Read Ben Horowitz's book It won't be easy. How to build a business when there are more questions than answers" (Ben Horowitz " The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers»). Unlike many theoretical books on management, the author of this book is the CEO of successful technology startups, as well as the manager of an investment fund that invests in technology startups.

The book is more about the problems that Ben Horowitz faced in managing companies. Once again you understand that in business it will not be easy. Often you have to choose between two evils. And sometimes a decision can be critical for a company, but it is simply impossible to predict which option will be better.

Including at Ben Horowitz, he gives a lot of advice on managing a crisis situation when you have to cut staff, including top managers. If you do not dismiss the staff quickly, do not inform them, then a number of additional problems arise.

If you spend time thinking about how you could do better, you can drown in this information. Instead, it is better to focus on what else can be done for the company. The situation is similar to how a racer ignores small situations and focuses on winning.

If, for example, the question of corporate culture is touched upon, then there will not be such an impressive story as in the book Delivering Happiness by Tony Shay. But the book talks about how the CEO does not take the problems of the company to heart, although at the same time not to ignore them completely, finding the positive in everything (as Polianna does).

Another couple of important questions that the director of any company faces is whether to hire employees from a friend's company, and whether to increase the employee's salary if he received a better offer from another company.

Ben Horowitz writes that it is important to hire a person not without flaws, but with virtues that the company really needs. All have some pros and cons. It is not at all necessary that a person with a beautiful resume will turn out to be a good employee.

A very important point for technology products and services is that your product must be at least 10 times better than the existing solution so that you can convince a significant part of users to change their existing habits.

Like , Ben Horowitz puts people first: "Take care of people, product and profit - in that order."

I was very impressed by the "Freaky Friday" management technique, when incomprehensible / conflicting managers are temporarily swapped.

• The absence of a system for managing activities or evaluating the work of employees is a fatal mistake.


• The most important responsibility of the CEO in operational activities is the development and implementation of an internal corporate communications system.


• Some company goals are quantifiable and some are not. If you require reporting on quantitative indicators and ignore qualitative ones, you can bet that the latter will not be implemented, and in fact they may be the most important.


• Outstanding CEOs know how to take a hit. They all said, "I refused to give up."


• I told the players a lot about what to do, but not enough about why it is necessary.


• A company doesn't have to be a good place to work when things are going well, but it becomes a matter of life and death if things go badly.


• If you hire a top manager who previously worked in a large company, then there is a risk that he will face two dangerous inconsistencies with his previous experience: 1) Difference in the rhythm of activity; 2) Mismatch in skillset.


• Training is one of the most productive activities that managers engage in. If your training program helps employees increase their efficiency by at least 1%, the company will receive a return many times greater than the number of hours spent by the manager on training and education.


• If you have already organized management training and functional training, then you should not forget about other forms and opportunities. Training in such functions as negotiating, interviewing, searching for sources of financing will significantly increase the competence of the company, as well as contribute to the establishment of moral standards. Training will be a mark of distinction for those employees who have achieved a unique level of competence.


• In a good place to work, people have the opportunity to focus on their work and at the same time are confident that how well they do it, the company as a whole and they in particular will succeed. Working for such a company is a real pleasure. Each employee wakes up in the morning knowing that he will have to work efficiently and effectively, and his work will play a big role both for the company and for himself. This is how motivation comes about.


• If the company is a bad place to work, then employees spend a lot of time overcoming organizational problems, internal struggles, and eliminating disruptions in the production process. They do not even fully understand what exactly their job is, so they have no way of determining whether it is done or not.


• The list of questions for discussing which individual interviews are very effective:
  
  
  • If we can improve something, how best to do it?
  
  
  • What is the main problem of our organization? Why?
  
  
  • What prevents you from enjoying working in our company?
  
  
  • Who hinders the normal work of the company the most? Who do you admire?
  
  
  • If you were me, what would you change about the company?
  
  
  • What do you dislike about the product?
  
  
  • What is the main potential opportunity for the company that you think we are missing out on?
  
  
  • What are we not doing that we should?
  
  
  • Are you happy working in our company?
  
  


• What makes people follow the leader:
  
  
  • The ability to clearly formulate a vision of the future;
  
  
  • Correctly oriented ambitions;
  
  
  • The ability to put the vision of the future into practice.
  
  


• Management quality assessment:
  
  
  • Recruiting and hiring
    
    
    • Do you have a clear understanding of exactly what abilities and skills are needed to successfully work in each free position?
    
    
    • Are your interviewers well prepared?
    
    
    • How effectively do your managers and employees represent the company to potential colleagues?
    
    
    • Do interviewers show up for meetings on time?
    
    
    • Do managers and recruiters keep a schedule of meetings and interviews with candidates?
    
    
    • How effectively do you compete for the best employees with other companies?
    
    
  
  
  • Compensation
    
    
    • Is the salary and compensation package in line with the development stage of your company?
    
    
    • Are the salary and stock option packages comparable to those of the companies you directly compete with for talent?
    
    
    • How well does your company's performance match your pay and compensation package?
    
    
  
  
  • Training and integration into the team
    
    
    • If you are hiring an employee, how much time, from his own point of view, according to his colleagues and his immediate supervisor, does it take him to achieve maximum productivity?
    
    
    • How well do newcomers understand, shortly after joining the company, what is expected of them?
    
    
    Activity management
    
    
    • Do managers give consistent and clear performance appraisals of their subordinates?
    
    
    • How well are written reviews of the work done?
    
    
    • Do all employees receive feedback on their work in a timely manner?
    
    
    • Are you systematically weeding out inefficient employees?
    
    
  
  
  • Motivation
    
    
    • Are your employees rushing to work in the morning?
    
    
    • Do your employees believe in the mission of the company?
    
    
    • Do your employees enjoy their work?
    
    
    • Do you have employees who keep aloof from colleagues?
    
    
    • How clearly do your employees understand what is expected of them?
    
    
    • Are employees late after the end of the working day or leave early?
    
    
    • What are the reasons for layoffs of employees?
    
    
  
  

Buy Ben Horowitz's book "It won't be easy. How to build a business when there are more questions than answers."

"If you don't want to be great, then you shouldn't have started a company." Ben Horowitz

I really liked the description of the book, but when "It won't be easy" It turned out that something went wrong in my hands. The first major books choked me with many small details about Ben's IT company with rare universal advice. Ben is also a co-owner of a venture capital fund. Well, since I didn’t know anything about Ben, I even thought about leaving reading this story, but ... in the second quarter of the book, the author began to show the same analysis of the situations that took place in his company. At this point, I realized that in my hands I had a high-level book of a talented inspirer and leader of the company. In this book, you will learn who the Real CEO is. Chief Executive Officer- chief executive officer).

Horowitz does not address the basic difficulties of a startup in his book, but the most difficult tasks that a company faces with active growth. Among the topics of the book: attracting investment, hiring and firing top managers, surviving the collapse and many others. There are not many top managers in my company at the moment, so for the most part this book was out of date.

However, I got a lot of great ideas for myself!

The book is dated 2015. In the first edition, the cover is mixed up: it is placed upside down. But it seemed to me that this was even very much in line with the title of the book “It won’t be easy” 🙂

Today's review will be in a new form, namely…

Ten best quotes from Ben Horowitz's book:

1) Are you late for training? Keep this bullshit to yourself. Don't know how to make accurate throws? Keep this bullshit to yourself. Can you crawl on the grass? Keep this bullshit to yourself.

This is a quote from a speech by Chico Mendoza, a football coach. The point is to take everything seriously. Whatever you do, you must always give your best and never relax for a minute in your battle.

2) Most management books teach you how to run a company the right way so you don't fail. We'll talk about what to do after you already have failed.

Those of you in business know that any company is bound to have bad times. It is after the first crash that you feel the seriousness of the situation and the responsibility for the company. Most of the newly created, seemingly successful companies do not withstand the first crisis. In his book, Ben pays great attention to the situations that occur after such a crisis. “A little advice to aspiring entrepreneurs: if you don’t like to choose between very bad and disastrous, don’t become CEO.” Ben also said:

"Sooner or later things will go wrong"

3) You form a unique moral climate, hire the most talented people. Together you are developing a great product that will delight consumers and make the world a little better. It's fine!

Oh, how many words in the book are devoted to emotions and a sense of happiness in the development of your own company. This book is written by a practitioner, which is immediately felt. Owning a business is the greatest pleasure for a talented entrepreneur!

4) If you don't want to become great, then you shouldn't have started a company.

In continuation of the previous statement of the author. Very true idea, with which I agree 100%. If you are doing something, do it with all your heart. If you are creating a business, put your soul into it, and do not use it just to get money. Only in this way you will get maximum pleasure and, oddly enough, profit.

5) If you have already decided that staff reduction is inevitable, then you should carry it out as quickly as possible. When rumors of layoffs seep into the team, you will have a whole host of additional problems.

Never delay resigning. If you are a CEO, you must first of all follow the interests of the company. It often happens that you like an employee as a person, but he is ineffective for the company. Remember that it is these employees who take bread from the rest. Inefficiency translates into loss of profits, and as a result of this, financial problems.

6) If you are going to run away when you have to fight, then you should ask yourself: “If our company is not good enough to win, then why should it even exist?”

Fight to the end! Only the strongest achieve great results.

7) Don't waste time agonizing over what you could have done differently. Better focus on what else you can do, because in the end nobody cares: just keep your company afloat.

This is universal advice not only for business owners. Whatever you do, in case of any mistakes, spend your energy on solving the current situation, and not on experiences.

8) Ironically, learning is one of the most productive activities that managers engage in. Imagine for a moment that you are giving a series of four hour-long lectures to the members of your department. Suppose you spend three hours preparing for each lecture. It will take 12 hours to prepare for the entire course. There are ten students in your group. Next year they will have to work for your company about 20 thousand hours. If your training program helps them improve their efficiency by even 1%, the company will receive the equivalent of 200 hours of labor as a return on the 12 hours invested.

Excellent and intelligible reasoning that it is vital to train employees.

9) Every CEO usually doesn't have many real friends in the business world, and trying to poach employees from a friend's company is a sure way to lose him.

Do everything to ensure that the best work in your company, but never step over friendship!

10) Probably the most important responsibility of the CEO in operations is the development and implementation of the internal corporate communications system.

The CEO is the person at the helm, but the engine is the employees. Your task is to create a warm team and a decent atmosphere.

11) Outstanding CEOs know how to take a hit. Outstanding CEOs were remarkably monotonous in their responses. They all said, "I refused to give up."

12) Over the past ten years, scientific and technological progress has drastically lowered the financial barrier to starting a new company, but the barrier of courage needed to start an outstanding company remains as high as ever.

13) Top managers who are better at determining the direction of the company, I call "first", and those who are better at organizing the current activities of the company - "second".

14) But what makes people follow the leader? I think there are three main qualities:

— The ability to clearly formulate a vision of the future;

— Correctly oriented ambitions;

— The ability to put the vision of the future into practice.

15) Replacing the CEO is always difficult.

As long as the company is led by its founder and ideological inspirer, it will develop without losing its soul. A prime example is Apple. Most associated the company with the name Steve Jobs. The founder was crazy about his brainchild and wanted to create a great company. And so it happened. still inspire thousands of people.

Summary:

Ben Horowitz's book "It won't be easy" is a great manual for company leaders. I highly recommend contacting her if your staff already has more than 30 people. For everyone else, the book may seem boring.

THE HARD THING ABOUT THE HARD THINGS

Building a Business

When There Are No

Easy Answers

An imprint of HarperCollins Publishers

Published with permission from Ben Horowiz, ICM Partners and Andrew Nurnberg Literary Agency

Copyright © 2014 Ben Horowitz

© Translation into Russian, edition in Russian, design. LLC "Mann, Ivanov and Ferber", 2015

All rights reserved. No part of the electronic version of this book may be reproduced in any form or by any means, including posting on the Internet and corporate networks, for private and public use, without the written permission of the copyright owner.

Legal support of the publishing house is provided by the law firm "Vegas-Lex"

* * *

Dedicated to Felicia, Sophia, Maria and Bucher - my family, who shared with me all the difficulties and joys of creating this book.

Introduction

Brother, this is the real world, school is over

Your dreams were stolen, and who is not clear.

Kanye West (American rapper), Gorgeous

Every time I get my hands on a book on management or from the “Help Yourself” series, I catch myself thinking that all these recommendations are good, but in fact there was nothing particularly difficult in the situations described in the book.

It is not difficult to set a global, risky and audacious goal - it is very difficult to fire people when it becomes clear that it will not be possible to achieve it.

It's not hard to hire brilliant employees. To face the fact that these "brilliant employees" think they deserve special compensation is a much bigger problem.

It is not difficult to draw the organizational structure of a future company on paper - it is much more difficult to achieve effective interaction between employees within its framework.

It is not difficult to make global plans - it is hard to wake up in a cold sweat when your dreams suddenly turn into a nightmare.

The main disadvantage of such books is that they offer ready-made recipes for solving problems that, by definition, do not have ready-made solutions. There is not and cannot be a universal way out of a really difficult and rapidly developing situation. There is no one-size-fits-all recipe for building a company or getting people out of trouble. No one will tell you how to write a hit streak or how to be an NFL star. There are no guidelines that can guarantee you win a presidential election or motivate employees to continue working in a failing company. This is the most difficult thing in a difficult situation - there is no ready-made solution for it.

Nevertheless, there is someone else's experience and useful advice from people who have been in similar situations.

In this book, I am not trying to come up with a magic formula for solving problems; instead, I will simply tell my own story and describe the difficulties that I had to face. As an entrepreneur, CEO, and now a venture capitalist, I find my experience useful - especially when working with the new generation of venture capitalists. Creating your own business is inevitably associated with overcoming numerous difficulties. I also had to go through this and succeed. Circumstances may differ, but the existence of global patterns in business makes someone else's experience invaluable.

Over the past few years, I have summarized my experience in a series of blog posts that are read by millions of people. Many of them turned to me, wanting to know more about the prerequisites for the development of certain events. In this book, for the first time, I will tell the background of my entrepreneurial activity and at the same time give conclusions already published in blogs. I was inspired to write this book by many friends, family members and acquaintances who supported me throughout my career and passion for hip-hop and rap music. Since hip-hop musicians usually strive to achieve success not only in creativity, but also in business, considering themselves to be a kind of entrepreneur, many topics - competition, making money, misunderstanding from others - are probably relevant to them as well. I share my experience in the hope of suggesting something and inspiring those people who are desperately striving to build something of their own from scratch to continue the struggle.

Chapter 1
From communist to venture capitalist

It's all I live for.

My wife, my children, my life.

But in the night I belong to Him, and rightly so.

My ups and downs, my dreams, my failures

My trials and tribulations, my heart...

DMX (Earl Simmons, American Rapper), Who We Be

I once hosted a huge barbecue evening at my house and invited 100 of my closest friends. Such parties are not uncommon for our family: my brother-in-law Courtney and I have been throwing them for many years in a row. Thanks to my talent in this business, I even got the nickname Jackie Robinson Barbecue from my African-American friends, thus destroying the racial stereotype.

This time at the party, the conversation turned to the great rapper Nas. My friend Tristan Walker, a young African-American entrepreneur, proudly claimed that he and Nas were neighbors and lived in Queensbridge, New York, one of the largest low-income housing estates in the United States. My seventy-three-year-old Jewish father interjected, "I've been to Queensbridge." Convinced that there was no way an elderly white man could be there, Tristan said, “You must be referring to Queens. After all, Queensbridge is a very disadvantaged area. But my father insisted: "No, it was Queensbridge."

I told Tristan that my father grew up in Queens, so I could hardly confuse these areas, and then I asked my father: “What were you doing in Queensbridge?” He replied: “At the age of eleven, I distributed communist leaflets and pamphlets there. I remember it very well, because my mother was upset that the Communist Party sent me to such areas. She thought it was too dangerous for a small child."

My grandfather and grandmother were communists. Due to political activity, my grandfather Phil Horowitz lost his job as a schoolteacher during the McCarthy era. My father grew up in a family with "leftist" beliefs and was familiar with "leftist" theories from childhood. In 1968, he moved our family to Berkeley, California, and began publishing the now-famous New Left magazine Ramparts.

As a result, I grew up in a city affectionately referred to by its inhabitants as the People's Republic of Berkeley. As a child, I was very shy and afraid of adults. When my mother took me to kindergarten for the first time, I wept bitterly. The teacher advised her to leave quickly, since such a reaction is quite normal for beginners. But when she returned three hours later, Elissa Horowitz found me wet with tears and still sobbing. The caregiver said that she never managed to calm me down, so my clothes were soaked through. This day was my first and last in kindergarten. If my mother had not been distinguished by angelic patience, I probably would never have gone to school. Despite the fact that all our acquaintances advised her to examine me with a psychiatrist, she patiently waited for me to adapt to the world around her, no matter how long it took.

When I was five years old, we moved from a house on Glen Avenue, which had become too small for a family of six, to a larger house on Bonita Avenue. In those days, this street was mostly middle-class Berkeley, and the area was somewhat different from others. Here lived hippies obsessed with their ideas, members of the lower class who worked hard to make their way to the top, as well as quite wealthy people addicted to drugs and slowly sliding down the social ladder. One day a friend of my older brother Jonathan Roger (not his real name) came to visit us. Он показал на маленького афроамериканского малыша, катавшего красную игрушечную тележку на углу квартала, и сказал: «Иди на угол и забери у этого мальчишки тележку, а если он попробует что-то сказать, просто плюнь ему в лицо и назови грязным ниггером».

Something needs to be clarified here. First, all this happened in Berkeley, where such things are by no means accepted. Мне никогда раньше не приходилось слышать слово «ниггер», и я понятия не имел, что оно означает, хотя и чувствовал, что это вовсе не комплимент. Secondly, Roger was not a racist and grew up in a very respectable family. His father was a professor at the University of Berkeley and was a wonderful person, like his mother. Only later did we learn that Roger had schizophrenia and the dark side of his personality attracted him to violence.

This order put me in a difficult position. On the one hand, I was afraid of Roger and knew that he would beat me severely for refusing to follow his instructions. On the other hand, it was even scarier to take the cart away from the boy. Damn it, I was afraid of everything! But it was impossible to stay close to Roger, so I went to the street corner to the boy. The distance did not exceed thirty meters, but they seemed to be thirty kilometers. Finally approaching the boy, I realized that I had to say something. "Can I ride in your cart?" - it broke out of me. Joel-Clark Jr. replied, "Of course." Turning around to see Roger's reaction, I found that he had gone. Apparently, the bright side of his personality took over, and he switched to another occupation. Joel and I played together until late in the evening and subsequently became best friends. 18 years later, he was best man at my wedding.

I have never told this story to anyone, and it was it that defined my life. Then I realized that being scared does not mean being helpless: it depended only on my actions whether I became a hero or a coward. I often look back on that day and think: if I had done what Roger demanded, I would never have found my best friend. I also realized that until you try to get to know a person, you cannot judge him. There is no way to gain knowledge without difficulty, especially when it comes to knowledge gained from experience. Relying on worldly wisdom and knowledge shortcuts is even worse than not knowing anything at all.

Keep this bullshit to yourself

For many years I have struggled stubbornly with the tendency to judge by first impressions and blindly believe in banal truths. I was an A student in Berkeley - in this town even football was considered too aggressive a sport. Therefore, I was not supposed to join the Berkeley football team. But I did it, and under the circumstances, my act was a very brave decision. I had never played in any children's football teams before, so this was my first exposure to the sport. Nevertheless, the first children's lessons in overcoming fear turned out to be very useful. In high school football, the ability to cope with fear is 75% of success.

I will never forget the team's first meeting with head coach Chico Mendoza. He turned out to be an elderly, robust man who had once played for the Texas Christian University Horned Frogs. Coach Mendoza began his opening speech: “Some of you guys are going to be out of here soon; you don't want to take the game seriously. You get on a team and start talking too much, spouting all sorts of nonsense, not doing a damn thing and just want to show off in your football uniform. But then you know what? Keep this bullshit to yourself." He further developed the idea of ​​what is meant by "nonsense": "Are you late for training? Keep this bullshit to yourself. Don't know how to make accurate throws? Keep this bullshit to yourself. Can you crawl on the grass? Keep this bullshit to yourself. Call me Chico? Keep this bullshit to yourself."

It was the most energetic, incendiary and poetic speech I have ever heard. I liked her very much. It was difficult to wait for the moment when I would return home and tell it to my mother. True, my mother was not delighted, but this did not make me like the speech less. Looking back, I realize that this was my first encounter with a real leader. Former Secretary of State Colin Powell says leadership is the ability to get people to follow you, if only out of curiosity. I was very interested in what Mendoza would say next.

I was the only student on the football team who majored in mathematics, so I rarely met my teammates in class. But as a result, my social circle expanded: I had to deal with people who look at life differently. It is amazing how different views on the same event depend on the worldview of a person. For example, the release of the album Hard Times by the rap group Run D.M.C. with his monotonous and aggressive rhythm of drums, he made a splash in the team, but went almost unnoticed in my academic group. Ronald Reagan's Strategic Defense Initiative caused a flurry of outrage in my study group, largely because of the controversial technical solutions on which it was based. Teammates did not show the slightest interest in her.

The need to perceive events from such different points of view taught me to separate the essence of facts from their assessment. This skill came in very handy when I became an entrepreneur and CEO. In particularly difficult cases, when the “facts” seemed to dictate a single version, I looked for alternative explanations and formed my own judgment only on the basis of the entire set of assessments. The very existence of an alternative and at the same time plausible scenario for the development of events sometimes helps to inspire hope and calm the agitated team.

"Blind date"

In the summer of 1986, I completed my sophomore year at Columbia College and stayed with my father, then living in Los Angeles. My friend and collegiate football teammate Claude Shaw arranged a blind date for me. Claude and I were going to have a foursome date with his girlfriend, Jackie Williams, and Felicia Wylie, who was meant for me, and cook a fancy dinner to celebrate. After carefully considering the menu, we spent the whole day in the kitchen: finally, by the appointed time of 19:00, everything was ready, including four beautifully decorated rib steaks. But the girls didn't show up. It had been an hour since the agreed time, and we were still not too worried. Jackie was notorious for her lack of punctuality, so why worry? However, an hour later, Claude decided to call back and clarify what had happened. Listening to his conversation, I looked in shock at our chic table with already cold dishes. It turned out that my failed girlfriend Felicia decided that she was too tired and did not want to go on a first date in such a state. Yeah. It's just disgusting!

I asked Claude to give me the phone and introduced myself: "Hi, this is Ben, your supposed beau."

Felicia: I'm sorry, but I'm too tired and it's getting late.

Ben: Of course it's late because you late.

Felicia: I know, but I'm just too tired to go anywhere.

At this point, I decided to appeal to her sense of compassion.

Ben: Of course, I understand your difficulties, but you could have been warned about this before we spent the whole day preparing dinner. And now you just have to get in the car and come, otherwise it will look rude and leave a very unpleasant impression.

If Felicia had been completely selfish, my speech would hardly have had an effect. But then it was not worth it to regret the broken date. If Felicia does not want to complete our acquaintance in this way, then maybe something will come of it.

Felicia: Okay, I'm leaving.

An hour and a half later, a beautiful-looking girl in white shorts knocked on the door. However, because of the experience, I completely forgot about the real fight in which I participated the day before. During an impromptu basketball game in the San Fernando Valley, a two-meter short-haired and camouflaged guy, who looked more like a member of some local gang, hit my brother Jonathan, a long-haired musician who at that time weighed no more than 70 kilograms, with a ball with a swing. But I played in the university team and was used to constant skirmishes, so I was always ready to act. Instantly assessing the situation, I rushed to the offender brother. A short fight ensued, and the "bandit" received several good blows. True, I also missed the oncoming hook with the right, as a result of which a black eye immediately appeared under the eye. It's entirely possible that the guy was just used to playing rough, and not trying to hit his brother on purpose, but since I didn't give myself time to think, now it's impossible to know.

Be that as it may, when I opened the door, I saw the astonished look of Felicia's lovely green eyes fixed on my black eye. As she told me years later, her first thought at the time was, “That’s a real thug! And why did I come here!

Fortunately, neither I nor she believed the first impression. We have been happily married for 25 years and raised three wonderful children.

Silicon Valley

During my summer vacation, I got a job as an engineer at a company called Silicon Graphics (SGI). The work turned out to be amazing. The company developed state-of-the-art computer graphics and released a range of innovative applications, from computer effects for the movie Terminator 2 to amazing 3D flight simulations. Everyone was a real genius, and the developments staggered the imagination. I would like to work here for the rest of my life.

After graduating from the College of Computer Science at Columbia University, I joined SGI. It was a dream come true and I really loved my job. A year later, I chanced upon former head of marketing at SGI, Rosalie Buonaro, who had started her own venture capital firm. Rosalie heard about me from her daughter, who also worked for SGI. She very persistently suggested that I go to her company and eventually persuaded me. Now I worked at NetLabs.

But this turned out to be a big mistake. The company was led by a former top manager of Hewlett-Packard and at the same time the husband of Rosalie Andre Schwager. The venture capitalists brought in Andre and Rosalie as a "professional management team". But, unfortunately, they were poorly versed in the products and technologies of the company, and as a result, they took on one or another crazy project. For the first time, I understood the role of competent management in a company.

Another problem was the fact that doctors diagnosed autism in our second daughter Maria, so I simply could not agree to an irregular working day in a startup - the family required a lot of attention.

One hot summer day my father decided to visit us. We couldn't afford air conditioning, so all three kids were crying from the heat, and my dad and I were bleeding. about sitting in the living room, where the temperature reached forty degrees.

My father turned to me and asked, "Son, do you know what's really cheap?" I had no idea what he was talking about, so I answered: “No, what?” He said: “Flowers. Flowers are very inexpensive. Do you know what is very expensive? I answered again: “No, what?” He said, "Divorce." Suddenly, this joke, which was only partly a joke, made me understand a simple thing: I have no more time. Up until this point, I hadn't made any big decisions. For some reason it seemed to me that unlimited possibilities were open before me and everything that I wanted could be achieved at the same time. But my father's joke made me realize that if I continue to act like this, then I will lose my family. In trying to achieve everything at once, I will lose sight of the most important thing. At that moment, for the first time, I forced myself to look at the future in terms of goals that were not only mine. I had to build a career, realize myself and create a strong family. More importantly, I used to think of myself first. But if you have a family or a team, then this way of thinking will lead to trouble. And I'm already in trouble. It seemed to me that I was a great guy and not at all an egoist, but my affairs spoke of something completely different. It was time to grow up and set priorities. First I had to take care of the people I loved, and only then about myself.

I read the book twice in two different languages ​​with a pause between them of two or three years. Unfortunately, both times I reached a little less than the middle, because. I could no longer force myself to read either in Russian or in English. Almost everything about the book annoyed me. Well, let's start with the fact that I approached the book as a management resource, but in fact it is more of an autobiography of a certain CEO. And what is the most or one of the most important problems associated with the fact that a person describes the history of the business that he led? Correctly. Objectivity. For example, when you are asked to describe your experience at university or school, whose description would be more accurate: your classmate/fellow student or your own? Of course, we do not want to bring to the light of God things that characterize us in an unsightly light, so it is not surprising that people tend to embellish such events. But even if they do not want to do this, our memory still makes significant adjustments and we often remember not what it was or how it was or whether it was at all. Of course, this can also happen to the aforementioned classmate/fellow student, so not one look at the event is required, but many. So, while reading the book, I had the feeling that the book went through more than one editing to portray the author - our main character - in a positive light, even where he writes like he, in fact, forgot about his wife.
But as for the wife - up to a certain point, the girlfriend with whom he had a first date - then for me it was simply unbearable. Well, why do I need to know about his first date, his wife, relationship with his father and so on and so forth (the description of which will be quite detailed)? Why do I need to know about sick employees that he paid for treatment? What for? But this is an example of leadership - they will tell me. Perhaps it was originally conceived that way, but the way it was presented (an impulse decision, not a rule) speaks more of an attempt to show what a sensitive leader he is. In general, this is some kind of mess, a mixture, without a clear script, which is why it all does not look like a story about how to be a successful CEO. It's all very mixed up here.
Further, all these numerous firms in which he worked. It's all very hard to read, because. they flicker extremely quickly, which makes it impossible to delve into the history of a particular company and you simply become not interested in reading all this. What are these companies? Most of it I don't even know. But let's even assume. The problem is that we do not know where the merit of the author is, and where the merit is of completely different factors. For example, the main success factor was a certain department of the company or the current situation in the market as a whole, or something else. And so there is a feeling that it is our author who is such a good manager that he solved all the problems himself. No I do not believe.

The author of the book, one of the most experienced entrepreneurs in Silicon Valley, Ben Horowitz, offers effective recommendations for building and developing startups. In doing so, he manages to combine theory and practice, which increases the value of the book for everyone, regardless of the career stage or life cycle of their own business. Horowitz eschews universal prescriptions. Instead, it offers better approaches to common situations like laying off employees or selling a business. This is a book for managers, entrepreneurs and those who are just about to start their own business. Published in Russian for the first time.

* * *

The following excerpt from the book It won't be easy. How to build a business when there are more questions than answers (Ben Horowitz, 2014) provided by our book partner - the company LitRes.

I will live

You expected me to fall at your feet

And I thought I would die without you.

But no, not me!

I will live!

Gloria Gaynor (American Singer), I Will Survive

With the success of Netscape, Mark met all the big VCs in Silicon Valley, so we didn't need referrals. Unfortunately, Kleiner Perkins, which financed Netscape, has already invested in a firm that could become our potential competitor. We have negotiated with all the leading venture capital investors and have decided to sign an agreement with Andy Rackleff of Benchmark Capital.

If I were asked to describe Andy in one word, I would choose the word "gentleman." Clever, sophisticated, amiable, Andy was the type of brilliant abstract thinker who could easily lay out the essence of a complex strategy in a few sentences. Benchmark was going to invest 15 million dollars, despite the fact that the company's preliminary capitalization was estimated at 45 million. Mark was going to invest $6 million, bringing the company's total capitalization, including cash, to $66 million. In addition, he undertook to take the position of full-time chairman of the board of directors. Tim Howes was supposed to be our CTO. I became the CEO. The Loudcloud platform is two months old since its inception.

Capitalization and funding were signs of the times and were a prerequisite for the company's future growth and market capture before financially powerful competitors could. Andy said to me, "Ben, think about how we should run our business if we had free financial resources."

Two months later, we were able to secure a $45 million loan from Morgan Stanley with no strings attached and a three-year interest deferral. So Andy's assumption of free funding wasn't all that far off the mark. However, it is dangerous to ask an entrepreneur the question, “What would you do if you got free funding?” It's like asking a fat man, "What would you do if ice cream had the same calories as broccoli?" Under the influence of this question, extremely dangerous ideas can appear.

We quickly developed the infrastructure for our "cloud" and began to enter into contracts with consumers. Within seven months, we received orders for 10 million dollars. Loudcloud turned out to be a very promising project, but time and competitors worked against us. This meant hiring the best people and creating an extensive technical support service, and this required money, and a lot of it.

We hired a hiring agent as the ninth in our company, and having increased the number of employees to 12 people, we invited a HR manager. We were hiring 30 people a month, poaching many of Silicon Valley's top talent in the process. One of the people we hired left AOL to spend two months climbing, but instead joined us; another lost millions of dollars by joining our company and quitting another company just the same day it went public. Six months later, we had two hundred employees.

There was a buzz in Silicon Valley, and Loudcloud was featured in a Wired magazine article talking about "the second coming of Marc Andreessen." We moved from our first office, where traffic jams popped out when trying to turn on the coffee maker and microwave at the same time, to a spacious 1,350 square meter office in Sunnyvale. But by the time we moved in, it became crowded there. We spent another $5 million to move into a three-story stucco building with yellowish-green tiles that we called the Taj (similar to the Taj Mahal). Given our hiring policy, it soon became crowded, with people sitting in the corridors. We hired a third car park quite far down the street and arranged for employees to be transported from there to the door by bus (the neighbors just hated us). The kitchen stocked as much groceries as a Costco wholesaler, and when we fired a supplier because our refrigerator looked like a refrigerator from Philip Roth's Goodbye, Columbus, the supplier demanded a stake in the company as compensation.

It was a glorious time!

The following quarter, we signed contracts for another $27 million, and the company had only been in existence for nine months. It looks like we were building the greatest business of all time.

But then came the colossal dot-com crash. The NASDAQ Index, which peaked at 5,048.62 on March 10, 2000, nearly double its average the previous year, was down 10% in just ten days. An article in Barron magazine titled "The Fire is Burning" predicted further developments. By April, when the government declared Microsoft a monopoly, the index had fallen even further. Startups have lost a significant amount of capitalization, and dot-coms, recently proclaimed the epitome of the “new economy”, went out of business almost overnight and were called “dot bombs”. The NASDAQ ended up falling below 1200, down 80% from its all-time high.

At that moment, we had no doubt that our business would become the fastest growing in the world. This was good news. The bad news was that as a result of the deteriorating business situation, we needed more money than we had anticipated. All of the $66 million in equity and debt that we were able to raise was spent almost entirely on creating a first-class cloud service and technical support for a rapidly growing army of consumers.

The collapse of the dot-coms scared off investors, so finding funding wasn't going to be easy, especially since there were a lot of startups among our customers. This became apparent during negotiations with the Japanese company Softbank Capital. My friend and Loudcloud board member Bill Campbell knew the people at Softbank well and offered to do a little “reconnaissance” while the negotiations were going on. As soon as the secretary told me that Bill was on the line, I immediately picked up the phone. We couldn't wait to find out how things were going for us.

I said, "Bill, what are they saying?" Bill replied in his raspy teacher's voice, "Ben, frankly, they think we're high on something." With a team of 300 and very little cash, I felt like I was about to die. As CEO of Loudcloud, this was the first time I felt like this, but as it turned out, not the last time.

It was then that I learned the cardinal rule of seeking private funding: look for one single investor. You only need one investor to say "yes", so the other 30 who said "no" can simply be ignored. In the end, we found an investor for the Series C project, even without financial backing, which had an excellent capitalization of $700 million, and agreed on an investment of $120 million. Sales for the next quarter were forecast to be around $100 million, and things seemed to be looking up. I was sure that sales would only grow - after all, previous forecasts turned out to be underestimated. And maybe, I reasoned, we could transition smoothly from our old dot-com-dominated customer base to more stable, traditional consumers like our then-largest customer, Nike.

But all hopes were dashed.

We ended the third quarter of 2000 with an order backlog of $37 million, far from the $100 million we had hoped for. The collapse of the dot-coms turned out to be a much more serious disaster than was first thought. And we have already spent a very large part of the cash on the development of infrastructure for the "cloud" based on the influx of new customers.

Euphoria and terror

I had to look for investors again, the situation continued to deteriorate. In the fourth quarter of 2000, I held meetings with all potential investors, including Prince Al-Waleed bin Tal of Saudi Arabia, but no one dared to invest in our company under any conditions. In less than six months, we went from the coolest startup in Silicon Valley to a potential bankrupt. With 477 employees behind me and a business that was like a ticking bomb, I frantically searched for a way out.

However, persistent thoughts about what would happen when we ran out of cash—the layoffs of all the employees I had so carefully selected, the loss of investors' money, the deceit of consumers who had hoped for our business—disturbed our focus on opportunity analysis. Marc Andreessen tried to cheer me up with a joke that didn't seem funny at all.

Mark: Do you know what is most important in a startup?

Ben: What?

Mark: You are constantly either euphoric or terrified, and the inability to sleep gives both emotions a special strength.

Against the background of a non-stop ticking clock, a not very attractive, but interesting opportunity arose - transformation into a joint-stock company. In such harsh times, the private equity market was almost closed to our profile companies, but the equity capital market was fraught with some opportunities. It may have seemed crazy, and it was, but still, private funds completely refused to finance us, and the equity capital market, although it was reduced in volume by 80%, still had 20% left.

Since there were no other options, I had to submit a proposal for corporatization to the board of directors. To prepare for the discussion, I wrote down the pros and cons of going public on a piece of paper.

First of all, it was necessary to convince the skeptical Bill Campbell. On our board of directors, Bill was the only one who had experience as CEO of a public company. He knew all its advantages and disadvantages better than anyone else. Even more importantly, in such difficult situations, colleagues relied on the opinion of Bill, since he was a very original person.

At that time, Bill was about 60 years old, but despite the gray hair and hoarse voice, he had the energy of a twenty-year-old youth. His career began as a coach of the high school football team, and he encountered the business world in his forties. But despite the late start, Bill became CEO and chairman of the board of directors of Intuit, and then - a legend in the technology industry. Great CEOs listened to his advice, including Apple's Steve Jobs, Amazon's Jeff Bezos, and Google's Eric Schmidt.

Bill is a very smart, incredibly charismatic person and an excellent organizer, but he does not owe his success to these qualities. In any society, whether it was the board meeting of Apple, where he served for more than a decade, or the board of trustees of Columbia University, where he chaired, or surrounded by powdered girls from the university football team that he once coached, he everywhere won sympathy and respect.

There are many opinions about the reasons for such popularity. From my point of view, everything is very simple. Every person, no matter who they are, needs two kinds of friends in life. The first are the ones you can call when something good happens and you want to share the joy. And you expect to see a sincere reciprocal feeling, and not just envy, covered with a kind smile. You need a person who would be more happy for you than he would be happy for himself if something like this happened to him. The second are the ones you can call when you're in trouble: your life is in danger and you only have one phone call. So, Bill Campbell combines the qualities of both.

I summarized my thoughts as follows: “We cannot find financing in the private investor market. We have a choice: to keep trying to find a private investor, or to prepare for shareholding. Our prospects for finding a private investor are slim; if we decide to go public, a number of problems also arise.

1. Our sales channels are not stable and sales are difficult to predict in any economic situation.

2. The economic situation is by no means standard - there is a rapidly worsening economic downturn, and it is not yet clear whether the bottom of the decline has already been passed.

3. Our consumers go bankrupt one by one, and this process can neither be predicted nor stopped.

4. We are incurring losses and will continue to incur them, at least for some time.

5. Our operational business processes are imperfect.

6. In general, we are not ready for corporatization.”

The members of the board of directors listened carefully to my arguments. Their faces showed deep concern about these problems. There was an eerie silence. As expected, Bill broke it: "Ben, it's not about the money."

I felt a strange relief. We probably shouldn't go public, and I overestimated the seriousness of the funding problem. Apparently, there is some other way to solve it. Bill continued, "Ben, it's about damn money."

OK. Apparently, we are still joint-stock companies.

In addition to the considerations presented at the board of directors, it should be borne in mind that our business is quite complex, including for investors to understand. Usually we sign contracts with consumers for two years and record income on a monthly basis. Now this is a common practice, but at that time this approach was quite unusual. Given the rapid growth in orders, revenue growth was only slightly slower. As a result, the S-1 form (the registration form required by the Securities and Exchange Commission) stated that our sales volume was $1.94 million in the past six months, and next year it was supposed to be $75 million - just incredible leap. Since the profit depends on the volume of sales, and not on the number of orders, we suffered huge losses. In addition to everything else, the accounting rules for share options made our losses appear to be four times greater than they actually were. All these factors created an extremely negative background for our IPO.

For example, a very venomously written article in Red Herring said that our customer list is "very short" and that we are too dependent on dot-coms. The author quoted an analyst from the Yankee Group as saying that we "have lost about a million dollars per employee over the past 12 months." Moreover, among the assumptions about how we succeeded, there was also a fire in the parking lot with the involvement of all employees in burning dollar bills on it. BusinessWeek tore us to shreds in an article that called our attempts to go public "IPOs from hell." The Wall Street Journal claimed that investment managers reacted to our IPO with the phrase "God, they're crazy!" One financier, by the way, who actually invested some money in our shares, called our IPO "the most insane among all the insane attempts to share shares."

Despite the appalling press coverage, we were determined to follow this road to the end. Comparing ours to our peers, we set our price per share at $10 following an upcoming share consolidation; the cost of the company was to be about $700 million. This is less than the value of the company after the previous round of private financing, but much better than filing for bankruptcy.

End of introductory segment.