during the normal course of business – to ensure the best-suited individuals are in the right places, and doing their jobs effectively.”
