Summary

• There’s no formula for dealing with hard things. But some advice and experience can be passed on from those who experienced it.
• Relationship advice: What’s cheap? Flowers. What’s expensive? Divorce.
• “Following conventional wisdom and relying on shortcuts can be worse than knowing nothing at all.”
• Look for alternative narratives and explanations that come from radically different perspectives to inform your outlook.
• Customers only know what they want based on previous experience. Solve the problems that the customers didn’t know they had, as well as the problems they have.
• Ask “What are we not doing?” more often.
• When you are building a company, you must believe that there always is an answer — and you can’t pay attention to your odds of finding it.
• Sometimes you have to be able to make the best move when there are no good moves. It’s an important skill to learn.
• Remember your mortality — memento mori.
• Dealing with The Struggle
  • Don’t put it all on your shoulders. Ask for help — don’t carry the burdens alone. Getting more brains on the problem can help immensely.
  • Don’t take it personally. Everything is your fault — you are in charge. You knew that when you signed up. “Evaluating yourself and giving yourself an F doesn’t help.”
• Share the bad news. Tell it like it is.
• Trust is essential. You’ll fail without it.
• If you have to lay someone off, do it well. They will remember it. And your reputation depends on it.
• We tell ourselves lies to justify poor performance. Instead: Find the reason and fix it.
• Sometimes, shiny solutions aren’t the right ones. You have to face facts. Sometimes you just have to eat dirt, suck it up, and get to work.
• Don’t get stuck in the past, mulling over ‘what you could have done’. Move on and focus on doing what’s best now.
• Take care of the people, the product, and the profits — in that order.

Highlights & Notes

Introduction

“This the real world, homie, school finished

They done stole your dreams, you dunno who did it.”

—KANYE WEST, “GORGEOUS”

That’s the hard thing about hard things—there is no formula for dealing with them.

Nonetheless, there are many bits of advice and experience that can help with the hard things.

Chapter 1: From Communist to Venture Capitalist

My father turned to me and said, “Son, do you know what’s cheap?”

Since I had absolutely no idea what he was talking about, I replied, “No, what?”

“Flowers. Flowers are really cheap. But do you know what’s expensive?” he asked.

Again, I replied, “No, what?”

He said, “Divorce.”

Don’t judge things by their surfaces

That experience also taught me not to judge things by their surfaces. Until you make the effort to get to know someone or something, you don’t know anything. There are no shortcuts to knowledge, especially knowledge gained from personal experience. Following conventional wisdom and relying on shortcuts can be worse than knowing nothing at all.

Turn your shit in

Coach Mendoza began his opening speech, “Some of you guys will come out here and you just won’t be serious. You’ll get here and start shooting the shit, talking shit, bullshittin’, not doing shit, and just want to look good in your football shit. If you do that, then you know what? Turn your shit in.” He went on to elaborate on what was unacceptable: “Come late to practice? Turn your shit in. Don’t want to hit? Turn your shit in. Walk on the grass? Turn your shit in. Call me Chico? Turn your shit in.”

Former secretary of state Colin Powell says that leadership is the ability to get someone to follow you even if only out of curiosity. I was certainly curious to see what Coach Mendoza would say next.

Look for alternative narratives and explanations

I learned to look for alternative narratives and explanations coming from radically different perspectives to inform my outlook. The simple existence of an alternate, plausible scenario is often all that’s needed to keep hope alive among a worried workforce. (Page 0)

Working effectively for a long time

People often ask me how we’ve managed to work effectively across three companies over eighteen years. 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. With Marc and me, even after eighteen years, he upsets me almost every day by finding something wrong in my thinking, and I do the same for him. It works.

Chapter 2: “I Will Survive”

Marc: “Do you know the best thing about startups?”

Ben: “What?”

Marc: “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”

A market of one

During this time I learned the most important rule of raising money privately: Look for a market of one. You only need one investor to say yes, so it’s best to ignore the other thirty who say “no.”

Chapter 3: This Time with Feeling

“I move onward, the only direction

Can’t be scared to fail in search of perfection.”

—JAY Z, “ON TO THE NEXT ONE”

Innovation

It turns out that is exactly what product strategy is all about—figuring out the right product is the innovator’s job, not the customer’s job. The customer only knows what she thinks she wants based on her experience with the current product. The innovator can take into account everything that’s possible, but often must go against what she knows to be true. As a result, innovation requires a combination of knowledge, skill, and courage.

What are you not doing?

Now that we’d improved our competitive position, we went on the offensive. In my weekly staff meeting, I inserted an agenda item titled “What Are We Not Doing?” Ordinarily in a staff meeting, you spend lots of time reviewing, evaluating, and improving all of the things that you do: build products, sell products, support customers, hire employees, and the like. Sometimes, however, the things you’re not doing are the things you should actually be focused on.

Note to self: It’s a good idea to ask, “What am I not doing?”

Chapter 4: When Things Fall Apart

Don’t play the odds

Through the seemingly impossible Loudcloud series C and IPO processes, I learned one important lesson: Startup CEOs should not play the odds. When you are building a company, you must believe there is an answer and you cannot pay attention to your odds of finding it. You just have to find it. It matters not whether your chances are nine in ten or one in a thousand; your task is the same.

The secret to being a successful CEO

People always ask me, “What’s the secret to being a successful CEO?” Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves. It’s the moments where you feel most like hiding or dying that you can make the biggest difference as a CEO

Memento Mori

first principle of the Bushido—the way of the warrior: keep death in mind at all times. If a warrior keeps death in mind at all times and lives as though each day might be his last, he will conduct himself properly in all his actions.

The Struggle

The Struggle is where greatness comes from.

Dealing with The Struggle

• Don’t put it all on your shoulders. Ask for help — don’t carry the burdens alone. Getting more brains on the problem can help immensely.
• This is not checkers; this is motherfuckin’ chess.
  • “Technology businesses tend to be extremely complex. The underlying technology moves, the competition moves, the market moves, the people move. As a result, like playing three-dimensional chess on Star Trek, there is always a move.”
• Play long enough and you might get lucky. Technology moves fast.
• Don’t take it personally. Everything is your fault — you are in charge. You knew that when you signed up. “Evaluating yourself and giving yourself an F doesn’t help.”
• Remember that this is what separates the women from the girls. “If you want to be great, this is the challenge. If you don’t want to be great, then you never should have started a company.”

CEOs Should Tell It Like It Is

Even more stupidly, I thought that it was my job and my job only to worry about the company’s problems. Had I been thinking more clearly, I would have realized that it didn’t make sense for me to be the only one to worry about, for example, the product not being quite right—because I wasn’t writing the code that would fix it.

A much better idea would have been to give the problem to the people who could not only fix it, but who would also be personally excited and motivated to do so.

Share the bad news.

On trust

Without trust, communication breaks. More specifically:

In any human interaction, the required amount of communication is inversely proportional to the level of trust.

Consider the following: If I trust you completely, then I require no explanation or communication of your actions whatsoever, because I know that whatever you are doing is in my best interests. On the other hand, if I don’t trust you at all, then no amount of talking, explaining, or reasoning will have any effect on me, because I do not trust that you are telling me the truth.

Get more brains on the problems

In order to build a great technology company, you have to hire lots of incredibly smart people. It’s a total waste to have lots of big brains but not let them work on your biggest problems. A brain, no matter how big, cannot solve a problem it doesn’t know about. As the open-source community would explain it, “Given enough eyeballs, all bugs are shallow.”

What kills companies

If you investigate companies that have failed, you will find that many employees knew about the fatal issues long before those issues killed the company. If the employees knew about the deadly problems, why didn’t they say something? Too often the answer is that the company culture discouraged the spread of bad news, so the knowledge lay dormant until it was too late to act.

Encourage sharing bad news

A healthy company culture encourages people to share bad news. A company that discusses its problems freely and openly can quickly solve them. A company that covers up its problems frustrates everyone involved. The resulting action item for CEOs: Build a culture that rewards—not punishes—people for getting problems into the open where they can be solved.

Avoid Persian Messenger syndrome.

It’s hard to do, but reward people for being the bearer of bad news - you don’t want to live in a world of positive delusions. That’s the highway to failure.

Beware ‘management maxims’

As a corollary, beware of management maxims that stop information from flowing freely in your company. For example, consider the old management standard: “Don’t bring me a problem without bringing me a solution.” What if the employee cannot solve an important problem? For example, what if an engineer identifies a serious flaw in the way the product is being marketed? Do you really want him to bury that information? Management truisms like these may be good for employees to aspire to in the abstract, but they can also be the enemy of free-flowing information—which may be critical for the health of the company.

Tell it like it is

If you run a company, you will experience overwhelming psychological pressure to be overly positive. Stand up to the pressure, face your fear, and tell it like it is.

Lies That Losers Tell

I asked Andy why these great CEOs would lie about their impending fate.
He said they were not lying to investors, but rather, they were lying to themselves.

Andy explained that humans, particularly those who build things, only listen to leading indicators of good news. For example, if a CEO hears that engagement for her application increased an incremental 25 percent beyond the normal growth rate one month, she will be off to the races hiring more engineers to keep up with the impending tidal wave of demand. On the other hand, if engagement decreases 25 percent, she will be equally intense and urgent in explaining it away: “The site was slow that month, there were four holidays, and we made a UI change that caused all the problems. For gosh sakes, let’s not panic!”
> Both leading indicators may have been wrong, or both may have been right, but our hypothetical CEO—like almost every other CEO—only took action on the positive indicator and only looked for alternative explanations on the negative leading indicator.

If this advice sounds too familiar. and you find yourself wondering why your honest employees are lying to you, the answer is they are not. They are lying to themselves.

And if you believe them, you are lying to yourself.

We tell ourselves lies to justify poor performance. Instead: Find the reason and fix it.

Lead Bullets

All these approaches reinforced to me was that we weren’t facing a market problem. The customers were buying; they just weren’t buying our product. This was not a time to pivot. So I said the same thing to every one of them: “There are no silver bullets for this, only lead bullets.” They did not want to hear that, but it made things clear: We had to build a better product. There was no other way out. No window, no hole, no escape hatch, no back door. We had to go through the front door and deal with the big, ugly guy blocking it. Lead bullets.

Sometimes, the shiny solutions aren’t the right ones. You have to face facts. Sometimes you just have to eat dirt, suck it up, and get to work.

There comes a time in every company’s life where it must fight for its life. If you find yourself running when you should be fighting, you need to ask yourself, “If our company isn’t good enough to win, then do we need to exist at all?”

Nobody Cares

That might be the best CEO advice ever. Because, you see, nobody cares. When things go wrong in your company, nobody cares. The media don’t care, your investors don’t care, your board doesn’t care, your employees don’t care, and even your mama doesn’t care.

Nobody cares.

And they are right not to care. A great reason for failing won’t preserve one dollar for your investors, won’t save one employee’s job, or get you one new customer. It especially won’t make you feel one bit better when you shut down your company and declare bankruptcy.

All the mental energy you use to elaborate your misery would be far better used trying to find the one seemingly impossible way out of your current mess. Spend zero time on what you could have done, and devote all of your time on what you might do. Because in the end, nobody cares; just run your company.

Don’t get stuck in the past, mulling over ‘what you could have done’. Move on and focus on doing what’s best now.

Chapter 5: Take Care of the People, the Products, and the Profits—in That Order

My old boss Jim Barksdale was fond of saying, “We take care of the people, the products, and the profits—in that order.” It’s a simple saying, but it’s deep. “Taking care of the people” is the most difficult of the three by far and if you don’t do it, the other two won’t matter. Taking care of the people means that your company is a good place to work. Most workplaces are far from good. As organizations grow large, important work can go unnoticed, the hardest workers can get passed over by the best politicians, and bureaucratic processes can choke out the creativity and remove all the joy.