This summer two grand masters of the Silicon Valley VC world have come out with books about how to start and run a business. Ben Horowitz (Andreesen Horowitz) and Peter Thiel (Founders Fund) perhaps timed the release of their books with the competitiveness that permeates the tech world they live in.
The Hard Thing About Hard Things, Ben Horowitz’s book, is hard to put down in its first 50 pages, where he describes what it was like to be there at the start of the internet age as we know it. It seems to have been exciting, but in the way that it’s exciting to be in a sailboat in the middle of a hurricane. He got in early at Netscape, but soon saw Microsoft annihilate the company’s lead position in the browser market. (“We are getting killed killed killed out there”, wrote Marc Andreesen, Netscape CEO, to Horowitz – the day before Andreesen appeared “barefoot and sitting on a throne on the cover of Time magazine”).
After Netscape sold to AOL, Horowitz did the popular thing and launched a startup. The business model was robust, and everything looked splendid – until the dotcom bubble burst. He avoided ruin by IPOing at the bottom of the market. He somehow steered his company back to moderate success, only to see a new competitor annihilate its position, forcing him to rebuild the company more or less from scratch. And so on and so on, until he becomes a respected billionaire VC dispensing advice to youngsters.
The meat of the book is a how-to guide to building and managing any internet-age business. This is the part that makes the book required reading for consumer e-commerce entrepreneurs. His advice is brutally honest and self-critical. There is no catchy concept of the sort that other management books put in their titles. His theme is basically: the tech world is cutthroat competitive, building your cool startup is going to be really hard, there are no easy answers to how you succeed, and even if you are brilliant you may well fail.
His advice about company culture, for example: “Ask ten founders about company culture and what it means and you´ll probably get ten different answers. It´s about office design, it´s about values, it´s about alignment … The primary thing that any tech startup must do is build a product that´s at least ten times better at doing something than the prevailing way of doing that thing. The second thing that any tech startup must do is take the market … If you fail to do both of these things, your culture won´t matter one bit. The world is full of bankrupt companies with world-class cultures.”
Such statements are sweeping and often sound a bit grumpy. But he backs them up with specific insights gleaned from working 30 years at the top of an industry that is about 30 years old. He has worked with hundreds of startups, starting with his own where he was founder-CEO. Entrepreneurs will get some bracing advice from this book, and it just might make their failure less likely.